Sitting of 20 March 1978

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
NEW WRIT
For Glasgow, Garscadden, in the room of William Watson Small, Esq., deceased.—[Mr. Michael Cocks.]
ORAL ANSWERS TO QUESTIONS
  ENERGY

    Coal-fired Power Stations
    Mr. Edwin Wainwrightasked the Secretary of State for Energy if he will bring forward proposals for further coal-fired power stations.
    The Under-Secretary of State for Energy (Mr. Alex Eadie): My right hon. Friend's approval has not been sought for any coal-fired station beyond Drax B. The timing of future orders will depend on many factors including the growth of electricity demand.
    Mr. Wainwright: Does my hon. Friend realise that we are exhorting miners to increase production and efficiency but that we are giving them no guarantee that the coal they produce will not be left on the floor at the top of the pit instead of being used in coal-fired stations? Is it not time that we planned to build more coal-fired stations so that we could guarantee that the coal produced by the miners would be consumed?
    Mr. Eadie: The CEGB's plan up to the early 1990s will provide a capacity to burn 85 million or 90 million tonnes of coal. On the question of future markets for coal, we are looking closely at the possibilities for exports. My hon. Friend asked about new power stations, but no
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    application has been made for new capital investment.
    Mr. Skeet: Has the Minister had an opportunity to examine the Health and Safety Commission's report indicating 1·8 deaths for every 1,000 megawatts of power produced by coal compared with only 0·25 deaths with nuclear power? Should he not therefore accept a recommendation for more nuclear power stations rather than more coal-fired power stations?
    Mr. Eadie: I believe that the view the hon. Member is advancing would command only minority support throughout the House. We have always said that it would be a great mistake for this country to be dependent on one source of energy.
    Mr. Skinner: Has my hon. Friend seen the recent article in The Times to the effect that if no more coal-fired power stations—apart from Drax B—are built by the early 1980s the power produced by coal will fall from 65 per cent. to 51 per cent. of the total, and that that will be disastrous for the mining industry at a time when it is producing a little more coal?
    On the question of exports, will my hon. Friend do something about the Common Market? It is burning less British coal now than it did at the time of the referendum. My right hon. Friend the Secretary of State said at the time that the Common Market was no good to us. That has been proved to be the case.
    Mr. Eadie: I can only repeat that coal-burning capacity will be 85 million to 90 million tonnes. We are of course looking at other uses for coal and we expect to produce a report on that. British coal is the cheapest in the Common Market.
    Mr. Rost: Are there not clear indications that even Drax B could be out of date long before it is completed since the trend will be increasingly towards converting coal into oil and gas in order to burn it more efficiently?
    Mr. Eadie: The CEGB was quite satisfied with the cost of generating electricity by burning coal. As for future developments, I agree with the hon. Member that coal is a very valuable raw material.

    Gas (Tariff Changes)
    Mr. John Huntasked the Secretary of State for Energy if he will seek to amend Section 25 of the Gas Act 1972 in order to impose an obligation upon gas boards to notify customers individually in advance of any changes in tariff structure.
    The Under-Secretary of State for Energy (Dr. John Cunningham): No. I am satisfied that the present provision is appropriate and that it is reasonably interpreted by the British Gas Corporation.
    Mr. Hunt: Is the Minister aware that one of my constituents who has business premises in North-West London was placed on the domestic rather than the commercial heating tariff without any consultation with him or personal notification to him? Since the North Thames Gas Board is now quoting the 1972 Act in defence of its arbitrary behaviour, is it not time that the Act was suitably amended so that the board's customers could be treated with more courtesy and consideration in such matters in future?
    Dr. Cunningham: I am not aware of the specific case. Decisions about tariffs and the appropriate tariff for consumers are normally for boards within their day-to-day management. If the hon. Member is dissatisfied with some aspects of the handling of the case he has mentioned, and if he writes to me about it, I will have it looked at.
    Mr. Viggers: If the Minister cannot accede to my hon. Friend's request to notify customers in advance, will he at least undertake on behalf of the Government to notify the chairman of the British Gas Corporation when prices are changed, because on the last occasion it was done in an arbitrary manner without reference to him?
    Dr. Cunningham: I did not say that customers were not notified in advance. Customers are notified in advance, as the hon. Gentleman should know.
    As for the specific situation to which the hon. Member referred, we do not envisage those circumstances recurring.

    National Nuclear Corporation
    Mr. Palmerasked the Secretary of State for Energy if he will make a statement on the proposed change in the shareholding and the management of the National Nuclear Corporation.
    The Secretary of State for Energy (Mr. Anthony Wedgwood Benn): Following my statement on thermal nuclear policy on 25th January, I shall want to be sure that the nuclear industry has the organisation and management which it needs to implement the Government's decisions. I have no proposals to announce yet.
    Mr. Palmer: Is my right hon. Friend aware that between 1972 and 1973 the Select Committee on Science and Technology was very critical of the arrangement under which the General Electric Company was given an artificially dominant position in the National Nuclear Corporation? Is he further aware that the Select Committee also predicted the difficulties that would arise if the General Electric Company decided to withdraw? Has that situation not arrived? In view of the considerable amount of public capital involved, should not a statement be made fairly soon?
    Mr. Benn: I appreciate the points that my hon. Friend makes. Following the announcement of policy that I made in January, certain industrial and management implications will follow. The GEC has indicated to me that it wishes to withdraw from the supervisory management position.
    Mr. Hannam: Can the Secretary of State say whether legislation will be required to change the balance of holdings in the Corporation? If so, will he start negotiations with the absent Liberal Party Members to make sure that that legislation will be acceptable to the House?
    Mr. Benn: I did not make any reference to the shareholdings; I referred to the supervisory contract. Therefore, perhaps the other question does not arise.
    Mr. Tom King: Does the Secretary of State agree that, as it seems clear now that the policy has been announced and there are to be changes in the structure, it is a matter of some urgency that the new structure should be arrived at as

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    soon as possible so that the policy can be implemented without delay? Will he contribute to that effort?
    Mr. Benn: That is a most helpful supplementary question. The organisation must fit in with the decision made. Therefore, there is urgency in the matter. On the other hand, in these as in other matters. I am trying to proceed by consent.

    Coal Industry (Incentive Schemes)
    Mr. Knoxasked the Secretary of State for Energy in what proportion of collieries have incentive agreements been implemented.
    Mr. Patrick McNair-Wilsonasked the Secretary of State for Energy in what proportion of collieries incentive schemes have been implemented.
    Mr. Eadie: The numbers of installation agreements have been steadily increasing and now cover about 80 per cent. of all faces and 75 per cent. of all development drivages.
    Mr. Knox: Can the Minister say by how much coal output has increased as a result of the implementation of these schemes?
    Mr. Eadie: Yes. There has been an increase in output per man shift of about 1·5 cwt. The National Coal Board expects in this financial year about 1½ million tons more than it would otherwise have had.
    Mr. McNair-Wilson: Whilst productivity is improving, which is to be welcomed, sales are the real problem. Can the Minister confirm that coking coal, a precious resource which we are still importing, is being put under the boilers in power stations? Would it not be wiser to coke it and stock it for the British Steel Corporation in the hope that there will he at some point an upturn in the future of the steel industry?
    Mr. Eadie: It is a fact that the steel industry is in the doldrums. It is a fact that coking coal is being stocked. I do not have any information about it being put into power stations. I share the hon. Gentleman's optimism because, before, when the world took off in its economy in relation to steel, countries all over the world were searching for coking coal. I
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    agree that we should stock it and not lose our nerve.
    Mr. William Hamilton: Can my hon. Friend say whether as a result of the incentive agreements there are any figures nationally to indicate an increase in the number of fatal accidents, in view of the recent remarks made by Mr. Scargill?
    Mr. Skinner: Yes; they have doubled.
    Mr. Eadie: I have no information that there has been any increase in the number of fatal accidents.
    Mr. Kelley: Is my hon. Friend aware that there has been a great deal of industrial friction in the Yorkshire coalfield and a possible strike of engine winders because of the degree of implementation of pit industry incentive schemes? Has he made a study of the number of shifts and the amount of coal lost as a result of the application of pit industry incentive schemes?
    Mr. Eadie: My hon. Friend may recollect that the last time on which questions were posed in the House about the incentive schemes I said that I thought it was too early to start to make some claims about how they would work and what success they would have. I stick to what I said then. It is far too early to make claims one way or the other as to how they will turn out. The question of negotiating at pit level in relation to the kind of incentive scheme that would be acceptable is a new experience. Therefore, until there is some more experience of the incentive schemes, we shall have to wait to see what the facts are.

    Electricity Bill
    Mr. Ridleyasked the Secretary of State for Energy when he proposes to introduce an Electricity Bill.
    Mr. Mike Thomasasked the Secretary of State for Energy when he expects to lay the Electricity Bill before the House of Commons.
    Mr. Adleyasked the Secretary of State for Energy when he now expects to introduce the Electricity Bill.
    Mr. Biffenasked the Secretary of State for Energy when he expects to present a Bill reorganising the electricity supply industry.
    Mr. Benn: I am not now in a positon to introduce legislation this Session for the reorganisation of the electricity supply industry but will publish my proposals as a White Paper. I shall shortly introduce a Bill providing for Drax compensation payments and giving effect to an international agreement on safeguards for nuclear material.
    Mr. Ridley: Is the right hon. Gentleman aware that the whole House will be sorry for him that his plan for centralising the electricity supply industry has been frustrated by the Lib-Lab pact? Does he agree that previously Ministers have resigned for less than this?
    Mr. Benn: I appreciate the helpful spirit that underlies the hon. Gentleman's supplementary question. There have been two years of discussion following the publication of the Plowden Report and a number of changes were made and agreed designed to prevent the kind of centralisation recommended in that report.
    I shall not conceal from the House that it is unfortunate that an industry employing 160,000 people and with a £4 billion turnover should be denied an organisational change which is wanted by all the management and unions in the industry.
    Mr. Adley: Is the Secretary of State aware that, although many of us fundamentally disagree with many of his views, at least we have the benefit of knowing what they are and that his principles are rather greater than those of self-preservation, which guide those on the Liberal Benches, who do not even appear to be here today? Is it his intention to try to introduce some of the bits of the Bill which may be generally acceptable to the House?
    Mr. Benn: In my answer—I am sure that the hon. Gentleman will want to read it—I have made it clear that the shortened Bill will be introduced on Wednesday and published on Thursday. As soon as I can get the full Bill dealing with the reorganisation of the industry published as a White Paper, which I think will be shortly after the Easter Recess, the whole House will have an opportunity of considering the proposals put forward after the two years of discussion that has taken place.
    I cannot speak for the Liberal Party, but I would welcome the publication by the Leader of the Liberal Party of the
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    reasons he gave me for not being ready to assist.
    Mr. Biffen: In the deplorable absence of the entire Parliamentary Liberal Party, would not it be helpful if the right hon. Gentleman could indicate whether the concept of area power boards, for example, was mentioned by the Liberal Party in any of the discussions, or were its objections so frivolous and so uncomprehending that their publication or otherwise could make no contribution to serious debate on the subject?
    Mr. Benn: I had wide consultations with the Conservative Party and with the Liberal Party about the whole problem of reorganising the industry. As will become clear when the White Paper is published, I took the view that it would be better to have primary legislation, and then the organisational framework could emerge from Statutory Instruments as and when changes were needed. As will appear when the White Paper is published, my Bill provides for Statutory Instruments that would allow power boards or the more decentralised form of organisation which I preferred to that proposed in Plowden, which was for a highly centralised industry.
    Mr. Stoddart: Is my right hon. Friend aware that the fact that the Bill is not coming forward will cause frustration, disillusionment and a loss of morale within the electricity supply industry, which needs the Bill and has asked for it? Does not he think it remarkable that Liberal Members show so little interest in the electricity supply industry that they are not here today? Does he think that the hon. Member for Truro (Mr. Penhaligon) is skulking in some antediluvian corner, afraid to come out and show himself today?
    Mr. Benn: Without going into the details of my hon. Friend's supplementary question, I think that it would be wrong that a great industry of this kind, the figures of which I have given, should be frozen permanently into a pattern that is no longer appropriate. As the House will see when the White Paper is published, there are certain provisions in the draft Bill with regard to consumers, industrial democracy and the needs of the supplying industry, and there is a special open government clause which I think, when the House sees it, will

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    recommend itself widely among hon. Members generally.
    Mr. Palmer: Does my right hon. Friend agree that, in view of the vast amount of work that has been done on the Bill, which deals largely with administration, it does not reflect much credit on the parliamentary system that it cannot even be discussed here?
    Mr. Benn: I appreciate my hon. Friend's point. The Bill will be published in its entirety together with the draft Statutory Instrument that would have been used to bring it into effect, and the House will then have an opportunity of considering how it wishes to proceed.
    Mr. Tom King: Is the Secretary of State aware that we regard this as the most tragic outcome of a seriously mismanaged situation for what he had described as an extremely important industry? We are bound to regret the enormous delay which led the right hon. Gentleman to put himself in the position with the Liberal Party that he did. As the right hon. Gentleman referred to us and the wide consultations that he had with us, will he note that they were extremely late consultations, which made it impossible for the Bill to proceed this Session?
    There is one point of detail. It has been alleged in the newspapers that the right hon. Gentleman's Bill included provisions for combined heat and power. Might they possibly be included in a revised statute in the first, minor Bill?
    Mr. Benn: With regard to consultation, I thought it wrong to bring to the House a Bill for the industry's reorganisation that had not been through the most detailed and elaborate consultations with the industry. Much of the time occupied since Plowden reported has been spent in seeking and finally obtaining a consensus within the industry. I think that the hon. Gentleman will recognise that before I made my statement in the House last summer there were general consultations. The Bill was then forecast in the Queen's Speech, and the outlines of the proposals have been widely known and understood. I think that the hon. Gentleman will confirm that I was able to give him an absolutely clear assur-
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    ance that the power board solution, one that I know has been of some interest to the Opposition, would be capable of being introduced under the Bill, and that is the case. I have had that checked and confirmed recently.
    I regret that an industry that absorbs so much of the nation's resources, and whose product goes into every home, should be denied the right to have a corporate strategy and proper framework for its future development.
    Mr. Skinner: Will not my right hon. Friend accept that the real reason why the Liberals have been playing truant today and acting awkward over the Bill is to give the impression to those that formerly supported them ouside, and are now voting Tory, that by attacking my right hon. Friend they have been out-manoeuvring the Tories on this matter? Perhaps the best answer to the Liberals is an indication by those in the coalfields and those that work in the electricity industry that they will not support them at the next General Election, and then they will finish without any votes at all.
    Mr. Benn: I think that when the Bill is published with the draft Statutory Instrument as a White Paper in about two weeks' time everyone in the industry and throughout the country, including consumers and hon. Members, will have an opportunity of judging for themselves the merits of the proposals. The Government are committed to the proposals, which were very carefully considered by them after the consultations with the industry. I believe them to be good proposals that will recommend themselves to those who look at them for the first time.

    North Sea Gas
    Mr. Skeetasked the Secretary of State for Energy, in view of overcapacity, whether he still requires four ethylene crackers based on North Sea natural gas liquid feedstock by 1985; and when he intends to make a further statement on the North Sea gathering pipelines.
    The Minister of State, Department of Energy (Dr. J. Dickson Mabon): The first part of the Question is a matter for my right hon. Friend the Secretary of State for Industry. I cannot make a

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    general statement on gas gathering before I have studied the final report of Gas Gathering Pipelines (North Sea) Ltd., which is due to be submitted to me at the end of this month.
    Mr. Skeet: Will the right hon. Gentleman consult the other Departments involved to ensure that there is no waste of financial resources here? Will he bear in mind that it is not much use making available the resources from the North Sea if the chemical industry is not in a position to use them? Will the right hon. Gentleman be satisfied that inflation does not make it impractical to go ahead with the pipeline, and thereby lose a great deal of the financial resources which could be used for other purposes?
    Dr. Mabon: The answer to the first two parts of the hon. Gentleman's supplementary question is "Yes". I have noted the hon. Gentleman's other point.
    Mr. Gray: Will the Government take steps to ensure that the information contained in the Williams and Mertz report is kept up to date constantly in a situation which changes all the time?
    Dr. Mabon: Yes, Sir; but when it is published it will be revised to remove commercially confidential information.

    Drax B Power Station
    Mr. Viggersasked the Secretary of State for Energy what sum of money the Government will make available to the Central Electricity Generating Board in respect of compensation for the early ordering of Drax B; and if he will now present a Bill to effect this.
    Mr. Benn: I have informed the Chairman of the CEGB that the Government are prepared to seek parliamentary authority for payments up to a cumulative maximum figure of £50 million.
    As I said earlier, I will shortly be introducing a Bill to effect this.
    Mr. Viggers: As the right hon. Gentleman said earlier that he intended to introduce the Bill tomorrow, I can scarcely complain about the delay, but would not it have been better for the House to have an opportunity to discuss earlier the way in which the order for Drax B was placed? It was done in a most controversial way and was a peremptory interference with the judgment
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    of the Central Electricity Generating Board.
    Mr. Benn: As I made the statement, I think, last July, it would be difficult to complain that there had not been adequate opportunity, through Supply Day debates or in other ways, for the matter to be raised. In the event, we followed the same procedure as the previous Government followed in respect of Ince B. I do not think that it makes sense for the supplying industry, in this case the Generating Board, to plan its own demand without any regard to whether there will be a manufacturing industry able to meet that demand. One cannot cope with severe fluctuations of this kind. I believe that the decision was right when I announced it. There has been plenty of time to discuss it. The Bill will come forward and the House will be able to reach a judgment on it.

    Energy Savings
    Mr. Formanasked the Secretary of State for Energy whether he is satisfied that his Department is making a sufficiently large allowance for energy savings in its forecasts of final energy consumption by the end of the century.
    Dr. John Cunningham: The Department's forecasts contained in the recent Green Paper allow for a 24 per cent. reduction in the final demand for energy below the level it might otherwise have reached by the end of the century. This provides for a reduction in primary energy demand of about 100 million tons of coal equivalent and includes the effect of higher fuel prices as well as Government action. I am satisfied that this represents a reasonable allowance on the basis of present knowledge.
    Mr. Forman: Can the hon. Gentleman confirm that his Department's forecasters are also looking at the low energy scenario put forward by the International Institute for Environment and Development, which strongly suggests that the previous one-to-one relationship between economic growth and energy growth is no longer a reliable guide to future policy?
    Dr. Cunningham: Yes, Sir. I can confirm not only that we are looking at it but that we are having discussions with the institute and others who are producing low energy scenarios. It is right and proper that we should be doing so. However, we do not accept all that has been

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    contained in preliminary notices about that report, as in some newspaper reports published a little while ago.
    Mr. Hooley: Is my hon. Friend aware that in the period from 1960 to 1976 the consumption of energy in the domestic sector was virtually static, according to the consultation document, despite the fact that standards have increased and we have 2½ million extra domestic dwellings? Will he take this into account when making calculations about increased demand and rising standards of living?
    Dr. Cunningham: Yes. We take such facts into account. One of the fundamental differences between our forecasting and that contained in some of the other documents is that we base our forecasts on trends whereas some of the other studies have been based on single years.
    Mr. Gray: What account has the Department taken in its estimates of possible heat and power schemes?
    Dr. Cunningham: We are expecting a full report on the potential of combined heat and power schemes. We had a preliminary report last year. This will be updated and published. I hope, in the not too distant future, in much greater detail. We shall then assess the situation.

    National Coal Board
    Mr. Jim Lesterasked the Secretary of State for Energy when he last met the Chairman of the National Coal Board.
    Mr. Canavanasked the Secretary of State for Energy when he next expects to meet the Chairman of the National Coal Board.
    Mr. Tim Smithasked the Secretary of State for Energy when he next expects to meet the Chairman of the National Coal Board.
    Mr. Moonmanasked the Secretary of State for Energy when he next expects to meet the Chairman of the National Coal Board.
    Mr. Benn: I meet the Chairman of the National Coal Board frequently, most recently last Wednesday.
    Mr. Lester: I thank the Minister for his reply. We are anxious that the posi-
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    tive side of the productivity schemes now being worked should be shown. Now that these are starting to move in the right direction, I hope that the right hon. Gentleman has received assurances from the Chairman of the National Coal Board about the marketing policy. We are anxious that he should be actively concerned within the Commission itself and that Ministers should try to support the British coal industry by replacing East European imports by United Kingdom produced coal.
    Mr. Benn: I am well aware of this, and at all the recent Energy Councils I have been urging this very strongly. I have the figures for subsidies in the EEC, and the House might like to hear them. For every ton of coal produced in Britain there is a subsidy of 50p. For every ton of coal produced in Germany there is a subsidy of £2·60. For every ton of coal produced in France there is a subsidy of £13·30. For every ton of coal produced in Belgium there is a subsidy of £15·80. Therefore, British coal is without doubt produced in the most efficient circumstances in the whole of the Common Market, and I have urged this most strongly at all the meetings that I have attended. I raised it again with the Commission and with the current President in office of the Council of Ministers, Ivan Nørgaard, when I went to Copenhagen recently.
    Mr. Canavan: Did my right hon. Friend discuss with the chairman the effects on the Scottish coal industry of the decision to go ahead with the advanced gas-cooled reactor at Torness? Can he still guarantee a minimum coal-burn of 8 million tons per year which will help to ensure a viable future for the Scottish coalfield, including pits such as Polmaise Colliery in my constituency?
    Mr. Benn: As my hon. Friend knows, I am not the Minister responsible for the generation industry in Scotland, which is a power board—the South of Scotland Electricity Board—responsible to my right hon. Friend the Secretary of State for Scotland. My hon. Friend the Under-Secretary negotiated a coalburn agreement between the National Coal Board and the SSEB last year and the Government are committed to the levels of assistance then announced.
    Mr. Ioan Evans: In view of the increased production, productivity and efficiency of British mines compared with our European counterparts, will my right hon. Friend ensure that the National Coal Board has all the financial resources to invest to maintain its efficiency in the future and to ensure that alternative uses for coal can be considered in view of the increased supply?
    Mr. Benn: At current prices the "Plan for Coal" represents an investment programme costing £4·04 billion. As for other uses for coal apart from European markets and coalburn in the United Kingdom, which I am seeking to stimulate, my hon. Friend the Under-Secretary is responsible for a study which will be reporting to me in the next few days, and subsequently in the House, on advanced methods of using coal—fluidised bed burning, liquefication, and other conversion technologies—which I believe will secure for the industry an outlet that we shall badly need. I hope that that satisfies my hon. Friend.
    Mr. Tom King: As there is general agreement on both sides of the House that the major problem facing the coal industry is that of marketing the production, which we hope to see increased, and as the facts he has given us about the European situation show what an overwhelmingly strong case we have in the Commission, how does the right hon. Gentleman account for the fact that we have failed to get any Community agreement? Is it a measure of the lack of good will felt towards this Government by the Governments of the other major States?
    Mr. Benn: If the hon. Gentleman reflects for a moment on his supplementary question he will realise that there is a conflict of interest between producers and consumers. That exists here and in the Community and elsewhere. It is part of our purpose that we should get a coal-burn scheme that shifts not only from oil to coal, which is obviously beneficial, but from imported to indigenous fuels. The discussions we are having and pressing strongly are designed to meet that need. The hon. Gentleman should not overlook the fact that other countries defend their national interests within the Community with the same zest and zeal that I seek to show.

    North Sea Oil
    Mr. Litterickasked the Secretary of State for Energy what is the tonnage of crude oil brought ashore from the North Sea oilfields during the latest six months for which figures are available; and what was the figure for the previous six months.
    Dr. J. Dickson Mabon: Nearly 21 million tonnes of United Kingdom Continental Shelf crude oil were brought ashore during the six months ending January 1978. This compares with about 18 million tonnes during the previous six months.
    Mr. Litterick: I am grateful for that answer. When does my right hon. Friend expect the North Sea fields to peak in terms of deliveries? What percentage of our total energy consumption at that time will that peak output represent?
    Dr. Mabon: That is an easy question. We hope to reach self-sufficiency in the calendar year 1980 and that we shall sustain self-sufficiency right through the 1980s. By how much we will be in excess of self-sufficiency—that is about 100 million tonnes—it is difficult to say, but it might be about as much as 20 million tonnes, 30 million tonnes, or even 40 million tonnes. It is very difficult to make a decision about the 1990s.
    Mr. Patrick McNair-Wilson: The Minister has expressed concern about the level of exports of North Sea oil. Is he satisfied that these are in the right sort of parameters?
    Dr. Mabon: No. We hoped that we should try to find up to two-thirds in the United Kingdom. At present the figure is running, over the past 12 months, at 58 per cent. That is still within the phrase "up to two-thirds", but "up to two-thirds "means" up to two-thirds". It is largely a matter of the nature of the market. The market for low sulphur oil, such as we have in the United Kingdom, is extremely attractive and it is therefore very difficult to influence the position of exports.
    Mr. Tim Rentonasked the Secretary of State for Energy whether he will institute an investigation of the likely

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    yield to the National Oil Account from North Sea oilfields in the years 1978, 1979, 1980 and 1981; and whether he will publish the results in the Official Report.
    Dr. J. Dickson Mabon: The latest forecasts of yield from royalties on North Sea oil and gas were set out in the answer by my right hon. Friend the Financial Secretary to the Treasury to the hon. Member for Croydon, Central (Mr. Moore) on 21st November 1977.
    Mr. Renton: Subsequent to that, to what extent are the newspaper reports correct that the yields to the National Oil Account are proving much less, thanks to increased tax allowances being claimed by the oil companies? Is it, for example, correct to say that the yield to the National Oil Account this year will be less than the financial losses of the British Steel Corporation?
    Dr. Mabon: As I do not know the answer to either of those questions, I cannot answer one way or the other to either. I would merely say to the hon. Gentleman that we have to accept that we are still in the development phase in the North Sea and the oil companies rightly deserve the tax allowances that we have given to them in order to develop the fields commercially and properly. It may mean that there will be some delay in gathering in the tax moneys, but the figure of £5 billion of tax collection up to 1982 remains as confirmed in the reply given on 21st November 1977.
    Mr. Hardy: Is it not the case that there could be some serious disadvantages as a result of the most unsatisfactory arrangements made during the fourth round licensing for which the Tory Government were responsible and that some blocks negotiated in that round have still not been developed as a result of those unsatisfactory arrangements?
    Dr. Mabon: That is very true. It will be seen from the hand-back of the fourth round blocks which we got only in the last week or so that we have not had the uptake that we should have had. We expect the fifth round to be much more successful than that.
    Mr. Gray: Will the Minister clarify the point that he made just now when he quoted the figure of £5 billion? I think he said 1982, but should he not have said
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    1980? If he does not know the answer, will he agree that it is now time that a ceiling was put on the amount to which the National Oil Account could grow, so that over a given ceiling the revenue would automatically be transferred to the Treasury?
    Dr. Mabon: I should not like to answer the second part of the hon. Gentleman's supplementary question without notice. On the first part, yes, I meant to say 1980. I thought I said 1980, but if I said 1982 I apologise.

    European Community
    Mr. Macfarlaneasked the Secretary of State for Energy when he next plans to meet the European Economic Community Energy Commissioner.
    Mr. Benn: I expect to meet Dr. Brunner at the next meeting of the Council of Energy Ministers, which is provisionally scheduled for 30th May, and possibly beforehand.
    Mr. Macfarlane: At that meeting, will the Secretary of State take urgent steps to discuss the recent two rounds of the nuclear hearings in Brussels? Once again, the British nuclear industry and the EEC nuclear industry seem to have taken yet another buffeting at the hands of those who are anti-nuclear power. What kind of dialogue can he initiate to ensure that the British nuclear industry gets a well deserved boost, particularly at any future hearings that the EEC Commissioner may decide to hold?
    Mr. Benn: Since the United Kingdom was the first country to adopt a civil nuclear programme, and since we now generate 13 per cent. of our electricity by nuclear power—which will rise to 20 per cent. when the existing advanced gas-cooled reactor stations are completed, and to 25 per cent. beyond that—and since we are the third country in the world in installed capacity and electricity generated by nuclear power, I am not very concerned at criticism made elsewhere.
    As for the Community, it is understood—and I have made it clear—that nuclear decisions must be taken by Ministers responsible to Parliament. Whatever discussions there may be—and I welcome them—in the Community or elsewhere, decisions about nuclear policy must be

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    made in such a way as to be accountable to the House of Commons.
    Mr. Woodall: When my right hon. Friend next meets the Commissioner and other Energy Ministers of the European Community, will he impress on them that this country can produce power, and particularly coal, cheaper than any other member of the Community? Will he try to ensure that the other member States stop importing coal from elsewhere and start to buy British coal?
    Mr. Benn: I have made that point most robustly, and so has my hon. Friend the Under-Secretary of State, at Council meetings. I have also proposed that Council meetings should be held in public so that people may know what is said by Ministers. Were the transcripts to be made available, the argument that my hon. Friend and I have put forward would be quite clearly seen to be on the record. I attach the greatest possible importance to the point.

    Domestic Insulation
    Mr. Arnoldasked the Secretary of State for Energy whether he will take steps to raise in the European Council of Ministers (Energy) Community—assisted home insulation schemes.
    Dr. John Cunningham: A draft EEC directive on the modernisation of existing buildings has already been proposed by the EEC Commission. This proposal is being revised in the light of additional data provided by member States. Substantive discussions will be initiated as soon as this is done.
    Mr. Arnold: Will the Minister agree that the European Commission has been actively pressing the United Kingdom Government to implement the scheme which was recently approved by the European Parliament, and has expressed some concern about what it sees as unreasonable delay? Will he also confirm that there are no disadvantages to the United Kingdom is adopting this aproach?
    Dr. Cunningham: As yet, there have been only preliminary considerations in the Council working party, and in no sense is it true to say that there is a finally agreed detailed scheme. While we support the aims of the scheme—that is, more houses insulated and more jobs created—we have questioned some of the
    964
    figures behind some of the arguments. That is why the detailed work is now going on. But in no sense, especially in view of my right hon. Friend's statement of 12th December, can we be accused of wanting to delay insulating more houses in the United Kingdom.

    Energy Conservation
    Mr. Hannamasked the Secretary of State for Energy for how long the encouragement and promotion of energy conservation measures within existing housing have been under general consideration by the Government, and when he expects to arrive at conclusions.
    Mr. Rostasked the Secretary of State for Energy if he will make a report on the progress achieved on the energy conservation programme.
    Dr. John Cunningham: The Government's first energy conservation measures were announced in this House on 9th December 1974. The White Paper of July 1976, Cmnd. 6575, announced further action and more measures were announced on 26th September 1977. The programme announced on 12th December 1977 substantially strengthened the Government's policy. As my right hon. Friend made clear last December, our energy conservation programme is a continuing one, and we shall bring forward further measures as and when necessary.
    Mr. Hannam: Why are the Government taking so long in applying the energy conservation measures to the private sector of housing? With specific regard to the Department of the Environment's building regulations affecting the design of the outside shell of buildings, what role is the Department playing in the drawing up of new building regulations concerning the size of the area of windows in these buildings, as there is an input of heat and a saving of energy and lighting through the use of glass windows?
    Dr. Cunningham: Within the terms of the 1976 White Paper, it is possible now to obtain assistance to insulate houses in the private sector. I wish that Conservative Members, when pressing us to get on with these things, would remind their right hon. Friends on the Front Bench, who are continually pressing us to reduce public expenditure, that they

    965
    should decide which way they would like it to be.
    As for the more detailed question on building regulations, I cannot answer that, but I will draw the hon. Gentleman's remarks to the attention of my hon. Friend the Under-Secretary of State for the Environment.
    Mr. Rost: Does not the Minister yet appreciate that energy conservation can reduce public expenditure, because it produces savings in public expenditure? How can the Minister be taken seriously with his energy conservation programme until he sets some specific target over a specific timescale?
    Dr. Cunningham: The Government are well aware of the advantages of public expenditure. What I am saying is that the Opposition cannot have it both ways. It is already clear that anyone who insulates his own house will save his own money, and be paid back very quickly, whether he lives in a council house or in a private house.
    I am not convinced of the arguments for setting long-term targets. As the hon. Gentleman well knows, this is a very disaggregated problem, which needs painstaking and detailed proposals in order to get to grips with it.

  OVERSEAS DEVELOPMENT

    Aid Programme
    Mr. Ioan Evansasked the Minister of Overseas Development if she will make a statement on the improvement in the official aid programme in order to reach the United Nations target of 0·7 per cent. of gross national product.
    The Minister of State for Overseas Development (Mrs. Judith Hart): Overseas aid is now planned as the fastest growing public expenditure programme, and I hope we shall move faster towards the target as a result. In 1976, official development assistance amounted to 0.38 per cent. of gross national product. It is too soon to give a figure for 1977.
    Mr. Evans: In view of the improvement in our national finances, will my right hon. Friend seek to persuade the Chancellor of the Exchequer to increase overseas aid in his Budget Statement? Would
    966
    it not be better to be spending more on overseas aid rather than on armaments?
    Has my right hon. Friend considered the possibility of using trained teachers and other skilled workers in this country to help in an overseas development programme, thereby reducing unemployment?
    Mrs. Hart: We try to make maximum use, under the volunteer programme and other programmes, of teachers who may assist in the developing countries.
    I have every sympathy with my hon. Friend on his first point, but he will recognise that the proper time for considering these matters is during the public expenditure discussions. Overseas aid did rather well the last time round.
    Mr. Rhodes James: Is the Minister aware that the problem of overseas aid is, alas, not simply one of money? Can she give any indication of any development in the Government's thinking about the support and encouragement which can be given to voluntary organisations working on overseas development matters?
    Mrs. Hart: I think that the hon. Gentleman will know that two years ago we introduced the pound-for-pound scheme, which has been a very helpful stimulus for us and for the voluntary agencies. It is a question of defining projects which are suitable for support. I think it is true to say that we have supported from ODM a very high proportion of the products submitted to us by the voluntary agencies, but I am always anxious that they should identify more of them.
    Mr. Stoddart: Did my right hon. Friend notice the publication of the figure of our net contribution to the EEC of £337 million? That is a contribution, as she will know, to the richest group of countries in the world. Could she say how near to the target of 0·7 per cent. of gross domestic product we would get if we contributed that £337 million to the poorest countries in the world?
    Mrs. Hart: I do not think that that point really arises, because our contribution to European Development Fund funding represents part of our own account to the Development Assistance Committee of the Organisation for Economic Co-operation and Development. It is all contained within the same total.

    967
    It is true, of course, that we have been anxiously seeking to persuade our colleagues in the EEC to give greater attention and a higher proportion of their budget to the poorest non-associated countries, as against the associates.
    Mr. Luce: Although the official aid programme has an extremely important role to play in alleviating acute poverty in the world, does the right hon. Lady recognise and accept that it is a question not only of the work of voluntary bodies but of preferential trade policies, private investment, and technical cooperation from the Western world? All these are very important engines of development in the Third world.
    Mrs. Hart: Yes, and I am sure that the hon. Member is familiar with some of the remarks that I have made which repeat his sentiments on this matter.
    Mr. Tim Rentonasked the Minister of Overseas Development whether she intends to review the overall commitment of Her Majesty's Government to overseas aid in the light of the increasing trend to protectionism among Organisation for Economic Co-operation and Development countries.
    Mrs. Hart: No, Sir. Our overall commitment is firm.
    Mr. Renton: Is it not paradoxical that those of the right hon. Lady's colleagues who are most strident in calling for increased protectionism are among those who are also keenest on increased aid? Does she not agree that there is a clear conflict of objectives here which is bound to become more acute as the worldwide recession deepens?
    Mrs. Hart: It is the case that there can be conflicts. I am not sure whether the hon. Member is aware, as the Select Committee on Overseas Development is aware, that the Government have initiated a study on adjustment assistance, which goes to the kernel of this problem and which I hope will assist us in working out what the policy for the future will be. I hope that the Opposition will be equally interested in working out viable solutions.
    Mr. Litterick: Is my right hon. Friend's Department prepared to reconsider Britain's overseas aid commitments in certain respects in view of the intensification
    968
    of State terrorism by certain Conservative Governments in Latin America?
    Mrs. Hart: I think that our polices have taken account of this. If I may, I shall write to my hon. Friend with the details of our full programme in Latin America. He will see that very consciously we do not support regimes of a terrorist character. There are one or two countries in which we seek quite deliberately to assist the very poorest groups—for example, in Paraguay, the Paraguayan Indians. But I think my hon. Friend will find that on the whole our policy meets his requirements.

    Malawi
    Mr. Arnoldasked the Minister of Overseas Development what steps she is taking to assist the Malawi Government in the commercial development of the United Kingdom-funded Vipyha forestry project.
    The Parliamentary Secretary to the Ministry of Overseas Development (Mr. John Tomlinson): The commercial exploitation of the plantations is being negotiated between the Malawi Government and potential investors. We have allocated a total of nearly £3 million for their maintenance and further development up to 1981.
    Mr. Arnold: Is not it the case that a letter of intent was signed recently by a commercial consortium for the construction of a pulp and paper mill at Vipyha? Will the Minister indicate what are the prospects for commercial participation in this next phase of the development, in addition to the German and Scandinavian interests which have been mentioned already?
    Mr. Tomlinson: The hon. Member is correct. The prospects at the moment are brighter than they have been at any time before. Negotiations last month between the Malawi Government and an international consortium of six firms, one of which was a British firm, resulted in the signing of a letter of intent for a 180,000-ton mill and the establishment of a joint co-ordinating and promotion committee which will try to finalise the arrangements, including finance, for the mill by the end of this year.
    Mr. Spearing: My hon. Friend mentioned the sum of £3 million. Will this be over a single year or a number of

    969
    years, and will he indicate the proportion of total aid which will be given to Malawi of which this sum constitutes a part?
    Mr. Tomlinson: The £3 million is for further development between now and 1981. My recollection is that it is divided roughly equally over the years to 1981. If that proves not to be correct I shall write to my hon. Friend. That figure represents about 12 per cent. of our bilateral capital aid which has been offered to Malawi for the period 1978–81.

    Crown Agents
    Mr. Luceasked the Minister of Overseas Development whether she anticipates any further sums of public money will be required to be made available to the Crown Agents in the light of their losses on own account activities.
    Mrs. Hart: The deficit remaining after the £90 million grant which we propose to make this financial year relates almost entirely to the Crown Agents' Australian property holdings. Whether further sums will be required will not be known until the financial results of the Crown Agents' disengagement from those investments are clear.
    Mr. Luce: If the Government decide to provide further taxpayers' money for the Crown Agents, will the right hon. Lady make it clear that on the next occasion she will make the announcement in the form of a statement rather than by way of a Written Answer to a Question, so that the House may have an opportunity to put questions to her? Since the Government intend to make the Crown Agents fully accountable to Parliament, when do they intend to legislate on this matter?
    Mrs. Hart: On that second question, as soon as we can. As the hon. Gentleman will know, there are great difficulties at present pressing upon parliamentary legislation. But it will be done as soon as possible.
    As for the hon. Gentleman's first question, I am sure that in consultation with my colleagues I can give that assurance. There were difficulties on the last occasion. There were pressures on parliamentary time and there was the need to inform the House before final publication of the public expenditure White Paper.
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    As I said in my Written Answer, there were no new factors arising. It was essentially a question of being able to make more money available.
    Mr. Skinner: Will my right hon. Friend confirm that the dabbling in English and Continental was among the reasons for some of the losses in the Crown Agents affair? Does she accept that there is an urgent need for an investigation into the sale of English and Continental, which, according to some peeple, was the result of the involvement of Osgoodby, one of the Crown Agents? Did my right hon. Friend and the Treasury give a seal of approval to the transfer of English and Continental?
    Mrs. Hart: On that first point, certainly English and Continental, with all the other investments in property and secondary banking during the period up of 1974, was the major contributory cause to the Crown Agents' losses. On the two specific matters which my hon. Friend raised, I cannot give a clear answer at the moment though I am prepared to look into them. But I am sure my hon. Friend recognises that I can take responsibility only for the period before 1970 and after 1974, with a certain interval since then.

    Developing Countries
    Mr. Formanasked the Minister of Overseas Development if she will make a statement about the Government's policy with regard to the writing off of the outstanding official debts of the poorest developing countries.
    Mr. Spearingasked the Minister for Overseas Development if she will make a statement on the outcome of the recent Trade and Development Board meeting in Geneva.
    Mrs. Hart: At the UNCTAD Trade and Development Board meeting earlier this month, I am pleased to report that a significant measure of agreement was reached on two issues of considerable importance in the North-South dialogue. First, in the field of aid policy, we and other developed countries were able to join in an undertaking to seek to adopt measures to adjust the financial terms of past aid, or other equivalent measures, for those poorer and least developed countries facing serious development

    971
    problems. We are now urgently examining the scope and modalities of any scheme which we might adopt following this undertaking. Second, in the debt field, we reached agreement on four basic concepts on future operations relating to the debt problems of developing countries. Further work in UNCTAD will take account of these common concepts.
    With permission, Mr. Speaker, I shall publish in the Official Report a copy of the operative paragraphs of the resolution adopted by the meeting.
    Mr. Forman: If this multilateral progress in UNCTAD and elsewhere gets bogged down, is the right hon. Lady prepared to recommend to her colleagues that the Government should consider proceeding unilaterally on the question of official debt for the poorest developing countries? Can she confirm that, if that were to be the case, she would see that countries with regimes hostile to Britain or tyrannical to their people, such as Uganda and Kampuchea, would be excluded from such a concession?
    Mrs. Hart: On the first question, I do not think that this really arises, because my understanding from the TDB meeting in Geneva is that all the developed countries subscribe to the phrase
    "We will seek to adopt these measures."
    It is a question now for us to consider whether we do it case by case or across the board for the poorest countries. But I can assure the hon. Member that the Government will take into account his last point, as I do myself. Clearly, there might be exceptions that we would wish to make.
    Mr. Spearing: Although the whole House will welcome the results of the conference, does my right hon. Friend agree that countries which have not incurred debts because they did not have the products whereby they could borrow will not be helped by this? Can she say whether she was able to contribute to the progress of the conference in her capacity as Minister in attendance?
    Mrs. Hart: I think that the essential factor which arises here is that there is obviously a real inconsistency between giving grants, as we have done for the last three or four years, to the poorer
    972
    developing countries and at the same time clawing back from them debt repayment and servicing. To the extent that there are countries—there are very few amongst the poorest countries—for which this would not provide advantage, there is plenty of opportunity open within the aid programme to increase our level of aid to them, and we seek to do this within the terms of the White Paper "Aid to the Poorest". The two are quite different.
    Mr. Rhodes James: While strongly supporting the two points made by my hon. Friend the Member for Carshalton (Mr. Forman), may I ask the Minister for an indication of the time scale that we are discussing? How soon can we expect a more positive statement rather than the vague phrase "seeking to adopt measures"?
    Mrs. Hart: I suppose it will not take my colleagues and myself more than a couple of months to determine the modalities of this matter, and thereafter I should be able to report to Parliament on the results.
    Following is the text:
    Operative paragraphs of the Resolution adopted by the UNCTAD Trade and Development Board meeting
    A

    1. Members of the Board considered a number of proposals made by developing and developed market economy countries.

    2. The Board recognises that many poorer developing countries, particularly the least developed among them, face serious development problems and in some instances serious debt service difficulties.

    3. The Board notes with interest the suggestions made by the Secretary-General of UNCTAD about an adjustment of terms of past bilateral official development assistance (ODA) in order to bring them into line with the currently prevailing softer terms.

    4. Developed donor countries will seek to adopt measures for such an adjustment of terms of past bilateral ODA, or other equivalent measures, as a means of improving the net ODA flows in order to enhance the development efforts of those developing countries in the light of internationally agreed objectives and conclusions on aid.

    5. Upon undertaking such measures, each developed donor country will determine the distribution and the net flows involved within the context of its own aid policy.

    6. In such a way, the net flows of ODA in appropriate forms and on highly concessional terms should be improved for the recipients.

    973

    7. The Board recommends that the fifth session of the Conference should review measures taken in pursuance of the above.

    B

    1. In accordance with resolution 94(IV), the Board has reviewed the intensive work carried on within UNCTAD and other international fora on the identification of those features of past situations which could provide guidance for future operations relating to debt problems of interested developing countries.

    2. Notes with appreciation the contributions made by the Group of 77 (TD/B/670, Annex II) and by some Group B members (TD/B/L.498).

    3. Common to the varying approaches in this work are certain basic concepts which include inter alia:

    (i) International consideration of the debt problem of a developing country would be initiated only at the specific request of the debtor country concerned.

    (ii) Such consideration would take place in an appropriate multilateral framework consisting of the interested parties, and with the help as appropriate of relevant international institutions to ensure timely action, taking into account the nature of the problem which may vary from acute balance-of-payments difficulties requiring immediate action to longer-term situations relating to structural, financial and transfer of resources problems requiring appropriate longer-term measures.

    (iii) International action, once agreed by the interested parties, would take due account of the country's economic and financial situation and performance, and of its development prospects and capabilities and of external factors, and bearing in mind internationally agreed objectives for the development of developing countries.

    (iv) Debt reorganisation would protect the interests of both debtors and creditors equitably in the context of international economic co-operation.

    4. The Board requests the Secretary-General of UNCTAD to convene a meeting of an Intergovernmental Group of Experts to recommend to the tenth special session of the Board prior to the fifth session of the Conference detailed features for future operations relating to debt poblems of interested developing countries taking into account the above-mentioned concepts and in the light of proposals made on this issue.

EUROPEAN COMMUNITY (COUNCIL OF MINISTERS' MEETINGS)
The Minister of State, Foreign and Commonwealth Office (Mr. Frank Judd): With your permission, Mr. Speaker, I shall make a statement about business to be taken by Ministers of the European
974
Community during April. The monthly written forecast was deposited on Thursday 16th March.
At present, six meetings of the Council of Ministers are proposed for April. Finance and Foreign Ministers will meet jointly on 3rd April, Agriculture Ministers on 3rd and 4th April and also on 24th and 25th April, Foreign Ministers on 4th April, Finance Ministers on 17th April and Development Ministers on 25th April. Heads of State and Government will also attend a European Council meeting in Copenhagen on 7th and 8th April.
Finance and Foreign Ministers are expected to discuss the Commission's assessment of budgetary problems.
Agriculture Ministers are expected to resume their discussions on CAP prices for 1978–79 and Mediterranean agriculture. They are also expected to consider agrimonetary matters, proposals for milk marketing boards, producer groups, market arrangements for mutton and lamb, and external fisheries questions.
Foreign Ministers are expected to discuss preparations for the European Council meeting, direct elections to the European Assembly, Japan, the European Foundation, Greek accession, steel imports, staff regulations and GATT multilateral trade negotiations. Foreign Ministers will also meet in the margins of the Council for a discussion on political co-operation.
Finance Ministers are expected to review progress in insurance co-ordination since March 1977.
Development Ministers are expected to discuss aid to non-associates, reciprocal implications of development co-ordination policy and other policies, and the volume and distribution of aid. They may also consider the legal basis of food aid.
Mr. Luce: May I put three questions to the Minister arising from that statement? First, referring to the meeting of Agriculture Ministers, he mentioned the proposals for the milk marketing boards. Will he give an assurance that the main functions of the milk marketing boards will be preserved?
Secondly, he referred to discussions on external fisheries matters. Will he say what progress is likely to he made on the internal fisheries problems that we

975
face in this country? Thirdly, the Minister referred to the meeting of the European Council. Will the British Government press for a specific date to be set for holding direct elections? Also, will the Minister avoid the use of jargon—whatever are agrimonetary matters?
Mr. Judd: I can assure the hon. Member that, like him, I, too, am holding a campaign to eliminate this kind of EEC jargon. I deliberately refrained from referring to "sheepmeat", a term which has rather irritated me during the past few months.
On the question of the milk marketing boards, the Government are deeply attached to the principle of the marketing boards and I am glad that the Commission understands our position and seems to support it.
We are determined to stand firm on internal fisheries. It was a great disappointment to us that the January meeting of Agriculture Ministers could not make any meaningful progress. I have repeatedly told the House the principles we feel are at stake. We shall not compromise on the fundamental issues facing the British fishing industry. We hope that reason will prevail, but in the meantime we are concentrating on conservation, which is crucial to preserve our stocks.
On direct elections, we shall be putting forward specific ideas about when we think it would be most appropriate to arrange these in 1979.
Mrs. Dunwoody: When my hon. Friend meets his opposite numbers in the foreign affairs Ministries in Europe, will he tell them that we are worried about the leisurely pace at which the Commission is producing its opinion on enlargement of the Community? It has not produced an opinion on Portuguese membership and it has taken a long time over the talks about Mediterranean policy in general.
Mr. Judd: Our position on enlargement is absolutely clear. We are in favour of a Community of 12. The Foreign Secretary has been at pains to point out at the various meetings that we are dissatisfied that more rapid progress has not proved possible on Portugal and Spain. We are keen on Greek accession, but we want to see evidence
976
that the Commission is moving forward on the others as well.
Mr. Henderson: In saying that no further discussions on the internal fishery regime will take place at the forthcoming meeting, is the Minister telling us that we have reached a deadlock? Will he assure us that there are no proposals being circulated which will be sprung on us suddenly and which will be against the interests of the British fishing industry?
Mr. Judd: The Government will not accept—nor will the House—any proposals that are fundamentally against the British fishing industry's interests. We are determined to persuade our partners in Europe what is at stake and why it is important for them to recognise our interests. We are not at the stage yet where it is appropriate to seek a formal meeting.
Mr. Christopher Price: Does my hon. Friend think that it is wise to fix a date for direct elections at a time when the Prime Minister of Luxembourg is threatening to boycott them if we do not guarantee to keep the Parliament in Luxembourg for ever? Also, has he seen the recent plans to build yet another Parliament building and to get the European Parliament to sign a contract for building it, and some flats in Rue Maillot in Brussels? Will the Council of Ministers say anything about this? The Council has always claimed that the business of where the Parliament is held is its job and not that of the Parliament.
Mr. Judd: The views of the European Assembly are relevant but the final decision on this matter is for the Council. I assure my hon. Friend that we are determined to avoid any unnecessary extravagance in that respect.
Mr. Wiggin: Is the Minister aware that when it comes to agricultural marketing boards, the major problem is the Government's failure to announce any future for the Potato Marketing Board? His Agricultural Minister colleagues announced that discussion on this had been held up in Europe. Will this subject be on the agenda at the May meeting?
Mr. Judd: It is not specifically on the agenda at this juncture. However, I

977
understand the concern felt and I am glad that the hon. Member has reminded me of it. I shall bring the matter to the attention of my right hon. Friend.
Mr. Spearing: The Minister mentioned the Commission's view about the milk marketing boards. However, the document that the Commission has put forward is most unsatisfactory if we are to retain our daily pinta and the milk marketing boards. Will the Government stand firm and not agree to anything that does not maintain the milk marketing boards intact?
Mr. Judd: The papers that my hon. Friend has referred to have been recommended for debate and he will have a chance to put forward his views. Our judgment is that the Commission is broadly behind our system and that that is a good situation on which we should build.
Sir John Rodgers: Does the Minister not think it a waste of public money for the countries of the EEC to meet in three different places—Brussels, Luxembourg and Strasbourg? Would it not be better for the offices to be confined to Brussels and for the Parliamentary Assembly to meet in Strasbourg?
Mr. Judd: I know that hon. Members on both sides of the House have strong views on this subject. I repeat what I have already said—that it is our objective, in the spirit of what has been agreed on the future of the European Assembly, to ensure that there is no unnecessary extravagance and that matters are arranged as economically as possible.
Mr. Skinner: Will the Minister tell the Foreign Secretary that if he wants to save his seat in Devon, where a growing number of people are rightly joining the anti-Common Market bandwagon, he had better stop being a Euro-fanatic and tell the other Foreign Ministers that we shall not have direct elections in 1979? If the Minister wants to get rid of jargon, why does he not start with decimalisation and then follow it with metrication, CAP and VAT? Why do we not get out of the Market and drop the whole thing?
Mr. Judd: Decimalisation and metrication are not matters which refer exclusively to the EEC as such.
978
On the other matter, I am sure that my hon. Friend, on reflection, having examined what my right hon. Friend the Foreign Secretary has said and done since his appointment as Foreign Secretary, will agree that working in the interests of the British people within the context of the Community is high on his list of priorities.
Mr. Fletcher-Cooke: When the Foreign Ministers meet to discuss political cooperation "on the margin", as I think the Minister for some reason described it, will they be considering whether they can achieve any common position on the events in the Arab-Israeli world, or have the EEC Ministers finally given up all hope of achieving a common position in that respect?
Mr. Judd: A helpful statement in the name of the Nine was issued under the British Presidency last year on the Middle Eastern situation. We still see those principles as fundamental if there is to be a lasting solution. Of course we are watching the situation closely with our partners in the Nine. We see the situation as sufficiently grave to necessitate positive results rather than as a matter of making statements for the sake of statements.
Mr. Ioan Evans: In view of the high unemployment in Common Market countries, may I ask my hon. Friend to include the subject of unemployment for discussion on the agenda of the Heads of State meeting in an effort to bring Europe out of its present economic recession?
Mr. Judd: It has become the normal practice at meetings of the European council to discuss the economic problems in the Community as a whole. It is inconceivable that the meeting of the European Council in April will not discuss the issue of unemployment, particularly bearing in mind the deep and fundamental concern of my right hon. Friend the Prime Minister about the position.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I propose to call the five hon. Members who rose to their feet, but I hope that they will co-operate by being brief.
Mr. Biffen: Will the Minister be a little more forthcoming about the Government's negotiating position on milk

979
marketing boards, and will he answer one specific question? Are the Government committed to maintaining the present restrictive arrangements under which liquid milk cannot be imported into this country from other EEC countries?
Mr. Judd: We are determined—and we shall stand by this answer—to see through and support the system of milk marketing boards as it now operates in this country.
Mr. Grylls: Has the Minister discussed within the European Council the subject of Her Majesty's Government using British overseas aid to give ships away to countries such as Vietnam? Will he be very frank about this matter.
Mr. Judd: That is a matter for my right hon. Friend the Minister of State for Overseas Development, and it is not a matter specifically related to the EEC as such.
Mr. Arnold: Reverting to the supplementary question asked by the hon. Member for Crewe (Mrs. Dunwoody), and leaving aside the subject of Spain and Portugal, may I ask when we may expect to see the formal opening of negotiations with Greece?
Mr. Judd: If I were to reply "as soon as possible", I am sure that the hon. Gentleman would say that he was not satisfied with that answer. But I must tell him that we are determined that preliminary work should be completed within months. I hope that we shall be getting into the final negotiating position towards the end of this year.
Mr. Dykes: What has happened to the proposal to form a European export company which, if kept under proper control, would be beneficial to British companies and underdeveloped countries?
Mr. Judd: I note the hon. Gentleman's concern. I shall bring the point to the attention of my colleagues in the Treasury, who no doubt on this occasion will be able to give an appropriate reply.
Mr. Rhodes James: Why is it that the Foreign Ministers' meeting on 4th April has not included in a full agenda the subject of the Middle East? Are Ministers not aware of the extremely critical situation in that area, and why has that subject been excluded?
Mr. Judd: I do not think the hon. Gentleman has any reason to believe that that subject will be excluded. I have said that the Foreign Ministers at the time of their meeting will be able in the margin, which is a technical phrase, to discuss political issues. No doubt they will consider the Middle East in the context of their discussions.

TANKER "AMOCO CADIZ"
The Under-Secretary of State for Trade (Mr. Clinton Davis): The "Amoco Cadiz", an American-owned tanker registered in Liberia with a cargo of 223,000 tons of light Iranian and light Arabian crude oil, lost steering control on 16th March off Ushant. It was subsequently taken in tow by a tug, but the tow parted and the tanker drifted ashore on rocks late that night some three miles from Portsall on the North Britanny coast and about 90 miles from both the Lizard and the Channel Islands.
As soon as it was clear on the morning of 17th March that there would be coastal pollution, we offered assistance to the French authorities and subsequently to the Channel Islands. We also sent to the scene of the casualty a pollution expert from Warren Springs Laboratory and a coastguard inspector to establish personal liaison with the French authorities. I have maintained close contact with them over the weekend through my Department's emergency operations room which has been manned throughout.
About half the cargo is thought to have spilled from the tanker, which broke in two on Friday, and the rocks and shallow water near the wreck make pumping out operations extremely difficult. There is heavy pollution on the North Brittany coast and this has spread south-west and north-east on the French side of the Channel. Yesterday evening we agreed to a French request to send five spraying vessels to deal with the pollution to the north-east of the wreck, thus providing some protection to the Channel Islands as well as to the French coast. Three of the vessels, to be accompanied by a naval frigate, are now in position, but there is a Force 8 wind, which will make spraying operations difficult.
These vessels are being supplemented as necessary in consultation with the French authorities. Other vessels and aircraft are

981
at readiness at Plymouth, though there is no immediate threat to our coasts.
I am sure the whole House will join me in expressing to the French authorities our profound concern and sympathy on the occurrence of this disaster, parallelled only in scale by the "Torrey Canyon" disaster 11 years ago. While the collaboration between our two Governments on Channel safety and anti-pollution measures is very close, I have made it clear that I should like to have an early meeting with my French opposite number to discuss all the lessons of this disaster.
Mr. Parkinson: Is the Minister aware that we join him in his expression of sympathy to the French authorities, and in particular to the people of Brittany whose fishermen and tourist industry may face a very bleak summer? May I also assure him that we welcome the Government's decision to offer aid to the French Government?
Is the Minister satisfied that proper arrangements have been made to protect the Channel Islands and the West Country coastline? Does he agree that it was ironic in the extreme that this terrible accident took place on the eve of the first World Maritime Day? Does not this accident confirm the importance of the work of IMCO in seeking to raise international shipping standards? Does it not further underline the need to improve arrangements for shipping safety in the Channel?
Mr. Davis: I am grateful to the hon. Gentleman for his remarks about the declaration of sympathy for the French authorities and for the people of Brittany, who have been afflicted by this disaster. On the subject of the Channel Islands and the West Country, I must inform the hon. Gentleman that we are doing everything possible to ensure that the maximum degree of protection is afforded to both areas.
I think that it is perhaps a bitter irony that this disaster occurred on World Maritime Day, but whenever it happened it would have been a disaster. It underlines the need for international action through the United Nations international body that is responsible for maritime affairs. Although it is much too early to judge, there is some satisfaction to be derived from the fact that at the last IMCO conference on tanker safety and
982
pollution a consensus was reached about certain protections that should be afforded to the way in which tankers operate in future.
The hon. Gentleman asked me whether there is anything more that we can do. I believe that we have maximised the effort that we can undertake. The Royal Navy will participate to the full.
Mr. Prescott: My hon. Friend has noted the comparison that may be made between this incident and the "Torrey Canyon" affair. We are fortunate that there has been no loss of seafarers' lives on this occasion, but will he recognise that yet again we are faced with the failure of a flag of convenience country to observe international conventions? That is why my hon. Friend should be addressing his attention to calling all European nations to come together to enforce regional agreements and to ensure that the standards and competence of the crews of such vessels are up to the standards that we enforce in this country.
Mr. Davis: There is to be an IMCO conference in June and July to deal with international standards of certification for seafarers to ensure that we achieve a higher standard of competence in future. That is warmly welcomed by the United Kingdom.
My hon. Friend should not expect me to answer the first part of his question. Obviously, there is bound to be an inquiry into this sad affair. It would be wrong of me to attempt to prejudge responsibility for the incident, which, of course, is bound to be a most difficult issue.
Mr. Stephen Ross: Is the Minister aware—I am sure he is—of the quite sickening effect that these continuing disasters are having on the populace in this country and throughout the world, as well as the sad effects on wildlife, which always suffer in vast numbers whenever there are oil slicks? Why is it that the United Kingdom still continues with the spraying of detergents and does not adopt the process of booms and skims that has been taken up by most countries throughout the rest of the world? Is the hon. Gentleman able to assure us that skims and booms will be available to protect Britain's South Coast resorts? What is

983
happening about the pumping out of the remaining oil from the tanker?
Mr. Davis: With respect, I do not think that the hon. Gentleman has applied his mind properly to these issues. It must be understood that we do not rely merely upon detergents. Indeed, we have a reluctance to use detergents. We have to adapt to meet different circumstances. The fact is that booms and skimmers would not operate in the prevailing conditions.
Mr. Stephen Ross: How do we know that?
Mr. Davis: Booms and skimmers would not operate off the French waters at present. There is a Force 8 gale. There has been a profound research study into booms and skimmers, which is nearly completed. I hope that the results will be published shortly. That does not mean that in the interim booms and skimmers are not available. The fact is that they are.
Mr. Norman Atkinson: My hon. Friend has referred to the international conference on tanker safety. Does he agree that the time has come when the maritime nations of the world can no longer accept the situation where good marine and ship design is sacrificed for the sake of transport economics? Does he agree that this disaster demonstrates that single-screw, single-steering gear ship designs of this sort, with crude tonnages of the sort involved in this disaster, are totally inadequate, and that Governments should now insist upon the sort of tanker design that would eliminate the vulnerability that this ship in distress demonstrated yet again? Will my hon. Friend consider the recommendations that have been made by marine engineers over the years for changing ship design in that direction?
Mr. Davis: I am not an expert on ship design. It would be presumptuous of me to make declarations about what is and what is not the right thing to do in the circumstances. There are international requirements dealing with steering gears. It would be wrong to convey a different impression. My hon. Friend is once again inviting me to make a comment that could easily have the effect of
984
prejudging an inquiry that is bound to take place.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I ask for briefer questions. This is the time not for arguing the case but for seeking information.
Mr. Patrick McNair-Wilson: Is the Minister aware that at Fawley I have the largest oil refinery in Britain, which obviously creates much local concern? Is the hon. Gentleman further aware that in the White Paper that was published after the "Torrey Canyon" report it was suggested that IMCO would look at the practice and law regarding these accidents? Will he tell the House what action was taken as a result of the meeting of IMCO after the "Torrey Canyon" report? Finally, does he agree that when ships are crippled in such a way as was the "Amoco Cadiz", the vessel should be towed into deeper water, rather than brought ashore, until the emergency services have been properly alerted?
Mr. Davis: I am being asked for detailed information on what I think should have happened. I am not at liberty to make such comments. The hon. Gentleman should know that there have been many deliberations at IMCO on this and other matters affecting tanker safety and the safety of other vessels. IMCO has a good reputation among United Nations' agencies in that regard. The real issue is not so much the resolutions, declarations or conventions that are made at IMCO as the will of nations to enforce them. There is not sufficient evidence of such will among a number of countries. I do not believe that the United Kingdom is among those countries.
Mr. Faulds: One sentence—does not this incident point up the Government's wrong-headedness in opposing the separate bulkhead concept at the recent London conference?
Mr. Davies: One word—"No".
Mr. Maxwell-Hyslop: Will the Minister try to persuade our partners in the EEC to set a date after which single-screw tankers will not be permitted within the territorial waters of any EEC country so that they do not lose directional stability when steering gears fail? Will he fix a date for that to take effect within United Kingdom territorial waters, irrespective of

985
whether there is agreement, so that avoidable hazards due to lack of steering may be put into the past? Is the hon. Gentleman aware that a multi-screw craft is able to steer even without its rudder?
Mr. Davis: I shall consider that matter, but I am bound to say that sometimes we have to differentiate between human error and the availability of proper facilities on the vessels. However effective those facilities may be, we are always subject to the element of human error.
Mrs. Dunwoody: Is my hon. Friend aware that it does not matter how many resolutions are passed, because, unless the United Kingdom leads a campaign against tax havens where standards of safety are not maintained, we shall not have any protection from these accidents?
Mr. Davis: I am aware that the vessels of some flags of convenience countries have a bad safety record. I repeat that if I were to condemn this Liberian vessel merely because of that, it would be grossly unfair in advance of an inquiry.
Mr. Wiggin: Will the Minister confirm that all requests from the Channel Islands are being fulfilled and that equal priority will be given to them as if the mainland were affected? Will Britain assist to break up the slick even though it may be in international waters?
Mr. Davis: The answer to those questions is "Yes". We are providing additional assistance today at the specific request of the Channel Islands to provide them with concentrates if they are needed.
Regarding operations in international waters, we have in practice carried out our obligations to our partners, the French, in that regard. We have every intention of doing so in future should another calamity of this kind take place.
Mr. Adley: Is it not disgraceful that international oil companies should be allowed to cut corners literally by sailing within two miles of coastlines, be they in Brittany or elsewhere, to save half-an-hour or an hour's sailing time with the appalling risks paid for not by the oil companies but by the communities concerned when things go wrong? Will the Minister set his mind urgently to reach-
986
ing agreement with the French that these oil tankers should stay 12 miles offshore other than at times when they are coming into and going out of harbour?
Referring to the point made by the hon. Member for the Isle of Wight (Mr. Ross), is it not also disgraceful that the oil companies should be the main manufacturers of the detergents which they sell at considerable profit after having caused the mess by allowing spills to take place?
Finally, dealing with the Warren Spring Laboratory, will the Minister look at the answer that was given to me after the "Urquiola" affair in May 1976, that
"Offshore trials have been planned and will be undertaken in the near future"
on international oil recovery equipment? These trials, two years later, have still not taken place.
Mr. Davis: The hon. Gentleman knows that there has to be a scientific assessment of these matters, and that takes time. I have already indicated, notwithstanding his exasperation, that the research is very nearly completed.
As for his taking up of Mr. Chirac's suggestion—
Mr. Adley: It is not my suggestion.
Mr. Davis: I know that Mr. Chirac is waiting on every word from the hon. Gentleman. We must have regard to the fact that it would be difficult for tankers to remain 12 miles offshore when going through the Dover Straits.

BILL PRESENTED
  INDEPENDENT BROADCASTING AUTHORITY
  Mr. Secretary Rees, supported by Mr. Michael Foot, Mrs. Secretary Williams, Mr. Joel Barnett, Mr. Solicitor-General and Mr. Brynmor John, presented a Bill to extend until 31st December 1981 the period during which television and local sound broadcasting services are to be provided by the Independent Broadcasting Authority and to exclude Section 4(2) and (5) of the Independent Broadcasting Authority Act 1973 in relation to proceedings in Parliament; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 92.]

  SITTINGS OF THE HOUSE
  Resolved,
  That this House do meet on Thursday 23rd March at Eleven o'clock, that no Questions be taken after Twelve o'clock, and that at Five o'clock Mr Speaker do adjourn the House without putting any Question.—[Mr. Coleman.]

  ADJOURNMENT (EASTER AND MAY DAY)
  Motion made, and Question proposed,
  That this House at its rising on Thursday, 23rd March do adjourn till Monday, 3rd April and at its rising on Friday, 28th April do adjourn till Tuesday, 2nd May.—[Mr. Foot.]
  4.2 p.m.
  Mr. James Molyneaux: Ulster Unionist spokesmen have frequently in times past questioned the wisdom of the House adjourning at critical times for various recesses, but I am quite sure that right hon. and hon. Members appreciate that in Northern Ireland the Easter Recess season is one of particular concern because of the emotions and myths kept alive for the past 62 years.
  This occasion is different for another reason. Hitherto, IRA terrorism was thought to be an internal Irish quarrel, but it is now recognised as an Irish dimension of a worldwide revolutionary technique to overthrow society by force.
  The Northern Ireland security debate of 6th March has been continued on both sides of the Irish Sea. In a sense, it has become a debate between the United Kingdom and the Irish Republic.
  The Secretary of State for Northern Ireland has been subjected to vicious and, I feel, a great deal of unwarranted criticism as a result of his reply to a suggestion made by the Prime Minister of the Irish Republic that only 2 per cent. of violence emanated from south of the frontier. Facts, not opinions, provide the Secretary of State with the most effective defence for which he could wish.
  It was from a Dublin Government that Ministers had to resign in 1968 following Press exposures of their links with the present IRA campaign. It is the present Dublin Government who stand isolated as the only EEC member country which refuses to sign the European Convention
  988
  for the Suppression of Terrorism. It is the same Dublin Government who repeatedly reject the generally accepted principle of extradition. It is a Dublin Government who permit the headquarters of the Provisional IRA political wing to operate in their capital city. It was in the Irish Republic that the terrorist kit, described recently by the Home Secretary in the House, was assembled for shipment to the Home Counties.
  Perhaps the most damning evidence was provided by the attack on a security post in South Armagh by terrorists who retreated south of the frontier on the very day that Mr. Lynch was seeking to deny that the territory of the Irish Republic was used as a haven of refuge and base for terrorists.
  It is not my purpose to embarrass Mr. Lynch and his Government. Indeed, I respect the claim of the Irish Republic to being a sovereign independent State. That, of course, does not include that part of Ireland which is, and will remain, part of the United Kingdom. But, in all charity, I have to ask Mr. Lynch to look at his own behaviour through the eyes of Ulstermen, other citizens of the United Kingdom and perhaps the inhabitants of other civilised nations which the Irish Republic seeks to influence and aspires to lead.
  One wonders whether Mr. Lynch is aware of the question mark which now hangs over his name and of the serious doubts about the capacity of Dublin politicians in general to co-operate in constructive efforts to create that climate of good neighbourliness which is greatly desired by all of us in Northern Ireland and by our fellow citizens in the rest of the United Kingdom. I am afraid that no such atmosphere can be created or is possible until Mr. Lynch and his entire Government—that includes some reluctant Ministers—give their unreserved support, as we have done, to all measures designed to stamp out murder, whatever name it bears. Such a change of attitude has been made essential and urgent following the examples of terrorist ruthlessness seen in various countries in the past week. It is now clear that any statesman who ducks the challenge will forfeit the respect of his fellows.
  Today in Europe the statesmen who even subscribe to the objectives of any

  989
  terrorist movement will become outcast, because all protestations and so-called explanations and clarifications will class the vocal supporter of terrorist aims as being as guilty as the one who pulls the trigger or lights the fuse.
  Revolutionary guerrilla warfare has increased in scale and ruthlessness in the three years since Dr. Clutterbuck wrote his book "Living with Terrorism". Indeed, for many in the British Isles the option of even living with terrorism has been closed. But Her Majesty's Government and this Parliament can do much to contribute to the eradication of revolutionary violence by meeting it firmly and resolutely. In that respect they will have the full support of my right hon. and hon. Friends and, I trust, of the entire House. We can also, as good neighbours, seek to persuade the Irish people that they deserve something better than Gaddafi-type politics.
  4.8 p.m.
  Mr. James Lamond: It will be within your memory, Mr. Speaker, that I have several times recently raised with my right hon. Friend the Leader of the House the question of having a debate on the Belgrade Conference and the coming United Nations Special Session on Disarmament. Therefore, while I appreciate the pressure of time on my right hon. Friend, it is disappointing that we are not to have such a debate, particularly as my right hon. Friend the Prime Minister is to visit President Carter during the course of this week.
  I understand that the purpose of the Prime Minister's visit to the United States is, in the first instance, to discuss not the United Nations Special Session on Disarmament, but the possibilities of economic recovery for the Western world. Nevertheless, I feel sure that at some time during the talks the question of the United Nations Special Session on Disarmament will arise.
  It would have been better had the Prime Minister been able to go to the United States with a firm understanding of the different feelings in different parts of the House on this matter. We cannot say that the two-day debate that we had on the defence White Paper last week was sufficient. Many hon. Members were anxious to speak in that debate. I always think that it is rather unfair that on the
  990
  first day of a two-day debate right hon. and hon. Members have a fairly free rein. Several speeches on the first day were up to half an hour long. Those from the Opposition Benches were particularly long. The Front Bench spokesmen spoke for an inordinate length of time on both days, with one honourable exception—the hon. Member for St. Albans (Mr. Goodhew), who opened the debate for the Opposition on the second day. He was certainly reasonable in the length of time that he took.
  Many of us waited a long time trying to get into the debate. When we did we were required by courtesy to our fellow Members, if nothing else, to truncate our speeches. I am sure that hon. Members in all parts of the House appreciate how difficult it is to argue a case in six or seven minutes, particularly when several aspects are covered, as they were in the defence White Paper. I am disappointed that we have not found time for such a debate.
  There have been a number of developments recently in international affairs which require our attention. The Belgrade Conference has finished and the Government's White Paper has been issued. I was disappointed with the final communiqué. Although it cannot be said that the conference was a complete failure, it was not the success for which most of us had hoped.
  I think that we have lost ground since the signing of the Helsinki Final Act on 1st August 1975. On our side we have concentrated too much on the question of human rights. I appreciate that this is an important aspect of the Final Act and that there is a basket which is particularly concerned with that matter in the Final Act. It is also mentioned in the seventh item of Basket I.
  No one would deny that it is important but there are many faults in the 35 countries which are signatories to the Final Act. There are some matters in this country of which we cannot be particularly proud. Similarly, the United States has some swill to carry. For example, a big demonstration was held in Washington on Sunday by United States citizens who feel that their Government are violating human rights with regard to the Wilmington Ten who have been found guilty of arson on the flimsiest of

  991
  evidence, if any evidence at all. These matters must lie heavily on our consciences.
  The relations between two other signatories of the Final Act—Turkey and Cyprus—also should have been brought up in Belgrade but they were not raised. No one can deny that there is a serious situation in Cyprus. We European countries have a special responsibility to try to settle that matter. There is only one solution. It is for the Turkish invading troops to be withdrawn and for Cyprus to be returned to the position existing prior to the invasion by Turkey. I fully understand that many of the Turkish Cypriots who have been listed as missing are dead and that nothing that we do can restore them to their families. Nevertheless, it is a matter that we cannot ignore. I cannot go into the recess feeling happy about the situation, because we have not discussed it in the House.
  The neutron bomb will be of significance in the discussions at the United Nations Special Session. It appears that a decision on this matter has not been taken. Several exchanges have taken place at Prime Minister's Question Time on this subject. The Prime Minister, in answer to a question of mine, indicated that he differed fairly fundamentally in his approach. He felt that the neutron bomb was not a departure from the weapons that are already in existence and that there was no question of the nuclear threshold being lowered because political discussion would be maintained. I believe that there is more to the argument than that. There is a psychological effect for this country. The Soviet Union certainly sees it as a testing ground for the genuine concern of the NATO Powers.
  Should the United States proceed with the development of the neutron bomb and should member States of NATO agree to its development, the Soviet Union will see that as a further extension of the arms race, as President Brezhnev said in the Kremlin when speaking at the special session of the Supreme Soviet to mark the 60th anniversary of the revolution. He mentioned the neutron bomb and said that the Soviet Union would hold its hand until it discovered the intentions of the United States. He said that if the neutron bomb were developed, it would take what it considered to be appropriate
  992
  action in developing weapons of its own to combat this new weapon.
  If President Carter has not forced the issue by making a decision to develop the neutron bomb before the NATO meeting in Washington at the end of May, the matter will be discussed and possibly a decision made then. We should have discussed this issue before the Easter Recess. At least a decision about developing and deploying this bomb should be postponed until the United Nations Special Session so that that session can proceed in the best atmosphere. That is a reasonable request that must be accepted by any reasonable person.
  We are anxious for the Special Session to be successful. We have prepared a document which we have submitted, with the support of several other Western European nations, for consideration at the Special Session. Although it does not mention the neutron bomb, it outlines the future as we see it. It describes the need for general and complete disarmament. Although I hear Opposition Members muttering about the Moscow line, what I say is completely in accord with the British Government's attitude. Several nations in the NATO Alliance have considerable misgivings about the deployment of the neutron bomb. We should share those misgivings.
  The Netherlands Parliament has already passed a motion calling on its Government to refuse to accept the siting of a neutron bomb on Netherlands territory. I understand that the Icelandic Government have also expressed their determination not to get involved and West Germany has considerable misgivings.
  This is a matter of such importance to the world that we must ensure that the UN Special Session, which has taken so long to set up, is held in the best possible atmosphere. The least the Prime Minister can do when he sees President Carter this week is to impress on him that a decision should at least be postponed until after the Special Session.
  4.21 p.m.
  Mr. Dudley Smith: There are a dozen and one reasons for us not to adjourn for the recess, but I should like to raise just one that is among the most important social issues of the day. I wish to speak about the plight of people with only one system

  993
  of heating in their homes, particularly if they are council or housing association properties.
  I suggest that we should debate this question as we are coming to the end of a difficult and cold winter, especially in the light of the announcement at the weekend that electricity prices are again moving inexorably up. For example, I was horrified to read that in the next 12 months there will probably be an 8 per cent increase in electricity prices in the Midlands. The Price Commission has already approved a 4 per cent. rise and the fuel adjustment charge will take that up to 8 per cent.
  I declare an interest because I am associated with a company that works with the Solid Fuel Advisory Service and I know that organisation well, but my concern is not motivated by that fact. In the past year, I have struggled on behalf of more than 100 housing association tenants in Leamington Spa who have been captives of electricity-only heating systems and who have not been able to afford the electricity bills and have therefore had to use other methods of heating, which have caused dampness in their houses and a great deal of discord in the households during this cold winter.
  The problem is not associated only with my part of the West Midlands. As hon. Members on both sides of the House can testify, it is a national one.
  When I first raised the matter, I received promises of action from the Department of the Environment, but no palliative moves have been brought forward during the winter. I am certain that the Government recognise the problem. The difficulty is getting action from the Departments of the Environment and Energy.
  I raised the matter in parliamentary Questions in January and February and it was followed up by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost). In reply to his Question, the Department of Energy referred him to the answer given to me on 13th February and said that the problem was primarily one for the Department of the Environment and local authorities. The reply added:
  "The Department of Energy is represented on a Joint Working Party on Heating and Energy Conservation in Public Sector Housing chaired by the Department of the Environ-
  994
  ment … and intends to look further into the design considerations for heating systems in new housing and into the choice of fuels."—[Official Report, 17th February 1978; Vol. 944, c. 400.]
  I followed that up on 8th March with another Question and was told by the Under-Secretary of State for the Environment that it was open to individual housing authorities and associations to select heating systems for their dwellings in the light of their own experience and local circumstances. I was also referred to the answer given to my hon. Friend the Member for Derbyshire, South-East who, in turn, has been referred to the earlier answer given to me.
  The matter almost came to a full stop on 9th March when the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) asked the Department of the Environment how many local authorities had dwellings under construction in which there was neither a fireplace nor a gas supply. The same Under-Secretary told the hon. Gentleman that the information was not available centrally.
  I quote these instances because they underline the lack of urgency shown by the Departments which should be giving a great deal of attention to this problem.
  The Under-Secretary of State for the Environment has said that is up to local authorities and housing associations to decide what sort of buildings to construct, but I think that most hon. Members would agree that housing associations and local authorities, given the financial restrictions on them, build the cheapest possible houses. Many have fallen into the trap of building them with electricity-only heating because this is the cheapest way initially. Of course, they have come to rue the day they made those decisions, because tenants, who are mostly in the lower earnings sector, cannot afford their fuel bills and sophisticated, up-to-date electricity heating systems are not used in the sort of cold weather that we have experienced this winter.
  It behoves the Department of the Environment to get together with the Department of Energy and work out a system for the future so that we can help the thousands of people throughout the country who have had a bad winter and who see nothing but gloom and despondency ahead. Urgent action is needed and

  995
  there should be a more realistic approach by the Govennment before next winter.
  The Government should look at the need to alleviate the position of thousands of tenants of local authorities and housing associations who have only one system of heating and, chiefly through the Department of the Environment, they should issue definite guidance to local authorities and housing associations so that they build no more houses without chimneys or an alternative source of heating to electricity.
  This would help us begin to make real progress in an admittedly difficult area. I do not expect the Leader of the House to say that he will find time for a debate. I am not criticising him, because he may not be aware of the problem, but I implore him to remind the Secretaries of State for Energy and the Environment that a number of hon. Members on both sides of the House have raised this issue several times in the last few months and to impress upon them the need for positive action. If he does that, he will have done a great favour not just to me, but to Parliament.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. Before I call the next hon. Member I should say that Mr. Speaker has asked me to tell the House that any speech of less than eight minutes will not be registered by him.
  4.30 p.m.
  Mr. Robert Kilroy-Silk: I suggest that it would be totally wrong, almost immoral, for the House to adjourn for Easter until we have had the opportunity of debating the terrible and worsening level of unemployment on Merseyside. I and several of my hon. Friends have constantly pressed the Lord President to permit a debate on Merseyside to take place, but each time, while he has shown sympathy with our plight, he has suggested that we should debate the subject in a general debate on unemployment or on the North-West, or that we should debate it in a Committee upstairs. I say—and no doubt my hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and Liverpool, Garston (Mr. Loyden) will reinforce this point—that our situation is so serious that it can be dealt
  996
  with only in a full-scale debate on the Floor of the House.
  Merseyside is in the front line of factory closures and redundancies. It contains two of the three unemployment black spots in the United Kingdom—Skelmersdale and Kirkby, which is in my constituency and which has a male unemployment rate of 25 per cent. Thus, two of the three areas of the country with high unemployment levels are to be found within the relatively small area of Merseyside.
  Mr. John Stokes: Does not the hon. Member agree that if we had not spent so much time discussing the Scotland Bill, and now the Wales Bill, there would have been ample time to discuss these matters affecting England, including this very important part of the United Kingdom?
  Mr. Kilroy-Silk: I accept what the hon. Gentleman has said. I and my hon. Friends have made that point many times.
  Unemployment on Merseyside, at about 12·6 per cent., is already double the national average. There are 10,000 redundancies pending from places such as Speke—my hon. Friend the Member for Garston will no doubt raise that matter—the Birds Eye factory in Kirkby, from Courtaulds, which is also in my constituency, and from English Electric. But those are only the well publicised cases involving large numbers of redundancies—3,000 at Speke and 1,200 at Birds Eye. We rarely hear about the hundreds of redundancies taking place in small firms where perhaps 25 or 50 people are laid off at a time. It is no exaggeration to say that over 10,000 redundancies are threatened on Merseyside at the moment.
  The Government have done a great deal. They have poured a tremendous amount of money into Merseyside. Thousands of jobs are supported by Government schemes, whether by temporary employment subsidy or job creation. But Merseyside's predicament demonstrates clearly that the conventional policies of all Governments, and, unfortunately, this Government's regional policy, cannot deal adequately with the kind of deep-seated problems that Merseyside faces.
  Merseyside has lost about 80,000 jobs net in the last 10 years. As quickly as the Government bring in new jobs and

  997
  firms and build more factories on Merseyside, so we lose the jobs that are already there. Merseyside demonstrates clearly the failure of private enterprise and of the capitalist system.
  We are constantly lectured by Conservative Members—not least by the hon. Member for Liverpool, Wavertree (Mr. Steen), who is so concerned about unemployment on Merseyside that he is absent today—that we should keep subsidies out of Merseyside and let private industry get on with the job so that Merseyside can prosper. Yet one of the major sources of redundancy today is Lucas, a private enterprise company, which is closing its factory in Merseyside, not because it is losing money or has become unproductive or inefficient, but because it wants to reorganise and rationalise its production, transferring it from a high unemployment area to one of lower unemployment in Birmingham. The same thing happened with Albright and Wilson. Private enterprise has come into the area, seduced by Government grants and assistance, has taken the money and, when it suited its purpose, has pulled up stumps and moved to more advantageous and profitable areas.
  Mr. Max Madden: Is not the situation at Lucas Aerospace particularly grievous since, for a number of years, the workers in that company have been pioneering a whole series of exciting and imaginative projects which would provide long-term and secure employment for the existing work force and for many additional employees? Has not the management of that company consistently refused seriously to consider these proposals?
  Mr. Kilroy-Silk: I accept what my hon. Friend has said. He and many others of my hon. Friends have been closely involved in trying to push the alternative programme formulated by the Lucas shop stewards. But, in spite of the imaginative, progressive and detailed nature of the proposal, the only response of private enterprise has been to dismiss it out of hand. That is the cavalier response to which we have been subjected on Merseyside.
  Merseyside's predicament demonstrates that we shall deal with the problems there, as well as in the North-West and the North-East, only when we have a
  998
  greater degree of public control over and ownership of industry in this country. Only then shall we be able to get a proper and fairer share of resources and employment for areas like Merseyside.
  Why should a few private individuals be permitted to dictate the future and livelihoods of hundreds of thousands of people who work for them? Conservative Members constantly complain about the abuse of power, but what greater power is there than the power possessed by the individuals who run the private corporations? They take their decisions behind closed doors. They are responsible and accountable to no one. They do not have to come to any public platform to defend or justify their actions. Yet they hold in their hands the livelihoods and destinies of thousands of workers and their families in Merseyside and Kirkby and areas and towns like them.
  The Conservatives support that kind of irresponsible power. It can be controlled only when industries are publicly owned and controlled so that investment may be directed to the areas where it is needed according to social priority, and not according to the whims of private individuals acting anonymously and irresponsibly.
  Mr. Norman Tebbit: Will the hon. Member answer two questions? Why does he think that these brutal capitalists are so reluctant to take up the sure-fire money-making schemes which have been put forward? Why does he think that, almost universally, public enterprise and private enterprise in this country are so reluctant to go to Merseyside and enjoy the privilege of employing the labour there?
  Mr. Kilroy-Silk: The hon. Member for Chingford (Mr. Tebbit) is doing what everyone outside Merseyside attempts to do, and that is to blame the workers. He asked why industries were not so concerned to take the money. Industries come to Merseyside, attracted by the carrot of 25 per cent. loans, of subsidies and of grants. As soon as they have qualified for that money and received it, they have gone somewhere else. In many cases they have taken their capital investment abroad. That happened in a scandalous way with Courtaulds, in Skelmersdale—
  Mr. Tebbit: Why did the company do it?
  Mr. Kilroy-Silk: The question is not why did it do it, but why should it be allowed to do it? We should not permit that disregard for the regions and for the people who live and work in them. The only way to prevent the disaster of Merseyside continuing and to prevent it from becoming a ghost town is by means of the public control I have described. The closure of Lucas or Birds Eye, or the threatened closure of Speke, implies exactly what the hon. Gentleman has suggested. The failures of private enterprise are shifted on to the character or attitudes of the work force.
  It is asserted that the militancy of the Merseyside work force leads to a lack of efficiency or closures. But the Government's own figures belie that assertion. The Department of Employment has discovered that in the last 10 years fewer days were lost per thousand workers employed in manufacturing industry on Merseyside than were lost in Scotland, Wales, Yorkshire, Coventry or even in docile Manchester. Yet we hear constantly of the alleged militancy of the Merseyside workers. The figures demonstrate graphically that there is less militancy on Merseyside and that it is less strike-prone than other supposedly safer areas of investment.
  We have a lower strike record than most other major manufacturing countries. The important point is not just the failure of private enterprise but the failure of our regional policy. It is not simply a question of the amount of money and resources that the Government and previous Governments have poured into Merseyside. It has not been selective enough. That is one of the most damaging criticisms that one can direct at regional policy. Its distribution is blanket-like. It is given on an overall basis without any regard to the particular problems and peculiar needs of certain areas.
  The Government assume that all regions are the same. They assume that they are equally represented in terms of the proportion of their workers employed in manufacturing industry and different types of industry, but that is not the case. Merseyside has an extremely narrow manufacturing base. It is an area that
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  is predominantly concentrated in the service and ancillary sectors. Therefore, the whole of the Government's industrial strategy of pumping funds and resources into the six key sectors does not help Merseyside to the same extent as it helps other regions.
  The Government should recognise that simply having a six-sector industrial strategy and regional policy specifically related to the regions, pumping money into those areas, does not automatically result in the money coming to Merseyside in the proportion that is expected.
  Merseyside has suffered a long period of decay of its major industries and neglect by successive Governments. The regional policy is too broad. If we are to deal with the problems of Merseyside, we need a Merseyside development agency. The Government already have development agencies in Scotland and in Wales. I do not begrude either of those two countries the agencies, with the hundreds of millions of pounds at their disposal to invigorate and regenerate industry in Scotland and Wales. However, the total number of unemployed people in Merseyside is far in excess of the number of unemployed in Wales. More people are unemployed in the Liverpool area than in Wales. Yet Wales has a development agency with its own funds, controlled locally. It is able to make its own decisions and to relate them sensibly and flexibly to the problems of industrial structure and regeneration.
  Although Merseyside has fewer people unemployed than Scotland, it has a larger percentage of people unemployed than Scotland. Yet Scotland has a development agency and Merseyside has not.
  We shall not deal with the problems of Merseyside and its worsening and terrible unemployment situation, which, if it is not a disaster today will be a major catastrophe tomorrow, unless urgent action is taken soon and before the end of the recess. We shall deal with the problem only when we have a Merseyside development agency capable of spending the £90 million or £110 million given respectively to the Scotland and Wales development agencies—an agency controlled by local people who will be able to deal with the problems, but not on a one off-basis, as with the NEB or the report commissioned by the Prime Minister. They would have to be

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  dealt with on an ongoing basis, with the pumping of money into the area so that industry can be invigorated and new industries stimulated. We need a tool that is responsive to local needs and sensitive to local problems.
  At present Merseyside is a terrible indictment of the failure of private enterprise to provide an adequate and fair distribution of opportunities amongst the regions. Merseyside is a graphic illustration of everything said by Labour Members for decades in condemnation and criticism of private enterprise. It is, unfortunately, also a very strong criticism of the present regional policy. The policy fails to preserve jobs on Merseyside.
  We do not need to debate the employment situation on Merseyside after the recess; we need to debate it this week. I suggest firmly to my right hon. Friend the Leader of the House that the House would be failing its duty if it were allowed to go on holiday without properly debating the problems of Merseyside and, much more importantly, what specifically, urgently and immediately the Government propose to do beyond that which has been done already to deal with the worsening employment situation.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker: I repeat the eight-minute offer to the hon. Member for Christchurch and Lymington (Mr. Adley).
  4.47 p.m.
  Mr. Robert Adley: In order to try to stick within the eight minutes, I shall not respond to the hon. Member for Ormskirk (Mr. Kilroy-Silk).
  May I say in passing that I was extremely disappointed by the statement made by the Under-Secretary of State for Trade about the "Amoco Cadiz" affair? Wil the Lord President note that those who represent coastal constituencies are very concerned about what may happen and would press the Government urgently to consult our French partners in the EEC and, if necessary, jointly, but alone with the French, take some action to do two things? The first is to make quite sure that rules are introduced that should ensure that these oil-carrying tankers are not allowed to cut corners by coming close to our coastlines with the appalling risk of accident followed by
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  spillage, the price of which is paid by everybody except the oil companies.
  The second is to ensure a great deal more urgency in the testing and practice of non-detergent oil-clearing devices. Detergents damage the marine ecology. For two years I have been expressing the view that it is little less than a scandal that the oil companies, which cause these massive pollution problems, manufacture the detergents and then stand to make a substantial profit every time one of these spills takes place and they are left in the happy position of providing the detergents to clear them up. In constituencies such as mine tourism and fishing are two of the most important activities, as well as recreational sailing and boat building. It is not good enough for the Government to continue to take a dilatory attitude towards the problem.
  I wish to deal with another point—and I recognise that this may not be entirely acceptable to Labour Members. I make no apology for raising it, because it is important that we have at the very least a statement from the Secretary of State for Social Services before we rise for the Easter Recess. If we cannot have such a statement, I hope that the Lord President will institute some form of investigation. I refer yet again to the allegations in "The Pencourt File" and the discrepancies between statements made by the Secretary of State for Social Services, statements made by the right hon. Member for Huyton (Sir H. Wilson), statements made by the Prime Minister and statements made by the right hon. Lady the Member for Blackburn (Mrs. Castle), all of which indicate a degree of discrepancy which I find most unsatisfactory.
  The Government, in their own interests as well as in the interests of the House and country, should see that some inquiry is held quickly so that we can clear up these extraordinary discrepancies. The allegations include assertions of interference by the Executive in action taken, or not taken, through the courts of this country. I raised this initially in a letter to the Attorney-General last October. He replied to my letter but was unable to give me sufficient satisfaction.
  The Secretary of State for Social Services then answered a Written Question the day before Social Services Oral

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  Questions last week. Many of my hon. Friends considered that to be not only inadequate but an underhand way of dealing with the problems that some of us are trying to raise openly in the House.
  "The Pencourt File" makes some serious allegations about the Secretary of State. I cannot understand why the right hon. Gentleman has not taken legal action against the authors and publishers of the book. The allegations are not of a passing nature. They are backed up by a great deal of evidence which, as far as I know, has not been officially refuted by the Secretary of State or any of the other people mentioned in the book.
  The Government cannot wish the matter away. It will not go away, because Ministers are involved. The noble Lady, Lady Falkender, was a party to the appearance of an extraordinary file apparently prepared by Mr. Jack Straw for the right hon. Member for Blackburn when she was Secretary of State for Social Services. I understand that Lady Falkender has said in reference to the file passed to her from the Secretary of State that
  "one of them was in fact a digest in the same way that Jack Straw did a digest of the whole case but giving all the political ramifications of it."
  My hon. Friend the Member for Blackpool, South (Mr. Blaker) has written to the Prime Minister about the matter informing him that there are tape recordings of conversations between the authors of the book and Lady Falkender. One would have hoped that the Prime Minister would take the opportunity to clear up this mess by replying to my hon. Friend. Instead, all that he did was to invite the Secretary of State to reply to the letter that my hon. Friend has sent to the Prime Minister. That was wholly unsatisfactory.
  I should like to know why Mr. Straw felt it necessary to produce such a digest. What was it for? For whom was it supposed to be? Where is it now? Until we have answers to those questions, I shall continue to press the matter in the House.
  I understand that the tapes were made on the specific instructions of the BBC and on equipment supplied by the BBC to those two journalists when they were working for it. The hon. Member for
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  Sowerby (Mr. Madden) tut-tuts. He is not averse to making allegations. I am making allegations that I can substantiate on the basis of tapes that I have heard. If the hon. Gentleman would like to intervene, I should be delighted to give way, though I intend to be brief.
  I find it most unsatisfactory that the BBC was pressurised by the Secretary of State to discontinue a programme that it had been compiling initally at the invitation of the right hon. Member for Huyton. The two journalists concerned were faced with the prospect of signing a wholly unacceptable contract aimed at silencing them, or facing dismissal. They chose the latter.
  I conclude, because many other hon. Members wish to speak. I hope that the Lord President will take the matter seriously this time and realise that some of us feel disquiet about it. We invite him to ask the Secretary of State to make a full statement so that he can be questioned and all our concern can be allayed, or, if not, at least to initiate an inter-departmental inquiry so that we can get to the bottom of the affair.
  Mr. Anthony Steen: On a point of order, Mr. Deputy Speaker. I understand that the hon. Member for Ormskirk (Mr. Kilroy-Silk), in his speech giving reasons why the House should not adjourn, impugned my interest in unemployment on Merseyside by saying that I was not in the House.
  Mr. Deputy Speaker: That is not a point of order. If he is fortunate enough to catch the eye of the Chair, the hon. Gentleman will have an opportunity to make his speech.
  4.54 p.m.
  Mr. Eric S. Heffer: Unlike the hon. Member for Christchurch and Lymington (Mr. Adley), but like my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk), I want to deal with a very serious matter, not the trivial sort of matter about which the former hon. Gentleman spoke.
  Incidentally, all that my hon. Friend said about the hon. Member for Liverpool, Wavertree (Mr. Steen) was that he was not in the House at that moment—and he was not. The fact that he has now appeared in the Chamber is probably because his hon. Friends told him that his absence had been noticed.
  Mr. Steen Mr. Steen rose—
  Mr. Heffer: Sit down.
  Mr. Deputy Speaker: The House had better leave this matter for the time being.
  Mr. Heffer: It would not be right for the House to depart for the Easter Recess before we have had serious answers about the most serious problem of unemployment on Merseyside.
  I want first to pay tribute to what has been done by the Government to help deal with Merseyside's problems. Merseyside has always had unemployment at twice the national average, even during the days of so-called full employment. It has never enjoyed full employment in the normally understood sense. When other parts of the country were booming, it still had its areas of unemployment and a residue of unskilled and semi-skilled workers seeking employment.
  The Government, in my opinion rightly, made Merseyside a special development area. The aid that has been poured into Merseyside for the past five or six years is fantastic. The Government have built 66 advance factories there, and because of IDC policies many companies have been induced to create employment, to build factories in the area.
  About £400 million has been poured into the area over those years. That is a tremendous amount. Despite that, despite the efforts of this Government and previous Governments to assist through regional policies, we still find ourselves with 11·3 per cent. unemployment in the Merseyside area. The number of school leavers last July was 17,400. There have been advances. Unemployment among school leavers went down to 5,520 last month. Nevertheless, one can see the picture of employment possibilities for young people.
  Last month we had 12,000 unemployed in the construction industry. Nearly 3,000 of them were highly skilled workers, carpenters, joiners, bricklayers and others.
  Regional unemployment in the North-West as a whole is 7·5 per cent. The national figure is 6·2 per cent. I said that there was 11·3 per cent. unemployment on Merseyside, but in Liverpool
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  it is even higher. We have about 90,000 workers unemployed in the city alone. That provides a measure of the problem we face.
  The position is not all bad. Last month there was a decrease of 1,800—minimal, but a decrease. I understand that tomorrow's figures will show a further decrease in unemployment on Merseyside. Nevertheless, as my hon. Friend rightly pointed out, this situation is tragic.
  I shall give one other figure which illustrates our problem. On 12th January, 28,199 people in the Merseyside special development area had been registered as unemployed for more than 52 weeks. Of these, 25,287 were in the Liverpool travel-to-work area. Those are long-term unemployed.
  In the past two or three weeks some of my hon. Friends and I have been industry's parliamentary firemen, so to speak. We have been dashing from one Minister's office to another, from one employer's office to another, arguing against closures or proposed closures. We have been to see Michael Edwardes. We are about to see the management of Lucas. One of my hon. Friends has seen the management of Birds Eye. My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) has seen the management of GEC-English Electric. Together we have met shop stewards. We shall be meeting more shop stewards, other trade unionists and other Ministers. It is a continual process. All this rushing around is getting us nowhere, because, as my hon. Friend the Member for Ormskirk rightly said, we live in a society which is dominated by the concept of private enterprise and private profit.
  Some people have asked why Liverpool faces these problems. It is not, as my hon. Friend the Member for Ormskirk rightly said, because the workers of Liverpool will not work harder, are lazy, are always going on strike. As a matter of fact, only this week there was a newspaper article in the Liverpool area about the Liverpool dockers who had turned ships round in record time. The ships had come in late, but the dockers got them out early. There has not been a strike on the Liverpool docks for the past four years. There has not been a strike at Lucas's main factory for 24 years. We can give example after example.

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  One of the basic problems is that we are on the wrong side of the country. The hon. Member for Chingford (Mr. Tebbit) laughs. When private enterprise goes in for rationalisation, if it is more beneficial to private enterprise to transfer a factory in the Midlands or anywhere else, that policy is pursued with a ruthless disregard for the interests of workers or other social consequences. What is happening now is happening because we are part of the Common Market. The trade patterns are changing. Some of us warned that this would happen once we were a member of the Common Market.
  Tory Members think the matter is worthy of laughter. It is a big joke to them. Admittedly, the official Tory spokesmen are not laughing, but other Tory Members are laughing. The 90,000 unemployed on Merseyside do not regard it as a joke; nor do my hon. Friends and myself.
  Some people think that if money is poured in for investment, that in itself solves problems. It does not. Pilkingtons are to invest £32 million in building a new plant on Merseyside. The new plant will employ 325 workers. The present plant employs 680 workers. The new factory, when completed, will produce more than the present factory. So the investment of £32 million means that the labour force there is more than halved.
  Example after example can be given in that regard. Exactly 16,000 dockers have disappeared. Yet, because of new methods, the productivity on the docks is as high as ever. We are talking about real problems. That is why I ask Tory Members not to treat this matter as a joke. It is a very serious matter.
  Mr. David Hunt: This is a very serious matter. Perhaps what is most serious of all is the hon. Member's refusal to condemn his Government. Does he not agree that one of the most serious difficulties facing Liverpool and Merseyside is the disappearance of the small business? The bankruptcies which have occurred in small businesses are directly related to the Labour Government's fiscal, monetary and bureaucratic policies.
  Mr. Heffer: If Tory Members will stop their Pavlovian reaction, I shall now ex-
  1008
  plain to the hon. Member for Wirral (Mr. Hunt) that the guts were taken out of Liverpool—the small businesses were destroyed—by the redevelopment carried out under the local Tory administration. The hon. Gentleman should get the facts right. I know the facts, because I was on the city council at the time.
  Mr. Steen: Will the hon. Gentleman give way?
  Mr. Heffer: No, I will not. When the hon. Member for Wavertree begins to treat the subject seriously, I shall give way to him. Until then, I shall not.
  Mr. Steen Mr. Steen rose—
  Hon. Members: Sit down!
  Mr. Heffer: I shall not give way to the hon. Gentleman. I entirely agree with the hon. Member for Wirral about the need to get small businesses back to Merseyside, to rebuild them where they were destroyed because of redevelopment. The hon. Gentleman has been here sufficiently long to know that I have been making speeches to that effect to the Government ever since I left ministerial office, and I made the same speeches when I was in office. I pointed out the amount of money—£400 million—that has been poured into Merseyside by the Government. Therefore, I am not criticising my right hon. and hon. Friends for not aiding Merseyside. I say that, despite all the aid that has been given to Merseyside, the problem has not been solved. That is my point. It is not a party issue. It is much more serious than to justify having party points scored in relation to it.
  Mr. Steen: Does not the hon. Gentleman agree that one of the major problems facing Liverpool is that we have 2,100 acres of vacant land in the inner area—a very serious matter—of which 80 per cent. is either in the ownership of the city council or belongs to nationalised industry? Because of that vacant land, no new business is coming to the Liverpool area and there is no rate base to produce more wealth.
  Mr. Heffer: The hon. Gentleman knows that, although there is vacant land in the city centre, many of us have been pressing for it to be redeveloped. He also knows that there are industrial estates all round the outskirts of Merseyside where factories have been built and

  1009
  employers induced to develop new industries. The hon. Gentleman has not added anything to the debate, because we are talking about redundancies at Lucas, at Birds Eye, at British Leyland, Courtaulds, and at GEC.
  I want to make the following suggestions for tackling this problem. First, we should have a Minister responsible for the Merseyside area.
  Mr. Dennis Skinner: More patronage—that is no answer.
  Mr. Heffer: Nor is the proposal of a development area. Nor is an agency in itself. If we are to co-ordinate the necessary activities, we need a Minister responsible for Merseyside. In the meantime, I appeal to my right hon. Friend to step in and halt all the closures and ensure that, whilst discussions are taking place, emergency aid is granted to Merseyside to help us to overcome the immediate closures.
  Next, the role of the National Enterprise Board must be extended. It should not just have an office on Merseyside. It should not just look for projects in which it can put some money. It should make a positive contribution towards helping Merseyside. Incidentally, I have no objection whatsoever to help being given to small businesses. On the contrary, I think that they have a very important role to play. The question of construction can be dealt with only on the basis of a boost to the economy and a boost in the Budget.
  We need a reduction in working hours. We should have a 35-hour week. There should be earlier retirement. Even during a period of full employment my area still had twice the national average of people out of work. That is an additional problem to that of the economy as a whole and it has to be understood. We also need to urge the unions, whether on Merseyside or elsewhere, to have control of overtime working, which should not happen to the extent that it does at the present moment. There must also be import ceilings. It is absolutely ridiculous that we are allowing our markets to be flooded and our people to be thrown out of work at the same time.
  These are, in my opinion, are some of the answers to the problem.
  Mr. Steen: Nothing new.
  Mr. Heffer: I do not know all the answers, unlike some people who seem to know everything. But I shall explain to the hon. Gentleman that the fact that a proposition is not new does not mean that it is not correct.
  The Liverpool City Council is asking the Prime Minister to meet a deputation not only from the city council but from the trade unions, the political parties, Members of Parliament, the Chamber of Commerce, and also religious people who are concerned with the problems of the area. I hope that my right hon. Friend the Leader of the House will at least pass on to the Prime Minister that we should like such a meeting to take place. We want a serious approach to be made, so that the Government may begin to deal with the problems. We are not asking for more aid such as in the past but for more aid in dealing with the problem. We have had plenty of aid in the past but it has not solved our problems. They are most serious and are getting to crisis level.
  Mr. Skinner: I have listened with great interest to my hon. Friend. Some of his proposals with a view to trying to generate a further boost in the economy, such as reduction in hours and in overtime working, are absolutely first-class. But there was one part of his speech which was in my view, to say the least, a little faulty. I refer to a policy of robbing Peter to pay Paul.
  I should have thought that the resolution of Merseyside's problems within the context that my hon. Friend has outlined today would not survive, long term, on the basis of taking something from somewhere else in order to try to compensate over a relatively short period. What is needed on Merseyside, as, indeed, is needed—[Interruption.] We can hear the wolves. What is needed throughout the whole of Britain is to carry out the policies which have been laid down by the national executive committee of the Labour Party, of which my hon. Friend is a member. In addition to that, we need to get out of the Common Market.
  Mr. Heffer: I often regret that my hon. Friend does not come in to listen to the whole of one's speeches, because I have not said in the debate that we should rob anybody in order to make the position better on Merseyside. I have not said it;

  1011
  nor would any Merseyside Member on the Labour Benches say it. The Merseyside workers would not say it. It has never been our policy and it will never be our policy, as far as I know, to say that we must have something at the expense of any other section of the community. That is not our argument. We are pointing to the particular problems that we have and to the type of measure that we want to be taken to deal with them.
  As to the Common Market, I shall explain to my hon. Friend that I made it quite clear that one of the basic reasons for our problems was precisely that we had gone into the Common Market. I ask my hon. Friend to come in to the debate—
  Mr. Skinner: I have come in.
  Mr. Heffer:—a bit earlier and to listen to the whole of the speech, rather than being like Conservative Members who come in halfway through a speech and then try to comment on it. I do not need this sort of help from my hon. Friend. I can do without it. I have made it absolutely clear that the policies that we require are policies of the sort which are outlined by the national executive committee of the Labour Party. But in addition to that, because of our peculiar problems on Merseyside and the closures which are constantly taking place, we need some emergency action to help us out of our difficulties.
  5.15 p.m.
  Mr. Cranky Onslow: I want to bring the House back to what is a very serious matter and should be seen as such. That is whether the House is being told the truth about the matters reported in the Pencourt File. I hope that even the Leader of the House will understand that it is important that the House should be told the truth and that he should not simply dismiss it with another petulant shrug.
  I raised this matter earlier this month in some questions to the Secretary of State for Social Services, at the end of which I had to say that I was not satisfied. It is because I am dissatisfied that I come back to the matter now.
  The questions related to the statements on pages 175–177 of "The Pencourt File" concerning certain files and what hap-
  1012
  pened to them. The Secretary of State said in part of his answer:
  "My right hon. Friend the Member for Huyton (Sir H. Wilson) evidently thought it necessary to inform himself about this case, as he has since made clear to the Press."
  But the Secretary of State said that he had "made a thorough investigation" and a full statement.
  I am not at all sure that that is a wholly accurate account of what happened, any more than I am sure that the right hon. Member for Blackburn (Mrs. Castle) was wholly accurate in that she said to the House about the whole thing being
  "a result of the fevered imagination of a couple of journalists".—[Official Report, 7th March 1978; Vol. 945, c. 1206–7.]
  In fairness to the right hon. Lady, I will remind the House of what she said in the Daily Mail on the subject of the file in question. On 1st February 1978, Mr. Gordon Greig reported:
  "The civil servant who dug out a confidential Whitehall file to satisfy Sir Harold Wilson's curiosity … was named last night. He is Mr. Jack Straw … Mr. Straw, Mrs. Castle said, made a personal report, and it was this—not the files—that she handed over to Sir Harold."
  The right hon. Member for Huyton went in to bat on the following day, in The Times of 2nd February 1978, in a lengthy statement, part of which I shall quote, as follows:
  "Much is made in the book of the disappearance of a social security file on Mr. Norman Scott from the Department of Health and Social Security. Sir Harold said: I was informed by an MP that the Social Security files relating to this man were missing. Naturally I asked for inquiries to be made. I was told that the particular file had been 'weeded' in 1970 and that this was a routine operation to save space."
  Most recently, in the Lancashire Evening Telegraph of 8th March, Mr. Jack Straw has said:
  "Cranley Onslow's allegation is completely untrue. As Mrs. Castle explained, 'I looked at the file in the department and wrote a report on it.' I and another civil servant wrote a report on the file and there was no question of it going outside the department. I handed the file back to the official dealing with it and gave the report to Mrs. Castle."
  I have to say to the House that there seems to me to be another side to the whole story and that there is a good deal more than fevered imagination to it. Like my hon. Friend the Member for Christchurch and Lymington (Mr. Adley),

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  I have seen the transcript and heard a tape relating to the statements made by Lady Falkender. In one passage of the tape she was asked whether she had seen the file, and she replied:
  "Yes with my own eyes, I mean it is not that I am making it up. I remember going through it, I think that I took it over to Chequers".
  Later she said:
  "I think we have got a copy of that file. I must go to Grange Farm … at the weekend and see if I can't find it. I am sure we took copies of the file."
  Later in the same interview, which is lengthy—and I shall not read the whole of it—there are passages indicating clearly that at some stage and by some means normal DHSS files went to No. 10 Downing Street and were there seen by Lady Falkender, who quite clearly in her capacity as constituency secretary to the right hon. Member for Huyton knows a DHSS file when she sees one. There was another file there, and that contained a digest. But again in this transcript Lady Falkender makes it clear that she went through the orginal files herself because, she comments, "The digest was just not very good."
  I could go on longer on this and in greater detail. But I am sure that any Government supporter who would like to hear the tapes has only to apply to Mr. Courtiour and Mr. Penrose and they will be happy to make the tapes available. I hope very much that some hon. Members will feel inclined to do so.
  In the meantime, we are left with a conflict where it is clear that some files went to No. 10 Downing Street, according to Lady Falkender, that they were copied presumably at No. 10 Downing Street, according to Lady Falkender, and that that copy has been taken away from No. 10 Downing Street and was in the possession at his home of the right hon. Member for Huyton.
  If this is the case, we should know. If it is not the case, it should be established. But there should be no cover-up. An attempt to cover up simply creates the impression, and perpetuates it, that there is something very fishy going on here. The Leader of the House owes it to us to undertake that there will be a full inquiry into these matters at the earliest possible moment.
  5.21 p.m.
  Mr. William Hamilton: In reply to the speech that we have just heard from the hon. Member for Woking (Mr. Onslow), I say merely that if he thinks there is any question of a cover-up, he had better look at the history of his own Government 22 years ago at the time of Suez when the most squalid cover-up this century occurred. It is still not clear what happened on that occasion. Government supporters choose to dismiss the kind of muckraking which we have seen in the Pencourt File. We prefer to deal with more important and immediate matters which concern not only our constituencies but the nation as a whole.
  I want to come back right away to the problems raised by my hon. Friends who represent Merseyside constituencies. Very properly, they are concerned about unemployment, as we all are. It is no use pretending that anyone anywhere in Western Europe or in the industrial world has an immediate short-term solution or even a long-term solution to this problem.
  But, having made that generalisation, I should be remiss in my duty as a constituency Member if I did not call to the attention of my right hon. Friend the Leader of the House a matter which is of concern not only to my constituency but to Scotland and to the nation as a whole. I refer to the projected petrochemical complex which is to be established, we hope, on the Firth of Forth at Moss Morran. It is to cost about £200 million, which will probably be the biggest investment in Scotland for a very long while.
  There was a very extensive public inquiry into the matter last year and, in response to a Question of mine in this House in November or December, the Secretary of State in a considered reply undertook to make his own reply to the inquiry before the end of the year. That was a few weeks before the Christmas Recess, since when we have had nothing from the Secretary of State, and there are increasing forebodings in my constituency and in Scotland as a whole about the reasons why this decision is being delayed. I have had discussions on the matter with my right hon. Friend the Secretary of State for Scotland, and he tells me that there are certain difficulties

  1015
  arising from the decisions to be made by other Government Departments.
  Be that as it may, there are other considerations which the Secretary of State should bear in mind, and one is related directly to the questions posed by my hon. Friends from Merseyside about unemployment.
  The proposed petrochemical complex is in the Cowdenbeath area. In that area we have more than 25 per cent. male unemployment. It was a mining area. It has now diversified. We have hardly a single coal mine in the area. But the other industry is becoming more technologically developed. It is producing more and more with less and less manpower. This is a problem which is not peculiar to my part of the country, but it is of little consolation to my constituents if I tell them that, although they are doing badly, other parts of the country and Western Europe as a whole are doing just as badly.
  I know that the environmentalists in my part of the world are worried about the destruction of the environment and about the safety problems associated with the establishment of a petrochemical complex of this magnitude, and I share their misgivings. They have suspicions about the intentions of and the statements made by the international oil companies in this regard. Equally, on the other side, I have great faith in the determination of the Labour-controlled regional council and in that of the Dunfermline District Council and the Kirkcaldy District Council, both of which are also Labour controlled. They are all determined to protect the local populace from the environmental, health and other likely hazards. But there are many jobs involved not only in the construction of the complex but in the spin-off which is normal and inevitable as a result of a speedy decision on this matter.
  I urge my right hon. Friend the Leader of the House to contact the Secretary of State for Scotland, the Scottish Office and all the other Departments concerned and to urge them to give us a speedy decision. The local authorities, the Glenrothes Development Corporation and all the others concerned with creating employment in the area want to see a speedy and favourable decision on the matter.
  1016
  I make one other point, and I do so knowing that it will raise the hackles of Opposition Members. I wish to refer to the Civil List.
  Mr. Patrick Cormack: I knew that that was coming.
  Mr. Hamilton: Of course. I take this opportunity to say that, in the past fortnight or three weeks, I have received literally hundreds of letters from all over the country and they are virtually unanimous in asking me and asking the Labour Government to take steps to reduce if not to abolish the annuities of certain persons who now get public money and who live private lives which are causing increasing disturbance among many sections of our community, of all political persuasions. I am taking it upon myself to send these letters to my right hon. Friend the Chancellor of the Exchequer urging him to take that kind of action.
  It is intolerable that, at a time when Government supporters especially but perhaps some Opposition Members, too, are increasingly concerned with the social and economic problems created by unemployment and by low wages among many sections of our community who are still employed, my Government are engaged in paying vast untaxed sums to people who are leading lives which are a disgrace to our community.
  Mr. Deputy Speaker: Order. The hon. Member knows the rules very well. He must not make any reflection upon these particular personages, even by imputation, although he is perfectly at liberty to discuss the Civil List.
  Mr. Hamilton: I shall conclude my remarks by saying that even court officials are now coming to admit that they find certain behaviour indefensible. I hope that the Government will take account of this statement—not only by court officials, but by the Tory Press—in determining the scope of annuities in the next Civil List, which I understand will be announced in a few months' time.
  5.30 p.m.
  Mr. Peter Blaker: I want to support my hon. Friends in asking that before the House rises the Government give an undertaking to have an independent inquiry into the existence of certain files held by the Department

  1017
  of Health and Social Security relating to Mr. Norman Scott and the way in which they have been handled.
  In a Written Answer of 6th March which has already been mentioned, the Secretary of State said, in effect, that all the files relating to Mr. Scott had been accounted for, except one. This missing one had related to a claim in 1962 and it was presumed lost or accidentally destroyed in 1967. The fact that a file was mislaid was probably a rare occurrence, according to my advice.
  However, that is not my main point. My main point is that the Answer of the Secretary of State does not deal with the important question whether the files were passed from the Department to No. 10 Downing Street during the period of office of the former Prime Minister.
  My hon. Friend the Member for Woking (Mr. Onslow) has referred to an Oral Answer he received from the Secretary of State on 7th March, and that answer seems to make clear by implication that the Secretary of State believed that the files had been passed.
  If we turn to the book—"The Pencourt File"—there are three points attributed to the former Prime Minister's political secretary, who is now Lady Falkender. The first point is that, after considerable difficulty, Lady Falkender was able to obtain various files from the Department, including a confidential political digest. The second point is that the noble Lady herself said in the book:
  "If you had looked at those files you knew that someone was up to no good".
  The third point is that copies of the files apparently were made and kept by Lady Falkender at No. 10 Downing Street.
  All this was totally contrary to the impression given to the official representative of the BBC, Mr. Peter Hardiman Scott, who attended the Department at the request of the Secretary of State. The impression he got was that the file had been destroyed as a matter of routine in March 1975, and that this was the only file relating to Mr. Norman Scott. Nothing appears to have been said to Mr. Hardiman Scott about the fact that a 1962 file was unaccounted for, and that is rather strange. As a result of his visit to the Department, Mr. Hardiman Scott felt that there was nothing to be gained by the BBC pursuing these inquiries.
  1018
  However, we know from the book and the tapes, to which my hon. Friends have referred, that some months after March 1975, when the impression was given to Mr. Hardiman Scott that the file had been destroyed, several files were in the hands of Lady Falkender. We have reason to believe that this is not a trivial matter. The whole inquiry was started by the former Prime Minister, who believed that a file had been kept from him—a file which he appears to have believed showed evidence of a conspiracy of South African origin against the Liberal Party.
  On 24th February I wrote to the Prime Minister and told him that I had heard tape recordings. I sent him extracts from the transcripts of those recordings and said that if he wished to nominate someone to hear the tapes, the authors of the book would be very glad to play them. Apart from a formal acknowledgement, I have had no reply from the Prime Minister. I had a very brief reply from the Secretary of State who did no more than refer me to his Answer to parliamentary Questions. I do not believe that the matter can be left there.
  There are five questions that require an answer. First of all, do the files referred to by Lady Falkender exist? Secondly, were they handed over, as she declares? Thirdly, what are the circumstances in which files relating to individuals may be released to people outside the Department without the citizen's consent? Here there is conflict between two Answers that have been given recently by the Secretary of State. In a Written Answer to me on 27th February he listed three circumstances in which files could be passed to people outside the Department without the consent of the citizen concerned. Then, in an Oral Answer to my hon. Friend the Member for Burton (Mr. Lawrence) on 7th March, the Secretary of State said:
  "It is for Ministers to decide for themselves, bearing in mind the need to respect the confidentiality of personal information, what papers they need to consult and what advice they need in order to perform their ministerial functions."—[Official Report, 7th March, 1978; Vol. 945, c. 1206.]
  It is strange that the Secretary of State did not make that point in his earlier Answer to me. It seems as if he had second thoughts.
  Fourthly, how far does this principle extend? Does it extend to any Minister

  1019
  who wants a file on any citizen? To which citizens does it extend? Can any Minister see any file on any citizen? The public wants to know the answer to this question, because it has very wide implications for the liberties of the individual citizen.
  My fifth question concerns political advisers. It is quite clear that these files were seen by two political advisers—the political secretary to the former Prime Minister and the political adviser to the right hon. Member for Blackburn (Mrs. Castle), Mr. Jack Straw. I can see that there is a case for Ministers and officials in the Department seeing files relating to individuals, but why is it necessary to extend this to political advisers who are, after all, appointed for party political purposes? It is perfectly clear from the Lancashire Evening Telegraph that Jack Straw saw the files of Mr. Norman Scott.
  Mr. Dudley Smith: Does my hon. Friend know whether these advisers are covered by the Official Secrets Act, which applies to civil servants and Ministers?
  Mr. Blaker: That is a valid question which should be explored. My question is whether it is right for political advisers to see these files. Why was it not right for the report requested by the former Prime Minister to be prepared by ordinary civil servants in the ordinary way? What was so political about the matter? The House should not rise for the Easter Recess until the Government have given an undertaking that there will be an inquiry into these matters.
  Mr. Nicholas Ridley: Can my hon. Friend say why it is necessary for anyone—Minister or political adviser—to see the files of Mr. Norman Scott? We must go back to the reason for this. It is the most important question of the lot.
  Mr. Blaker: I hope that this does not come out of my eight minutes, Mr. Deputy Speaker, but yes, that is a very important point.
  5.38 p.m.
  Mrs. Barbara Castle: Of the three hon. Members who have raised this Matter this afternoon, only the hon. Member for Blackpool, South (Mr. Blaker) had the courtesy to inform me in advance that he was going to refer to
  1020
  me personally. Otherwise, I almost certainly would not have been in the Chamber this afternoon.
  I shall make my intervention extremely brief. I congratulate the three Conservative Members on their ingenuity in having managed to find parliamentary forms of expression for calling both the Secretary of State for Social Services and myself liars.
  The hon. Member for Woking (Mr. Onslow) had all sorts of clever formulae. He queried whether the House was being told the truth. He hinted that there was another side to the matter; he said there was "a good deal more to it" and he ended with the words "cover up". The House has all the facts it needs to know on this matter. It has the statement of my right hon. Friend the Secretary of State for Social Services on 6th March and it is in Hansard for all to see. That is my right hon. Friend's statement of his part in this much magnified so-called mystery, and it can be challenged only on the assumption that he is lying to the House.
  Mr. Onslow: I, too, am anxious that the truth should prevail. Will the right hon. Lady say where in that statement the questions relating to the copying and keeping of files are dealt with in any way?
  Mrs. Castle: The hon. Gentleman should contain himself. I am just coming on to my second point.
  The second allegation had been made against me. I was approached by the Press on this matter, and I never made any mystery about my part in it. Indeed, the hon. Member for Woking read the frank statement I made to the Daily Mail. It was I who volunteered Jack Straw's part in the matter. There was no attempt to cover up on his part or mine. Indeed, there was nothing to cover up.
  The facts are simple, and the statement I made to the Daily Mail has already been read. Early in 1976 the right hon. Member for Huyton (Sir H. Wilson), the then Prime Minister, asked me to see whether there had been anything untoward in the handling by the DHSS of Mr. Norman Scott's social security position. I asked Mr. Straw to look at certain papers on my behalf. Mr. Straw made a report to me which I passed on

  1021
  to the Prime Minister. As I told the Press, there was no indication in the papers to show that anything untoward had been done by the Department. That was the end of the matter so far as Jack Straw and I were concerned.
  Mr. Tebbit Mr. Tebbit rose—
  Mrs. Castle: I hope that I shall be allowed to complete my statement. I know that the moment the hon. Member for Chingford (Mr. Tebbit) thinks there is any dirt about, he tries to get in on the act, but his hon. Friends have preempted him and I shall not allow him to intervene. I am replying to the three speeches which have been made.
  Mr. Adley Mr. Adley rose—
  Mrs. Castle: No, I cannot give way. I wish to complete my explanation. It is silly to be questioned about something halfway through. Therefore, I hope the hon. Gentleman will allow me to complete my record of what happened.
  The then Prime Minister was then passed by me a folder of papers which contained only summaries of Mr. Scott's case, with photocopies of a few extracts from the case history. It is untrue to say, as hon. Gentlemen have said more than once in the House, that at some stage, by some means, normal DHSS files went to No. 10 Downing Street. No such files went to No. 10 from me or from Jack Straw. I am telling the House this part of the story. My right hon. Friend the Secretary of State for Social Services has told the House the other part. There is no mystery about a missing file. Perfectly accurate and normal explanations have been given about the one file from 1962—namely, a sickness benefit file to which my right hon. Friend referred.
  We were told by the hon. Member for Woking this afternoon that Lady Falkender made it clear in a transcript in his possession that she went through the original files themselves. I can only tell the House that no original files were sent to No. 10. I cannot help it if some people have imaginations. They were not sent to No. 10 by myself or Mr. Jack Straw or anybody else associated with "The Pencourt File" story.
  Therefore, I say to the House that an inquiry is unnecessary because there is no cover-up. My right hon. Friend and I have told the House exactly what hap-
  1022
  pened. If hon. Gentlemen wish to call me a liar, I trust you will see. Mr. Deputy Speaker, that they put it in correct parliamentary form.
  5.45 p.m.
  Mr. Ian Gow: On 13th March this year Mr. Speaker wrote to the Prime Minister letting him know the recommendations of the Speaker's Conference on Electoral Law relating to increased representation for Northern Ireland in this House.
  On 9th March on the Business Statement I asked the Lord President whether he would
  "make a statement on behalf of the Government on their response to the recommendations of the Speaker's Conference for increased representation for Northern Ireland in the House?"
  The right hon. Gentleman replied
  "I agree that a statement should be made to the House at an early date and we shall see that it is done."—[Official Report, 9th March 1978; Vol. 945, c. 1613.]
  That was 11 days ago, and I do not believe it is right for the House to adjourn for the Easter Recess without our being given a statement from the Lord President this afternoon about the Government's attitude to the recommendation of the Speaker's Conference. That recommendation was as follows:
  "That the number of parliamentary constituencies in Northern Ireland should be 17 but that the Boundary Commission should be given power to vary that number, subject to a minimum of 16 and a maximum of 18."
  Why is it important that we should have a declaration from the Government on their attitude to that recommendation? I believe that it is of the greatest importance, because it was under pressure from the hon. Member for Antrim, North (Rev. Ian Paisley), my hon. Friend the Member for Abingdon (Mr. Neave) and from other right hon. and hon. Friends, that the Government agreed to set up the Speaker's Conference. That conference was set up because there was general recognition by the House that Ulster was under-represented in this place. The conference endorsed that view and recommended a significant increase in the parliamentary representation of Ulster.
  If there is a general view in this House, and if the Speaker's Conference in an almost unanimous recommendation says that there should be an increase in the

  1023
  representation of Northern Ireland, it is incumbent on this House to put right something that is manifestly wrong. But that can be done only by legislation.
  I am asking the Lord President to tell the House this evening, first, that the Government accept in principle the recommendation of the Speaker's Conference communicated to the Prime Minister on 13th February; secondly, that the Lord President will introduce the necessary short Bill to give effect to the recommendation of the Speaker's Conference.
  It is important that we should press ahead with these matters because of important evidence given to the Speaker's Conference on 23rd November by the deputy chairman of the Boundary Commission for Northern Ireland. Assuming that legislation was passed to increase the number of constituencies in Northern Ireland, he was asked what would be the time scale to enable the Boundary Commission in Northern Ireland to carry out its review of the existing boundaries. Mr. Justice Murray, the deputy chairman of the Boundary Commission for Northern Ireland, was asked:
  "Did I understand you to say in the preamble to your remarks that there was some work which you might be doing now but which you were not doing because of the appointment of Mr. Speaker's Conference?"
  He answered as follows:
  "Yes, that is so … once we had been told that this Conference was set up, then if we were to go on and work on the 12 seats, then find that the number had been changed, the work would simply be wasted and thrown away. So we simply stopped work until we know what is the position."
  Therefore, we have the deputy chairman telling the Speaker's Conference, as published in the official House of Commons Paper, that work on the boundaries in Northern Ireland had been stopped. That was work that was envisaged as a result of the increase and disparity of the population.
  Another question was put to Mr. Justice Murray. He was asked:
  "Suppose that this Conference were to make a recommendation for an increase in the number of seats from Northern Ireland, and suppose that recommendation were subsequently translated into legislation, how long would it take you, do you think, from the date upon which that legislation received the Royal Assent to the date upon which you would be able to make your recommendations
  1024
  which, to use your own words will take a very great deal of work indeed?"
  He replied:
  I would envisage that if there were a change of law here as a result of these proceedings probably one should work on something like a four year period from the passing of the legislation.
  It is only right to point out that that four-year period was subsequently reduced in a later answer to my hon. Friend the Member for Beckenham (Mr. Goodhart). My hon. Friend asked Miss Simmons whether it would be possible to speed up matters if she had all the resources that she wanted and all the staff that she wanted. She replied that it might be possible to take two years.
  In the appendix to the White Paper there is set out a minimum period of 110 weeks. Nevertheless, none of us can foresee the time scale of future General Elections. It is plain that it will be impossible for Northern Ireland to have the increase in representation that the Speaker's Conference recommended until after the next General Election. However, we have a duty to the people of Northern Ireland to ensure as soon as may be that their representation here will be fairly, justly and equally compared with representation for the rest of the United Kingdom.
  We have a duty to ask the Government to make their position clear and to tell us that the simple Bill that is required—it would be a simple Bill—will be introduced this Session. If such a Bill were introduced during the Session, and if it were to receive Royal Assent before the House rises at the end of July, it would be possible for the Boundary Commission for Northern Ireland to start work straight away to ensure that, even though we are not able to have fair representation for Ulster in the next Parliament, we should certainly have it in the Parliament after that.
  5.54 p.m.
  Mr. Eddie Loyden: I return to the debate on Merseyside, in which my hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and Ormskirk (Mr. Kilroy-Silk) participated. Bearing in mind the present problems on Merseyside, it would be disastrous if the House were to adjourn before careful and positive consideration had been given to the problems that have

  1025
  been brought to the attention of the House this afternoon by my hon. Friends.
  I am sure that the House will accept that the problems of Merseyside have been constantly paraded before the House during the past two years. In spite of the approaches that have been made about the increasing problems in the Merseyside area—various efforts have been made in many directions—the rate of unemployment continues to increase. The closures continue, redundancies continue, and day by day the whole problem is worsening. The point has been reached when the morale of the people is at an extremely low ebb.
  It is important that the Government take into account the points that have been made today about the Government's efforts and the effect that they have had on Merseyside. Considerable sums of Government money have been poured into Merseyside to encourage private enterprise to establish jobs in the area. On the other hand, there has been a job loss far in excess of the number of jobs created.
  The people of Merseyside find it extremely difficult to understand why vast sums of Government money have been spent for the purpose of creating short-term jobs while long-term jobs—in many instances skilled jobs—are vanishing from the scene. It will take a great deal of imagination, and perhaps some political will, to change the situation so that jobs of a longer-term character are provided. The provision of short-term jobs is welcomed, but in areas such as Merseyside the answer to the longer-term problem of declining job opportunities is the provision of long-term jobs.
  The problem of unemployment is not confined to Merseyside. It is a North-West problem. The region has a higher share of national unemployment than any other region and a lower share of nationally notified vacancies. It is significant that, although there has been a slight improvement in the North-West's share of national employment, the peak period of the region's share of unemployment was during the years from 1972 to 1974, during the years of the Conservative Government. Of course, it is no comfort to the people of Merseyside merely to draw comparisons between periods of Conservative and Labour Government. We take
  1026
  the view that the present situation demands more positive and immediate action from the Government.
  In a recent Adjournment debate we discussed British Leyland. When the Minister replied he read closely from a brief in the usual fashion and ignored all the points that had been made in the debate. We had paraded before us the efforts that the Government have made—for example, special development area status and all the other instruments that have been used to overcome many of the problems that exist in the area of which I speak.
  It must be recognised that the measures that the Government have taken have not done the job for which I understand they were created—for example, compensating for the loss of jobs in declining industries and, indeed, compensating for the declining industries that we have lost. The measures that have been taken have not been able sufficiently to compensate for the job loss in declining industries. We see industries contracting and closing almost daily.
  During the Adjournment debate my hon. Friend the Member for Ormskirk observed that British Leyland had been brought to Merseyside with an industrial development certificate and an initial Government grant of £4 million, and that at a certain stage it had decided to draw stumps and move on. The Opposition were shouting words to the effect "Why not?" The answer is to be seen in the Select Committee's report. Lord Stokes was questioned about the Leyland situation. The report makes the situation patently clear.
  I have argued that the Leyland situation cannot be divorced from the closure of the Speke No. 2 plant. Leyland said that it went to Merseyside virtually because it was told to go there and that it was against the management's economic and commercial judgment. That was not on the basis of the work force's performance or the location. In that sense it is an attractive location. There are good facilities for transport. It has a port, an airport and is linked to the motorways. Therefore, Merseyside is an attractive location.
  We are now beginning to realise that the motor car industry is arguing that any geographical location must suit the economics of car production. Therefore,

  1027
  that means the Midlands. If we extend that argument to industry generally, the Northern Region had better look out, because it will be in for an extremely rough time.
  Private enterprise is incapable of resolving the problem of unemployment. It is motivated by profitability, performance and so on. If private enterprise were to determine the location of industry, the consequences for employment would be completely disregarded.
  Mr. Kilroy-Silk: Will my hon. Friend confirm that Leyland and many other companies have tried to put the blame for the closure of Speke on the workers at the factory because of their alleged militancy, lack of productivity, and so on? However, both he and I know from meetings with the company that the closure of Speke has more to do with Leyland's mismanagement, its over-capacity, its design faults on the TR7 and its anticipated market in the United States not materialising. Is it not typical of both the Opposition and private enterprise that, when they make mistakes which bring calamity to an area, they try to evade their responsibilities and put the blame on others?
  Mr. Deputy Speaker: Order. The hon. Gentleman has made his speech.
  Mr. Loyden: My hon. Friends know, from meetings with the Leyland management, that the reason given for the closure of the Speke No. 2 plant was performance at that plant. But it was not the only point that was made. It was the central motive for the closure of Speke, but the management shifted its position entirely on the reasons for the closure of Speke. As my hon. Friend the Member for Ormskirk said, in a somewhat lengthy intervention, the causes for the closure of Speke went far beyond the performance of the work force.
  For example, from the birth of the TR7 it would have been an impossible task for the workers at Speke to produce sufficient cars to satisfy Leyland. There was market resistance in the United States. Therefore, Leyland wanted less production, not more. Production in that sense was no longer an important factor.
  Michael Edwardes is now talking about reducing Leyland's capacity to 750,000 as
  1028
  opposed to its potential of producing 1 million cars per year. That is the kind of unambitious plan that has been advanced by Leyland. That means that the second most modern plant in the Leyland setup is to be closed. The management has argued that will be beneficial for the future of Leyland.
  For too long now the workers on Merseyside have been blamed for the problems in that area. But the figures clearly show that that is not so. Merseyside has no more problems in that sense than other areas of the United Kingdom. There is an indication that the industrial base in that part of the country is beginning to break up. The Government must not sit back and watch it take place. The political implications are far more wide-ranging than the Government have suggested.
  I do not suggest that there is an immediate answer to these problems for either Merseyside or the North-West Region as a whole. These problems will not be resolved until the Government pursue an alternative policy. It is no use arguing that action now being taken on Merseyside will necessarily resolve the long-term problems. We need alternative economic policies to bring about a change in the situation.
  Mention was made of the Lucas situation. The combined stewards at Lucas have produced a corporate plan for their industry. The alternatives are practicable. There were sneers from the Opposition Benches when that matter was raised. The stewards have produced a socially desirable production scheme for the manufacture of kidney machines and heating pumps which will be more efficient and less costly than anything on the market today. They have also produced and road-tested a rail-road vehicle. Those are matters not to be sneered at. They indicate the creativeness of the British worker. He can pose a viable alternative to the only scheme that the boss has at the moment—namely, closing factories and creating redundancies.
  I believe that it is time that the Government listened more to the trade union movement than to those in the City who constantly close factories and make judgments which affect the lives of countless thousands of people on Merseyside and throughout the rest of the country.

  1029
  I do not believe that the House should go into recess until the Government have taken account of the situation on Merseyside and in the North-West Region and, indeed, throughout the whole of the United Kingdom.
  It is not enough for the Government to wring their hands in despair and to say that nothing can be done about unemployment. We do not expect that kind of attitude to be adopted by a Labour Government. It is their responsibility to give a lead and to seek alternatives. Their first action should be to stop the notices going out to workers on Merseyside. They should then talk to the Lucas stewards about their alternative plan and encourage progressive and creative approaches to solving our employment problem.
  6.8 p.m.
  Mr. Nicholas Winterton: I am pleased to follow the hon. Member for Liverpool, Garston (Mr. Loyden) not because I agree with much of what he said but because my constituency also lies within the North-West Region. I believe that my constituency has one of the lowest unemployment rates in the North-West. That is because the area has a reputation for hard work and relies predominantly upon small businesses. If the Government appreciated the importance of small businesses instead of merely paying lip service to them, I believe that in a very short time unemployment could be solved virtually—I hesitate to use the words of a past Leader of the Conservative Party, my right hon. Friend the Member for Sidcup (Mr. Heath)—"at a stroke".
  The debate is important because it gives Back Benchers the opportunity to raise matters that affect them and their constituents. I intend to raise two subjects—hospital waiting lists and education.
  The situation in the area covered by the Macclesfield hospitals is serious.
  Mr. Deputy Speaker: I must point out to the hon. Member that Mr. Speaker has depreciated hon. Members debating now any subject which might impinge on the Consolidated Fund. Item 7 in that debate deals with the Question that the hon. Member now raises.
  Mr. Winterton: I shall of course heed your advice, Mr. Deputy Speaker. But
  1030
  Mr. Speaker does not necessarily call all hon. Members who might wish to become involved in a debate on the Consolidated Fund.
  Mr. Deputy Speaker: would certainly call any who happened to be here.
  Mr. Winterton: There is no guarantee that that debate will be reached. However, I shall endeavour to restrict my remarks on this subject. It is of such importance to my constituents that I hope you, Mr. Deputy Speaker, will allow me to mention it briefly.
  The ex-mayor of the borough, who is a member of the community health council, has described the situation as a "scandalous state of affairs". The waiting list for surgery shows that well over 2,000 people are waiting for operations amongst which are more than 300 orthopaedic cases. Some will have to wait for more than two years before there is a chance of being admitted. Consultant surgeons are unable to cope with the list. Some patients could have been accommodated but there have been administrative problems involved in accepting them at the right time.
  The district management team is deeply worried. The administrator has said:
  "I suppose it must be quite true to say that some people are likely to die before getting in to hospital for an operation."
  He added that he thought that death would result not because they were not being treated but because they would not have an operation in time.
  Mr. Deputy Speaker: The Chair has been indulgent. Perhaps the hon. Member could move on to his other subject.
  Mr. Winterton: I am happy to do that but there are not many opportunities for Back Benchers to raise matters that are of grave importance to their constituents.
  The district management team is worried. Local general practitioners have co-operated in every way with the hospital authorities. They are dealing with more patients than is normal. Without their co-operation the waiting list would be nearer 5,000 cases.
  I turn to the education problem in the Macclesfield area. A recent headline in the Macclesfield Express reads:
  "240 Boys Caught in the Crossfire".

  1031
  The whole problem and difficulty has arisen because of a decision by the Secretary of State for Education and Science that from September 1979 the Cheshire education authority will no longer be able to pay for students to attend King's School, Macclesfield—an independent school which has co-operated for many years with the county education authority to the advantage of many thousands of pupils from every social walk of life in the area. Boys have gone on from that school to Oxford and Cambridge and some have played for England on the rugby field. This is a fine school which should be allowed to continue to play an important part in the community.
  Cheshire will not be able to provide the places that were made available previously under an agreement with the Governors of Kings School. Funds for pupils from the King's Junior School to move into the senior school have been withdrawn by the Secretary of State in the present Socialist Government and under the punitive destructive powers of the 1976 Act. This measure was strongly opposed by the Conservative Opposition in the House of Commons.
  The problems created by that Act are coming forward in monstrous proportions. The present difficulty is being urgently discussed by the county education authority, the Department of Education and the governors. The district education officer hopes that there will be a satisfactory outcome to enable the 120 boys to go to the school. But, he has publicly confirmed that if the governors are unable to accommodate these boys, the county does not have places for them. He has said:
  "I am unaware of any option open to me to accommodate the 120 pupils within the district."
  This is a serious state of affairs. An independent school must plan for its own future. The Government of the day cannot say that it must co-operate just as long as the Government want it to co-operate. A school must plan to secure its own future. There are grave problems about accommodating the 120 boys who are scheduled to be sent to King's School by the local education authority.
  The 1976 Act is destructive and punitive. The local education authority
  1032
  is the body that is best qualified to decide to which school local children should be sent. The Secretary of State is not so qualified. The withdrawal of the opportunity for these boys to attend this school has robbed them of the advantages that they would have enjoyed and expected to enjoy.
  A directive from the Department of Education can remove from the local education authority the right to fund the education in independent and direct-grant schools of pupils over the age of 16. Children who are beginning their sixth form studies and who already attended such schools before the 1976 Act became law can be seriously affected. This situation has created grave problems for the parents of these children. No hon. Member would say that it is right that children should be removed from a school arbitrarily at the age of 16 and be sent to another school or college of further education to complete their education when they were originally selected for grammar school education. This is a most disastrous state of affairs.
  In one area of the county—Congleton—some boys who attend the Crewe Grammar School, which will become comprehensive later this year, were guaranteed that they would be given a selective education through to and including their sixth-form studies. However, because of the directive and the difficulties involved in planning the changeover from selective to comprehensive education, the county has decided reluctantly to terminate education at the Crewe Grammar School at sixteen. This means that the boys are being faced with going to a college of further education at the age of 16 in order to complete their education. I do not believe that this Government, even with their punitive education measures, can really mean to do this destructive damage to the education of some of our young people. They are robbing them of their right which was enshrined in law but which, because of a directive from the Department and because of the grave problems forced upon many Conservative-controlled education authorities, is being taken away retrospectively.
  I hope that before he winds up the debate the Lord President will look into the problems that I have raised so

  1033
  that I may have something to tell my constituents and the young people who are affected and who are gravely concerned about their future education.
  In conclusion, I commend the speech of my hon. Friend the Member for Eastbourne (Mr. Gow) who demanded of the Lord President increased representation for Ulster in the House. I have supported Ulster from the time I became an hon. Member and I believe that it has been the victim of grave injustice since the abolition of Stormont.
  I ask that Ulster should be treated as fairly as Wales or Scotland and that its representation should be increased to at least 17 hon. Members—preferably 18—at an early date.
  6.21 p.m.
  Mr. Leo Abse: If I may take the debate away from matters that are important to Macclesfield, I should like to look at wider vistas that affect the next generation no less than the problems described by the hon. Member for Macclesfield (Mr. Winterton).
  In the last three or four years, Holland has been racked by a debate with which this country is intimately concerned. It arises because of a consortium of which we are a member, Urenco, which produces enriched uranium at Capenhurst in Cheshire and at Almelo in the Netherlands.
  In order that the House may understand why I am raising the matter, I should explain that the German nuclear industry is attempting, subject to the pressures of international opinion, to sell nuclear power stations and reprocessing facilities to Brazil, a country which is under a military dictatorship and is situated in an area of great instability. More significantly, it is a country which has not signed the non-proliferation treaty.
  Under the terms of the projected agreement, the Germans naturally have to deliver enriched uranium, since otherwise, the proposed power stations in Brazil could not run. The United States has refused to sell enriched uranium to Brazil because that country continues in its insistence that it will not subscribe to the safeguards in connection with the plutonium that would emerge from the reactors and that could be speedily converted into nuclear bombs.
  1034
  There is an agreement under which this enriched uranium that Brazil requires is to be supplied through Urenco and, because of our membership of that consortium, we are party to the agreement. I have naturally expressed my concern, echoing the deep disquiet felt in Holland.
  The Dutch Government attempted to allay the anxiety of the Dutch Parliament by insisting that the safeguards negotiated between the Anglo, Dutch and German parties to the agreement with Brazil were adequate. They put the safeguards before the Dutch Parliament and the debate that took place there made abundantly clear that the safeguards were inadequate.
  So incensed was the Dutch Parliament that the Government party was split and the Government have been compelled by the Parliament to endeavour to renegotiate the agreement. The Dutch Parliament believes that the safeguards are totally inadequate and dangerous and would be putting into the hands of a military dictator a potential power that could lead to a nuclear conflagration.
  Earlier today, in a Question to the Secretary of State for Energy, I asked whether it was my right hon. Friend's intention, in view of the Dutch attitude, to exercise the veto that he possesses under the Anglo, Dutch and German treaty to prevent the export to Brazil of enriched uranium from Capenhurst. The Dutch are naturally fearful that, if the consortium is frustrated from sending enriched uranium from Almelo, it will sell the uranium from Capenhurst. I also asked the Secretary of State to make a statement
  "on the future policy of Urenco relating to the supply of enriched uranium to countries who have refused to sign the non-proliferation nuclear treaty."
  I regret that the Secretary of State said that, in his opinion, there was no need for a veto. He has repeated what the Dutch Government told their Parliament. He is satisfied with the safeguards and other non-proliferation conditions that have been negotiated between Brazil and the other parties and regards them as adequate.
  I ask the Leader of the House to ensure that, before the recess, the claimed safeguards are deposited in the Library so that the House will know precisely what safeguard clauses are included in the contract. By stealth, an agreement

  1035
  has been entered into that apparently ignores what the United States is not prepared to ignore, namely, that enriched uranium can be put into the hands of a military dictatorship.
  There is no doubt that the Dutch Parliament believes that before enriched uranium is allowed to get into Brazil's hands there should be not merely an inspectorate from the International Atomic Energy Authority, as is, apparently, proposed, but a non-stop vigilance over any enriched uranium that gets into Brazil.
  There is no doubt about the goal of the Brazilians. With rare impertinence, the Brazilian Embassy wrote to me unsolicited, when it found that I had put down a Question to the Secretary of State for Energy and asked me to reconsider my decision to question my right hon. Friend about the proposed deal. It was a curious intervention from an embassy which is more accustomed to working within the ambience of a dictatorship than within a democracy. The letter made clear that Brazil was going along the road of nuclear energy and added:
  "Once having decided to take this road, and being the size it is, Brazil must be sure not to have to rely, in the future, on the goodwill of others for the supply of the enriched fuel and must be able to produce this fuel in the country. This is the objective of the nuclear agreement with Germany."
  The Brazilian Government have declared unequivocally their intention to have a full nuclear fuel cycle. They intend to do exactly what, if we listen to Mr. Justice Parker, we shall do, namely, to enter the area of reprocessing. This will allow plutonium to come into the possession of a country that has not even signed the non-proliferation treaty.
  That we should be in any way party to sabotaging the efforts of the Dutch in halting this mad drive to Armageddon reflects no credit upon this country. That we should be in a position in which we have had no examination of the terms of the agreement by our State-owned company and no surveillance of it, even while the debate has raged inside Holland, reflects badly upon the House and upon its lack of involvement in this grave nuclear issue.
  1036
  The lack of contact that exists between the Government and British Nuclear Fuels is leading to a position where the company's atom salesmen are going out in the world, no doubt to make profits for Britain but only in order to condemn to death future generations not only of this country but of the whole world. It is even more dismaying that reports are coming in from the Press outside this country suggesting that British Nuclear Fuels is actually involved in assisting Brazil to create a plant which would be needed for uranium enrichment. That plant is intended to make hexafluoride, one of the necessary steps before one can have a plant for uranium enrichment.
  By stealth, and quietly, a company of ours—owned by the State—is going out into the world and creating a situation which is frustrating all the attempts of President Carter to ensure that there is no nuclear proliferation. It is frustrating attempts made by countries such as Holland which are alert and vigilant to the danger. In the meantime, we are placidly accepting the situation and are lacking the necessary surveillance and vigilance.
  I believe it is time that the voice of the British Parliament was heard. It is time that the British Government made clear that the policy of non-interference with the commercial sales of British Nuclear Fuels cannot go on, since it is clear that the company is conducting its sales in a manner and form that are sabotaging every effort by America and others which could at least give us some hope that we shall have no nuclear proliferation.
  The issue I am raising has a direct relevance to the debate that we shall have on Wednesday. The whole basis of the argument which Parker has put forward, naive and jejune as it is, is that it is absolutely essential that this country has its own reprocessing plant because, if we do not, other countries will want to have a reprocessing plant. Yet here, demonstrably, we have a declaration from Brazil that, far from being inhibited in any way by the suggestion that we shall have a reprocessing plant—which should cause Brazil not to have one—it is determined that it shall have one.
  The chauvinism that exists inside the Parker Report—which reveals the dangerous consequences of a nineteenth century concept reacting to the problems of

  1037
  the twenty-first century, if we are ever to have one—is based upon the fallacy exposed by the very fact that Brazil, even with the knowledge that this Government are likely to give support to a reprocessing plant in Britain, is still determined to go it alone. Indeed, we are becoming the nuclear hawks of the world, despite the fact that we have nominally subscribed to the Downing Street agreement which intended that during the next 18 months or two years we should endeavour to find out whether it is necessary to have any reprocessing plants at all and to see whether we can curb the proliferation of plutonium, which can be converted into a crude but dreadful nuclear weapon.
  I ask the Leader of the House to convey my remarks to the Secretary of State. I trust that all the information that I have requested will be placed in the Library so that the House may have at its disposal the claimed safeguards in order that they can be investigated here as they have been investigated by the Dutch Parliament. Those investigations left the Dutch Parliament profoundly dissatisfied. We should have the information so that we can appraise the situation. The people of Britain ought to know.
  What is happening is that a nationalised concern is so zealous for profits that it is frustrating all international efforts to prevent the proliferation of nuclear weapons. It is actively stimulating support for enriched uranium and placing it in the hands of an irresponsible dictatorship. The people of Britain ought to understand that this nationalised concern, backed by one of the most powerful nuclear industries in the world, and in collusion with the nuclear industry of the United States, itself attempting to sabotage Carter's policy, is likely to take us on the road to Armageddon unless this House begins to assert its authority.
  The amount of time that is left is small. It is clear that we are being hustled and harried by this company into making a decision about our own reprocessing plant, even though Carter—who has shown by example that he is prepared to accept the rules—is asking that there should be a hiatus in order that a proper evaluation can be made. We are being pressurised and stampeded into making a fatal decision which, as I have said once before, could produce a chain of
  1038
  events which could lead to the next generation being the last generation.
  6.38 p.m.
  Mr. John Stokes: Having listened to all the speeches this afternoon, I believe that there has seldom been a debate on the Adjournment motion with a greater number of reasons why the House should not adjourn.
  We have heard a lot about industry. Production is absolutely flat, overmanning is rife and unemployment remains stubbornly high. There is a total lack of confidence among management and men in both industry and commerce. In addition, we have the discontent of the Armed Forces and the police with regard to their pay and many experienced men are leaving them. There is great public concern about immigration, yet the Government come forward with no proposals for further reducing it.
  Finally, with regard to foreign affairs, we have no policy at all. We appear to be allowing Russia to roam at will wherever she likes all over Africa. The nation seems to be drifting at home and abroad without either national will or purpose. I cannot remember a more miserable time, even taking into account the worst years of the war.
  We have heard much today about Merseyside, an important area of England, largely because this House, instead of concentrating on England, which constitutes four-fifths of the United Kingdom, has spent weeks talking about a much smaller number of people in Scotland and, now, in Wales.
  I wish to refer briefly to the last part of the speech by the hon. Member for Fife, Central (Mr. Hamilton). I have heard him speak a great deal on the subject of the Civil List. I am sorry that he is absent now. Perhaps he has had to go to Europe, or perhaps he has some other good reason for not being here. I ask myself whether he was attacking the alleged indiscretions of one member of the Royal Family or the whole institution of monarchy. I suspect his motives and I dislike them being disguised under the cloak of morality.
  I turn now to our treatment of Russian and other prisoners of war from 1944 to 1947. As the Leader of the House knows, I asked for a debate on this

  1039
  subject which he thought fit to refuse. The Foreign Secretary has declined to take action on requests both from this House and the other place. I have written to the Prime Minister asking for an inquiry. I still await a reply. As I told the Lord President, I believe that this matter touches the honour of this country and the House should not adjourn until it has been debated.
  Lord Bethell first drew attention to our forcible repatriation of Russians and others in his book entitled "The Last Secret" which was published in 1974. Among other things it referred to the infamous Yalta agreement by which we agreed to repatriate these unfortunate people and which eventually allowed Poland to come under the Soviet yoke.
  Since then—and this is why I raise the matter now—under the 30-year rule much new evidence and many hitherto secret documents have been disclosed. Count Tolstoy has used this material in his recent book "Victims of Yalta", which tells with dignity and restraint the horrifying story.
  It is because the actions of our troops in forcibly repatriating so many thousands of desperately miserable people either to certain death or to long terms of harsh imprisonment were so untypical of our character and history that I feel that the subject must be examined by this House. Several correspondents wrote to me after my broadcast. They simply could not believe that British soldiers could behave in this callous and inhuman way.
  Others wrote to me who had been forced to take part in these dreadful activities, herding men, women and children into lorries and trains to take them behind the Iron Curtain. The people who wrote to me say that their part in these dreadful activities still lies on their consciences. In mitigation it must be remembered that towards the end of the war Stalin and Russia were painted as heroes by the Government and the media, and the public shut their eyes to the known cruelties and evils of the Soviet system.
  The Foreign Office desperately wanted us to remain friends with the USSR, and therefore the attitude of a number of Foreign Office officials gives rise to seri-
  1040
  ous concern, particularly since some of those officials are still alive and some of them still occupy important positions.
  As can be seen from the mass of evidence now made public, these officials urged on every possible occasion that these unfortunate people should be forcibly repatriated. This affected not only the Russians who had fought against the Soviets, who constituted a small number, but other people who had not done so or who had been pressed into service for one reason or another. In addition, there were large numbers of women and children and peoples such as the Balts or the White Russians who, having fought the revolution in 1919, thereafter left the country and became exiles. Further—and this is particularly odious—these officials were most anxious that this terrible repatriation that our soldiers found so repellent and to which some of our generals so strongly objected should be kept secret from Parliament and the public.
  Mr. Mayhew, who was an Under-Secretary at the Foreign Office in 1947, has publicly acknowledged his role in the matter, although he quite unwittingly deceived the House in giving it false information. However, as far as I know, no other officials have given any explanation of their conduct or motives. One of those concerned was Sir Geoffrey Wilson, who subsequently became chairman of the Race Relations Board. As far as I know, when Sir Geoffrey Wilson accepted that appointment, he did not disclose that he had been an enthusiastic supporter of our policy of sending wretched Russians or others to death or to appalling treatment at the hands of Stalin in order that Russo-British relations should remain good.
  Therefore, any subsequent moralising that Sir Geoffrey Wilson might have made—for instance, on the subject of human relations—seems vitiated by what we know of his conduct during his spell at the Foreign Office in dealing with the whole question of the repatriation of these unfortunate people.
  My object in calling for a debate on this subject is not to castigate guilty officials. However, they should be given the opportunity as a result of an inquiry—we have many precedents for such inquiries—to explain their conduct, otherwise they will stand condemned for ever in the history books of this country.

  1041
  Two further steps should be taken. A memorial should be erected at public expense to those who were wrongly and forcibly repatriated by this country. Also, in so far as it is possible, some compensation should be given to the surviving relatives of those poor people.
  This action was quite untypical of our history. We are a kindly and tolerant race. This is an almost unique exception to the way in which we normally behave, and I do not believe that the House should continue to brush the matter under the carpet. After all, many thousands of people were involved and, as I know from the letters I have received, many people are still extremely concerned about this whole wretched affair.
  6.49 p.m.
  Mr. John Lee: The extremes of politics do not always meet, but as a result of what the hon. Member for Halesowen and Stourbridge (Mr. Stokes) said—and I do not necessarily accept all he has said—I share in some measure his unease. My main purpose in taking part in the debate was not to say that, and I shall speak only briefly. I apologise to the House if I am late in taking part. It might be thought discourteous that I should have come in and got to my feet so quickly.
  Let me turn to the matter which prompts me to speak in this debate and, if I can find a Teller to accompany me, to divide the House at the end of it.
  There are no doubt many gradations of involvement of persons in the extraordinary business which happened at the end of the war. There were no doubt a number of Russians who could correctly and not pejoratively be described as Fascists who actively and willingly assisted the Nazi cause. For them I have no sympathy.
  But it must be at least arguable that there were a number of people whose involvement was neutral and in some cases tragically the result of matters beyond their control. One does not have to be a Conservative to regard Stalin as one of the most monstrous dictators who have disfigured this century. Indeed, his successors no longer even bother to defend him. None of us can be untroubled in our consciences about a number of occurrences towards the end of the war.
  1042
  It may be that in the desperate situations of war one is forced into alliance with people whom one does not like and one sometimes has to acquiesce in situations which one finds repugnant. That is the excuse that is given for a number of things about Yalta. The hon. Member for Halesowen and Stourbridge referred to the former chairman of the Race Relations Board. Let the hon. Member not forget that it was Sir Winston Churchill who acquiesced in a great deal of that which is responsible for the present arrangements with regard to the Polish frontier. We do not know the full story about that.
  There are many reasons why one does not have to accept the Hockhuth version. Nor does one have to speak highly of the pre-war Polish Government, who were nearly a Fascist Government. If the war had taken place in 1938 instead of 1939, the irony is that the Poles would probably have been allies of the Germans instead of their enemies, and the Czechs would have been far more effective allies than the Poles were destined to be.
  However that may be, there is a case for further investigation. I cannot think that it could do our reputation any harm, and it might well do some good. It might well also put right the injustice to some of the persons who were the victims of real-politik in those days.
  I wish briefly to say why I have intervened in the debate. It is to ask, before we adjourn, why it is necessary to create 16 life peers, four of whom are Conservatives. Is it really necessary to provide a consolation prize for a clapped-out ex-Commissioner of the European Economic Community? If "Fatty Soames", as he is normally referred to in Private Eye, has to be given a consolation prize, can he not wait until we have a Conservative Government, if we ever have another one, to give it to him?
  If arrangements have to be made for a future Conservative Lord Chancellor—I know that there are at least three candidates: Lord Hailsham, Lord Justice Lawton and the now-departing right hon. and learned Member for Epsom and Ewell (Sir P. Rawlinson), who apparently is to be recruited as the third—what business is it of the Government to facilitate the private arrangements of the Leader of the Opposition? My right hon. Friend the Leader of the House owes us an

  1043
  explanation. I do not suppose that we shall get one.
  At least the majority of life peerages that have been doled out in today's Honours List, if it can be called that, represent Labour and go a fraction of the way, though only a fraction, towards redressing the political imbalance in the other place. At any rate, they are a great deal less ludicrous than some of the things we are accustomed to seeing produced.
  I have given up my attempts to amend the Peerage Act, out of sheer embarrassment at the resignation Honours List. I do not regard that as any longer a defensible proposition. But I ask my right hon. Friend for an explanation of why it is necessary to assist the right hon. Member for Finchley (Mrs. Thatcher) in her Shadow Cabinet arrangements.
  6.56 p.m.
  Mr. Norman Tebbit: I had orginally intended to raise the matter of local government and the proposed new form of Government purchasing contracts, about which there is considerable mystery at the moment as to why the Government have, on the occasion of phase 3 of their incomes policy, not given any advice to local authorities, although they did so, by circular, on phases 1 and 2.
  We might also have usefully asked the Lord President whether he could make available some advice to local authorities before the House rose, as they must find it extremely puzzling why they should have had circulars about phases 1 and 2 which had promised that the black list of firms would be distributed to them. That such a black list exists has been confirmed for firms on phases 1 and 2, but it was never issued. Yet we are nine months through the year with phase 3 of the incomes policy and no such advice has been given to local authorities.
  However, I was so taken by what the right hon. Member for Blackburn (Mrs. Castle) said in her speech that I decided that I, too, should follow my hon. Friends in asking for an inquiry into the matter that we might best call the affair of the Norman Scott file. Indeed, I told the right hon. Lady before she left the Chamber that I would do so. Since then my determination to do so has been increased by having been sent whilst in the Chamber a copy of the transcript of a
  1044
  telephone conversation between Mr. Barry Penrose, one of the authors of "The Pencourt File", and the right hon. Member for Huyton (Sir H. Wilson). This, too, appears clearly to contradict what the right hon. Lady said.
  The right hon. Lady made it plain that in her opinion someone was telling lies about the mystery of the file of the Department of Health and Social Security on Mr. Norman Scott. There is a clear conflict between what the right hon. Lady said today and what Lady Falkender and the right hon. Member for Huyton told Mr. Penrose and Mr. Courtiour. Those conversations, as the House now knows, were tape recorded at the time and are available to be heard by any hon. Member on either side of the House and quite possibly by the gentlemen from the Press, for all I know.
  It would be very proper if the Prime Minister had accepted the offer made by my hon. Friend the Member for Blackpool, South (Mr. Blaker) that the Prime Minister should depute somebody to hear those tapes and hear what was said by Lady Falkender, by the ex-Prime Minister and others. The conflict must be resolved. I support my hon. Friends in asking that there should be an independent inquiry into the matter.
  I shall quote from what I have every reason to believe represents a transcript of a telephone conversation between Mr. Penrose and the former Prime Minister. They were discussing the matter of the files of Norman Scott, and it appeared in the conversation that they had had some difficulty when the former Prime Minister had sent them to see the right hon. Member for Blackburn to discuss the matter.
  It appeared that the difficulty was that she thought, as did her personal assistant, Mr. Jack Straw, that these two journalists were still concerned about the leak of papers on the Child Benefit Bill, which you will remember, Mr. Deputy Speaker, caused some comment. That was not so. The right hon. Member for Huyton said to Mr. Penrose:
  "I gave you personally myself—nobody else—the story about the Chelsea file".
  That is the file on Mr. Norman Scott. Later the right hon. Gentleman said:
  "All you need to say is the Prime Minister or Harold Wilson or however you like to describe me called for it and inquired why the Chelsea file was missing. And was told …"

  1045
  Later he said:
  "Just put the story—put it in terms of me, however you want to write it down, that I asked for the thing and got it."
  The "thing" in question was the file that the right hon. Lady said today did not leave her Department. It appears that the former Prime Minister believes that he asked for it and got it.
  Mr. Lee: It is not my purpose to defend my right hon. Friend the Member for Huyton (Sir H. Wilson), but did the hon. Gentleman warn my right hon. Friend that he intended to mention him in this sort of context? It is the custom of the House to do so.
  Mr. Tebbit: I have already said that I warned the right hon. Lady. The right hon. Gentleman was warned, as was the Secretary of State, that the matter would be raised in this debate.
  It is clear that the file was transmitted and that the difficulties that arose at the time between Mr. Penrose and the right hon. Member for Huyton were only over the problem of Mr. Jack Straw, whose name, it was asked, should be kept out of the Press, because, in the former Prime Minister's words about his right hon. Friend:
  "She is trying to get him adopted as a candidate at Blackburn. You don't have to mention that either."
  That has now happened, so I do not see that it harms Mr. Straw's chances of being selected to make known why it was so important that his name should be kept out of the papers because the Prime Minister of the day made it plain that he was strongly suspected of being involved in the child benefit papers leak.
  So much for the tape of the conversation with the former Prime Minister. There are tapes of the conversations with Lady Falkender. It is clear that whatever the truth of the matter, whether the files were moved from one place to another, Lady Falkender, who is nobody's fool in political matters, believed that they had been. She believed that she had handled them, that she had seen them, that she had had photocopies taken of them, and that there were copies not only at No. 10 but at the former Prime Minister's private residence.
  There is also this question, which must puzzle all right hon. and hon. Members. Why did Mr. Jack Straw make the report
  1046
  on the implications of the Norman Scott file? Why could no civil servant be trusted with the matter? Was it a delicate political matter? None of us knows. Why was a political aide, a partisan individual, put on to the job of making a summary of a private individual's private record at the Department of Health and Social Security? Was it because no civil servant could be trusted to do the job, because no civil servant was willing to do it, or because it was a job that no politician dared ask a civil servant to do?
  What are the implications, the political implications as Lady Falkender frequently describes them, of the Norman Scott file? How could the question of an unimportant private citizen's Department of Health and Social Security file have political implications so grave that the Prime Minister of the day should call for the file?
  Whether the file was actually taken to the then Prime Minister physically or whether it was a photocopy is to a large extent irrelevant. The right hon. Lady hedged her bets a little when she said that the original file never left her Department. That left it open to her to say afterwards "I did only say the original, and not the photocopy".
  Mr. Adley: No one is suggesting that the right hon. Lady is in any way trying to deceive the House or anyone else, but there were two parallel investigations going on, and it appears that she may have been unaware of what was happening to the files in her Department. Is not that possible?
  Mr. Tebbit: That is indeed possible although presumably, as her personal political aide, Mr. Jack Straw, was involved in at least one of the inquiries, she may have had just some gist of an idea that something important was going on in her Department that related to the files of Mr. Norman Scott.
  Are we to believe that the Prime Minister of the day wanted to see the file merely out of curiosity, that he had not seen many files of that sort and thought it would be rather nice to have one about the place, and keep it at home as well as at No. 10? Or was it to give instructions to someone about what to do about Mr. Scott's claim or to do with his case?

  1047
  We must ask ourselves how often this happens. Was Mr. Norman Scott so important, or is it particularly unusual for files, or photocopies of files, to be carted down the road from the Elephant and Castle to No. 10 to satisfy the curiosity of a Prime Minister?
  We ask for an inquiry not solely because we are concerned about Mr. Norman Scott's file. It is his file that we know about, but what about the others? How often does this happen? If it was Mr. Norman Scott's file two or three years ago, might not it be Mr. Norman Tebbit's file at some future date, or any other citizen's file if he becomes objectionable to a member of the Government?
  After all, in the memorable phrase of the late Aneurin Bevan, some people were regarded in the past as lower than vermin. At least I have been promoted. The Lord President regards me only as vermin, so we are making some progress.
  Once someone has been described as verminous, once one regards him as beneath contempt, how long is it before one starts down the slippery trail down which President Nixon went when he first said to his aides "Look through the files. See whether there is anything we can get on our political opponents to discredit them"?
  Why was the Scott file taken to the Prime Minister? Was it to discredit someone who was politically dangerous to the Government? If that is how this Government operates, what are the reasons for us to believe that the same thing is not happening today, that other political embarrassments to the Government are not having their files looked through by political aides? How can we be sure that the Inland Revenue files are not being thumbed through to see whether there is some embarrassment that can be raised to keep somebody quiet, to keep him down in his place?
  It is not so long ago that, leading up to the Watergate scandal, it began to be leaked in America that certain people had a history of mental instability. That is exactly the sort of thing that could be discovered in the files held in the Department of Health and Social Security. There were leaks in America about people's business and taxation affairs, exactly the
  1048
  sort of things held in the files of the Inland Revenue.
  We want an inquiry not only to clear up the affair of Norman Scott's file but to make sure that no longer are private files of individual citizens who have committed no major offence—they may have committed a petty offence—pored over by political aides and digested and passed to the Prime Minister of the day so that he can protect his political friends against attack.
  7.9 p.m.
  Mr. Ivan Lawrence: I want to follow up the speeches made by my hon. Friends the Members for Chingford (Mr. Tebbit), Woking (Mr. Onslow), Blackpool, South (Mr. Blaker) and Christchurch and Lymington (Mr. Adley). I am amazed that the Government should want to go into the Easter Recess, perhaps the last Easter Recess before an election, without trying to answer some of the questions raised by "The Pencourt File". Have not the Government boasted continually of believing in open government? Have they not continually accused the Opposition of being irresponsible in even suggesting that they have sometimes stepped outside the rule of law when they pleased?
  It is not with a great deal of amazement that I understand why some members of the Government should want to pretend that there is nothing in this, that really it is merely a bit of a muck-raking exercise. That is always the phrase used by those threatened by the revelation of something unpleasant. But I consider it a little odd that Labour Members who normally sit below the Gangway, but by no means exclusively those Members, do not see the point made by my hon. Friends about the threat to the liberty of the individual posed by a system which allows a free transference of secret files whenever a person in government or associated with government may wish.
  How many Labour Members signed the motion for the freedom of information Bill? How many Labour Members always come into the Chamber whenever an issue is raised which affects civil liberties? I wonder how concerned with civil liberties hon. Members below the Gangway are if they support the Government when the Government say "There is nothing in this."

  1049
  Clearly, there is something in this. There are some questions that have to be answered. The authors of the book had conversations of which they have given an account. They have tapes which some of us have heard played. They have transcripts and we have in this debate heard quotations from some of them. What their hook amounts to concerning this matter is that the Government—a Labour Government—their Ministers and their civil servants have been concerned in a cover-up of some serious irregularities.
  Ought the matter to be left there? Ought we just to pass it over? Does it happen so often under this Government that this is just another one of those occasions when it happens? I think not. If the Government are behaving irregularly in any serious way, the public and those of us who represent the public have a right to know. If, on the other hand, the Government have been unjustly accused by the others of this book, they should want to clear the matter up at the earliest possible opportunity. Yet months have gone by since this matter was first raised by hon. hon. Friend the Member for Christchurch and Lymington, and all that we have received are conflicting answers and explanations and confusion making worse confounded.
  Let me remind the House of some of the conflicts which surround the Norman Scott-DHSS files. The authors say that in May 1976 the right hon. Member for Huyton (Sir H. Wilson) told them that they ought to look into the question of the Scott-DHSS file which was, apparently, missing in the DHSS. If the Prime Minister thinks that there is something important and significant about that, ought not we so to think? They go on to say that they were not allowed to question the Secretary of State about the matter because they were employees then of the BBC, but a very senior representative of the BBC was asked to go to see the Secretary of State and he was shown a file which told him that the file—the Scott file—had been destroyed.
  Apparently, that senior representative was satisfied. We now know that there was not a file. There was not the file. There were a number of files. Why was this senior representative—Mr. Hardiman Scott—palmed off with an explanation which showed only that there was a file
  1050
  and that that had been destroyed in 1975?
  Then the right hon. Member for Huyton made inquiries about it and he was told that the file had been weeded out in 1970. I suppose that means that it had gone through the normal process of destruction. Who told him that? Why was he told that if it was not true? Why was Hardiman Scott told one thing and the right hon. Member for Huyton told another?
  Then the noble Lady, Lady Falkender, either late in 1975 or early in 1976, examined the files—four files—relating to Norman Scott and one which was a digest which had been prepared by somebody. She examined them very carefully and she came to the conclusion—this is the allegation in the book—that someone had been up to no good.
  The Secretary of State has made inquiries and he says that he is satisfied that nothing untoward—no impropriety—has happened. He has consulted his right hon. Friend the Member for Blackburn (Mrs. Castle) and she is satisfied that there has been no untoward conduct and that nothing unsatisfactory has happened. That is the grossest of insult, offence and, it may even be, innuendo of dishonesty against Lady Falkender and, for all I know, against the right hon. Member for Huyton, too, because they were concerned that something very improper had happened.
  Of course, I do not say that the Secretary of State knows what happened. I do not say that the right hon. Lady the Member for Blackburn knows. However, there is some question whether they ought not to have found out and whether they ought not to have known. Although the right hon. Lady, who, I am sorry to say, is not in the Chamber now, said that it was untrue that original files came from the DHSS through Jack Straw or anybody else to No. 10 Downing Street, Lady Falkender saw, according to the transcript of her conversation which I have also heard on the tapes, that there were five files in a big container. What were they—duplicates? Where had they come from? Who had brought them? Who had given permission for them to be released when it seems that nobody knew about it?

  1051
  So there is a conflict between those who say "There is nothing untoward", that nobody ever saw the files improperly, that nobody ever took them out of the DHSS to No. 10 or to Chequers or to wherever it was that they were taken, and Lady Falkender, who says that she saw them.
  Is Lady Falkender lying? If so, is not that a matter which should be resolved? It is a very dangerous thing if we have at large people who are prepared to make statements on tape to journalists which are to form the subject matter of a book and if they have just got this magnificently inventive imagination which causes trouble left, right and centre. Something should be done to stop them. They are a menace, if that is what has happened.
  In which circumstances, then, do personal files get circulated from one Department to another and in which circumstances are they examined by any Tom, Dick and Harry party political worker? What does the Civil Service think about it, because, after all, it has some responsibility?
  My hon. Friend the Member for Blackpool. South asked the Secretary of State for Social Services on 27th February
  "to whom the contents of files held by his Department and relating to individuals may be disclosed; and in what circumstances."
  My hon. Friend received the answer:
  "Information in my Department's records concerning individuals is held in strict confidence"—
  —I expect the right hon. Gentleman is satisfied about that—
  "and is not disclosed to third parties without the consent of the person concerned."
  He had made inquiries and discovered that that is the rule. The Secretary of State continued:
  "In exceptional circumstances, information may be disclosed in the departmental and public interest to other Departments or public bodies, principally to prevent the duplication of payments from public funds, to meet statutory or welfare requirements and to assist the police in the prosecution of cases other than trivial crime."—[Official Report, 27th February 1978; Vol. 945, c. 49.]
  On 7th March I asked the Secretary of State for Social Services under which of those headings the files given to the Prime Minister from the DHSS fell. I did not receive an answer to that question. I received this answer:
  1052
  "It is for the Prime Minister of the day to decide what information he needs to see, and what information he asks of a responsible Secretary of State, to enable him to decide whether there is any impropriety or anything else. … I … assured the House that there had in no sense been any impropriety on the part of my Department"—[Official Report, 7th March 1978; Vol. 945, c. 1207.]
  It appears that there is another circumstance which the Secretary of State forgot when he answered the question addressed to him by my hon. Friend the Member for Blackpool, South—that is when the Prime Minister wants to see the file. Then the file can be given. That was not in the answer. That is not part of the rules. Why? Why is he incapable of giving me an answer to the question I have asked him?
  I have written a letter and no doubt in due course I shall get some sort of reply. I have said "Of course, that answer you gave me was to an oral question. You have not had time to consider it fully, you will want to consider it fully, and in due course you will want to answer it. But you must forgive people for thinking that, if you will not answer a question, it is either because you cannot answer the question, or because the answer to the question is one which harms you."
  The reason that a question is not answered is that the person concerned cannot give the proper answer. I have no doubt that in due course the Secretary of State will want to give me a full and accurate answer.
  The matter did not stop there, because my hon. Friend the Member for Christchurch and Lymington asked the Secretary of State
  "if he or Ministers in his Department may have access to personal files without the specific consent of the individual concerned".
  There is the rub. Three headings were laid down, and it was stated that it was subject to seeking the consent of the person concerned. My hon. Friend asked how it could be done without the specific consent being obtained, and there appear to be more rules about that. They are
  "where the individual has complained to an hon. Member and the hon. Member has asked the Minister to investigate the matter; where the individual's case forms an important precedent; or where the Secretary of State has to exercise some discretion provided for by statute."—[Official Report, 15th March 1978; Vol. 946, c. 232.]

  1053
  These are the circumstances in which the Secretary of State's answer to my hon. Friend the Member for Blackpool, South was inaccurate, because he did not give the full answer. But in which circumstances were the Scott files falling under any of those headings?
  The affair is unsatisfactory. Of that there can be little or no doubt. If there were an impropriety, why do the Government say that there was no impropriety? How easy is it for a Secretary of State to be satisfied that there was no impropriety? Who satisfies him? There are many other questions, and I could stand here for the next 15 or 20 minutes trotting them out. They follow one upon the other.
  The whole thing stinks, and I should have thought that a Government who are about to go to the country, boasting about how open they are, would want to get the smell out of their system if the answer is an honest one, and if they have done nothing improper. Surely they would want to say "We will show you exactly why we have done nothing improper. We will show you that we have abided by all the rules."
  Perhaps the Leader of the House is not able to answer these questions at this moment, but I ask him at least to announce that there will be a proper independent inquiry.
  7.23 p.m.
  Mr. Anthony Steen: I am glad to have the opportunity to follow in debate my hon. Friend the Member for Burton (Mr. Lawrence), because in his attack on the Government he raised a number of very important points which I hope will be taken very seriously, just as I hope that the points that I shall make about Merseyside will also be taken very seriously.
  Earlier in the debate the hon. Members for Liverpool, Walton (Mr. Heffer) and Ormskirk (Mr. Kilroy-Silk) made a quite outrageous charge that not only was I not in the Chamber but that other Conservative Members representing Merseyside were not in the Chamber. When the Labour Members stood up to speak in the debate, Mr. Deputy Speaker, no one had any idea what they would speak about. Certainly they did not give me or my hon. Friend the Member for Wirral (Mr. Hunt) any idea that they were to
  1054
  speak about the problems of Merseyside. I suggest that it was quite improper for them to allege that I and other Conservative Members representing Merseyside should have been in the Chamber on the chance that the Labour Members might have risen to speak about Merseyside.
  Mr. David Hunt: Where are those Labour Members now?
  Mr. Steen: As my hon. Friend indicates, none of them is here now. Once they have made their speeches, they all sneak off and do not bother to be here when other hon. Members wish to speak in the Adjournment debate on subjects which ought to interest them. But it is not only outrageous. It is also totally hypocritical. The Labour Members go through the same old hoops. They shed crocodile tears and bewail the collapse of Liverpool and Merseyside. Conservative Members are sick and tired of hearing the same old tunes from them without their having anything constructive to offer.
  Labour Members complain every time a factory closes or the unemployment figure goes up. They offer no hope or opportunity to the people of Merseyside. At least some of us are trying to make constructive suggestions to improve the lot of the people living there. The Labour Members offer no hope at all, and their carping criticism and complaint do nothing to make Merseyside a happier place.
  The sole suggestion from the Labour Members so far, after the collapse of a number of sizeable companies on Merseyside, has been that the Prime Minister should come up to Liverpool, have a look round, and set up an inquiry. A fat lot of good that will do. In spite of the £400 million which the hon. Member for Walton said was poured into Merseyside, nothing has happened for the better. We have had higher unemployment, worse housing, more school leavers unemployed, and, in spite of what the Government have done, no improvements can be easily recognised. I cannot imagine that the Prime Minister coming up to Merseyside, as the hon. Member for Walton suggests, would make the slightest difference.
  Liverpool has been besotted by inquiries, research and experiments. Since 1968, there have been more inquiries in

  1055
  Liverpool than in any other city in the country. One could not walk across half a mile of Liverpool without stumbling across some special development, special experiment or special inquiry. We have had the urban aid programme, the community development project, the quality of life studies, the neighbourhood studies, the educational priority areas, the inner area studies, the comprehensive community programme, the urban deprivation unit, the general improvement areas and the housing action areas.
  All we can say is that things have got worse. How dare Labour Members criticise Conservative Members, therefore, for not being in the Chamber when those Labour Members happen to get up and shed a few more crocodile tears! That is not the way in which Liverpool's future will be determined. It does not help for them to criticise and complain about whether Conservative Members are present or not. That is a complete red herring.
  The basic problem is caused by too much Government intervention. That is the, basic message that Labour Members do not understand. That is why, when they ask for and receive more money, they are simply pumping the patient with more and more of the wrong medicine, with the result that the patient is gradually getting worse. The patient keeps crying out in the hope that this pumping of the wrong medicine will stop, but every time it cries out, more medicine is pumped in. The meeting on Wednesday with Ministers, to which all Merseyside Members will be invited, will once again hear a cry from Labour Members for more public money.
  Mr. David Hunt: Does my hon. Friend agree that the medicine that is being pumped into Merseyside is Socialism, and that that is the wrong medicine? The prosperity of Merseyside in the past has been bound up with private enterprise, and in particular with the small firms. Will my hon. Friend agree that incentives are needed on Merseyside? All the Government have done is to destroy the incentive of the small business man with their fiscal, employment and bureaucratic policies. Finally, will my hon. Friend agree that what Merseyside really
  1056
  needs is not more Socialism but a General Election?
  Mr. Steen: I am most grateful to my hon. Friend for that intervention, because it encapsulates the problem. Liverpool is a prime example of a city gripped in Socialism. It is, in fact, the prime example of a city gripped in Socialism. We have not only a Socialist Government in Westminster. In Liverpool the Labour Party has 41 seats. It is not quite the majority party because the Liberals have 42 seats, but the Labour Party was previously the majority party. There are more Government bodies or quasi-Government bodies in Liverpool than in any other city in the country. The whole of Merseyside is gripped in Socialist hands. That is the major problem facing the city.
  I was saying that it is the nature and extent of Government interference which is the problem in Liverpool. Until that is perceived by Government supporters, there will be no resurgence of health for the patient.
  But it is not only too much Government interference that is the problem. It is also the speed of that Government interference and the speed with which the Government withdraw. The companies which have declined have not done so over a period. They have suddenly been pulled out of the area. It is the asset stripping by this Government of some of the industries which they control on Merseyside which has caused much of the breakdown in confidence and the fear that the whole of Merseyside industry will collapse like a pack of cards. The Government have a lot to answer for in terms of the speed of intervention and the speed of the withdrawal of intervention. They do not realise that that is the stripping of assets which they have complained about in private enterprise. They are doing the very thing about which they complain.
  It would not be right in this debate to go through the factors which have caused the decline of Liverpool. Instead I end on a positive note, because it may be useful to explain to Government supporters that there are remedies for Liverpool but that they have not started to approach them.
  I give three or four specific examples. First, we have more vacant land in the inner area than any other provincial city

  1057
  in the country. We have 2,100 acres of vacant land, 60 per cent. of which is in the ownership of the city council, with another 20 per cent. in the ownership of nationalised industries. The term "land hoarding" could not be more appropriately used than about what the city council and the nationalised industries are doing in the city centre. They need to put that land on the market by way of public auction. If the city council and the nationalised industries are not prepared genuinely to develop that land themselves, it should be put on the market so that those who are prepared to develop it, whether it be for housing, commercial use or industry, may have the opportunity to buy it.
  The local authority's hoarding of the land has had a number of disastrous consequences. For example, the rate base in Liverpool is insufficient to support the services which are now required in the inner area. The city council is now pinching money through the rates from the wealthier areas and putting it into the inner area. It is a process which the Labour Government started in 1968 through the urban aid programme. They pinched from the shire counties and put into the urban areas. But now they are encouraging local authorities to do it within the cities themselves. The city council intends to divert money through the rates from the more prosperous residential areas so that it can pump it into the inner area because of its failure to realise the vacant land already in its possession which could provide the wealth.
  First, therefore, it is essential to utilise the public land which has been locked in, development of which has been prevented. Secondly, we must have some writing down of the artificially high land value. The land value which has been attracted to that vacant land is artificially high because demand has been created by the city council holding back the land which it possesses. The result is that there are artificially high rents and rates on the business premises which are still standing. So the first essential for any rejuvenation of an area such as Liverpool is for the vacant land in public ownership to find its own price and to be developed by private enterprise.
  Secondly, we need to halt the building of new factories on green field sites outside the city centre. Those green field
  1058
  sites are in a sort of arc round Liverpool. They are cheaper and the infrastructure is cheaper to instal, with the result that city centre land will remain vacant unless a halt is called on green field site development. That has to correspond, of course, with the development of vacant land in the inner area.
  Next, it will not be possible to get people back to the inner area in order to develop small businesses if there are no homes built in the inner area. At present 25,000 people are leaving Liverpool every year. Unless we get the skilled workers back from the edges of the city into the inner area, they will not be there to man the small firms and businesses which are at the root of the revival of Liverpool.
  This probably is not the time to give a long dissertation on the importance of a positive and constructive view about how to revive the Liverpool and Merseyside area. Suffice it to say that Government supporters have the hypocrisy to bewail the decline of Liverpool but do not offer one constructive suggestion. Every time that an Opposition Member attempts to do so, Government supporters have no time for it. The Opposition have a great number of constructive and positive ideas and, given the opportunity, we shall expound on them at great length to Government supporters, assuming that they bother to turn up to listen to debates such as this one.
  7.36 p.m.
  Mr. Francis Pym: During the past three and a half hours or so, a great many hon. Members have raised a number of issues, a good many of them within the eight minutes which was suggested would be short enough to keep hon. Members off Mr. Speaker's list. I shall try not to exceed that time by very much myself.
  In the past year or so, I have observed that more hon. Members seem to like to participate in these Adjournment debates, and that is one expression of the increasing problems which people are confronting. It is one consequence of the growing dissatisfaction with the Government's performance, and it is one indication of the lack of time that there has been in this Session—though that was not true of last Session—for the debating of

  1059
  issues of first importance such as unemployment, about which we have heard so much today. My hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes) said that if we had not spent so many hours discussing devolution Bills, we could have come to these matters. The hon. Member for Ormskirk (Mr. Kilroy-Silk) said that many of these matters should have been debated but that they had not been and that that was why hon. Members had raised them in this debate.
  We began with a speech by the hon. Member for Antrim, South (Mr. Molyneaux) on the ever-important matter of security in Northern Ireland. He dealt in particular with the relationship between Northern Ireland and the Irish Republic. I hope that the Lord President will be able to make some reassuring comment about that. Both sides of the House regard it as overwhelmingly important, and I am certain that both sides agree that co-operation with the Irish Republic in all matters relating to security, especially on the border, is essential.
  My hon. Friend the Member for Eastbourne (Mr. Gow) referred to the Speaker's Conference on the representation of Northern Ireland. The consequence of that conference and the report which has been issued require action on the part of the Government. I think that they acknowledge that that is so. That action should take the form of legislation. Legislative proposals should be brought before the House, and I am sure that we should all like to know from the Lord President when he proposes to introduce that Bill and what his opinion is about the time scale, to which my hon. Friend the Member for Eastbourne also referred. There is a responsibility on this House to make progress on that subject, so we hope to hear about that.
  The matter which probably took the most time was that relating to "The Pen-court File". It was raised first by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley), who drew attention to the discrepancies in the statements which had been made by various of the characters involved. My hon. Friend the Member for Woking (Mr. Onslow) referred to a few of the transcripts and tapes, and the files that went, in some unexplained way, from the DHSS
  1060
  to No. 10. He also referred to the files that were destroyed. My hon. Friend the Member for Blackpool, South (Mr. Blaker) developed this point and concluded his speech by asking five very pertinent questions, raising the whole question of political advisers and matters of principle arising from this case.
  Then we had the right hon. Member for Blackburn (Mrs. Castle) intervening and making what amounted to denials and protestations. These protestations were certainly important and significant, and the House will take careful note of them. However, they are not by themselves enough, because it appears that there is conflicting evidence between the right hon. Lady and Lady Falkender.
  There are at least two accounts of what happened, and my hon. Friends the Members for Chingford (Mr. Tebbit) and Burton (Mr. Lawrence) pointed out some of the confusion and conflict in the evidence. Therefore, we face not only uncertainty and an absolute lack of knowledge about this case in particular but confusion over the whole principle underlying the events. How do the Government intend to handle this? It should be cleared up. My hon. Friends have called for an inquiry, and I agree that a full statement should be made. If the Government have nothing to hide, and if there is nothing in this matter, there should be no hesitation by the Government in coming forward with the fullest possible explanation.
  The two most formidable problems confronting the British people today are inflation and prices, and unemployment. Inflation and prices were referred to only by my hon. Friend the Member for Warwick and Leamington (Mr. Smith) and then only in a comparatively narrow aspect. He spoke of rising fuel costs and the price of heating—issues of very great importance to a large number of people.
  In our opinion the Government are much too complacent about prices and inflation. The Prime Minister delights in saying how marvellously successful the Government have been in getting inflation down to 9·9 per cent. He exudes an air of complacency, but I doubt whether single figures will endure for much longer. In the last election, when the figures indicated the rate of price increases, I went on television and said that we would see inflation at 28 per

  1061
  cent. That was thought to be so horrendous that the then Prime Minister said that I was only extrapolating figures and nothing like that would happen. He also claimed that inflation was in hand, and the Chancellor of the Exchequer went on the record with his 8·4 per cent. figure. We all know what happened then. Inflation did reach 28 per cent.
  It is all very well the Government taking pride in the fact that inflation has come down to 9·9 per cent. It is an improvement, but it is still unsatisfactory. Anyone who talks to housewives and consumers will know that they are seriously affected by continuously rising prices. The Government's prices policy has failed. It has all the trappings of something that is supposed to be effective but it has not proved effective in practice.
  Unemployment was raised by the hon. Members for Ormskirk, Liverpool, Walton (Mr. Heffer), Liverpool, Garston (Mr. Loyden) and my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen). There is no doubt that although unemployment was raised tonight in the context of Merseyside, it is by far the most grievous national problem that we face today.
  The hon. Member for Walton admitted that unemployment in Merseyside had occurred despite massive Government aid, substantial incentives and the building of new factories. This is something that we must regret utterly, but the solutions that he proposed did not amount to much.
  The hon. Member for Ormskirk thought that nationalisation was the solution, but this is a disastrous policy which would make everything go from bad to worse. He also proposed a Merseyside development agency, which the hon. Member for Walton thought would be unsatisfactory. That hon. Member suggested a Minister for Merseyside, but I do not think that he would have a great deal of power. He also suggested that a boost was needed in the Budget—and I agree with that—and that the Prime Minister should visit Liverpool. I do not think that the latter suggestion would help, particularly as the former Prime Minister, the right hon. Member for Huyton (Sir H. Wilson), has a Liverpool constituency and spent a great deal of time there. Despite all that attention,
  1062
  unemployment in the Liverpool area has gone from bad to worse.
  The basic causes of unemployment are low productivity and our relative uncompetitiveness. This is the heart of the disease. If it is to be put right there must be a drastic change in the economic climate. That is the only way in which new jobs can be created.
  The hon. Member for Walton said that this was too serious a matter to be party political. I agree with that, but the cause of unemployment and the solution to the problem are highly political issues. Unemployment is caused by a failed economic policy, and even the hon. Member for Garston said that an alternative economic policy was essential if unemployment was to come down.
  If there is one expression of the failure of the Government's economic policy it is the enormous number of people without jobs in Liverpool. We must return to a situation in which the economy is prosperous and the climate allows investment—a fact which could have a deleterous effect in the short run, but which is the only way in the long run to create a large number of extra jobs. Job creation is the only possible and sensible way to bring down unemployment figures. On these counts we need adequate answers from the Leader of the House.
  My hon. Friend the Member for Macclesfield (Mr. Winterton) raised two lesser matters—the length of hospital waiting lists and problems arising in education, particularly the difficulties caused by the dispute between his education authority and the Secretary of State for Education and Science. It so happens that both the issues affect my constituency of Cambridgeshire.
  Undoubtedly the harshest suffering in my constituency at present is among those who are waiting to go into hospital, particularly in the area of mental health. If I suggested that these matters were of lesser importance I meant that in terms of general political debate. In terms of people involved there is nothing that affects people more harshly than long delays in getting into hospital, and that is what is happening up and down the country.
  My hon. Friend the Member for Halesowen and Stourbridge raised the question of repatriation of Russians.

  1063
  Without covering all the points made in all the speeches, I must say that the Leader of the House has a good deal to answer, although I hope that he will not take all night in doing so.
  The Prime Minister appears to be far too preoccupied with playing the election guessing game. It is all very amusing to talk in Scotland about the next Session and then to come back to London and call a sudden meeting with his election advisers. The Prime Minister is trying to give the impression one day that he is going on for ever and the next day that there will be a quick election. There are far more important things for him to do, even though this might be an amusing game.
  The right hon. Gentleman should be tackling the problems raised in this debate, and many other problems besides. For example, he should be concentrating on getting Britain back to work. I shall not continue the slogan and say "With Labour", because we must get Britain back to work without Labour.
  We know what the Prime Minister must do to bring that about. No matter how much the Prime Minister juggles with the figures, no matter how much less tax he decides to confiscate from the British people after the next Budget, and no matter what he does, he will lose either way. The sooner he gets on with it, the better.
  7.50 p.m.
  The Lord President of the Council and Leader of the House of Commons (Mr Michael Foot): I think that the right hon. Member for Cambridgeshire (Mr. Pym) exceeded his eight-minute quota by only a bare minute or so, but I hope that the House will forgive me if I take a little longer than that. I shall not go on all night, because there are some important debates still to come, and I am sure the House would not wish me to take too much time from the other discussions that are to follow.
  I shall try to cover most of the subjects that have been raised. I hope that I shall be forgiven if I do not take the various subjects in the order in which they were dealt with. Some of the subjects lend themselves to grouping, and I hope that it will be convenient to the House
  1064
  to approach the matter in that way rather than to deal with each matter individually.
  I fully accept what was said by the hon. Member for Antrim, South (Mr. Molyneaux) and the right hon. Member for Cambridgeshire about the need to co-operate with the Republic of Ireland if we are to defeat terrorism in the North. The Government are as determined as ever to defeat terrorism and to secure the greatest possible aid they can from the Republic to that end. I shall not comment on the remarks of the right hon. Member for Antrim, South on the subject, but I agree with his purpose, because that is also the Government's purpose—to secure maximum co-operation.
  The right hon. Member for Cambridgeshire and the hon. Members for Eastbourne (Mr. Gow) and Macclesfield (Mr. Winterton) asked me to comment on the Speaker's Conference and the Government's attitude to it. I am not in a position to make a statement here this evening, but a statement will be made to the House very soon after the recess. I gave evidence to the Speaker's Conference, and I believe that there is a just claim for an increase in the number of representatives in this House from Northern Ireland. The Government approached the matter in that light, but we shall be indicating to the House soon after the recess how we propose to proceed.
  My hon. Friend the Member for Oldham, East (Mr. Lamond) spoke at the beginning of the debate. [HON. MEMBERS: "Where is he?"] He asked whether we could at an early stage debate the results of the Belgrade conference and the situation in Cyprus. They are both extremely important matters, and I am sure that we shall return to them when the House returns after the recess—assuming that this motion will eventually be passed to allow us to have a recess.
  I turn to the remarks of the hon. Member for Warwick and Leamington (Mr. Smith), who dealt with the subject of electric heating costs. I refer the hon. Gentleman to a reply made on an earlier occasion, although the hon. Gentleman himself quoted it. Money has now been allocated amounting to £28 million per year over a period of four years. Local

  1065
  authorities will be getting technical advice shortly on this programme, which will begin in the financial year 1978–79.
  A working party which has been set up with the local authority associations and the Department of the Environment will examine other questions relating to thermal insulation and related matters concerned with the problems of electrically heated dwellings. I fully accept what the hon. Gentleman and others said about the importance for the individuals concerned and also for the energy programme of the country that we should proceed on those lines as best and as effectively as we can.
  As was said by the right hon. Member for Cambridgeshire, one of the central features of this debate has been unempployment. Indeed, it is one of the most serious questions that face the country and the Government as a whole. This debate has concentrated on the position in Merseyside, and unemployment on Merseyside is as serious as in any other part of the country. Nobody would dispute that—not even those who, including myself, represent other constituencies which are suffering very heavy unemployment.
  I come to the speech of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). [HON. MEMBERS: "Where is he?"] This has happened on a number of occasions in similar debates. My hon. Friend told me the reasons for having to leave the debate earlier. I must tell Opposition Members that there have been occasions when I have replied to points made by a number of hon. Gentlemen when, for one reason or another, they have had to leave but have courteously indicated to me that that would happen.
  I say to my hon. Friends from the Liverpool area—and I include my hon. Friend the Member for Liverpool, Garston (Mr. Loyden)—that we made Merseyside a special development area in August 1974. As a result, the highest level of regional incentives in Great Britain is available there. Moreover, Merseyside is among the areas to which the highest priority is given in the placing of mobile industry.
  The National Enterprise Board last year made a study of the problem of unemployment in Merseyside and the North-East. Following that report, the Government have increased the scale of
  1066
  regional selective assistance available in special development areas. The NEB has established regional boards in Merseyside and the North-East to bring more local knowledge and experience to the discharge of its responsibilities. If the Government had not taken these and other accompanying measures, the problem would be even more serious.
  On the question of assisting small businesses, I must tell the House that there are hundreds of small businesses on Merseyside and throughout the country which, if it had not been for Government aid, would not be in business today. Furthermore, there are hundreds, and indeed thousands, of people throughout the country who are working today and would not be in those jobs if temporary employment subsidy and kindred measures had not existed. We intend to persist in maintaining those measures because we believe that they are important. The Government do not claim that those measures by themselves are sufficient to deal with the problem.
  My hon. Friend the Member for Gars-ton mentioned the subject of British Leyland. He has asked me about this matter on a number of occasions in recent weeks. The Government have now received the NEB report on British Leyland's 1978 corporate plan. We are still considering the recommendations. I assure the House that there will be an adequate opportunity to debate the financing of British Leyland when the Government have reached firm conclusions on the NEB report.
  The Government are considering how best to make available background material to the House before the debate takes place—subject to safeguarding commercially confidential information release of which could be damaging to British Leyland. However, I hope that the arrangements we make for the debate will be of assistance to my hon. Friends from Liverpool and to the House as a whole in reaching their conclusions.
  Mr. Loyden: I thank my right hon. Friend for what he has said, but will he give an assurance that the Government will not deal with the subject of British Leyland in the form of a parliamentary Question, but that there will be a statement to the House and a debate on the subject?
  Mr. Foot: I indicated to the House a week ago that I could not promise a statement before Easter. However, I have already indicated that there will be plenty of time for information to be given to the House and for the matter to be debated, even if the debate is to take place after the recess. It may be that some indication will be given at an earlier stage, but there will be full opportunity for my hon. Friend and others to raise all the questions that they wish. These matters should and must be debated in the House as they are of essential industrial importance.
  My hon. Friend and others have referred to the Lucas aerospace workers. As I understand it, the management is ready to consider any alternative proposals that may be put forward by the work force. I know that my hon. Friend and others have referred to the alternative plans and proposals put forward by the Lucas workers on a number of occasions. Both the management and the Government are prepared to consider those plans seriously and to ascertain whether they can act upon them.
  I hope that my hon. Friends will not wish me to speak at great length on whether we should establish special new machinery or adapt older machinery in Merseyside. It is sometimes said—this was argued by my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk)— [HON. MEMBERS: "Where is he?"] It is sometimes said that a special development agency should be set up for Merseyside. I understand the strength of feeling on the subject among my hon. Friends, but I am doubtful whether that is the best way to proceed. My lion. Friends have also urged that we should have a special conference on Merseyside. We are fully prepared to consider that proposition. However, I say to my hon. Friends the Members for Garston, Walton and Ormskirk, who have put their case on this issue so effectively, over some many weeks and months, without any assistance from Opposition Members, that I take full account of the representations that they have made afresh today.
  Mr. Steen: I ask the right hon. Gentleman to retract that statement. The Lucas factory is in my constituency. I take great exception to the right hon. Gentleman's suggestion that I am not making representations. I have written to the
  1068
  Prime Minister. I ask the right hon. Gentleman to retract his statement.
  Mr. Foot: I do not think that I need retract anything that I may have said about the hon. Gentleman's part. I made it clear that I was replying to the direct representations that they have made in respect of Lucas. If the hon. Gentleman thinks that I have done him any wrong, and if he wishes to be associated with the proposals that the Lucas workers are advocating, I am sure that that may be arranged.
  Mr. Steen: That is dishonest.
  Mr. Foot: It is not dishonest at all. The hon. Gentleman interrupted to say that the Lucas factory is in his constituency and that I must take account of that. I am taking account of that, and I should have a vote of thanks from the hon. Gentleman instead of any further criticism.
  Mr. Loyden: Is my right hon. Friend aware that over the past two years my hon. Friends and I have been meeting the combined stewards of the Lucas factory—[HON. MEMBERS: "What have you achieved?"] Is my right hon. Friend aware that the hon. Member for Waver-tree has not appeared at one of those meetings?
  Mr. Foot: I understand that. I cannot intervene further in these matters.
  My hon. Friend the Member for Fife, Central (Mr. Hamilton) referred to the Moss Moran chemical complex. I listened to him with great interest. I am sure that he will understand that I must ask him to await the decision of my right hon. Friend the Secretary of State for Scotland. I understand that his decision is likely to be announced shortly.
  The hon. Member for Macclesfield referred to Northern Ireland, on which I have already replied, and to a school in his constituency. I shall not go into the matter in great detail, but I tell the hon. Gentleman that the intentions of my right hon. Friend the Secretary of State for Education and Science have been clear since the Education Act 1976 was introduced. It is my right hon. Friend's intention that local education authorities should not be able to take up places in independent and direct grant schools

  1069
  that they do not need in contravention of the comprehensive principle. The position is clear in respect of sixth-form places in direct grant and other non-maintained schools. No child is being required to leave his or her school at 16. My right hon. Friend has already made it clear that there is no question of that.
  Local education authorities have been told that they may no longer offer free places to pupils entering sixth-form places whose parents have previously paid fees for them. However, such pupils are free to continue in the sixth form. If they do so, their parents will continue to receive remission of fees in line with the parental income that they have hitherto enjoyed. I hope that that statement will assist the hon. Gentleman.
  Mr. Nicholas Winterton: Is the right hon. Gentleman aware that there is an unofficial prices and incomes policy and that people have to adhere to the Government's guidelines? Is he aware that the parents of the children to whom I have referred, who went to direct grant schools such as the Manchester Grammar School and the Cheadle Hume School, accepted a certain financial responsibility? That responsibility is now being substantially increased. It would appear to those who represent Cheshire on the county council that this is direct action by the Secretary of State to try to prevent pupils from remaining at the direct grant schools. Is he aware that this would appear to be a form of retrospective legislation?
  Mr. Foot: Nothing that has been said justifies the criticism that the hon. Gentleman is making of my right hon. Friend. I have nothing further to add.
  Several Hon. Members Several Hon. Members rose—
  Mr. Foot: I am sure that the House understands that if I were to give way to every hon. Member who chooses to rise after my comments, I should exceed the eight minutes I have possibly exceeded already.
  My hon. Friend the Member for Pontypool (Mr. Abse) raised matters of momentous importance for the House, the country and the world as a whole. As my right hon. Friend indicated, the matters that he raised will be debated in the House on Wednesday. I shall consider whether there is further fresh information that
  1070
  should be available in the Library before the debate takes place. I make no promise to my hon. Friend. However, in the light of his representations I shall consider whether any further information can be provided. I know that my hon. Friend is aware of the statement made today by my right hon. Friend the Secretary of State for Energy, as he referred to it in his representations. I repeat that I shall consider whether any further information can be placed in the Library over and above the information to which my hon. Friend has referred. As he fairly acknowledged, many of the other matters will be open to discussion when we come to the major debate on Wednesday.
  The hon. Member for Halesowen and Stourbridge (Mr. Stokes) referred to a matter that has caused widespread concern throughout the country. I have no addition to make to what has already been said by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. I ask the hon. Gentleman and the House to recognise that if an inquiry were to be instituted, it would raise considerable problems of a far-reaching nature.
  The whole issue raises problems about the consequences of the lifting of the 50-year rule. I think that it was right that that was lifted and that we should have a 30-year rule. I acknowledge that many advocate that the rule should be curtailed still further. Are we to accept the suggestion that it should be curtailed and that there should be an inquiry on such occasions? It may be said that the matter that the hon. Gentleman raised has such far-reaching consequences that it should be placed in an exceptional category.
  If an inquiry were to be made, some of those who, in the past, might have been called as witnesses—I have in mind Prime Ministers such as Sir Winston Churchill and Sir Anthony Eden—would have been called as responsible for the conduct of the Foreign Office at the time. That is the sort of thing that would have to be taken into account. It would be wiser for the House to understand that, rather than to pillory by name the individuals concerned in the approach adopted by the hon Gentleman.
  Therefore, I hope that the House will consider the fairness or the injustice to

  1071
  individuals who may be involved in the approach made to the subject today. A fair method of dealing with it would be for an inquiry of a more widely ranging character to be instituted. I say that as one who at the time wrote many critical articles about Yalta. Of course, it will be recalled that the House as a whole overwhelmingly approved the decision of Yalta when its critics inside and outside this House were a very small handful.
  The hon. Members for Blackpool, South (Mr. Blaker), Christchurch and Lymonton (Mr. Adley), Chingford (Mr. Tebbit) Burton (Mr. Lawrence), Woking (Mr. Onslow) and the right hon. Member for Cambridgeshire made a brief reference to the so-called Pencourt Files. I have not yet read the book "The Pen-court File". The various book reviews that I have seen do not encourage me to make good that omission. It does not seem, from all the accounts that I have read in the newspapers, that the book is worth the paper on which it is printed. I believe that is the judgment that many people will make when they look into these matters.
  I do not believe that a debate on the Adjournment of the House should be used for raising the question of an inquiry. I have no powers to decide how the debate should be used. Individual Members are subject to the rulings of Mr. Speaker and are entitled to raise whatever is in order. I am not suggesting that this is out of order. However, it is not a good idea for the Adjournment motion to be used as a kind of sub-standard inquiry arrangement for spreading smears and innuendoes of this character and trying to multiply their dissemination. We had that on a previous Adjournment motion and we have had it again on this one.
  I ask the House, before it proceeds further, to consider whether this is a satisfactory way to deal with these matters. If the official Opposition wished an inquiry to be made into matters of this character, they had plenty of opportunities before now to raise them.
  Mr. Pym: I thought that it would be appropriate for the right hon. Gentleman to make a full statement about it if there is nothing to hide. My hon. Friends asked for an inquiry. I think that it is correct, on an occasion such as this, to ask for a
  1072
  statement. If this is not the right occasion for my hon. Friends to ask for an inquiry, what other opportunities are there?
  Mr. Foot: The right hon. Gentleman has had long experience in the House. He knows that this matter of the so-called Pencourt File, or whatever absurd, pompous name it is given, was raised in the House by some of his hon. Friends weeks ago. If the official Opposition wanted to raise the matter, they did not have to leave it to the Adjournment motion. They have had plentiful opportunities for debating the matter. They have never raised it with us. Not a single query has been put to us. Now, at the fag end of an Adjournment debate, after many prejudicial questions have been raised, it is suggested that this is an appropriate and proper moment to raise these matters. I do not believe that it is. I believe that, on reflection, the right hon. Gentleman will consider that this is a most inappropriate way for the matter to be raised. Anyone who has had such long experience in the House as the right hon. Member for Cambridgeshire should have realised that.
  I turn now to one or two other matters.
  Mr. Adley Mr. Adley rose—
  Mr. Tebbit Mr. Tebbit rose—
  Mr. Foot: I shall not answer any jeers or sneers from the hon. Member for Chingford. I am not seeking to gag anybody. For the reasons which I have given, which I believe are perfectly well understood by other hon. Members, I suggest that there are other opportunities for pressing these matters if the House of Commons wants to press them. The most inappropriate way in which to try to deal with detailed matters of cross-questioning of this kind is on an Adjournment motion of this character. If the Opposition want to turn the Adjournment motion into a kind of muck-raking session, as they did on the last two occasions, they will injure the House of Commons itself. I ask the Opposition Front Bench to consider these matters, even if we can expect little consideration of decency and courtesy by the hon. Member for Chingford and others who have joined in a pact with him.
  Mr. Blaker: I thought that one obvious opportunity to raise the matter was on the Consolidated Fund Bill. I sought

  1073
  advice on that matter and was told that it would not be in order.
  Mr. Foot: One of the reasons why it is inappropriate for muck-racking matters of this kind to be raised in this fashion on the Adjournment motion is that Ministers should have a proper opportunity to deal with them. Informing Ministers that matters will be raised on the Adjournment is not sufficient. The right hon. Member for Cambridgeshire knows that very well, although I do not expect him to rally to the cause at the moment as that might be embarrassing to some of his hon. Friends. But he knows that if hon. Members turn an Adjournment debate into the kind of session that we have had on this occasion, and which some hon. Members tried to do on a previous occasion in much the same kind of miserable style, it will inflict great injury on the valuable Adjournment debate that the House has before it.
  Mr. Pym: I think that the right hon. Gentleman is protesting too much. Frankly, he is dodging this issue, with a lot of smoke. No one has talked about the book. Reference has been made to the great conflict of evidence. I asked for a statement. If there is nothing to hide, why cannot we have a full statement when he has had a chance to read the transcript and to hear the tapes? Why cannot he give that undertaking? It is reasonable to ask for such an undertaking on an Adjournment debate.
  Mr. Foot: I shall not go and listen to any tapes or any of that nonsense. I have heard the statement by my right hon. Friend the Secretary of State for Social Services. I have also heard the statement made by my right hon. Friend the Member for Blackburn (Mrs. Castle). If the official Opposition wish to press the matter further, that is for them to decide. They will have to consider what course they wish to take.
  I repeat that the worst possible way to raise this kind of matter is by hon. Members slinging out innuendoes and smears in a debate of this character in the hope that they will get away with it in that way. I have not heard a single word further about the smears that were made on the last occasion. Opposition Members have now turned to some fresh smears. It is the old McCarthy tech-
  1074
  nique—when one lot of smears gets wiped away, turn aside and bring up some fresh smears. I am surprised that the right hon. Member for Cambridgeshire should lend himself to such a miserable and squalid affair.
  Mr. Tebbit: The right hon. Gentleman more than anyone else has walked in the vale of smears in this House. But let him understand that we see nothing improper in raising this matter on the Adjournment, particularly as we set out to defend the truth and the account that was given of these events by the noble Lady, Lady Falkender, and the right hon. Member for Huyton (Sir H. Wilson). If the right hon. Gentleman chooses to believe two of his friends rather than another two of his friends, that is no business of ours. However, we want a statement about the manner in which private files were abstracted from the Department of Health and Social Security and hawked between the Elephant and Castle and Downing Street for cheap, shoddy, political gain.
  Mr. Foot: The hon. Member says that he sees nothing improper in what he and other hon. Members have done. We are not surprised. His standards are not very high. The House knows of the way in which he seeks to use the House, net for purposes of proper debate but for smear purposes.
  I turn to the complaints by the right hon. Member for Cambridgeshire about the timetable of the House recently. Sometimes the House does not recognise how heavy is the burden of business which has to be carried by the House alongside the other legislative measures that the Government have to introduce. We now have to carry a heavier burden because of our membership of the EEC and because of our debates on Northern Ireland. This is the first Parliament in which these extra burdens have been imposed on the normal requirements of what a Government are entitled to ask from the House.
  We have come through these difficulties without too many scars. I know that hon. Members like to fling around all their charges but they cannot say that we have been denied the right to have debates on many of these topics.
  The right hon. Member for Cambridgeshire mounts to the peak of absurdity when he says that the Prime Minister is

  1075
  complacent about prices and unemployment and when he says that the Prime Minister is not acting properly about these problems. The Prime Minister is going to Washington to assist in seeking a way of dealing with this on an international plane. We are seeking to deal with the unemployment problem and with prices and inflation.
  This problem is difficult when there is inflation all over the world. We came into office in 1974 when the inflation rate was soaring. Now it is going down. That is a big change. The problem was worsened because we were left a legacy of ingrained inflation. This added to the general difficulties of the world slump of which no recognition has been made by the Opposition. Before the right hon. Member makes such foolish charges perhaps he had better stick to "The Pencourt File". Perhaps he thought that he had such a weak case on that subject that he would grab other opportunities.
  Hon. Members might be gratified that the motion deals not only with the Easter Recess but, for the first time in the history of Parliament, it provides that May Day shall be a national holiday. I was at the Department of Employment when the decision to proceed with this holiday was taken. Against the will of my hon. Friend the Member for Fife, Central, I went to the Palace to the Privy
  1076
  Council on the day on which this agreement was made. Even if there are objections to other parts of the motion I hope that the whole country will acclaim that at least we have made May Day a national holiday.
  Question put:—
  The House proceeded to a Division—
  Mr. Frank R. White and Mr. Joseph Harper were appointed Tellers for the Ayes and Mr. John Lee was appointed a Teller for the Noes, but no Member being willing to act as a second Teller for the Noes, Mr. DEPUTY SPEAKER declared the Ayes had it.
  Question accordingly agreed to.
  Resolved,
  That this House at its rising on Thursday 23rd March do adjourn till Monday 3rd April and at its rising on Friday 28th April do adjourn till Tuesday 2nd May.

  ADJOURNMENT (EASTER AND MAY DAY)

    BUSINESS OF THE HOUSE (CONSOLIDATION FUND (No. 2) BILL
    Ordered,
    That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund (No. 2) Bill may be proceeded with at this day's sitting.—[Mr. Frank R. White.]

  ORDERS OF THE DAY

    CONSOLIDATED FUND (No. 2) BILL
    Order for Second Reading Read.
    Motion made, and Question proposed, That the Bill be now read a Second time.

    RHODESIA
    8.27 p.m.
    Mr. John Davies: We must be grateful for the procedures of the House which enable us to raise this evening an issue which to many seems of overwhelming importance. I am glad that we have been able to do this through the good fortune of Mr. Speaker's ballot, particularly since the Opposition have been asking the Government to provide time for a discussion on Rhodesia, which is a most vital matter.
    It must be said that, with due care, it looks as if a solution to this longstanding, agonising problem might be just about within our grasp. For that reason I attach enormous importance to the handling of the problem at this juncture by the Government and by others who are directly concerned. Every word counts in handling a most difficult and sensitive situation.
    We could reasonably enjoin the Government and those with whom they are in frequent and perhaps daily discussion on the other side of the Atlantic to give careful consideration to the impact of their words on what might be the long desired solution of this long-standing problem. Ill considered remarks, uttered at the whim of the person concerned and in sharp reaction to new circumstances, could be terribly damaging to the outcome of events. I hope, therefore, that there will be no more of them and that there will be only carefully thought-out and carefully reflected statements on this issue.
    The story of the Rhodesian problem since UDI is one of countless opportunities which, for one reason or another, have, unfortunately, failed to come to fruition. Today we have before us just such another opportunity, and it is
    1078
    incumbent upon every one of us to try to ensure that this time it does not fail to come to fruition. We have been in a new phase for the last 18 months. That new phase started with the intervention of Dr. Kissinger in the problem back in the early autumn of 1976. But even since then the problem has been characterised by progressive delay, by late decision and by late conversion to situations which were evolving, and as a result there is once again a grave risk of missing an opportunity to solve the problem.
    That comment is true of the conduct of the Geneva conference. I acknowledge that during 1977 the Foreign Secretary put an immense amount of effort into seeking to move towards a solution, but I think that that comment is also true of the handling of the so-called Anglo-American initiative. It is also, unfortunately, dismally true of the response that has been given to the other major breakthrough in the whole situation, which was the acceptance by Ian Smith last November of the principle of universal suffrage.
    We now have the agreement reached in Salisbury on 3rd March which again offers just the opportunity to which I have referred. Does it hold within itself the seeds of a solution to a long-standing problem which is regarded by every hon. Member as one of the greatly desirable aims for this Parliament to achieve? How blessed it would be to start the new Session of Parliament without the incubus of the uncertainty and irresolution of the Rhodesia problem hanging round our necks. It is important to try to find a solution to it.
    I think that the immediate grudging and discouraging attitude that has been the character of the first reactions to the agreement, both on the Government side and on the other side of the Atlantic, has done poor service to the hope that I express. If one looks in all fairness at the agreement reached in Salisbury, who can say that it offends in any way the Six Principles which both sides of the House accepted as necessary to bring about a true and lasting agreement? Who can honestly say that the agreement, which provides for the whole motion towards majority rule by an orderly process and election, with the necessary intervention of an interim Government,

    1079
    and with the serious endeavour to seek to protect minority interests—which has always been accepted, and which is embodied in the Six Principles to which We all adhere—offends in terms of its relationship to the principles to which we have committed ourselves absolutely?
    I realise that we have yet to see whether the proposals are acceptable to the people as a whole, as provided for in the Fifth Principle, but to some degree the favourable presumption that there is of that should be given some weight. How can anybody genuinely reject the apparent spontaneity of what I believe to have been the largest meeting ever experienced in Salisbury following the return there of Bishop Muzorewa?
    Mr. Robert Hughes: Does the right hon. Gentleman accept that there are conflicting reports about the attendance at that meeting. Does he accept that one newspaper says that the meeting was far smaller than the last occasion on which Bishop Muzorewa returned to Salisbury? A lot depends on the newspaper that one reads. I am referring to The Times. Conservative Members may scoff at The Times if they wish, but that is what it says.
    Mr. Davies: I say this in the spirit of trying to move towards a solution. In view of the obvious discrepancies in reports, I took the opportunity of consulting what I considered to be a reliable source of information in Salisbury. I am assured that the meeting was the largest political gathering ever experienced in the country, and that it took place in weather conditions which were little better than our own yesterday, which might have been regarded as a discouragement.
    If we are looking not for unfavourable comment but for a presumption of favourable effort, which surely must be our will, what we have in front of us offers at least the encouragement to adopt a presumption in favour rather than against. I find it hard to understand why there has been no offer of help to bring the agreement to fruition. There has been grudging acceptance, with the Prime Minister saying that the proof of the pudding is in the eating and, if the pudding proves edible, we shall have to digest
    1080
    it, with the Foreign Secretary saying much the same in different words.
    What is needed is a genuine extension of help to make the arrangements stick and to make them work. We could offer genuine and useful assistance to those who seek what I believe to be the right objective.
    I am pleased to see the Foreign Secretary here. I have asked him many times why there is no mission in Salisbury and why we do not have there people of the necessary stature and ability to be able to tell him of the depth of feeling of people in Rhodesia. We have no such people in Salisbury and we have to rely on incidental advisers as to the validity of various claims.
    In the last few days, private talks have taken place in Pretoria between British Government officials and people from Rhodesia, but they should not have been necessary. We should have had people in Rhodesia in whom we had confidence to guide and advise us in a very difficult situation.
    I realise, no less than anyone else, the need to achieve ceasefire before moving on. That is highly desirable, but no ceasefire is worth buying at the price of surrender to those who exercise the fire power. If a ceasefire can be achieved only by abandoning the course of reference to the people in order to bring about peace, we have hardly lived up to the principles to which we have attached ourselves.
    Much the same must be said of our attitude to the acceptance of leaders of the Patriotic Front to participation in the agreement. They cannot exercise a veto and, although the Prime Minister and the Foreign Secretary have emphasised that they would not be prepared to see the Patriotic Front holding a veto, in a sense it is already doing that by virtue of realising that the requirement to have the Patriotic Front involved is so great that there is a sword of Damocles effect on the agreement which has been achieved after so much difficulty.
    The need to persuade those concerned has not been adequately undertaken by the Government. Before the Foreign Secretary went to Malta, I urged on him the need to use that exceptional opportunity to press upon Mr. Nkomo and Mr. Mugabe how unwise it was to believe

    1081
    that this matter could be settled only by resort to force and how necessary it was to make them believe that, at some stage, they must submit themselves in a proper and orderly way to the process of democratic choice, and that that, in its way, could best be undertaken within the framework that was painfully being hammered out. In the event, the Foreign Secretary did little in exercising his power of persuasion at that time and Mr. Nkomo and Mr. Mugabe were not persuaded.
    There has been a similar situation in regard to activities and discussion with Zambia. That country is having the utmost economic difficulties and needs a peaceful settlement of the Rhodesian problem. It could get that settlement if the agreement were participated in, agreed and carried to fruition by all concerned. But can anyone imagine that the interests of Zambia would be served if the internal settlement, so-called in Salisbury, were swept away and if there was a persistence to try to procure the result through a Patriotic Front offensive? On the contrary, that would perpetuate indefinitely all the economic problems with which that country is faced and which hon. Members on both sides are anxious to relieve.
    Mr. Ioan Evans: Does the right hon. Gentleman agree that there will not be a peaceful settlement in Rhodesia unless those forces outside are brought into the negotiations? Why has the right hon. Gentleman moved away from the Anglo-American initiative, which could well form the basis for a settlement, and about which all parties at one stage seemed to be moving towards agreement? Why do we not go back to that initiative which has the support of the Security Council of the United Nations?
    Mr. Davies: Unfortunately, it has the support of virtually no one else. It is only quite recently that Mr. Nkomo has even brought himself to discuss the Anglo-American initiative. Previously he rejected it out of hand, as did Mr. Mugabe and others in Rhodesia. The chance of using something which was universally rejected as a vehicle for achievement seems already totally forestalled.
    But here we have something which, for the first time, unites what are believed to be those who enjoy majority support from both sides in that country. Surely the
    1082
    argument must lie in favour of trying to support to finality the arrangement. The terrible impression that has been given is that we are in some way committed to a solution which would only, I fear, persist in maintaining the economic problems of Zambia.
    I should like to refer to the recent Security Council debate. All people who are genuine believers in the principles of democracy were deeply concerned at what happened in that debate. It cannot but be said how unacceptable it appears when we have the spectacle of a world organisation, committed in the most solemn way by its articles to the procedure of settlement by peace, prepared to listen to the men of war rather than to the men of peace.
    I well understand all the difficulties and all the sensitivity of African relationships. I understand how important it may be not to exacerbate tensions in order to induce great difficulties, particularly with those with whom we have large and extensive commercial dealings. But we are dealing with the life and future of a whole people. That is really what is at stake. No considerations of self-interest should be allowed to supervene in order to make us in any way a conspirator in something which seemed to me to be totally unworthy of the United Nations in its treatment of the issues before it. The act of abstention is something which I regard as a blot on our history in the United Nations. The French have an expression which says that the absent are always wrong. On this occasion I fear that we were wrong.
    There is still time to try to achieve a solution within the terms of the arrangements which have been proposed. But this requires the Government now forth-rightly and determinedly—without forswearing their pursuit of a ceasefire and absolutely committing themselves to an agreement which yet has to receive the full acceptance of the people as a whole—to stand up and try to support that arrangement in order to bring it to a finality, which will be a great relief to us all.
    8.45 p.m.
    The Secretary of State for Foreign and Commonwealth Affairs (Dr. David Owen): It may be of some help if I intervene now, if for no other reason than

    1083
    to bring the House up to date on some of the activities of the past week. I very much welcome the opportunity provided by this debate and the good fortune in the ballot of the right hon. Member for Knutsford (Mr. Davies) which has given us the chance before the House rises for the Easter Recess to discuss an issue which all of us who have been studying it—there are many hon. Members on both sides of the House who have taken a close interest in it—will welcome, and it is in that spirit that I welcome it.
    First, let me report on what has been happening over the last fortnight. I thought it right that I should meet Secretary Vance and, as it turned out, President Carter to review the situation to decide how we should proceed after the announcement of the results of the Salisbury talks. We agreed that the best response we could make to this situation would be still to strive to bring all the parties of the dispute together. I know that that is not easy, and we have no illusions that it will be. We have sought to hold a meeting as soon as possible and to achieve a forum to which everyone would be able to come.
    We noted that there was a surprising degree of common ground on some essential principles, and it is important for me first to map out that common ground.
    It is common ground that Zimbabwe should become independent in 1978. The formal position of some is that it should be no later than 31st December, but many would welcome Zimbabwe coming to independence before that, and they will push for that. It is common ground that the Government should be elected by universal adult suffrage with votes at the age of 18. It is common ground—though here it is more difficult to achieve a definition—that elections should be held in conditions which will permit them to be conducted freely and fairly.
    These issues, particularly the first two, were not common ground at any of the previous conferences, and certainly not in Geneva. So I do not believe that what we are trying to do in bringing all the parties in the dispute together is merely to reconvene the Geneva conference.
    Mr. Patrick Cormack: Does the right hon. Gentle-
    1084
    man agree that he is in effect saying that the internal settlement should be totally put aside and that there should be a new meeting and a new settlement, and that all that has been achieved in Salisbury after months of negotiations to which the Patriotic Front was invited should be forgotten?
    Dr. Owen: That intervention shows why it is unwise to give way early in a speech.
    This is a rather fundamental point and we may have to consider it. One of the central problems is how to bring all the sides together. It is perfectly obvious that if we were to ask all the sides to come together and immediately to disavow their previously held positions we would not get a meeting of all the parties. I have made it abundantly clear and have stated so publicly, and I welcome the opportunity of repeating it tonight, that at the meeting as envisaged no one need concede in advance any previously held positions. Attendance at the discussions would carry no recognition and would confer no legality on what is and what will remain an illegal Government. It would require no one to depart from a position previously adopted, whether in Malta or in Salisbury. Nor would it require us to depart from what we still believe to be the ideal solution, which is the basis of the Anglo-American initiative and of our White Paper in September.
    All the parties, therefore, would come retaining their positions, but it would be foolish to call such a conference if everyone came so firmly entrenched in the views that he was unable to listen to those put forward from the other sides and was unable to make any movement.
    At the moment the response to this invitation has been disappointing. On Monday and Tuesday of last week I discussed the issue with the Patriotic Front. I discussed the issue in London with Bishop Muzorewa towards the end of the week as he was passing through on his way back to Rhodesia. A senior official from the Foreign Office, who has been closely involved in all the negotiations and, perhaps, more important than anything else, had heard the meetings with the Patriotic Front and with Bishop Muzorewa, went to South Africa and discussed with representatives from the

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    regime the situation over two days on Friday and Saturday of last week and also took the opportunity to discuss it with a representative of Mr. Sithole.
    During that period we have tried to have discussions with all the relevant parties. All of them, for a variety of reasons, are either preserving their positions or tending to take up an impossibly rigid position. On the one hand, the Patriotic Front is saying that it would come only to a conference that was based on the Anglo-United States proposals. On the other hand, the Salisbury talkers say that they would come only to a conference which took as read everything that had occurred in Salisbury. I am not saying that they should change their positions. I am only asking that the conference should not be constrained within those obvious restrictions, because were it to be so there plainly would be no point in our meeting.
    Mr. Julian Amery: I should like to put the record straight. The right hon. Gentleman has referred to his talks with Mr. Nkomo, Mr. Mugabe and Bishop Muzorewa. Is it also the case that he saw Chief Chirau and had full talks with him?
    Dr. Owen: I saw Chief Chirau, as I have intended to see everybody in the Rhodesian talks. My door has been open to a remarkable extent because I am very well aware that there are many different views. I have seen the centre parties. I often wonder that we do not give enough credence to the fact that there have been many white Rhodesians who have wanted to see black majority rule. I have seen deputations of farmers and others.
    We have recognised that we shall not get people to the conference by our excluding various people involved hi the Salisbury talks. The exact extent of their delegation is up to them. But I have always held that the negotiations are best confined to the representations at Geneva. I think that that has stood us in good stead. But I have not excluded representation of the Salisbury talkers at any new conference which I hope it is possible to hold.
    People will say that we should not hold a conference, that it is impossible to achieve it. I have constantly to reiterate that we cannot possibly achieve a cease-
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    fire unless there is a negotiation. That negotiation must involve, at the very least, the two major elements that are fighting each other. The absence of this dialogue has been most depressing in the whole problem over Rhodesia. Not since Geneva has the Patriotic Front been able to sit down in the same room as the Rhodesian Front and Mr. Smith's regime. The absence of such a meeting has made it difficult to achieve the necessary compromise and detail which will have to precede any ceasefire.
    There are those who say that we should give this up, that there is no point in searching for a ceasefire. I was pleased to hear the right hon. Member for Knutsford say that he thought that it was reasonable for us to pursue a ceasefire. I believe that there is no other task for us. We must pursue a ceasefire right up to the last moment. The last moment when the next decision will have to be taken is were there to be an election. That would be a decision in which we would have to take account of the Fifth Principle on which we have firmly and resolutely stood.
    Anyone who has read the speech of our permanent representative to the United Nations and his explanation of vote will have seen that we have reserved completely the position not just of successive Governments but of the House in relation to the Fifth Principle.
    In searching for a formula for a ceasefire we come up against the problem that has beset bringing about a negotiated settlement, the problem of law of order. Whether we like it or not, in Africa as in some other parts of the world there is a strong feeling that he who controls law and order—particularly the armed forces, but also the police forces—is able to determine the shape of an election and to overthrow the result of an election if he does not like it. That is a reality which lies behind many of the fears of the Patriotic Front and many of the other African countries. That is why they always attached a great deal of importance to there being in the transitional period an absolute transfer of power.
    That was the problem that beset Geneva—inability to get to grips with the question of who should hold the law and order portfolios. The distribution of those portfolios was the greatest difficulty, and it is still the problem that

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    besets us. It was only in an attempt to overcome that problem that we postulated that the Resident Commissioner should have an executive role and should be the commander in chief of the armed forces and hold authority for all forces, whether the Rhodesion defence forces or the liberation forces, and in the creation of the Zimbabwe national army.
    The absence of the Resident Commissioner is one of the major differences in the internal settlement. In his absence and the absence of definite and specific proposals on law and order lies one of the major anxieties about what has been achieved in Salisbury. It is seen, and with justice, that there has been no basic change in the control of the forces of law and order within Rhodesia. They are seen to be a continuation of the Smith army and of what is called in African countries the Smith police force.
    To a great extent, these are early days. It is envisaged in the internal settlement proposals that the portfolios in the Lower Council shall be shared. I imagine that it is envisaged that there will be one white Minister of Defence and one black Minister of Defence. It is argued by Bishop Muzorewa and Mr. Sithole that they are committed to the principle of involving the liberation forces in the structure of the new army and are determined to exert their influence and control. However, when Bishop Muzorewa was in America there was a raid on Zambia and he was publicly critical of it. He expressed concern and made it clear that it would be inconceivable that the new Government should not have control over that sort of thing.
    Mr. Robert Hughes Mr. Robert Hughes rose—
    Dr. Owen: I shall give way shortly.
    The Smith regime would probably say that it never intended to have a transfer of power, that although it is prepared to start introducing some of the nationalist leaders into the structure of power, the only time there would be a transfer of power would be on independence day. There again lies a major difference between the internal settlement and the Anglo-American proposals, under which there was to be a transfer of power on the formation of the transitional Government
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    and a transfer of power on independence day. The problem about not having a genuine transfer of power until independence day—
    Mr. Robert Hughes Mr. Robert Hughes rose—
    Dr. Owen: Perhaps my hon. Friend will allow me to develop the argument.
    The problem about delaying the transfer until independence day is that the power that controls the period in the run-up to the election and during the election is seen not to have made a fundamental shift. It therefore becomes much harder to satisfy people that a fair and free election has taken place. If there is also a continuation of the armed struggle and the fighting it becomes doubly hard to convince people that a fair and free election has taken place.
    Mr. Robert Hughes: Is it not correct that Bishop Muzorewa and Mr. Sithole say that they knew nothing about the raid into Zambia? If there were an apparent agreement to share power, is it not an ill start to such an agreement that on something as important as a raid into Zambia at least advance notice was not given to those who would apparently share the consequences of that action?
    Mr. John Davies: My comment relates specifically to what the hon. Member for Aberdeen, North (Mr. Hughes) has said. Surely it is a fact that at that time, and indeed now, the interim administration had not been instituted, so there could be no question of such notice being given. What the right hon. Gentleman is saying represents something of a travesty of the reality, because surely the overall control—certainly as it has been explained by Bishop Muzorewa and the Rev. Ndabaningi Sithole—vests in the Executive Council which vests in four people who will operate by consensus. It seems to be irrational to say that that does not represent a major change of overall responsibility. Clearly it does. What the right hon. Gentleman is saying—that there will be no transfer—is not reconcilable with the specific proposal made for the interim regime.
    Dr. Owen: I shall deal first with the point raised by my hon. Friend the Member for Aberdeen, North (Mr. Hughes). There would be the difficulty that an interim Government had not been

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    formed. All it portrays is the problems we would face were that sort of action to be taken in the future when those members of the Executive Council would be undoubtedly identified with those who would claim that this sort of issue would have to come to the Executive Council. We have yet to see how exactly the Executive Council will work, but one of the problems that has been associated with it is that Mr. Smith has continued to call himself the Prime Minister. As I understand it, the Executive Council is formed under the 1969 legislation, which allows for an executive council. I imagine that its members will be appointed under the 1969 legislation and that the Parliament stays in control and will be responsible for enacting the legislative action.
    I am not saying that there has not been a change. There has undoubtedly been a change, or will be a change, but it is not a transfer of power. Power is still vested in the structures of the illegal Parliament and in the illegal regime, though there has been a sharing—I think that would be a more accurate description of it—in the terms of the Executive Council and in the Lower Council. It has yet to be determined exactly how much sharing of power and of control there has been, and in particular in these sensitive areas this raises very serious problems.
    On top of that, there has been a serious problem over the whole question of the future independence constitution. It has always been envisaged, under the Sixth Principle, that it would be right to protect minorities. I have upheld that principle all the way through. Because of that principle, I was prepared to advocate specially elected Members, because I felt that it was not sufficiently competent for this House to say that there should be two or three white Members of Parliament, as it could have been if there were no provision for specially elected Members of Parliament. It might have been fewer. It depended a little on where the constituency boundaries were.
    We were advocating a different proposal. I do not claim a monopoly of wisdom. The proposal was put forward in the Anglo-American proposals, but I somewhat ruefully look back on the difficulty I had in persuading some of the nationalist leaders now involved in the
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    internal settlement of the validity of the various arguments about what needed to happen.
    However, those nationalist leaders have conceded—it is important to recognise that it is a conceding, because they have openly said that they wanted something different at different times—28 members out of a Parliament of 100, 20 of them to be elected on a restricted roll, eight to be elected on the universal roll. The dual roll system has been very strongly criticised both inside Rhodesia prior to the arrangement and no doubt since. We know, again, that certain of the nationalist leaders did not wish for that.
    This has been offset, as I have explained to the House before, to some extent by the provision which Bishop Muzorewa won as the price for going for a 28 provision, that the 28 would never form the Government, so they could never formally form a coalition Government with a minority party to overthrow the results of the majority. However, the extent of that concession on individual voting will be very hard to put into any constitution. I put it no higher than that. I hope that they would not be able to vote on the President and also not be able to vote on the impeachment of the President.
    But it raises other very serious questions, such as whether they are able to vote on Supply or money matters, or on some of the central matters which any Government have to be able to carry in order to stay in power. I am pointing these things out only because individually and singly many of these concessions could be lived with. What we have to do is to cumulate them. It may be that some of the measures were necessary for the sake of confidence, but, on top of the arrangements we now have, the external nationalist leaders are still outside the settlement.
    Mr. Amery: I fully appreciate the hon. Gentleman's overall theoretical responsibility for African affairs and for the African citizen, but if Sithole and Muzorewa can accept this agreement, who are we to criticise it?
    Dr. Owen: I would answer the right hon. Gentleman by asking, who are we in comparison with the people of Rhodesia as a whole? That is why I think we have to come back to the Fifth Principle. Let

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    us suppose that we were to reach a position in which we, as a matter of our own judgment, thought that this package or arrangement was not satisfactory to the people of Rhodesia as a whole. The fact remains that I do not think that this House has ever wanted to give responsibility to any individual nationalist leaders, whether they were members of the Patriotic Front, or Mr. Sithole or Bishop Muzorewa.
    When the right hon. Gentleman's Government were in power, the agreement forged between the then Government and the illegal regime was put to the Pearce Commission. There were very different reasons for choosing that type of commission, when the Government had aligned themselves to some proposals. In Africa at the time—and, indeed, in this House at the time—there were many people who thought that we were selling out, that the Pearce Commission was a fix and that we would not stand by the Fifth Principle.
    To those people in Africa who at the moment are suspicious and anxious about the British Government's standing by the Fifth Principle, I would say that the record over the last 12 years shows that this House will not lightly ignore the Fifth Principle. I do not believe that the way in which the Fifth Principle can be tested in the future will be by that type of commission. I think that that commission was peculiar to the circumstances of the time, when the Government were aligned with the proposals. I say in fairness to the then Conservative Government that when the Pearce Commission reported negatively they had no hesitation whatever in saying that they could not go forward with the proposal.
    I think that what we shall now see, as I understand it, is that those concerned are determined to bring this to an election. The right hon. Member for Knutsford has drawn attention to the questions that people will want to ask—and the sorts of questions that we in this House will want to ask—if this situation arises. I hope that it will not. I hope that before then we shall have had a ceasefire. I hope that before then we shall have been able to get a wider measure of agreement.
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    But, were it to come to an election being held, several questions would arise, such as how many of the total electorate voted, whether it was in circumstances in which there was an intrusive military presence, whether there was any evidence of intimidation, whether the procedures of the election were faithfully carried out, whether there was any censorship, whether there was freedom of movement throughout the country, whether people who wanted to come in to observe the election were able freely to do so, and to satisfy themselves, and what was the general feeling and the atmosphere in which the election was held.
    I believe that that is a decision which will not be left just to a Government. It will be a decision that this House will insist on taking. I am prepared, and have been prepared at all times, to defend that ultimate principle.
    I hope that any such election or test of opinion will not take place against a background of armed conflict, because we would all admit that it is very much harder—if not almost impossible, some would say—to conduct a fair and free test of opinion in such circumstances. I believe that, prior to that, the duty of the Government here is to work for a genuine ceasefire, with the involvement of, if possible, all the nationalist leaders, and that we should try to bring the proposals and their implementation as close to the Anglo-American proposals as we can.
    They should come closer to the Anglo-American proposals not because those proposals have been put forward by the British Government and supported by the American Government. That is a reason, but it is not the dominant reason. The major reason is that they have received an ample degree of international acceptance. When I say that, I do not mean just the Organisation of African Unity. I do not mean just the front-line Presidents. I ask this House to take into account the international factor. Britain does not live in isolation. Others will form a judgment about whether the settlement is acceptable to the people of Rhodesia as a whole. Our friends and allies will form a judgment.
    If any hon. Member reads the reports of the Security Council debate, he will

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    find the contributions of the Federal German Republic, of France and of Canada voicing the same sort of anxieties about this settlement, as I have, not in a destructive sense. They, like us, abstained on the resolution. They did not wish to be seen either to have voted for the resolution, which would have been seen to be an attitude of total condemnation, or to have voted against it, which would have been seen to be an endorsing of the settlement.
    Amid a range of criticism, we have to recognise that the Western industrialised allies—friends of ours with experience in Africa; we are not the only ones with experience—and with the experience of decolonising which France has had, themselves have doubts about the settlement, the form of it and its viability. They themselves are urging that we should do our utmost to involve the Patriotic Front leaders and widen out the consensus.
    That is the goal which the British Government, helped by the Americans and the whole international community, should now try to work towards. So I am not prepared to believe that it is inevitable that we accept at its face value the reluctance of the parties at present to come into a wider meeting. Somehow, somewhere, I believe that it will be necessary to have such a wider meeting, and certainly I intend to work for such a meeting.
    Mr. John Davies: Will the right hon. Gentleman do me the favour of reading carefully what he has said to date this evening? If he were to do that, he could not but be struck by the fact that he has dwelt on every doubt and every negative consideration of the problem. He has not dwelt on what seems to be the extraordinary change which took place as a result of involving three heavily supported black leaders in Rhodesia in discussions with the white regime, leading to agreement with them and seeking to carry it through. Surely the immense challenge of that deserves a much more forthcoming response.
    Dr. Owen: I started by identifying the three areas on which I thought there was common ground, and they are quite important areas. If I reiterate them it is only to re-emphasise them. They are that Zimbabwe should become indepen-
    1094
    dent in 1978, that elections should take place on the basis of universal adult suffrage, and that there should be free and fair elections. That is the basis on which there is common ground on which I think we can build. If I go on to point out the other difficulties and differences, if it is no other consolation it is to point out that this is what other countries are saying as well.
    If Zimbabwe is to reach a secure future, it is not enough merely to convince the Government and most of my hon. Friends—and I believe in their hearts many Opposition Members—that this is not yet an adequate settlement. I point out these matters because that is the overwhelming view of the international community. I have resisted the temptation to condemn the settlement outright, because I believe that that would be wrong. Instead, I have advocated trying to widen the areas of agreement.
    On the question of the United Nations there is one aspect that I shall single out—the reluctance to allow Bishop Muzorewa to speak. I believe that that was a great mistake. I have always held a belief in the universal membership of the United Nations. It has been a positive strength of the United Nations, despite much anguish that has been caused, that it has been possible for it to be used as a vehicle for spokesmen of liberation movements. Sometimes I have not wished to hear from some of the liberation movements that have been able to speak but, on balance, it has been of advantage, particularly in the Middle East, that they have been able to do so. It would be of advantage, in the Rhodesian context, if they were able to speak.
    I think we should ensure that everyone is able to speak. Had Bishop Muzorewa been able to put his case in an international forum, much more cognisance would have been taken of the things that he has said about the need to get support from the international community.
    In the long term it must be in the interests of Zimbabwe to get a broader international agreement. The lifting of sanctions is a decision that needs to be taken not just by individual countries but by the United Nation as a whole. The idea of Zimbabwe becoming independent without some basic support in the world is not one which anyone with the future of that country at heart would welcome.

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    International acceptance is the objective of British policy, and of anyone who wishes a successful future for Zimbabwe. Much will have to be done to heal some of the wounds.
    We shall be guided by the Fifth Principle. The British Government will need to be satisfied that any basis for independence is acceptable to the people of Rhodesia as a whole. We shall take account of the Sixth Principle that, regardless of race, there should be no oppression of the majority by the minority or the minority by the majority. We regard any settlement on the Six Principles as a right settlement. We shall strive to bring an end to the war and achieve a ceasefire. We shall also strive to involve the Patriotic Front, the internal nationalist leaders and the Smith regime.
    I was glad that the Leader of the Opposition said at Question Time the other day that she thought it would be an advantage if Mr. Mugabe and Mr. Nkomo were involved in the negotiations. I do not know whether the right hon. Member for Knutsford saw Mr. Nkomo and Mr. Mugabe in London, but I hope that Conservative Members will make themselves available to speak to nationalist leaders and expose themselves to their views.
    I urge the House to bear in mind the legitimate anxieties, criticisms and fears expressed throughout the world, particularly in Africa, about the settlement. I do not believe that in its present form it is adequate and will bring about the sort of transfer of power that all of us wish unless in certain important areas there is a broader measure of agreement than that which exists. We shall work towards that over the next few weeks and months.
    I have no doubt that there will be criticisms, as there have been, from those who will press me for instant solutions, and for instant acceptance, and urge me to go for soft options. We will not do so. Whether the criticism comes from Africa or from hon. Members, opposite this Government will stand by the principles of a fair and just settlement. Many hon. Members on both sides of the House have stood up for a fair and just settlement over the past 12 years. It would be a negation of all that we have stood for over 12 years, under successive Governments, if we were to turn and run and endorse something that will not last and
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    will only give comfort to those in Africa who believe that we are not committed to these principles. It would simply give comfort to those who witness our internal debates and wonder whether we are prepared to stand up for fairness in a non-racial society.
    I have confidence that this House will never agree to a settlement that is not genuinely acceptable to the people of Rhodesia as a whole, and I intend to work towards that end.
    9.20 p.m.
    Mr. Nigel Forman: I am fortunate to be called to speak following the remarks of the right hon. Gentleman the Foreign Secretary, but I was doubly fortunate to be present during the speech of my right hon. Friend the Member for Knutsford (Mr. Davies), because I found myself entirely in agreement with its contents.
    I wish to devote my remarks to looking at the way ahead in Rhodesia, and I shall try to explore what is involved in the transition. I shall try to examine what are our real chances of getting towards an independent Zimbabwe peacefully and what else needs to be done to achieve those ends.
    It seems to me that the main problem is to be sure that Mr. Smith is sincere in what he is undertaking and that the balance struck in this internal agreement on 3rd March will be sufficient to enable the interim Government to persuade the guerrillas to stop fighting and the whites to stay on in Rhodesia on less favourable terms than hitherto. It is well to recall how much less favourable those terms are likely to be.
    The dilemma from Britain's point of view is that Western interests in Rhodesia are not necessarily synonymous with those of the white Rhodesian population. If the situation becomes sufficiently attractive to persuade the guerrillas to stop fighting and for us to achieve a proper ceasefire, it may by that time have developed further than the whites in Rhodesia can accept. On the other hand, if it remains confined within the limits acceptable to the whites in Rhodesia, it will probably not be attractive enough to bring in Mr. Nkomo or Mr. Mugabe and, still less, to stop the war. Therein resides the nub of the difficulty.

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    If we examine the matter and ask ourselves about priorities for the West, we are bound to conclude that the main priority is to end the war, to remove the pretext for Soviet-inspired intervention, and to see a sympathetic black regime installed in Zimbabwe. If we can do these things, we may have to press for more than the whites in Rhodesia are prepared to accept. But that dilemma has to be accepted and faced up to in the framing of British policy.
    The evidence on these two main points is not too promising, at any rate when observed by a layman such as myself. In the first place, we see that Mr. Nkomo and Mr. Mugabe have said that their forces will go on fighting despite this agreement. We have also seen that the Rhodesian economy is in great difficulty. We know that the war is costing that country £500,000 a day and that there was a net white emigration from Rhodesia to the tune of 11,000 people last year. Therefore, nobody can pretend that that country is a bed of roses.
    In addition, we must bear in mind Mr. Smith's personal record, in the sense that if we examine that record over the years all the way back to UDI in 1965, it is easy to doubt whether the leopard has changed its spots. One must retain these doubts if one is to have an objective view of the situation.
    It is obvious that the transitional Government will have a good deal to do in a short period of time. Their chances of success do not look particularly good. So much will depend on the good will and efficiency of the whites in Rhodesia and on the progress made in the controlling and, one hopes, ending the guerrilla war.
    What are the main tasks? The Foreign Secretary spoke about the ceasefire as a priority task. Surely all the Government's efforts must be bent to that end. But there must be concern about the composition of the military forces in Rhodesia over the period ahead. One sees from the terms of the internal settlement published in The Times how for the foreseeable future those forces are likely to remain white-dominated. I happen to think that that is essential for the immediate future. These are the people with professional expertise and who, contrary to what the right hon. Gentleman has said, can best guarantee
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    that free and fair elections are held within the time scale of which we are speaking. That is not to say that they are necessarily the ideal officers to be in charge.
    However, it is as well to recall that there are a number of professional armies in black Africa that have either assistance from white professionals or have white officers serving in some way in their forces in an advisory capacity. I do not see that as necessarily a bar to a peaceful and reliable law and order force in Rhodesia or even beyond that in an independent Zimbabwe.
    Another key problem is the dismantlement of discrimination. If we read the terms of the settlement, we see that that is held out in the agreement of 3rd March. To my way of thinking, that will be one of the acid tests whether the changes to which the right hon. Gentleman referred are taking place. It will be on that that so much will depend if we are to have a good chance of bringing Mr. Nkomo and Mr. Mugabe back into the main stream.
    The question may be put whether it is progress towards a black Rhodesia at the end of this year or to a new Zimbabwe. The answer to that question will hinge on many of the confidence factors to which the right hon. Gentleman referred. Obviously, we have to try to help create a climate in Rhodesia that will be conducive to the holding of free and fair elections. For example, we have to ensure that the registration of voters—especially women in the rural areas—is carried out purposefully and properly.
    I retain some of my doubts about the agreement. As my right hon. Friend the Member for Knutsford has said on a number of occasions, the agreement is a great step forward. I believe that it is an agreement that is on trial. At this stage we must all give it our full support, but we must suspend judgment about the eventual outcome.
    I was struck by a passage in the agreement dealing with the new constitution and the spirit in which it is to be approached. There is the rather artificial phrase about the drafting of a new constitution:
    "within the terms of this agreement."
    That makes it clear that so much depends on how the agreement is to be interpreted. We must recognise some of the objective facts that have been pointed out by parts of the American Press rather

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    more than the British Press. There is the fact that 3 per cent, of the population will enjoy 28 per cent, of the voting rights and retain about 50 per cent, of the land. If those figures were to apply to any other post-colonial situation, many hon. Members on both sides of the House might draw rather different conclusions, especially when we bear in mind that during the vital interim period the 3 per cent, will be supported by the assurance that it will have control of the army, the police, the judiciary and the civil service. Those sectors will remain in the hands of the 3 per cent, until independence comes about.
    Mr. Frank Hooley: If I understand the arrangement correctly, that will apply for not only the interim period but for the next 10 years.
    Mr. Forman: With respect, it seems that the hon. Gentleman is forgetting that there is the implication of movement away from white domination in the areas contained within the agreement. One of the hopeful things from the point of view of black majority opinion in Rhodesia must lie with the Executive Council, which must be given a chance to work and make progress. It will be examining which changes need to be made not only to remove discrimination within the sphere of petty apartheid but to ensure that the balance within the various forces of law and order and the civil service changes in a healthy direction that will enable an independent Zimbabwe to stand on its own, when eventually the whites decide to throw in their lot completely with the new regime or to find a career and future elsewhere.
    Against that background, it is clear to anybody that there are daunting prospects and awful doubts whether any or all of these objectives that I have mentioned can be achieved, let alone on time.
    I suggest that the key word for the Government to bear in mind and the hallmark of their policy in the coming months should be momentum. The Foreign Secretary must do everything possible to maintain the momentum of this agreement and what follows from it to persuade the blacks in Rhodesia and world opinion within the Organisation of African Unity, the United Nations and the front-line States that the agreement deserves support and a fair trial.
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    Secondly, pressure must be maintained by Britain and the United States acting together through diplomacy and, if necessary, sanctions to try to hasten those changes within the residual white set-up in Rhodesia which might bring in Mr. Nkomo or Mr. Mugabe or perhaps even both. The dilemma is that there are five black African leaders on the scene. In my view, five into two will not go. There is really room for only two at the top of the pile at the end of the day. One of the real problems we face is not only the black-white problem, but the internal politicking problem of a youthful and inexperienced democracy, if such it can be called.
    Finally, there is the need for perspective to be maintained by the Government and the American Administration. They must not lose sight of the wider Western interests. There is a terrific prize attached to the possibility of success in getting a free and independent Zimbabwe which is conducive and susceptible to Western interests. But there is a fantastic penalty for failure. There is the possibility of the spreading of race war and all kinds of strategic dangers further afield if the situation should go wrong. No one in this House can want to bring about a situation which would make it easier or more plausible for the Soviets, the Cubans or the East Germans to continue with their lethal African strategy. The Government must do everything that they can to remove the preconditions for the success of such a cynical strategy.
    In order to maximise our influence and to help bring about this preferred outcome, the Government are right to be cautious in not completely endorsing the settlement so far. I choose my words carefully—"not completely endorsing the settlement so far". On the other hand, it is necessary that the good will of the Government be fully behind this internal settlement because, according to all accounts, the chances are that it will have the mass of popular support within Rhodesia.
    The real test will come when the four-man Executive Council, including the three black leaders, can prevent Mr. Smith from doing some of the things which have so far proved to be obstacles to further trust and confidence. For example, one thinks of ending the hanging of terrorists, seeing that the protected

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    villages are dismantled—that will be important—and preventing any further cross-border raids by the Rhodesian forces into Zambia or Mozambique.
    Consultation at least will be a prerequisite to these measures. Preferably they should not be undertaken at all, because I think that they are likely to be misunderstood by the other parties on the black side whom we want to draw into the final settlement.
    If matters continue as before—if terrorists are hanged and so on—the internal settlement will be shown to be little more than a continuation of what has gone on for 12 years. That cannot be in the wider Western interest. On the other hand, if advantage can be taken of these confidence building measures, there is hope of real progress.
    There is another aspect on which I should like to touch briefly—a kind of litmus test of the transfer of power. That is the degree to which wealth and economic rights are being or will be transferred from whites to blacks. The possible fatal flaw in this respect is that those whites who may be prepared to remain in Rhodesia after independence will probably stay only on the understanding that the transfer of wealth is restrained and perhaps does not take place to any great extent at all.
    Are the whites prepared to face that reality and the need for the transfer of wealth and power? Has Mr. Smith prepared them adequately for it? For example, do they think that the blacks will be content with the trappings of political power but without the realities of economic, judicial, administrative and military power? That is the question that they should consider.
    The tragedy is that the situation has developed so far over the years that we have moved into this dreadful area—forgive the jargon—of the zero sum game where it is perceived on both sides that "his loss is my gain and my gain is his loss." We must somehow move back into a more positive sum situation in which all parties can feel that they have more to lose than to gain by pursuing the war and hostility.
    The day after the internal agreement was reached, The Times, in a long leading article, said:
    1102
    "It is discrimination that has made Rhodesia what it is; its removal will make Zimbabwe something completely different."
    For once I agree with The Times. That is one of the acid tests of this development.
    What has to happen is nothing less than a decisive shift of wealth and power in order that the agreement in theory, to which we all lend our wholehearted support, can be turned into a lasting settlement in practice. I am sure that the Government can help to bring in the Popular Front by their diplomacy at the UN and OAU, with the promise of interest and aid for reconstruction later once the country has found its feet. I hope that that aspect will not be lost sight of. But at the end, as at the beginning, we are at the mercy of Mr. Smith. There is a need to have trust and faith in Mr. Smith. He is as enigmatic at this stage as he was before. We need a few benchmarks against which to measure the vital progress that must be achieved.
    I shall suggest a timetable of progress. We need to see a new constitution ready by about August. We shall need to see a referendum for the white population by September. We shall need to see elections held on a fair and free basis on a new register by about mid-November at the latest. We shall need to see a new black Government firmly in office by the end of the year when Mr. Smith says that he will stand down. If these objectives are not met and such a timetable not fulfilled, the Government should not hesitate to reconsider their position.
    We must not be allowed to be manoeuvred by others into supporting the wrong side if the momentum fails and civil war breaks out. The real danger is that in any civil war there would be only one victor and everyone else would be the losers. The victor would be the Kremlin and those who want to stir up problems, not only for Rhodesia but for the Western interest.
    A lasting settlement cannot and must not be imposed from outside. The people of Zimbabwe must achieve their own independence in their own way. That is what in effect the Government recognise in paragraph 14 of the White Paper which stated:
    "A lasting settlement cannot be imposed from outside. It is the people of Zimbabwe who must achieve their own independence."

    1103
    I quote those words because, of all the proposals and statements in the White Paper, they are the most important.
    The principle of Zimbabwe must be "Zimbabwe fara da se" to use the words of Cavour in another context. These words should be applied not only to the Foreign Secretary but to Mr. Young, Mr. Nkomo, Mr. Mugabe, the Soviets, the Cubans, the front-line Presidents and anyone else who seeks to stir the pot. The attitude of those outside the country should be helpful and constructive and not such as to undermine the situation.
    As the situation unfolds, the Rhodesian issue will require great wisdom and subtlety from the Government. I am not sure that they have exercised that so far. It will require forbearance and sincerity from the Smith regime. It will require courage and good luck on the part of the black leaders every bit as much as political skill.
    It will require great responsibility and restraint on the part of the world community, and once again I think that the Government have a responsibility to try to foster that. All this might just be possible, but I fear that the jokers in the pack may turn out to be the Popular Front leaders themselves. Which way will they go? Can five go into two, as I put it before? Will it be possible to keep personal ambition and personal rivalry out of the situation to a sufficient degree to prevent that from undermining the settlement that we all wish to see? I can only conclude by saying that we must hope and work for the best and urge the Government to do so, but we must prepare for the worst.
    9.40 p.m.
    Mr. Robert Hughes: The hon. Member for Carshalton (Mr. Forman) made an interesting speech, and it contained a great deal with which one could agree. I wish that the kind of sentiments that he was espousing about the need for reconciliation, the need for a proper, orderly and free transfer of power, and for Mr. Smith to come to terms with the situation and prepare white Rhodesians for a transfer of power had been made in this House a decade ago by Conservative Members. One of the great pities is that the right hon. Member for Brighton, Pavilion (Mr.
    1104
    Amery) was not present to hear his hon. Friend's speech. Elder statesman though the right hon. Gentleman claims to be, he would have learnt a great deal from his hon. Friend. Having said that, I must at once go on to say that I did not agree with some of the things said by the hon. Gentleman.
    The hon. Gentleman is right to have the greatest scepticism about the bona fides of Mr. Smith and about how far he is willing to come to an agreement. The hon. Member said that it is easy to believe that Mr. Smith does not mean it, or something to that effect. He certainly cast doubts on what he would do.
    I think that Mr. Smith's record over the past decade since UDI has been one of prevarication, duplicity and even treachery. I do not blame any African leader who doubts whether Smith means what he says. Lest it be thought that I have nothing good to say about Mr. Smith, let me say that he is the greatest escapologist since Houdini. As soon as one thinks one has him tied down to something, with one bound he is away and on to another tack, and we must take that into account.
    I hope that we shall approach these internal settlement proposals with a great deal of caution and scepticism, because even if they were remotely acceptable we should have to watch and make sure that the machinery is there to ensure that they were carried out. For a number of reasons I do not believe that the proposals are remotely acceptable to the Patriotic Front, to the Rhodesian people, far less to me, and to the people of Zimbabwe.
    I hope, and I think that my right hon. Friend made this clear—that there will be no question of sanctions being lifted until there is a guarantee of a transfer of power. Ideally, the Bill which confers legal independence on Zimbabwe should be the Bill which lifts sanctions, because then we can be sure that the thing will work.
    Why should I say that the proposals are not remotely acceptable? First, they have not been agreed with the representatives of the Patriotic Front. The people whom Mr. Nkomo and Mr. Mugabe represent are important. There is always a danger and a tendency to personalise these things as though it were an individual and personal struggle among five

    1105
    African leaders, as though all that was at stake was personal ambition. It is far from that. These leaders represent substantial bodies of opinion in Zimbabwe, and their views ought to be taken into account.
    Two other aspects of these proposals have to be considered before we can begin to understand the situation. First, these proposals did not suddenly evolve because of a wish by the Rhodesian Front to come to terms with the situation because it wanted to see a transfer of power. The proposals began to emerge because a guerrilla war was being conducted, and that has to be taken into account. But for the liberation struggle, Mr. Smith would not even have gone to Geneva, far less start proposals in Salisbury. There is the gravest suspicion in the minds of Mr. Nkomo and Mr. Mugabe because, initially, Mr. Smith set out with his so-called internal settlement for the purpose of bypassing the Anglo-American proposals and cutting out the Patriotic Front. Mr. Nkomo and Mr. Mugabe are naturally unwilling to begin to discuss proposals which were designed to bypass their legitimate aspirations.
    The point is often made—as it was by the right hon. Member for Knutsford (Mr. Davies) and the hon. Member for Carshalton—that Mr. Mugabe and Mr. Nkomo are outside the country and that there should not be too much interference from outside. We make far too much of the fact that they are outside the country. If they had not been outside, they could not have directed the guerrilla struggle, and if they had been inside, Mr. Nkomo would have been back in the sort of detention in which he spent so many years—without trial or conviction for having done anything wrong, but simply because of his views.
    What if they are outside the country? I have been seeking to find a comparable situation in order to argue this case. I know that one of the most dangerous things in politics is to try to argue by analogy or by reference to historic parallels, since no circumstances are precisely similar. The nearest that I can get to the situation in Rhodesia is that when Marshal Petain became the head of government in France, the fact that General de Gaulle was outside the country did not detract from his status. He remained what he had always been
    1106
    —a representative of a legitimate expression of the people of France and their determination to expel, in that case, an external dominator.
    The fact that Mr. Nkomo and Mr. Mugabe are outside Zimbabwe detracts nothing from their right to the respect of those struggling against internal domination and aggression. We cannot just dismiss them by saying that because they are outside the country, they do not count and have no legitimate cause to be considered.
    The proposals are not remotely acceptable, but they at least deserve a reading. Very little, if anything, has changed and the only thing to which I give my wholehearted support is Clause E, which says:
    "It is hereby agreed that Independence Day shall be 31st December 1978."
    If I cannot get it earlier, that date will do. For the rest, the army remains firmly in the hands of Mr. Smith and the Civil Service remains firmly in the hands that have always held it.
    Reference has already been made to the fact that the Rhodesian Army crossed the border into Zambia in an act of aggression against a neighbouring State. Bishop Muzorewa, Mr. Sithole and, I imagine, Chief Chirau were not told that this was about to happen. The right hon. Member for Knutsford immediately sprang to Smith's defence by saying that there was no interim Government.
    That was strange behaviour when a transitional agreement had been concluded for an Executive Council, names had been put to a piece of paper saying that everything would be different, black and white would work together, the views of black Ministers on the Executive Council would have equal weight and portfolios were to be shared between black and white Ministers and the people were to be asked for their views.
    Despite knowing that Bishop Muzorewa was going to the United Nations and to Britain to try to sell the settlement, it never crossed Smith's mind that he had better have a word with the bishop and say that there might be a little local difficulty that could have international repercussions. He did not even bother to tell them. That shows that he thinks he is still in control of the situation, that he has

    1107
    them in his net, that they will not escape, that he can do what he likes and will treat them as he has always done—as though they did not really exist. That is a very bad start.
    I do not believe that this settlement is likely to produce any change whatever. I believe that Smith intends to carry on in control of the situation. That is the tragedy. In that sense I agree with the hon. Member for Carshalton. We are faced with an equation. How does one make both sides of the equation balance? How far can one transfer power to the black majority of the population and make it acceptable to the whites, and how far can one leave the whites sufficient privileges so that the majority of the black population will accept the situation? How do we reach a position of equality? It is extremely difficult to do.
    The irony is that many of us in this House who argue in support of the Patriotic Front being regarded as legitimate, and who argue for a real transfer of power, are the people who are now being told that we are the merchants of violence. My hon. Friend the Member for Eton and Slough (Miss Lestor) argued in this House long before I was here the need for a proper transfer of power in Zimbabwe. If her views—and the views of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) and myself—had been listened to even 10 years ago—about the need for the British Government to do something urgently to get the situation changed—there would have been no violence. Our whole reason for wanting a transfer of power was to prevent violence, because it was perfectly obvious that in a modern world one could not have a situation where a minority population could for ever dominate the majority.
    There has to be this change. The sad thing is that what we have now is too little and too late for the situation to carry. We must take into account the climate of opinion which, fortunately or unfortunately—depending on how one looks at it—is not static in this kind of situation. It seems to me that people are looking at these so-called internal settlement proposals as though they had been put forward 10 years ago before the guerrilla struggle started and before it had gained momentum. When people
    1108
    are in a war situation they are not willing to give up without very substantial concessions indeed. Who can blame them? After generations of trying to get one's political rights by peaceful means and seeing every attempt frustrated, it is much more difficult for one to accept that there should be concessions. In these circumstances I at least agree with the right hon. Member for Knutsford that one has to use words carefully.
    The right hon. Gentleman and my right hon. Friend the Foreign Secretary should both be very careful. We have heard today about the common ground to grant universal adult suffrage. That is true. But there is more to it than that. The proposals for the new Legislative Assembly state that 72 seats of that Assembly will be reserved for blacks who will be elected by voters who are enrolled in the common roll. I understand that to mean both black and white voters.
    Then it states that 28 seats will be reserved for whites.
    "Twenty will be elected on a preferential voting system by white voters who are enrolled in the common roll."
    So that the whites will vote for the 72 members in the common roll and then have a special little election of their own for the extra 20. Then there are another eight to be elected by voters on the common roll. The whites will vote for those as well. They will be elected from 16 candidates who will be nominated in the first Parliament by an electoral college composed of white Members and the existing members of the Assembly.
    Accepting that 28 seats were to be specially reserved for whites, with all the blocking mechanisms that would involve and that 20 of them are to be exclusively elected by the whites, of the eight who are elected on the common roll, the blacks would have no chance of nominating which whites they could vote for. The choice of the special eight is reserved for a caucus, apparently, because we are not told what an electoral college is. We are simply told that it will be an electoral college composed of white members. I do not know whether that means all or some of them. So the existing white Members will put forward 16 names and the college will decide which will be nominated.
    That is not even universal adult suffrage or having reserved seats. It is not even 28 seats in the Assembly being elec-

    1109
    ted by 3 per cent. of the electorate. If constituencies are to be based on geographical boundaries, what kind of black Members will be elected to the Assembly for the white suburbs of Salisbury and Bulawayo where the whites will exercise a powerful influence? There is an awful lot wrong with this.
    I accept that it is necessary to try to get all the different groupings to come together to find the peaceful settlement that we all want. But the next time my right hon. Friend the Foreign Secretary sees Bishop Muzorewa or Mr. Sithole he might tell them that they are doing certainly themselves, if not my right hon. Friend, immense damage by going back to Salisbury and saying that they believe that my right hon. Friend is desperately looking for an excuse to put his imprimatur on these proposals. I understand that in the world of diplomacy my right hon. Friend cannot make comments as strongly as can Back Benchers, but perhaps he should speak out more strongly against the proposals. I do not believe that they will permit the proper facilities to work.
    My right hon. Friend the Prime Minister said, as have others, that the proof of this settlement will be in the eating of it, and whether or not we can digest it. But the hangings still go on. The interesting thing is that Mr. Smith is not even prepared to show his good faith to the three people who have signed this internal settlement by making any concession whatever as to how the country is run and in what has been happening during the negotiating period.
    I do not have before me the letter I wrote to my right hon. Friend about the Africans who were to be hanged. I do not know whether they have been hanged, because information does not come out of Rhodesia. The two Africans in question were members of ZAPU or the Patriotic Front—as it is now called. However, they have never been involved in terrorism or violence. They never were guerrilla fighters. They were, however, found guilty of assisting people to leave the country. Some people might say that that was a qualitative difference. Bishop Muzorewa was one of those who appealed to Mr. Smith for clemency—and he appealed on behalf of people who were not members of his organisation. As far as I can find out, certainly from the replies which I have seen from that country, the
    1110
    pleas for clemency were rejected out of hand. That is why I very much doubt whether there is a sufficient climate of opinion to bring both sides together. There is a long way to go—
    It being Ten o'clock, the debate stood adjourned.

    BUSINESS OF THE HOUSE
    Ordered,
    That Government Business may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Waller Harrison.]

    CONSOLIDATED FUND (No. 2) BILL
    Question again proposed, That the Bill be now read a Second time.

  RHODESIA
  Mr. Robert Hughes: There is a long way to go before we can say that we have got a kind of agreement which is capable of being accepted in the House and, indeed, by international opinion. Therefore, I am glad that my right hon. Friend the Secretary of State made it clear this evening that he thought that the Anglo-American proposals were still on the table and still provided the best basis for a negotiated settlement. All of us want to see that. It behoves all of us to understand that unless we can reach a negotiated agreement which is internationally accepted, acceptable to the Patriotic Front, the guerrilla war will continue.
  The hon. Member for Carshalton said "if a civil war breaks out". Civil war exists. It has already started. As a result, innocent black and white people, people of mixed race, Indians, call them what you like, are dying. There is a heavy responsibility on us. That is why I am glad that the right hon. Member for Knutsford has retreated from his initial position—it appeared to be from the Conservative Front Bench—of total acceptance.
  Mr. John Davies: That is incorrect.
  Mr. Hughes: The right hon. Member can correct me if I am wrong, but he will recall that he said "Why on earth does not my right hon. Friend welcome

  1111
  this settlement?" If he is now saying that that did not mean that he was endorsing these proposals, which he admitted he had not seen at the time, I would be glad if he would tell me so, and I shall take him at his word. I should not like to misrepresent him. The impression was created that those proposals had the full-hearted support of the Conservative Front Bench. They have responsibility just as much as we have. If a little less rhetoric were used against the Patriotic Front it might be willing to begin to acccept our bona fides.
  The Patriotic Front has great reason to doubt whether the British Government are sincere in what they are trying to do. The proof of that, as I have said before in the House, was HMS "Tiger" and
  1112
  HMS "Fearless". So often in the past it has looked as though all we wanted to do was get Rhodesia off our backs, to get the matter settled and get something cobbled together and call it an agreement It has looked as though as long as we could get the matter settled, we could forget all about it. The fact that the guerrilla struggle exists means that we cannot take that kind of attitude.
  We must put forward positive proposals and give full support to ensure that the end of the long, long struggle for a free democratic Zimbabwe comes as early as possible and as peaceably as it possibly can. We can then honestly say that we have discharged our responsibilities. Our record throws great shame on the reputation of the British Government and Britain as a believer in democracy.
  10.4 p.m.
  Mr. Nicholas Winterton: I shall not follow the line of argument of the hon. Member for Aberdeen, North (Mr. Hughes), but straight away I congratulate my right hon. Friend the Member for Knutsford (Mr. Davies) on having been successful in the ballot for selection. He made a very positive and constructive contribution.
  I also pay tribute to my hon. Friend the Member for Carshalton (Mr. Forman), who gave the House a well-thought-out and interesting expression of view on how he sees developments now and in the immediate future in Rhodesia.
  It is a pity that some hon. Members, particularly from below the Gangway on the Government side of the Chamber, have not taken the opportunity to go to Rhodesia. I did so at the end of last year and was struck by the basic harmony between black and white there, particularly outside the large urban areas of Bulawayo and Salisbury. Even in black townships outside Salisbury there is considerable harmony, and people there move quite freely. I was much impressed by the considerable harmony everywhere. The media do no service towards solving the Rhodesian problem by blowing up disagreement and conflict and making them seem bigger than they are.
  I am pleased that the Foreign and Commonwealth Secretary and his Minister of State have come to this debate. For once I find myself in considerable agreement with what the right hon. Gentleman said and the very moderate and reasonable way in which he put the Government's case. I do not agree with all that he said, however, because, although we are on common ground to a considerable extent on the three points he emphasised two or three times during his speech, we on this side of the House see a slightly different way of achieving the objective that we all want, which is a peaceful transfer of power in Rhodesia, or Zimbabwe—call it what one will—at the end of this year.
  Unlike the hon. Member for Aberdeen, North, I have confidence in Mr. Ian Smith, the present Rhodesian Prime Minister. Despite what hon. Members below the Gangway say, I have no doubt that
  1114
  he is desperately keen that the internal settlement that he has negotiated should succeed, that he should step down and that the black leaders of Rhodesia should take over.
  In addition, the business people that I was privileged to meet also believed that overwhelmingly the Rhodesia Front party which has controlled the destiny of Rhodesia, not unsuccessfully, for the past 12 years, wishes to see a transfer of power to the black majority. I join it in wishing to see that happen peacefully, and I have full confidence that it will take place on 31st December this year.
  I was surprised and a little disappointed that the Foreign and Commonwealth Secretary did not answer my right hon. Friend rather more positively. To some extent, the whole debate has been latched on to expenditure and estmiates relating to Rhodesia. My right hon. Friend made a positive proposal, that without delay this Socialist Government should send a high-powered mission to Rhodesia to monitor the position and be able to report back to the Government far more accurately and fully than the staff we have there now can about the mood of the country and the feeling of the majority of the people about the internal agreement.
  It is important that this debate should take place now because, having made in recent times a fairly close study of the situation in Southern Africa, I do not believe that there is a great deal of time on our side or on their side. Indeed, the hon. Member for Aberdeen, North might point out that Mr. Smith has pontificated, that he has also delayed matters, and that a settlement could have been reached 11 or 12 years ago. I do not think that that is the case. We are not living in the past. We are living in the present and looking to the future.
  I am disappointed that the Government did not, while not necessarily accepting everything that goes with the internal agreement, join my right hon. Friend in extending a very warm welcome to this dramatic step forward. It is also strange and a little sad—I address this remark, through you, Mr. Deputy Speaker, to the Minister of State—that the leaders of the black nationalists who have made this internal settlement with

  1115
  Prime Minister Ian Smith are now, if a word can be found to describe what is happening, being denigrated by those Labour Members, particularly from below the Gangway, who only a few weeks or months ago would have hailed these people as the heroes of the new Zimbabwe. This is extraordinary.
  In my short period in the House I have read Early-Day Motions praising the Rev. Ndabaningi Sithole and Bishop Muzorewa, but many of those who signed those Early-Day Motons have been the very Members who in recent times have been very critical of Bishop Muzorewa and Mr. Sithole. I believe that Bishop Muzorewa and Mr. Sithole probably know more about the situation in Rhodesia, the needs of that country and the aspirations of its people than some Labour Members who sit below the Gangway who have never been to Rhodesia.
  It is unfortunate that Chief Jeremiah Chirau has not featured more prominently in discussions with the Secretary of State. Whether or not members of the Government, and particularly Members below the Gangway, like the fact that he is a chief of chiefs in Rhodesia, the fact is that this is the tribal structure and he represents a very large body of opinion in the rural areas and the tribal trust areas of Rhodesia. He therefore deserves respect from our Foreign Secretary and from the Government.
  I do not believe that we can divorce Rhodesia from the overall situation in Southern Africa. How right my right hon. Friend the Member for Knutsford was to mention Zambia specifically. The position in that country is very serious. Not only as regards unemployment but also economically Zambia is probably on the brink of collapse. It would be very unfortunate, to say the least, if Zambia were to collapse, because undoubtedly it would open up another opportunity for Marxists, of whom there are plenty in Africa, to take over control of that country. I do not believe that that would be to the benefit of the people of Zambia or would be conducive to a solution of the problems of Southern Africa as a whole.
  Zambia desperately needs a solution to the Rhodesian problem. So does
  1116
  Angola. We know that the regime in Angola is propped up by Cuban mercenaries. We do not often hear that mentioned by Labour Members below the Gangway, but it is a fact. We know that there are at least 15,000 Cuban mercenaries and many Soviet mercenaries in the Horn of Africa at present propping up another Marxist regime in Ethiopia.
  We also know that there is considerable Marxist aid for President Machel in Mozambique. Although the South African Government are aiding President Machele to run vital services in his country, again we do not hear much about that from Labour Members below the Gangway.
  Therefore, the situation is critical in Southern Africa. We must seek a very early settlement in Rhodesia to prevent a very serious crisis from engulfing the whole of mid-Southern Africa.
  We cannot avoid the personalities when discussing this subject. It is interesting and unfortunate that Mr. Joshua Nkomo, who is undoubtedly the more responsible of the leaders of the Patriotic Front and who certainly leads the more efficient of the two guerilla armies based mainly in Zambia, should not have actually returned to Rhodesia to be party to this very important internal settlement. It is undeniably true that he is a key to the success of this internal settlement which has been the major subject of our debate tonight.
  The Secretary of State was not regrettably as forthcoming as he could have been. Perhaps he was not in a position to be as forthcoming as he might have been about what approaches are being made to Mr. Nkomo with a view to ensuring that he becomes a party to this settlement.
  As a member of the Conservative Opposition, I fervently believe that the internal settlement holds the whole future of Rhodesia. If it is a success, I consider that Rhodesia will go forward to be one of the most prosperous countries in the whole of Africa. As I have said on a previous occasion, I believe that it could turn out to be the Switzerland of the African continent. But we must not throw the opportunity away. Surely it is the ballot box that matters, not the rifle and the bullet. Whether

  1117
  the Government are prepared to accept it or not, the fact is that the black nationalist leaders in Rhodesia, who have negotiated and agreed this settlement with the present Prime Minister, represent an overwhelming majority of black Rhodesians. That is an absolute fact.
  When I was in Rhodesia last year, I met representatives of all the factions, of all the Rhodesian nationalist leaders, including those who are now outside the territory of Rhodesia. I think it is terribly sad that Mr. Nkomo has isolated himself from what is really happening—away from reality, away from the ballot box. He would appear to accept that he could not win ultimate power for himself at the ballot box, and therefore he is prepared apparently—I say apparently, because I do not level this accusation at him directly—to rely upon the bullet and the terrorist rather than the ballot box.
  Some of the atrocities which have been committed in Rhodesia highlight the type of person who apparently some Labour Members below the Gangway would like to see forming a major part of the security forces of Rhodesia. I refer to an incident on Sunday, 6th February 1977, when a group of 12 Mugabe terrorists, in camouflaged uniforms, murdered seven white missionaries at St. Paul's Mission, Musamie. Four of them were women.
  On other occasions, atrocities have occurred in which terrorists have cut off people's lips, their cheeks and their ears, and have then forced the wives of these black Rhodesians actually to eat their own husbands' flesh. Are these really the sort of people who are fit to lead and to form a leading part in the security forces? I do not believe that they are.
  I feel that the more responsible elements of Joshua Nkomo's guerrilla army could form a very useful part of the new security forces of Zimbabwe. I hope that, should he ultimately become party to the internal agreement, he will bring with him those people who have been armed by the Soviet Union, at considerable expense, with very sophisticated weapons, so that those people, if they have the best interests of Rhodesia at heart, can then turn those guns on anyone who would seek to invade and take over Rhodesia.
  Mrs. Gwyneth Dunwoody: Will the hon. Gentleman who has been quoting some exceedingly lurid tales, tell us from where he gets the information? Will he identify his source? Will he tell us also whether he is seeking to assist the settlement of the situation in Zimbabwe or to exacerbate it?
  Mr. Winterton: I reply very bluntly to the hon. Lady that I am seeking to assist the success of the internal settlement. I am also saying—I have said it forcefully—that, like my right hon. Friend the Member for Knutsford, I should like to see the Patriotic Front come into the settlement and be part of it so that it could then draw with it into Rhodesia those people who at present are carrying out atrocities internally against the people of Rhodesia.
  My information comes to me from within Rhodesia. I declare that it comes from within Rhodesia. That is a very good place for it to come from, bearing in mind that these atrocities are being committed inside that country. I do not think that the information could be supplied from anywhere else. I might say to the hon. Lady that, although there is some censorship and some restriction of Press freedom in Rhodesia—which is to an extent in a state of war—there is probably more Press freedom in that country than there is in any other country in Africa. That clearly indicates that many of these incidents, which are horrific, could be verified.
  I come back to the fact that when I was in Rhodesia I went to tribal trust areas, some of them threatened by terrorists coming in from both Zambia and Mozambique. I visited several areas of that wonderful country, and there the people had demanded that the Government provide them with protection, protected and concentrated villages. They are painted in some of the media as concentration camps. That is very far from the truth. These people are happy, but they need protection, and they demanded protection of their Government. Their Government have given them protection with considerable difficulty and at considerable expense. That Government believe that they have a responsibility to all people, black and white alike.
  I want briefly to mention the position of Rhodesia's army. I consider it to be

  1119
  a great army, and I have no doubt at all, as I said to the black nationalist representatives whom I met in Rhodesia, that if a black Government took over the country that army would support them as leaders of that country as loyally as they have supported Mr. Ian Smith and the present Administration and the Administrations before Mr. Smith came to power. Therefore, as my hon. Friend the Member for Carshalton said, I believe that the army must to some extent remain very much as it is at present to guarantee security and a peaceful election which is so vital to the success of the present internal settlement.
  It was with great disappointment, although not much surprise, that I read of the motion passed at the United Nations. I share the view of the Foreign Secretary that it is a good thing that the United Nations exists and that people with all sorts of views should have the opportunity to express those views to the world from that platform. But to some extent the United Nations devalued its own position by refusing to allow Bishop Muzorewa to speak during the recent debate at the United Nations. The United Nations demonstrates double standards when it allows to speak somebody who represents a minority view in Rhodesia and who is outside Rhodesia, whereas someone who is very much in touch with what is going on in Rhodesia and who can be instrumental in guaranteeing the future success and prosperity of the new Zimbabwe is not given the right to speak at the United Nations. What a very sad day for the United Nations that was.
  I am pleased that I have been called to make a contribution to this debate. I support the internal settlement. Like my right hon. Friend the Member for Knutsford, I want to see it work. My right hon. Friend, in his way, has done a very great deal on behalf of the Conservative Opposition to try to stay with the Government and to show a united front to the world over the grave problem of Rhodesia. When all is said and done, Rhodesia is our problem. It is not the problem of the United Nations. It is not the problem of the United States of America. It is the problem of the United Kingdom.
  If we had our feet on the floor, if we appreciated that the internal settlement
  1120
  is really the only basis for a successful, prosperous and peaceful outcome to the problems of Rhodesia, and if we could wean Joshua Nkomo back into the fold and possibly get him into some position in the new Government—perhaps even as president—we should make a positive contribution to Africa and guarantee the future of black, white and coloured in Rhodesia.
  10.20 p.m.
  Mr. Ioan Evans: The hon. Member for Macclesfield (Mr. Winterton) will not expect me to follow much of his speech, because he is an apologist for the South African regime. When he says that he has been to Rhodesia, one wonders under whose auspices he went. Was it under the auspices of the South Africa Foundation? The fact that he is in communication with an illegal regime does not help us in our discussions of the problems of Rhodesia today.
  Mr. Nicholas Winterton: I should like to ask the hon. Member for Aberdare (Mr. Evans) whether it is permissible for me to have friends in Rhodesia who are not members of the Government but who supply me with information which comes from their knowledge of living there. If it is wrong and I cannot communicate with them, what sort of country do we live in?
  Mr. Evans: The hon. Member misunderstands what I have been saying. Perhaps he will read what I said in Hansard. I asked under whose auspices he went to Rhodesia.
  Mr. Winterton: I shall answer that question directly. I went to South Africa as a guest of the South African Government, and on the way back I took the opportunity of calling in on Rhodesia where I received hospitality from the Rhodesian Government, the Rhodesia Promotion Council, business people and personal friends whom I have known for many years.
  Mr. Evans: I had my suspicions and the hon. Member has confirmed them. He went under the auspices of the South Africa Foundation. He has come back here to make an apology for an apartheid regime which has been universally condemned by the United Nations, which has delegated this year as a year against

  1121
  apartheid. The hon. Member says that there is complete harmony in South Africa when we all know differently. As part of a trip arranged by the South. Africa Foundation to whitewash the South African regime, the hon. Member was told to visit Rhodesia to whitewash that illegal regime. I suspected as much and he has confirmed it.
  Mr. Cormack: This happens to be the tenth anniversary of the invasion and rape of Czechoslovakia. A vast number of Labour Members strut around at the expense of East European Governments.
  Mr. Evans: That is completely irrelevant. I condemned the invasion of Czechoslovakia just as I condemn the denial of human rights everywhere. The Opposition seem to believe in one-eyed justice. They see injustice in some parts of the world but deny that it exists in Southern Africa.
  On 11th November 1965 the Rhodesian Government, led by Mr. Ian Smith, made its illegal declaration of independence. There have been numerous attempts to negotiate a settlement in Rhodesia and when the final chapter is written about the attainment of their freedom by the people of Zimbabwe there will be some sorry words about the conduct of the Conservative Party in the whole period when Mr. Smith sustained this illegal regime despite universal condemnation by the rest of the world.
  We have just heard the Foreign Secretary referring to discussions in the Security Council in which there has been condemnation by France, West Germany and many other countries. Not a single country has justified the illegal regime or recognised it. We know that South Africa is supporting it, but even South Africa did not give it official recognition. Yet time and time again in this House Mr. Smith has had support from the Conservative Benches.
  The most recent attempt to bring about a so-called internal settlement has been signed by Bishop Muzorewa, the Mr. Sithole and Chief Chirau, as well as the leader of the illegal regime himself. We know that Mr. Sithole and Bishop Muzorewa have support in Rhodesia and have been recognised as leaders of the people in Zimbabwe. However, the hon. Member for Macclesfield did not say that Mr. Sithole spent years in concentration camps
  1122
  in Rhodesia, imprisoned by Ian Smith on trumped up charges that he had attempted to assassinate Ian Smith. That is the reality of the situation.
  Mr. John Lee: But the matter does not end there. Was not Bishop Muzorewa recently insulted at a Conservative conference by some of the baboon elements in the Conservative Party?
  Mr. Evans: Yes, that was the case. We have agreement with certain nationalist leaders inside Rhodesia, but I believe that the so-called internal settlement will be doomed to failure if it is not supported by all the nationalist leaders. This is the old British game of divide and rule. It means that one talks to certain nationalist leaders but tries to exclude others, instead of trying to reach agreement by bringing them all together. I believe that negotiations for a peaceful settlement leading to a free and independent Zimbabwe will not be successfully concluded unless all the nationalist leaders, including the Patriotic Front, are brought into discussions.
  It is important that there should be international recognition by the United Nations of a final settlement. There was agreement on both sides of this House—with some prevarication on the part of some hon. Members—to impose economic sanctions against Rhodesia. We went to the United Nations to obtain support for those sanctions. We took action and carried the United Nations with us. I believe that if we are to achieve a settlement, we can no longer say "This is our prerogative", but must go to the United Nations and obtain agreement internationally to ensure that a settlement is acceptable to world opinion.
  The Government were making progress following the Anglo-United States initiative launched in March 1977. Following discussions with leaders of Zimbabwe inside and outside Rhodesia, a White Paper was published in September 1977 entitled "Rhodesia: Proposals for a Settlement", Command 6919. At the same time, we appointed a resident Commissioner designate for Rhodesia, Field Marshal Lord Carver.
  Mr. Cormack: We know all this.
  Mr. Evans: I know, but I am prefacing my remarks with the facts. The proposals

  1123
  were based on the following elements. They included the surrender of power by the illegal regime and a return to legality. However, an examination of the constitutional proposals of 3rd March does not show a complete surrender of power by the regime, and there will not be a return to legality if there is not a recognition of the agreement.
  The proposals also included a provision for the orderly and peaceful transition to independence in the course of 1978. We all hoped that by the end of 1978 we could say "Hooray, we have a free and independent Zimbabwe". But how can we say that there will be a peaceful transition to independence if there are forces outside the country, including people in ZANU and ZAPU and the Patriotic Front, who do not accept the agreement made inside the country? In my opinion that condition has not been met.
  My hon. Friend the Member for Aberdeen, North (Mr. Hughes) has dealt with whether the settlement provides for universal adult suffrage. He observed that 72 seats will be reserved for the blacks and 28 for the whites, the whites having a small percentage of the population. However, it is worse than that. We find that these are to be entrenched provisions that may be amended only by an affirmative vote of not fewer than 78 members. Bearing in mind that there will be 72 seats for blacks and 28 seats for whites, I cannot see how the proposed constitution can be described as a move towards universal adult suffrage.
  Will the settlement provide for the establishment by the British Government of a transitional Administration with the task of conducting the elections for an independent Government? Obviously, we shall have no part to play in the transition. Let it also be remembered that we are not merely condemning the proposals made by a British Government. We are condemning the proposals put forward by the Government in agreement with the American Administration.
  The hon. Member for Macclesfield keeps talking about the threat from the Soviet Union, but it is not only the Eastern World that is involved in Rhodesia. The whole world outside Southern Africa is involved. We said that there
  1124
  should be a United Nations presence, including a United Nations force, during the transitional period. If there are to be free elections, it is important that there should be some international body to ensure that they are free. However, there is no provision of that nature in the proposals set out in the internal settlement.
  It was agreed that there should be an independent constitution providing for a democratically elected Government, the abolition of discrimination, the freedom of individual human rights and the independence of the judiciary. In my opinion discrimination is entrenched in the constitution.
  In any settlement for Zimbabwe we must be careful that we do not make the same mistake that we made in respect of South Africa. There was a hurry to settle the problem in South Africa and from that day to this we have had difficulties. It is of paramount importance that we get an agreement that does not write racialism into its clauses.
  Mr. Julian Amery: The hon. Gentleman said that we must be careful not to make the same mistake that we made in respect of South Africa. I understand his point, but what about the mistake that we made in Uganda? What about the mistake that we made in Ghana, where there have been three military coups d'etats? What about the mistake that we made in Nigeria, where there has been civil war? What are we talking about?
  Mr. Evans: We are talking about human rights. We do not deny human rights in any area because another regime is not practising human rights. If the right hon. Gentleman wishes to condemn what is happening in Uganda, he is right to do so and I join him in so doing. I should be disgressing if I were to take up his point about Uganda. I merely say that we might not have had difficulty in Uganda if Conservative Members had supported Dr. Milton Obote and not the coming into power of Amin.
  The internal settlement does not meet the conditions that the Government laid down in the Anglo-American agreement. It does not meet them because it does not have the support of all the nationalist parties, which is essential. It will not lead to a peaceful settlement. That is

  1125
  self-evident. If people are fighting inside or on the borders of the country, plainly there will not be a peaceful settlement. I do not believe that it will gain the recognition of the United Nations. The recent discussions in the Security Council prove that.
  Mr. Michael Shersby: Does the hon. Gentleman welcome the settlement as a useful step on the road to a peaceful solution?
  Mr. Evans: I believe that there must be an agreement to bring about a peaceful solution. The proposed settlement does not have the universal agreement of the nationalist leaders. I know that a long journey begins with the first step. The trouble is that all kinds of steps have been proposed time and again. The constitution as outlined will not meet the Six Principles laid down by this Government and agreed by the Opposition at different times. There was the agreement proposed by the Conservative Government. Lord Pearce went out to Rhodesia and found that that agreement was not acceptable to the people of Rhodesia. If those terms were not acceptable, I am sure that the terms of this settlement will not be acceptable.
  We hope that there will be a settlement by the end of the year, but the Government must insist that all Zimbabwe nationalist leaders are involved in the negotiations. I am glad that they are keeping the Anglo-American proposals on the table. The Government should seek to bring about a meeting with Joshua Nkomo and Robert Mugabe outside the country, Bishop Muzorewa and the Rev. Ndabaningi Sithole inside the country and the representative of the chiefs, Chief Chirau, if that be required, although he is part of the apparatus inside the country at the moment. They should then seek to reach a negotiated settlement. I believe that the African Presidents of the neighbouring States should also be kept fully informed of developments and that we should carry them with us in the negotiations.
  It is all very well for the Opposition to talk about the difficulties created in Zambia. Kenneth Kaunda and the other African Presidents know the difficulties that they have had to face. Sanctions have hit them as well as supposedly hitting Rhodesia. They are prepared to
  1126
  make that financial sacrifice, because they do not want to see a settlement in Rhodesia go the same way as the settlement in South Africa, with all the tragedy that there has been in that country since it was given powers by this House.
  There should be no settlement without the support of the United Nations. We went to the United Nations and the United Nations gave us support in trying to get a justifiable settlement. We must carry the United Nations with us.
  Sanctions against the illegal regime should not end until there is an acceptable agreement. Meanwhile, it is important that pressure be brought to bear on South Africa. I am convinced that there would have been a peaceful settlement of the Rhodesian problem many years ago. The Prime Minister at that time would have been right in saying that it would be weeks, not months, had it not been for the undermining of international sanctions against Rhodesia by the South African regime. I hope that there will be pressure by the United Nations on South Africa to tighten up economic sanctions on Rhodesia until we get a real agreement.
  Labour Members above and below the Gangway look forward to an independent and free Zimbabwe by the end of this year. I am pleased that we have had this debate, if only to have heard the Foreign Secretary's statement. We must stand by the conditions that we laid down many years ago about the minimum requirements for granting independence to Zimbabwe. I hope that we shall succeed in the months ahead. We cannot do that unless we carry all the people of Rhodesia with us. The test must be put to the people. In the meanwhile, we must carry the nationalist leaders with us and reach a general agreement before moving to a settlement.
  10.45 p.m.
  Mr. Patrick Cormack: I hope that in one matter at least the hon. Member for Aberdare (Mr. Evans) will agree with me: it is something of an indictment of the procedures of the House that we are forced to debate the most important foreign policy issue at such a time and in such a form.
  Mr. John Mendelson: Get on with it.
  Mr. Cormack: I do not think that the hon. Member for Penistone should start interrupting from a sedentary position in such a nasty manner, because he often makes great play of the procedure of the House and the role of Parliament. It is shameful that we cannot debate issues of this prime importance at a different time.
  It is a pity that the Foreign Secretary did not come earlier and make the statement that he made tonight. It is a pity that when the internal agreement was first made, the Government did not set aside one or two days for a full debate and that that debate did not begin with a full, firm and resolute statement from the Government. I do not believe that in saying that I am being inflammatory or controversial.
  Mr. Mendelson: God preserve us.
  Mr. Cormack: The hon. Member for Penistone should make his speech standing up. He looks as though he might have dined not wisely but too well.
  Mr. Robert Hughes: My hon. Friend the Member for Penistone (Mr. Mendelson) has not eaten at all. That is the trouble.
  Mr. Cormack: Bile can sometimes have the same result.
  I do not speak as someone who has voted against sanctions on each occasion that they have been debated. Some of my hon. Friends disagree with me and feel that I should have done so. I speak as one who, like my hon. Friend the Member for Carshalton (Mr. Forman), has had great suspicions about Mr. Smith over a long period of time and who feels that we must face up to the credibility gap. At the same time, and I say this particularly to the hon. Member for Aberdare and the hon. Member for Aberdeen, North (Mr. Hughes), we have to accept the realities of politics. We have to accept that people do change.
  If one takes a good look around the Commonwealth one finds that there are honoured and revered statesmen and leaders who have had backgrounds that have not excluded fierce criticism from parts of the House. Kenyatta is an honoured and respected African leader. Who can forget his background? Last year we mourned the death of Archbishop
  1128
  Makarios, and yet he was a man whose background did not entirely endear him to the House over a long period.
  I remember Mr. Smith announcing his acceptance of the Kissinger proposals. I heard the announcement on the radio as I was travelling by car to my constituency. That was a watershed in African history. Mr. Smith said that he was prepared to do a number of things that would lead to black majority rule within two years. The two years are not yet up.
  The Kissinger proposals, which seemed to have the total backing of the Government at the time, have been adhered to strictly in the internal settlement. That is a fact that has not yet come out in the debate. It should be borne in mind by all hon. Members. Dr. Kissinger was negotiating not only with the full knowledge but with the full authority of the Government. That was not contradicted at the time. He was attempting to make Mr. Smith face the realities of African politics and that the time had come for change. If one looks at Mr. Smith's statements and actions since that fateful day when he made that broadcast, one finds that he has not gone back on what he promised Dr. Kissinger.
  One can argue from all sides in a question like this and say that Mr. Smith should have done this many years earlier. One can say that be brought many of his difficulties upon his own head, that he should have recognised the realities of being in a minority population in a totally black dominated country and should have taken this action many years before he did; but since the day on which he accepted those proposals he has not gone back on them. He has strenuously sought to reach agreement with African leaders within his country.
  What is the question to which we in this House have to address ourselves? Above all, it is whether the provisions of the internal settlement meet the Six Principles and conform to the Kissinger proposals. I suggest that to both questions the answer is in the affirmative. It would appear that they meet the requirements of all Six Principles, and I shall come later to the most important of them, which is the fifth.
  It would also appear that the provisions of the internal settlement meet the Kissinger proposals, and I hope that most

  1129
  hon. Members will agree that it is desirable that Rhodesia emerges as a free Zimbabwe not under Soviet influence, not propped up by Cuban mercenaries and a Soviet arsenal, but as a free country. I hope that most people will agree that it is important that if Zimbabwe eventually decides to choose a Marxist Government, it will do so in free elections because it wants that Government, and not because it has been imposed from outside.
  My right hon. Friend the Member for Knutsford (Mr. Davies), in what I thought was a moderate and masterly speech, referred to the meeting, about which we have all read, in Salisbury yesterday. We can argue about the number of people who attend, but Bishop Muzorewa addressed what was, by common consent, a vast meeting. I am not prepared to argue whether it was the largest ever held in Salisbury, but it was a meeting attended by a vast number of people. It was obvious that Bishop Muzorewa was being greeted as a hero by his own people. Here was a man who was being honoured. Here was a man who had brought home the possibility of peace and a real settlement to which they could adhere, in which they would be included, and which they welcomed. I do not think that anybody can lightly set aside that fact.
  I do not think that anybody can dismiss the fact that the Reverend Ndabaningi Sithole is a man who commands enormous support in Rhodesia and that Chief Chirau is a traditional leader who again has a real role to play. Mr. Nkomo and Mr. Mugabe were not excluded from the talks that led to the settlement. They excluded themselves. They could have taken part and, indeed, even now would not, I think, find doors closed to them if they wished to participate in the internal transitional arrangements and in the elections that followed. But if they choose to exclude themselves, much as we might deplore and regret it—and I both deplore and regret it—we should not therefore believe or behave as though the settlement is invalid and worth nothing. What we need from the Foreign Secretary and from the Government is a breadth of vision and a boldness of optimism, which I respectfully suggest have not characterised the right hon. Gentleman's utterances so far.
  I believe that the hon. Member for Aberdare is something of an opponent of Welsh devolution. He does not happen
  1130
  to agree with that form of constitutional arrangement within the United Kingdom. Loving his own part of the country as he does, would he accept any solution for Wales that was imposed at the diktat of Plaid Cymru, or of any other small minority group? Of course he would not. He would believe that they should all be given the opportunity to participate both in the moves leading up to devolution and in an Assembly afterwards and that democracy should out.
  No doubt the hon. Member also believes that those elected to positions of responsibility should be able to occupy and to enjoy them. But how is that consistent with arguing that the Rhodesian settlement should hinge upon the diktat of those who have voluntarily excluded themselves? That point has not been faced up to sufficiently strongly on the Government side of the House.
  It has been made clear time and again from these Benches that we regret that Mr. Nkomo and Mr. Mugabe have not associated themselves with the discussions. We should like them to participate now and in the free elections, but if they will not, they should not be granted the power of veto.
  In order that we can say definitely that the Fifth Principle has been observed, we should try to work out a system to monitor the elections. I hope that the Foreign Secretary will arrange for this to be done. In addition, before monitoring the elections, it is important that we should have a British presence in Rhodesia. This point cannot be made too often.
  We want in Salisbury someone of the calibre of Sir Christopher Soames, who has been ennobled today, Lord Thomson of Monifieth, who was his colleague at the European Commission, or perhaps a retired ambassador, such as Sir Frank Roberts, to whom we could look for advice that we could feel able to accept. We want a top level mission and it might not be a bad idea for a Select Committee to go to Rhodesia to observe the elections and the preparations for them.
  If we allow this chance to slip away, the whole of Southern Africa could become a cauldron of war, turmoil, confusion, chaos and tragedy, and it could be that my hon. Friend the Member for Macclesfield (Mr. Winterton), who quoted some of the atrocities that have taken

  1131
  place, may have given only a trailer of what could become the general pattern. I want to see a free Zimbabwe emerge from Rhodesia during the next 12 months. I want the target date of 31st December to be adhered to, and I should like the Patriotic Front to be involved, but I do not believe that the Front should be given the power of veto.
  Everything possible should be done by the Government to ensure that the settlement is properly tried and tested and encouraged to work. That means a mission, a presence from this House and more than the disdainful agnosticism displayed by the Foreign Secretary. It means that we have to accept that men such as Mr. Smith can change, learn and accept. His actions in the past two years indicate that he has accepted and learned and that he believes in what he is seeking to formulate. He should be encouraged, as should the black leaders who have had the courage to work with him. It is a question of war or peace. When it is a question of war or peace, this House should never be in any doubt where it gives its verdict.
  11.0 p.m.
  Mr. Frank Hooley: The future of Zimbabwe is an African problem and in the long term it will be settled by Africans in their own way. It will not be settled by Europeans either here or in Rhodesia.
  In a real sense we abdicated our responsibility in 1965 when we failed to put down the white rebellion in the first place. But we still have residual obligations, not least because the international community acknowledges the United Kingdom as the only legal authority for Rhodesia and no country in the world recognises the Smith regime.
  In fact, that in a way is the clearest evidence of the bankruptcy of Smith's own policies. It is something of a tragedy that so far no outstanding African leader has emerged in Zimbabwe with the national status within Zimbabwe of men like Kaunda in Zambia, Nyerere in Tanzania, Machel in Mozambique or, in a different context, Makarios in Cyprus and Nehru in India.
  But the fault lies with Smith, because Smith has always encouraged divisions between the various African parties. That is precisely what he is doing now. His
  1132
  whole technique at present is to seek to divide the leading African politicians, to create divisions and maintain his own power in that way.
  I should like to look quickly at this interim settlement which some Conservative Members are so anxious to rush to embrace. I exempt the hon. Member for Carshalton (Mr. Forman), who wisely suggested that we should be extremely cautiously and who expressed a great deal of scepticism about the value of this settlement.
  Mr. John Mendelson: The hon. Gentleman knows something about it.
  Mr. Forman: Do not overdo it.
  Mr. Hooley: That shows credit to the hon. Gentleman's judgment compared with that of some of his hon. Friends. The hon. Member for Carshalton made an extremely thoughtful and constructive speech.
  I come back to the interim settlement. First, there is no return to legality. The illegal regime purports to go forward to independence but without the consent of this country or this House. Secondly, there is the racist composition of the proposed Parliament. It is totally absurd to suggest that a 3 per cent. minority in a particular country should have specially reserved to it 28 per cent. of the seats in the national Parliament. As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) pointed out, quite clearly this is not one man, one vote. Certain men will have two if not three votes. The whole thing is an absurd concoction from the point of view of any genuine democracy.
  Thirdly, there is the racist composition of the Ministerial Council. The idea that 3 per cent. of the population should have 50 per cent. of the Ministers in the Cabinet is the weirdest idea that anyone could possibly ever come across. Not only that, but this weird set-up will not have any real power, because the Green Paper that the Rhodesians have produced makes absolutely clear that any decisions, even of the Ministerial Council, can be over-ridden or referred back to the Executive Council. Since the Executive Council has to work by consensus, that means that in the end Smith has the final veto and can exercise the final power. That is the object of the entire exercise.

  1133
  My right hon. Friend the Foreign Secretary has already referred to the control of the armed forces. Here again, under this settlement, control of this apparatus of State power in Zimbabwe remains effectively in the hands of the white minority. In those circumstances it is in no way extraordinary that this settlement is not acceptable to the Organisation of African States or to the United Nations.
  Conservative Members have underrated the general wisdom of the United Nations in these matters. The Security Council, the General Assembly and other United Nations' bodies have been dealing with problems of racial discrimination and apartheid for decades. For Conservative Members to condemn any United Nations' decisions and actions merely shows their own lack of understanding of the problems of the African content and of the world at large. I would not argue that the decisions of the United Nations are always infallible and correct, but they are usually more in tune with the reality of the situation than are the ideas of Conservative Members.
  Contrary to the interim settlement, the Anglo-American proposals, with which my right hon. Friend rightly persists, contain three important principles which the House should continue to support, which the UN will support and which most of the Zimbabwe African leaders will come round to supporting in due course. The first is the return to legality and the elimination of the power of the Smith regime. The second is an international presence to supervise the electoral process which can establish a properly and legally constituted Zimbabwe Government. The third is free elections under such international supervision to ensure that the people concerned have a genuine opportunity to express their opinion through the ballot box without coercion and without the threat of force. In view of these three principles, we should continue to support the plan and endeavour to encourage my right hon. Friend to pursue the proposals in spite of the present immense difficulties of getting them accepted.
  My right hon. Friend was right in stressing the international dimension of the problem. It would be lunacy for this House and any British Government to rush to embrace a settlement concocted
  1134
  by Mr. Smith which was then rejected by the whole of Africa and the United Nations. This country would make itself look ridiculous if we agreed with Smith a pseudo-independence for Zimbabwe only to find it ostracised by all the countries of Africa and not remotely likely to gain acceptance by the UN as an indepedent sovereign State.
  That is the kind of cul-de-sac into which the Conservatives wish us to rush as they so eagerly press on us acceptance of the interim settlement. My right hon. Friend is right to press on with the basic Anglo-American proposals, but we should make it clear that until there is a return to legality, sanctions will continue and, if possible, be strengthened.
  I should like to know what is happening about oil sanctions, what has happened to the Bingham inquiry, which has apparently sunk without trace, and why the suggestion of oil sanctions seems to have melted away. The oil flowing through South Africa is lubricating Mr. Smith's war machine. Without it he could not conduct his raids on Mozambique and Zambia and the war against the guerrilla forces. It would be interesting to know what we have said to South Africa about oil sanctions and the flow of oil to Smith.
  It is essential for the Government to continue to work closely with the frontline Presidents of the five African States that have to bear still the great burden of the conflict. We must also continue to work within the United Nations. It has so far shown itself willing and anxious to support our efforts to get a return to legal government within Zimbabwe and to assist us in achieving a transition to an authentic Government there. We should continue to seek and work for support in the Security Council and, if necessary at a later stage, within the General Assembly. On that basis lies the best hope ultimately for a sensible transition to a truly independent sovereign State.
  To rush into acceptance of the weird concoction that Smith has thought up for the preservation of his own power would be a folly by this country and would expose us to ridicule and criticism throughout the world.
  11.9 p.m.
  Mr. Ian Gow: I wish to start by referring to one suggestion made

  1135
  by my right hon. Friend the Member for Knutsford (Mr. Davies). It would be incredible, were it not the fact, that there are no effective eyes and ears of the British Government at present in Salisbury. There is an overwhelming case for upgrading and strengthening our present mission in Salisbury. I hope that the Minister will listen to my right hon. Friend's advice and say that the Government have decided to strengthen and upgrade our mission.
  I was rather depressed by the Foreign and Commonwealth Secretary's speech. It seemed to me that he was holding out little hope that the agreement reached in Salisbury earlier this month could ever be translated into a free and independent Zimbabwe. I believe that it can and that we should respond to the appeals by the three black nationalist leaders, who have asked for a helping hand from Britain to overcome the immense difficulties that face Zimbabwe.
  I have been studying, as the House will have been, the contrast—in so far as there is one—between the principles enunciated in the Government's White Paper and the terms of the agreement signed in Salisbury on 3rd March and in this context the Six Principles that have guided successive British Governments in their policy towards Rhodesia. I think that it is common ground between the Government and the Opposition that the agreement of 3rd March violates none of the Six Principles. It could not violate the Fifth Principle, because that is a test still to come.
  Mr. Robert Hughes: Mr. Smith's current proposal is not for one man, one vote. It is for one man, one vote if that man is black, but if he is white, it is one man, three votes.
  Mr. Gow: I listen carefully to what the hon. Gentleman says, but if he has studied his own Government's White Paper published last autumn he will have seen that that, too, envisaged a special representation for the European minority in the Parliament for a a period of 10 years. I repeat that the agreement of 3rd March could not violate the Fifth Principle, because the test of acceptability is still to come.
  I would much prefer that the referendum to take place among the existing
  1136
  electorate be conducted also among the whole of the adult population of Zimbabwe, because it would be immensely difficult for this House, Her Majesty's Government and the United Nations to refuse to recognise the Government that will be formed on 1st January 1979 if there had been put to the whole electorate and not only the existing electorate, predominantly white, the simple question "Do you accept the new constitution that will be drawn up by the interim Government?" It is very desirable that that question should be put before the General Election takes place, or simultaneously with it.
  I turn to the White Paper, Cmnd. 6919, published in September, and look at the seven principles set out in the foreword. I wish to examine to what extent the 3rd March internal agreement does violence to those principles. I believe that on all the essentials the agreement is in conformity with the principles set out by the Government.
  The first principle was
  "The surrender of power by the illegal regime and a return to legality."
  It is true that the Government's proposals envisaged a return to sovereignty of the United Kingdom Government and the presence of a Resident Commissioner appointed by Her Majesty's Commissioner in Salisbury. That was for the interim period only, and I remind the House that the Government's White Paper envisaged that there would be during 1978 a black majority Government and that the interim presence of the Resident Commissioner would come to an end before 31st December this year.
  So although of course it can be argued that there will be no surrender of power by the illegal regime, in the sense that power will be transferred to the Resident Commissioner and then to a black majority Government, it seems to me that there is nothing in the argument that there will be no surrender of power by the illegal regime because there is not an interim British presence but we go straight from the illegal regime to the existing Executive Council and then to majority rule.
  The second of the principles set out in the White Paper was that there should be
  "An orderly and peaceful transition to independence in the course of 1978."

  1137
  It is just precisely that commitment to a black majority Government in which certainly, as I understand it, there will be no white Minister at all, which is envisaged in the agreement of 3rd March.
  The third principle was that there should be
  "Free and impartial elections on the basis of universial adult suffrage."
  Here again I quote from the agreement of 3rd March:
  "It is hereby agreed that a constitution will be drafted and enacted which will provide for majority rule on the basis of universal adult suffrage".
  I say to the hon. Member for Aberdeen, North (Mr. Hughes) that even in the Government's White Paper there was not to be parity of representation by the Europeans as compared with the African majority.
  There is, of course, now a departure from the fourth and fifth principles set out in the foreword to the White Paper, for it is not now proposed—to quote the fourth principle—that there should be
  "The establishment by the British Government of a transitional administration, with the task of conducting the elections for an independent government."
  Nor is it envisaged that there should be, to quote the fifth principle
  "A United Nations presence, including a United Nations force, during the transition period."
  There again, if the objective of majority rule by a totally black Government is to be achieved, it seems to me that a settlement which as it were jumps over those two conditions going to the ultimate goal on 1st January 1979, with the omission of those two stages, does not violate the principle to which the Government are rightly committed.
  The sixth principle is that there should be
  "An Independence Constitution providing for a democratically elected government, the abolition of discrimination, the protection of individual human rights and the independence of the judiciary."
  Those items are specifically referred to and specifically guaranteed in the internal agreement of 3rd March, paragraph A.3:
  "The independence and qualifications of the judiciary will be entrenched and judges will have security of tenure."
  Paragraph 2 states:
  "There will be a justiciable declaration of rights."
  1138
  Thus, those principles are safeguarded in the internal agreement.
  The last principle is one to which the Foreign Secretary made no reference. I believe it to be of great importance. We have not heard about the development fund to revive the economy of the country which the United Kingdom and the United States view as predicted upon the implementation of the settlement as a whole, I hope that the British and American Governments, if indeed the procedures set out in the internal agreement are implemented in full, will set up the development fund to which we were commited in the White Paper published in September.
  It will be argued that it will be an adequate test of opinion whether the internal settlement is acceptable to the Rhodesian people as a whole, in accordance with the Fifth Principle, if there is a sufficiently high vote in the General Election which is envisaged for the autumn. I repeat that I would prefer that there should be a referendum, not just as the Rhodesian Prime Minister has proposed, among the existing electorate, but among all the adult population over the age of 18. But, if we cannot have such a referendum, then, as my right hon. Friend the Member for Knutsford said, if there is a high turnover and if the elections are conducted fairly, that may be the best test that can be obtained.
  Concern has been expressed during the debate that the security forces will remain primarily under the command of white generals and white officers. I do not believe that it has ever been suggested that the security forces of Rhodesia, whether under white officers or under black, would be other than loyal to whichever Government takes power on 1st January 1979.
  If there is to be a General Election, and if, following that General Election, there are elected 72 Members of Parliament, and from that Parliament there is formed a black majority Government, I believe that this House and the world community ought to recognise such a Government. I believe that sanctions ought then to be lifted, and I believe that there would be a duty upon this House and upon Her Majesty's Government to do all they could to protect that Government if it should be the subject of assault, as I fear it might

  1139
  be, from the Patriotic Front forces operating from Zambia and from Mozambique. That would require, of course, almost certainly the kind of international force which the Security Council proposed yesterday should go into the Lebanon. It would be quite wrong for the world community to say that if the newly independent black majority Government of Zimbabwe were attacked from outside, we could simply shrug our shoulders and allow the forces from outside to seek to overthrow a democratically elected Government.
  There is, of course, very grave danger in Southern Africa that the forces of the Patriotic Front, if they refused to participate in the forthcoming elections because they feared that they would not be able to secure democratic approval for their cause, would continue with the war. I share the hopes, expressed by the Foreign Secretary and by my right hon. Friend, that the Patriotic Front will agree to participate in the General Election. I hope that it will do that, because that is the only way in which it can bring itself within legality. If it refused to particpate in a free General Election and continued the war of terror thereafter, I believe that it would be the duty of the international community to protect the newly independent black majority-ruled Zimbabwe against those who sought to destroy it from outside.
  11.25 p.m.
  Mr. John Mendelson: The hon. Member for Eastbourne (Mr. Gow) pontificated at length about what various groups of people in Zimbabwe must do and must not do, as though he were one of those directly responsible for representing majority or minority opinion among the people of Zimbabwe. I found it surprising to hear him speak in such a tone because, until very recently, what we heard from the Opposition was full-scale support for Mr. Smith and all his works.
  Mr. Gow: What absolute rubbish.
  Mr. Mendelson: I shall prove it in a moment. Interruptions are only encouraging.
  Mr. Russell Kerr: Even from that source.
  Mr. Mendelson: From all sources.
  1140
  The starting point really should be a certain acknowledgment on the part of the Opposition of where the responsibility lies for the changes which have occurred recently in Rhodesia. For that reason, I was glad to hear the right hon. Member for Knutsford (Mr. Davies), although he missed the opportunity on several occasions recently at Question Time, for the first time pay some slight grudging tribute to my right hon. Friend the Foreign Secretary for having activated American policy in the right direction. There was half a sentence in the right hon. Gentleman's speech today, and it was the first time that we had heard even the slightest grudging tribute from the Opposition for the work of my right hon. Friend.
  The right hon. Member for Knutsford referred to American involvement. He ought to have gone much further. Many of the developments which right hon. and hon. Members have been discussing today, as though they had come down from on high, by accident, and with no one having worked for them, are due to the work of the British Foreign Secretary, and it is hard to understand why right hon. and hon. Members find it so difficult to give recognition to the man responsible at this difficult juncture in Rhodesian affairs. When the hon. Member for Eastbourne pontificates about what different groups in Rhodesia should do and praises the advances which have been made, he must realise that they are not the result of the work of the Opposition in forcing many late-night votes in this House in support of loyal Mr. Smith and all his racialist works.
  As for the international situation, I regret that the right hon. Member for Brighton, Pavilion (Mr. Amery) is to speak later. I should have preferred him to speak before, because I am sure that he will survey the international scene and give us a speech typical of a leading article in the Morning Post of 9th November 1910. He looks at these affairs in the grand imperial manner. He looks back rather than forward.
  Those who care a great deal about the international connection of affairs in South Rhodesia should remind themselves that the position of this country today, having activated American policy, having carried the good will of many of the States surrounding Rhodesia, and having worked closely with a number of the

  1141
  major Powers, due to the efforts of the Foreign Secretary, is much stronger internationally that it might have been if we had followed some of the wild adventurous schemes usually propounded by the right hon. Member for Pavilion.
  The people who like least the work that the Foreign Secretary has been doing in activating American policy and the position that he has established for this country in the affairs of Southern Africa are the Russians. Anyone reading translations of leading articles in Isvestia will know that they are critical of what I regard as the successes of the British Foreign Secretary. I had hoped that they would be more co-operative. They are not. But we can be certain that the Soviet Union would have liked the adventurous policies proposed by some of the Opposition, because adventurous policies can be replied to by adventurous policies.
  I suggest that the key to finding a reasonable solution to this difficult and intractable problem is to neutralise Soviet influence see to it that the vast majority of members of the United Nations work closely with us and hammer out a policy in which we can take a sensible lead. That is really the motivation for everything that the Foreign Secretary is doing. The Opposition, far from offering the carping criticism that we have had tonight and making statements about not being impressed, should start to recognise the Foreign Secretary's work.
  On the political position in Zimbabwe at present, I do not go along with my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), who blamed Mr. Smith for divisions among the African leaders. I believe that Mr. Smith can be blamed for a lot of things, but not for that.
  The hon. Member for Macclesfield (Mr. Winterton) made great play of having been to Rhodesia recently, and he asked Labour Members why we did not go. The fact is that many of us have been, but we do not make a song and dance about it. We do not believe that we have the vast expertise that he attributes to himself just because we have spent a couple of weeks in Rhodesia at some time.
  There are deep and profound differences between nationalist groups in Rhodesia and these differences preceded
  1142
  Mr. Smith's time as Premier. I use this example as an illustration. When I was in Rhodesia I found it impossible to meet Mr. Nkomo and Mr. Sithole on the same day. Mr. Sithole agreed to spend the better part of a Sunday with me, at the home of friends, and the next day I met Mr. Nkomo in his office in Salisbury. Even then I could not meet them both on the same day. That cannot be blamed on Mr. Smith. There are profound differences, and these differences are facts of political life in Rhodesia.
  These differences have nothing whatever to do with any reluctance on the part of the Foreign Secretary to do more to bring the nationalist groups together. They precede any efforts of any Foreign Secretary and have nothing to do with the work of any British diplomat or political leader. Positions change and new alliances are struck by these different movements.
  Nor is Zimbabwe so different from other emerging countries. India has been full of divisions over many years and these have nothing to do with the particular machinations of the district commissioners in India. There are no district commissioners in India now, but that country is still pretty well divided. These are profound differences that must be taken into account.
  What is the Foreign Secretary to do? Is he to say, after 30 years of history, that he is to be the authority who decides where all these movements should go? Or should he continue, as he is trying to do—painstakingly, slowly, carefully, with good sense and with hard work—to encourage them to come together?
  This is a British policy which I would have thought could be supported by both sides of the House. I find no difficulty in getting support for what the Foreign Secretary is trying to do from people in all walks of life up and down the country. This is not a particularly partisan point of view.
  In the United Nations the Foreign Secretary must work with the materials available. I was profoundly shocked that Bishop Muzorewa was not allowed to speak. I think that he should have been invited to speak not just allowed to do so. This is the sort of nonsense that we often get from United Nations committees and organisations.

  1143
  In this respect I do not share the view of my hon. Friend the Member for Heeley that the United Nations always finds the reasonable solution. I remember the United Nations passing resolutions year after year when Franco was in power in Spain saying that we must hand over Gibraltar to Spain next week. We always ignored them, and rightly so. It was better for the well-being of the people of Gibraltar that we did. So, I would not always accept everything from the United Nations as the gospel truth. These are some of the difficulties with which the Foreign Secretary must work.
  It is of the utmost importance that the British Government are now working step by step with the American Administration that President Carter is an active participant and that the American Secretary of State works closely with our Foreign Secretary. This is the only way in which success can be achieved.
  I go further. I am profoundly convinced that the considerable change, with which I agree, which has occurred in the past two and a half years in the attitude of Mr. Smith is largely due to a radical change in United States policy. I date it from that change. As long as the United States closed both eyes to the breaking of sanctions, Mr. Smith knew that he was safe. Whenever I was in Rhodesia, members of the business community, some of them quite prominent, said to me "This cannot last. It must change and we want it to change"; but they added "But when we tell Mr. Smith that, he does not believe us. He says 'The Americans are on our side, the South Africans are on our side and many British people are on our side. We have nothing to worry about'". When the American attitude changed, all that changed and became immaterial. That is why, to some extent, Mr. Smith has moved.
  The Foreign Secretary is working closely with the American Administration, and it will be an historic achievement if we can activate American policy in the right direction. That should dictate our attitude. It was right for the Foreign Secretary and the Government to be hesitant, because how can the British Administration work to encourage the various nationalist movements—which, to some extent, are wide apart—if they immediately embrace a set of pro-
  1144
  posals worked out by some of them against the others? After all, there is beginning—in fact, we are right in the middle of it—not only a struggle for the independence of Rhodesia but a profound struggle for the leadership of an independent Zimbabwe.
  How can the British Government hope to encourage Mr. Nkomo and Mr. Mugabe to work with the others if they immediately establish themselves as partners of one side only when the discussion begins? It should give us confidence in the work of the Foreign Secretary that he did not immediately commit himself even purely on diplomatic grounds. There used to be a premium on the diplomatic finesse of a British Foreign Secretary. Every specialist in foreign affairs should have welcomed the reluctance of the Foreign Secretary to be embraced immediately by one side or the other. This aloofness makes him attractive—I hope to all sides. It can lose nothing, and it has not lost anything.
  Therefore, I do not see why the Opposition are so worried. On the contrary, there is now a growing realisation—some of my closest political friends may not agree with me on this—that if the vast majority of the Africans of Rhodesia are to be persuaded that immediately after independence they should not insist that one man, one vote must mean that there can be no entrenched clauses and no reservations to make the transition easier to give confidence to the white minority, and if the Africans declare that that is right, we shall not stand in the way of such an arrangement.
  That is all that can be found in the White Paper. The Government foresaw this and deliberately put it in the White Paper. The White Paper is not an academic document to win prizes at the Academy of Sciences. It is a diplomatic document helping to pave the way for what is beginning to occur. Nothing is gained by trying to create a contrast between what my Friend the Member for Heeley said and what is in the White Paper. The Government showed their good will by being reasonable and pragmatic, as one would expect from a Government who want to make a practical contribution.
  All speeches must come to an end, and I conclude by saying that my right hon.

  1145
  Friend the Foreign Secretary may not have impressed Opposition Members. I hope that on reconsideration they will take a more positive view of his remarks. My right hon. Friend was not bombastic but spoke quietly and reasonably. It is the quiet and reasonable tone that is needed in the present situation. Let him succeed first and then the trumpets can be blown.
  11.40 p.m.
  Mr. Julian Amery: I am sure that the right hon. Gentleman the Foreign Secretary, who has spoken with unaccustomed modesty in this debate, will be more than usually grateful to his hon. Friend the Member for Penistone (Mr. Mendelson) for interpreting the right hon. Gentleman's motivation and for telling us the thoughts and moods that have inspired him in his career up to date.
  The hon. Gentleman said that the Foreign Secretary's influence on American policy was one of the things to which we should pay the greatest attention and respect. I wonder about that. The right hon. Gentleman told us earlier that in the debate in the Security Council most of the permanent members were of much the same opinion as he was. That is the first point on which I take issue with him. If he had said over the past few weeks to the United States Government and to European Governments that the Salisbury pact, if I may so call it, was a good idea—in other words, if he had preached its virtues—he would have been given a great deal of support. Because he did not do so, and because he followed in the wake of American policy, which for electoral and international reasons has not been so well-disposed to the agreement, the Salisbury pact has not had such a good Press as it could have had.
  I think that it is a very good settlement and I agree entirely with my right hon. Friend the Member for Knutsford (Mr. Davies) that it conforms to the Six Principles, both in execution and to a large extent in intention.
  Of course there are imperfections, as there are in any settlement. But they are imperfections very much in the British tradition. When we began to democratise the House of Commons in the last century, we did not take away all the block-
  1146
  ing powers of the House of Lords, and it was some time before the Army and the Civil Service began to reflect the democratisation that had taken place in the House of Commons. Nobody with a sense of history would think that we should have done better if we had accepted the Chartist proposals of 1848.
  I believe that the settlement was good for deeper reasons. The deepest reason is that the Salisbury pact was not imposed; it was not a colonial constitution, of which we have seen so many. Indeed, I have been guilty of helping to impose or donate some of them to different countries, and most have gone with the wind. But this settlement sprang from a genuine coming together of hearts and minds in Salisbury between black and white, between the leaders of the black majority and leaders of the white minority. The fact it did so was little short of a miracle. It is not so easy to make a miracle in life.
  In the French Revolution the Committee of National Safety put out a competition. It abolished Christianity and said "Let us have a new religion and let anybody bring forward proposals". A young man went to M. Talleyrand, who was the secretary of the committee, and produced a scheme embodying a new religion. M. Talleyrand examined it and said that he was interested. The young man asked if he was convinced, and the reply was "Go and crucify yourself, rise from the dead in three days, and I will believe you. We need a miracle before we can be convinced of a new religion."
  There has been something pretty close to a miracle in Salisbury. If the Foreign Secretary had said to me or anybody else a year ago that Mr. Sithole, Bishop Muzorewa, Chief Chirau and Mr. Smith would be agreed—not merely intellectually but with a considerable emotional content, which has stood up to unremitting pressure from Moscow, London and Washington—I do not think that he would have been believed.
  The situation was well described in Louis Heren's articles in The Times. It is well known that Mr. Heren is not of extreme Right-wing persuasion. However, what he wrote when he returned from Salisbury seemed to go straight to the heart of the matter—namely, that something had happened in Salisbury not

  1147
  just intellectually, not just emotionally but spiritually.
  It would be a great mistake to try to tamper with the arrangement that has been made or to try to impose amendments upon it. I do not know what Mr. Graham's mission was charged to do, but if it was to try to amend or change, that would have been a mistake. If it was to try to disrupt the existing agreement with a view to enlarging it or otherwise, that would have been a crime.
  I urge the Foreign Secretary to try to put aside rancour and bitterness. The right hon. Gentleman has been in his present job for only a short time and what I am about to say does not attach to him, but his predecessors and officials have been made to look pretty silly by Mr. Smith over the past 12 years. In the Foreign Office there is bitterness, rancour and a desire for revenge. There is the excuse for that attitude that it would be cosmetically more attractive to other African countries if the Smith regime could be seen to be humiliated. That is why I am glad that in the end the right hon. Gentleman agreed to meet Chief Chirau.
  It would be a good thing if we stopped the vendetta against Mr. Smith, Mr. Gaylard, the Chief Justice, and the chief of police, which I gather is still being promoted, or was in Pretoria even at the weekend. If Mr. Sithole, with 10 years' experience of imprisonment under Mr. Smith, having been accused and convicted of trying to murder Mr. Smith, can put up with the settlement, who are we to take objection? Let the interim Government and their successors, when duly elected, deal with these matters.
  In the past the right hon. Gentleman and some of his hon. Friends have given credit to the Patriotic Front, and sometimes even to sanctions, for bringing about the move that Mr. Smith has made towards one man, one vote and majority rule. I think that this is true, but perhaps not quite in the sense that the right hon. Gentleman usually invokes. What has brought the leaders of the black majority and the white minority together has been the fear that the Patriotic Front would bring to Rhodesia what Frelimo has brought to Mozambique and what the MPLA has brought to Angola—namely,
  1148
  anarchy, chaos, poverty and the destruction of a civilised Western-type society.
  We regret that Mr. Nkomo and Mr. Mugabe are not parties to the agreement. That is not because I condone their crimes. They have been guilty of terrible crimes. However, I would not worry too much about that. I have shaken hands with more terrorists and murderers in my life than I like to admit, but in the cause of peace who would not?
  It may be that the fighting will continue and will even escalate. It does not depend on what we do. It depends on the Soviet Union and the front-line Presidents. If the Soviets do not support the fighting, it will stop in a few weeks.
  We need to recognise why the fighting may go on and why it is not so easy to bring the Patriotic Front into the deal. I think that it was Churchill who said about Oliver Cromwell that, obsessed with the power of Spain, he failed to observe the rise of France. It is easy for official thinking to get into a groove.
  The crisis and the crunch in Rhodesia today are no longer racial. It is no longer an issue of black against white. Beneath the personal and tribal rivalries there is a whole series of economic and social tensions to be resolved.
  The Soviets and their client States in Angola and Mozambique advocate Marxist solutions to these problems. These solutions envisage not elections but a Marxist elite, as in Frelimo or the MPLA, to handle the problem.
  If the Patriotic Front were prepared to advocate Marxist views in an ordinary election campaign within the framework of the Salisbury pact, there would be no problem. But if it wants to impose them, first, by taking over the security machinery, that would clearly be unacceptable to this House. Indeed, the Foreign Secretary knows that he would not be able to get the House of Commons to accept a solution of that kind.
  The Foreign Secretary said to Mr. Sithole—this conversation appears to have been published in Salisbury—"Do at least try to include Joshua". It is not so easy to include Joshua. I do not take the view that Nkomo is an opportunist who is ready to accept a well-paid honorific job. I think that he is a serious politician who wants real power. But he cannot hope to get real power by

  1149
  election, unless the election were rigged by his having prior control of the security forces.
  Mr. Robert Hughes: How does the right hon. Gentleman know that?
  Mr. Amery: Every expert opinion in Rhodesia, including Nkomo's, knows that. If he thought that he could get it, he would come in at once and say "I will walk over it". He knows perfectly well that he cannot get it by an ordinary election.
  Mr. Robert Hughes Mr. Robert Hughes rose—
  Mr. Amery: I shall give way to the hon. Gentleman later. Mr. Nkomo has made it clear in private to many people and he has made it pretty clear in public. Both he and President Kaunda have said that they do not want elections until they have the power. He knows that he would not win the power through an ordinary election. He wants an election to ratify his power.
  Mr. Robert Hughes: Joshua Nkomo has made it clear that he is willing and ready at any time to submit his views to free, independent and fair elections. That has always been his view. The right hon. Gentleman must believe some very odd propaganda if he thinks that he can say which of the African leaders has the greatest responsibility of winning such an election. I think that he is in great danger of arrogating to himself the divine right of saying who shall be the leader of Zimbabwe without a proper test of electoral opinion.
  Mr. Amery: I should not dream of saying who would be the leader. There can be no doubt that for a long time Mr. Nkomo said that he did not wish to have elections. President Kaunda said the same on his behalf. Then, eventually, they compromised on a formula that Mr. Nkomo should have power first and, having got power, should then hold elections to ratify his position. We know what that means—one man, one vote once. We have been through all that rigmarole before.
  The trouble with the Anglo-American proposals is that they imply in effect, control of the security forces would be given to the Patriotic Front. That is why, rightly, they were dismissed, not only by the whites but by the blacks.
  1150
  Any chance of bringing Mr. Nkomo in on a lesser basis was ruined by the Foreign Secretary's blatant pursuit of the Patriotic Front. It was bad diplomacy and I am surprised that my old Department did not brief him better.
  It is important to remember Burke's old saying:
  "It is fatal to be tied to the carcase of dead policies."
  The Anglo-American proposals are dead, and everyone knows it. There is a new proposal which is alive and active and other agreements could be made in the future. The Anglo-American proposals are no longer viable.
  Too much emphasis has been put on personality. The Foreign Secretary might do well to ask the opinion of the hon. Member for Penistone and others who are more Marxist inclined. Of course human beings are important. But if Mr. Nkomo were to fall under the proverbial bus, to whom would we look? Would the Government change their policy completely, or would they say that the man should be Mugabe or someone else? I do not believe that they would change, because the only point about Mr. Nkomo is that he is identified with the Soviet Union and Kenneth Kaunda. His inclusion would avoid a confrontation with the Soviet Union.
  Let us think that through. If that is the aim, the Government are following a Yalta-type policy in Africa. It is interesting to look back on Yalta. After the 1945 peace we arranged in the Yalta negotiations that for Poland, Czechoslovakia, Hungary, Rumania and Bulgaria Governments should be set up in which the pro-Soviet element had the leading role but the pro-Western elements were included. Within two or three years the pro-Western elements had been exiled, shot, or imprisoned.
  There was some excuse for Yalta, because the Red Army was already in position in most of the territory. There is no such excuse this time. In Angola and Mozambique the Soviets' hold is shaky and could be destabilised. In South West Africa and Rhodesia they only have a toehold and there is a case for pushing them out. That would be easy enough. The time has come to draw the line. President Carter's speech at the weekend indicated a slightly

  1151
  healthier view in the United States, though they have a long way to go.
  If we decide to draw the line, the terrain and the communications all favour the West; now the Salisbury pact gives us the moral foundation from which to face any challenge from the Soviet Union. The West is beginning to understand. But I am sorry that we lacked the courage in the United Nations to veto the ridiculous resolution passed by representatives of Governments most of whom have no experience of what majority rule means.
  We all know that at the end of the day, whether we are talking about Rhodesia or South-West Africa, much greater issues are at stake. We must consider communications round the Cape—the Southern entrance to the Indian Ocean—and the vast economic interests of trade, investment and our long historical relations. How race relations develop in South Africa will depend on what happens in Rhodesia.
  I know that there are those who look forward to a crusade against apartheid, to carrying revolution into South Africa; but for the more realistic among us there must be a realisation that if we can find a settlement in Rhodesia where white and black work together, as appears to be the solid foundation of the Salisbury pact, there is a real chance that the influence of it will spread for good to the whole of South Africa, with great advantage to the free world.
  Mr. Peter Blaker Mr. Peter Blaker (Blackpool, South) rose—
  Mr. Speaker: The hon. Member for Blackpool, South (Mr. Blaker) will be the last Back Bencher I shall call to speak on this subject.
  12 midnight.
  Mr. Blaker: I want to make two points. First, I understand the desire of the Foreign Secretary to get all parties involved in the settlement and to get a ceasefire, but I believe that as a result of that desire he is in danger of appearing to give way too much to the parties which favour a violent solution. This seems to be totally contrary to the traditions that we have followed for 30 years in giving independence to more than 30 countries. With two exceptions—and
  1152
  these are not very happy exceptions—Aden and Zanzibar—I think I am right in saying that we have always insisted on free elections before independence is achieved. I do not see how we can fly in the face of that tradition on this occasion.
  Mr. Robert Hughes: We are not flying in the face of tradition.
  Mr. Blaker: Like the Foreign Secretary, I hope that Mr. Nkomo can be persuaded to come into the settlement, but I am not too optimistic about it, because there is a lot in what my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) said about Mr. Nkomo's desire to have the real power. But I think it right that the opportunity for him to come in, and indeed for Mr. Mugabe to come in if he will, should be held open, and I believe that it has been held open over recent months. However, they cannot be given the opportunity to wreck the settlement.
  This is the great flaw in the argument that we have heard from so many Labour Members. For example, the hon. Member for Aberdare (Mr. Evans) insisted that all the nationalist leaders must come into the settlement, or there should be no settlement. That is not a tenable position. Indeed, I believe the best prospect—if there is a prospect—of bringing Mr. Nkomo into the settlement is to give the impression that the internal settlement will go ahead anyway, whether he likes it or not.
  My second point is that the Government's help may be needed in achieving a satisfactory internal settlement. I hope that if the time comes when the Government should step in in a more positive way, they will be prepared to do that. I believe that the Government bear a responsibility for the failure of the Kissinger agreement because they were too reluctant at that time to come in and do what was required of them by the world.
  If, when that settlement was made, if, after we had heard Mr. Smith announce on 24th September 1976 that he accepted majority rule—it was a great announcement and I remember being surprised, astonished and deeply moved by it and believing, as I still do, that he meant what he said about accepting majority

  1153
  rule—if the British Government had been prepared to say "We will convene a conference. We will do everything we can to clinch this deal" things might have gone rather differently.
  Mr. Robert Hughes: The hon. Gentleman must not forget an essential fact of that so-called agreement. It was that none of the representatives of the African national parties of Zimbabwe was consulted before Kissinger started, during the time that he was having discussions with Mr. Smith, or afterwards. One cannot have a settlement on that basis.
  Mr. Blaker: With respect, I do not think that the hon. Gentleman is accurate in his recollection of the facts. I believe that if the Government had shown more willingness at that time to accept their responsibilities we might have had a chance of a settlement then.
  I hope that we shall not again reject a British role. I had the impression that the Foreign Secretary was indicating tonight that if, later this year, we are faced with a situation in which it has not been possible to bring in Mr Nkomo and Mr. Mugabe, and elections or some other method of ascertaining the opinions of the people of Rhodesia as a whole are to take place, Britain may be faced with a decision to take part in helping that process forward. I should welcome that. The way in which we might be called on to help would be to send observers to the election or to join with other countries in sending observers.
  I understand that the Foreign Secretary accepts that five of the Six Principles have been fulfilled by the internal settlement. The only one that has not been fulfilled is the fifth—that Britain should be satisfied that a settlement is acceptable to the people of Rhodesia as a whole. That has not been fulfilled because the elections have not yet taken place.
  I do not understand why so many hon. Members opposite appear to believe that Bishop Muzorewa, the Rev. Ndabaningi Sithole and Chief Chirau do not know what their people will accept. They are experienced men. We saw the reception
  1154
  given to the bishop when he returned to Salisbury yesterday. We know that Mr. Sithole was under arrest for 10 years. These men have good credentials; they have struggled hard for a settlement and they should be able to judge what their people will accept.
  It is likely that if the elections take place, even without Mr. Nkomo and Mr. Mugabe, they will show that an overwhelming majority of Rhodesian people support the internal settlement. The problem will be to see that the elections are free and fair. That is why observers will be necessary. If we are to send observers, two things are required—we must have the political will to send them and it must be politically possible for us to do so.
  This is where the Security Council vote is relevant. I am glad that, according to the Foreign Secretary, the British permanent representative has reserved our position, but it is a pity that he did not veto the resolution, because the vote has made it more difficult politically for us and our friends who think as we do to do what may be necessary later this year to assist the elections to take place.
  The Government should be preparing the way for those elections. The Foreign Secretary said that the French, the Germans, the Americans and the Canadians shared our view in the Security Council. I believe that Britain carries great weight on the question of Rhodesia and the fact that those countries shared our view is probably a reflection of the fact that they believe that we know something about the subject. We certainly ought to—we we have had a great deal more acquaintance with it.
  I hope that we shall use our knowledge and experience to prepare those countries for the fact that later this year they may be called upon to join us in assisting the process of achieving majority rule by democratic means. When the time comes, the right course may be for Britain and other countries to send observers so that the people of Rhodesia may show whether they believe that the settlement satisfies the Fifth Principle.

  REGIONAL DEVELOPMENT GRANTS
  12.10 a.m.
  Mr. Michael McGuire: The purpose of my intervening in the Consolidated Fund debate is to ask how much of the £92 million under this Vote is to be allocated to helping the Wigan travel-to-work area overcome some of its problems, particularly the unemployment problem.
  As the Minister will know, the present rate of unemployment in the Wigan travel-to-work area is approximately 9 per cent. We have a total of about 6,579 wholly unemployed. I realise that is the job of my hon. Friend and his colleagues to keep under constant review what type of regional assistance is required as between one area and another and to make decisions accordingly. I know that these decisions have been made from time to time, and as recently as April 1977.
  The various changes that have taken place over the past 30 years illustrate that the history of regional aid is one of changes in Government policy, such as I have mentioned. What I cannot understand is why the Wigan travel-to-work area has always been badly treated when, using the Government's own criteria, it should have been better treated.
  I should explain that, apart from the new town of Skelmersdale and a small part of my constituency that is in the St. Helen's metropolitan borough, the rest of my constituency lies wholly within the Wigan travel-to-work area: hence my reason for speaking about the needs of the area.
  The Wigan travel-to-work area lies midway between the counties of Greater Manchester and Merseyside. If it is to solve its special problems, including the most important, such as unemployment and dealing with social and industrial dereliction, it needs a high level of industrial development. My right hon. Friend the Secretary of State for Industry has power to designate areas as development or special development areas
  "having regard to all the circumstances actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies".
  I should like to deal with the general position of Wigan. The borough lies in
  1156
  the heart of the once great South Lancashire coalfield, which is now largely gone. It has completely gone in the Wigan travel-to-work area. There once was a large textile work force. At one time, I think as recently as 1959, it was estimated that coal mining accounted for about 22 per cent. of the work force and that about 17 per cent. of the workers were employed in textiles.
  The coal mines have all gone and the number of coal miners who have to travel outside Wigan has been very much reduced. The number of people employed in textiles and clothing is now down to about 3,000. The decline of coal and cotton has meant that thousands of jobs have been lost in Wigan, but Wigan was helped by the earlier regional policies of the post-war Labour Government. I believe that those policies were embodied in the Distribution of Industry Act 1945. By 1960 the position in Wigan had sufficiently improved—about 8,000 or 9,000 jobs had been created to make up for those lost in coal and textiles—and the development area status which Wigan up to then enjoyed was withdrawn.
  Wigan has problems of unemployment and industrial and social dereliction. It has far too many old factories. A high percentage of all industrial buildings in the borough were built in the nineteenth century, and a recent survey by the Greater Manchester County Council showed that Wigan was the worst area in the county for obsolescence, with 37 per cent. of all buildings being classed as obsolete and a further 27 per cent. as poor. Of vacant industrial buildings fewer than one-eighth were regarded as adequate.
  On mining dereliction, 5 per cent. of the land area of the borough is classed as derelict. Wigan has 2,582 acres of recorded derelict land, which is the third highest figure in the country. If one includes land which by the official definition justifies reclamation, it has the highest total in the country. On the housing front, some 21 per cent. of the housing stock was described in a recent survey as unfit—probably as unfit or substandard, that is, lacking one or more of the standard amenities or having repair costs of £500 or more.
  Wigan has a much bigger school population than most boroughs in the country and the largest in the Greater Manchester

  1157
  area. Twenty-six per cent of the population is at school, and that figure is significant in terms of future employment prospects.
  All available evidence shows that Wigan is an area of low incomes, with poor services to match, which is not surprising given that it is not possible to create the income needed from within the community, so that standards are less than an energetic and hard-working council can provide. The borough has been shabbily treated by the Government on the rate support grant.
  That is the general background to Wigan's position. The travel-to-work area is further handicapped in that it is surrounded by towns or cities that enjoy special assistance of one kind or another. There are four new towns and neighbouring authorities which have been designated as special development areas.
  Wigan cannot compete with that on fair terms, even though the travel-to-work area has intermediate area status. My colleagues and I have been particularly angered by the replies to recent Questions, which have highlighted how badly the Wigan area has been treated. My hon. Friend the Member for Wigan (Mr. Fitch) has lead many deputations to Industry Ministers and other Ministers pressing the claims for Wigan. I have been privileged on several occasions to join in, as has my hon. Friend the Member for Westhoughton (Mr. Stott). On every occasion an irrefutable case has been put forward for Wigan. We have always been given—I will not say that they were anodyne answers—the usual replies saying that the case was being considered, that an immediate response was not possible, but that we would be contacted. But always the claims for Wigan have been turned down. I cannot understand why.
  Recent answers that we have been given show why the way in which Wigan has been treated cannot be understood. There are 144 districts, areas or towns in the country that enjoy a higher standard of grant aid than Wigan does either of special development areas status or development area status. Sixty-four of them have a lower rate of unemployment, many of them a considerably lower rate, than Wigan. Only four of the 64 have a higher number of unemployed. Wigan's total is 6,500. There are a further 80
  1158
  areas with an unemployment rate as high as Wigan's or higher, but only six of those have a higher total of unemployed, and all six enjoy the highest form of grant aid.
  To sum up, 144 areas enjoy a higher form of grant aid than Wigan, in only 10 of them is there a larger number of unemployed, and seven out of those 10 are designated as special development areas. This appeal is not for special development areas status, although a substantial claim could be made and has been made. This claim, like the claim made last June, is for development area status. The case is irrefragable. I hope that my hon. Friend the Minister will tell me that our case has been made and must be met.
  Wigan has a marvellous labour relations record. It is renowned throughout the area. Industrialists have no hesitation in nominating it as one the areas to which they would go if they were given the extra help, and many of them would expand within the area.
  There is no shadow over the ability of the people of Wigan to deliver the goods if they are given the chance. It would give a fillip to the area, an area which believes that it has been badly done by in practically every form of Government assistance—industrial development aid, regional aid grants, rate support grant and inner urban grants. It feels that its claim has been consistently and shamefully overlooked.
  Development area status for Wigan would give a fillip to the area. It would encourage development, because despite its good name, Wigan cannot compete with areas that enjoy the higher form of regional development aid. Wigan has consistently made a case over the past two years for being given this higher form of grant aid.
  I hope that my hon. Friend will not advance the argument we have heard so many times—that there is only so much jam to be spread around by the Government and that if they concede its case to every area that makes a claim, we shall finish up spreading the jam so thinly that there will be hardly any taste in it and it will do no one any good. I realise the special problems of the neighbouring area of Merseyside. I have not suggested that it does not have special problems. That is why I said that I am not

  1159
  making a claim and Wigan is not making a claim that it should be treated on a par with Liverpool. What we say is that we need special help to deal with our special problems.
  There are many areas which do not have the same total unemployment or the same rate of unemployment and moreover do not suffer some of the problems of social and industrial dereliction that Wigan has, largely as a legacy of history, but which receive better treatment. If 65 areas whose claims are not as pressing as the claims of Wigan can be given special help in the form of special development status, Wigan's claim should be conceded. The case has been proved, and I hope that my hon. Friend will not seek refuge in saying "We cannot spread the jam any more thinly."
  Wigan can be a greater growth area if the Government would concede its claim. Wigan's great advantage is that it is recognised as a communications centre and as having an outstanding work force. With a little extra help it could consolidate and become a greater growth area, and that would help areas which have a question mark hanging over them at present.
  I hope that my hon. Friend will state that the figures disclosed in parliamentary answers as recently as three weeks and one week ago prove that Wigan's case is unanswerable and that that was just the information for which the Government were waiting. I hope that I have shown that if any region or travel-to-work area needs special help, it is Wigan. I look forward to a favourable reply.
  12.27 p.m.
  The Under-Secretary of State for Industry (Mr. Bob Cryer): I congratulate my hon. Friend the Member for Ince (Mr. McGuire) on raising this subject, which he has pressed on a number of occasions. His zeal on behalf of his constituents is well known to members of the Department of Industry.
  My hon. Friend will appreciate that he has raised a number of matters which are not the direct responsibility of my Department. I shall draw those matters to the attention of the relevant Departments. For example, the Department of the Environment is responsible for the rate support grant and for the clearance of
  1160
  derelict land. I understand my hon. Friend's representations, because the level of unemployment, in Wigan and elsewhere in the country, is a matter of serious concern to everybody and the Government are very alive to these matters.
  Perhaps it would help the House if I were to explain briefly the eligibility for regional development grants. They are available, first, towards capital expenditure incurred in providing new buildings or works—other than mining works—and adaptation of existing buildings, on premises used wholly or mainly for qualifying activities in special development, development and intermediate areas. They are available, secondly, towards capital expenditure incurred in providing new machinery or plant for use in premises used wholly or mainly for qualifying activities in special development and development areas.
  The qualifying activities concerned are the manufacturing activities described in Orders III to XIX of the Standard Industrial Classification together with certain repair activities specified in the Industry Act 1972 and varied by the Regional Development Grants (Qualifying Activities) Order 1976. The rates of grant are 22 per cent in special development areas and 20 per cent in development and intermediate areas.
  As the House will recall, following a recommendation by the Public Accounts Committee, there has been a review of the rules under which the scheme is operated. As my right hon. Friend the Minister of State explained in a Written Answer to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) on 27th February—this is Vol. 945, col. 15—this review has been completed.
  Given the automatic and responsive character of the scheme as prescribed by Part 1 of the Industry Act 1972, it would not be practicable to introduce new rules which would reduce its scope further. Nor are the Government prepared to alter their application in ways which put at risk important objectives of the industrial strategy. Accordingly, apart from some minor administrative changes, no alteration to the rules of the scheme as it is currently administered is envisaged.
  The amount of regional development grant payable to firms operating in a particular assisted area depends on the

  1161
  area's assisted status. There are three classes of assisted areas in Great Britain—the special development, development and the intermediate areas.
  As my hon. Friend has already pointed out graphically, part of his constituency lies within the Merseyside special development area and the remainder within the North-West intermediate area. We all recognise that there is bound to be some feeling of resentment in those places which lie just on the less favoured side of a boundary, but boundary lines have to be drawn. The difficult task of Ministers in the Department of Industry is to determine as fairly as possible where the boundaries of the assisted areas should be drawn. My hon. Friend has pointed out absolutely accurately the criteria which the Secretary of State has to bear in mind under the Act in making those decisions and therefore I need not repeat them.
  The geographical unit used for designating assisted areas is the employment office area or, where a number of employment office areas are grouped, a travel-to-work area. These areas are defined by the Employment Services Agency in the light of data from the periodic censuses of population about the pattern of journeys to work in the areas concerned. Statistics of employment, unemployment and of unfilled vacancies are normally available each month for such areas.
  It would not be reasonable to expect local labour markets necessarily to correspond precisely with local authority areas and the lack of coincidence between assisted area and local authorities boundaries is not of itself a reason for alter-ting the boundaries of the assisted areas. There are several examples of this lack of coincidence on the borders of the Merseyside special development area. A similar argument was advanced by the hon. Member for South Ayrshire (Mr. Sillars) in a recent Adjournment debate on the assisted status of the Doon Valley.
  As my hon. Friend has explained, the metropolitan borough of Wigan, in which a substantial part of his constituency lies has been pressing for some time to be made a development area instead of an intermediate area. Indeed, my hon. Friend, together with my hon. Friend the Member for Wigan (Mr. Fitch) took part in a deputation to the Department of Industry on 16th June to press Wigan's
  1162
  claims. My right hon. Friend the Minister of State for Industry wrote on 27th September explaining the reasons for not making the Wigan travel-to-work area a development area.
  My right hon. Friend explained that during a recession—the worst world recession since the 1930s—when rates of unemployment are high in many parts of the country, the Government are reluctant to make changes in the coverage of the development areas unless there are compelling reasons for doing so. My hon. Friend has put forward some reasons, to which I shall reply subsequently, which he regards as being of considerable importance.
  The Government introduced certain changes last April and to balance these changes—for reasons of public expenditure and to maintain the effectiveness of regional policy—several areas whose relative prosperity no longer justified the continued provision of assistance on the previous scale were made intermediate areas. Before those decisions were reached the position of every other area was reviewed.
  The Government then concluded that, although unemployment was high the Wigan travel-to-work area did not face problems as serious as those of the areas upgraded. Furthermore, the Government then considered that the other measures that they had introduced on a national scale to promote investment in employment were the most effective way of helping Wigan. This remains our view.
  Wigan is at least fortunate in that it has been spared, because of its industrial history and its geographical location, some of the problems that face other areas as a result of the well-known problems of such diverse industries as shipbuilding, steel, motor assembling and fishing. Moreover, Wigan continues to benefit from the national measures that the Government are taking to counter recession. For example, my right hon. Friend the Secretary of State for Employment last week announced the extension of the small firms employment subsidy to the intermediate areas. That will now apply to the Wigan area. What is more, the small firms employment subsidy, which is a very valuable measure introduced by the Department of Employment, was introduced as a pilot scheme for the special development areas and,

  1163
  therefore, the differentiation in that respect between even the special development area and the intermediate area and the development area has now been ended.
  I conclude by demonstrating the sincerity of the Government's great concern for the problems of unemployment in Wigan by giving a few examples of recent help to the area under the many schemes of assistance which are available there. My hon. Friend said that he regarded Wigan as being very badly done by on every aspect of Government assistance. I thought that that was unfair, although I understand my hon. Friend's strong feelings in presenting the case so capably on behalf of his constituents. Nevertheless, the Government have been diligent in putting forward schemes of assistance, and in this context Wigan has not been badly treated.
  There have been 24 offers of selective financial assistance to companies in the Wigan travel-to-work area under Section 7 of the Industry Act 1972. Assistance of some £1·2 million has been offered towards problems, which will safeguard about 1,600 jobs and provide some 1,100 new jobs.
  The area has also benefited from the national schemes of assistance under Section 8 of the Industry Act 1972. The accelerated projects scheme has enabled two offers to be made, amounting to £267,000, towards project costs of some £2·1 million. My hon. Friend will see that such a scheme produces some incentive to private enterprise to invest considerable sums of money. A further three projects have been offered assistance of £21,000 towards project costs of £53,000 under the clothing industry scheme.
  Five advance factories have been allocated to the Wigan travel-to-work area since July 1974. Of these, three, each of 10,000 sq. ft., have been constructed and allocated with a potential for 95 new jobs, while work is about to commence on a fourth unit of 10,000 sq. ft. The fifth unit, of 25,000 sq. ft., is currently available and several companies have expressed interest. Additionally, the Department holds a further 12 acres of land for future development and is considering other sites for future land acquisition programmes. Quite clearly, with this sort of background, Wigan is bound
  1164
  to be considered seriously for inclusion in future programmes of advance factory building.
  I refer now to a specific item which my hon. Friend brought to our attention when he said as a background to his case that Wigan had many old buildings. The Department of Industry is currently examining a pilot scheme for the conversion of old mills into modern, up-to-date premises. We have not made a decision on this, but a pilot study has been carried out in Calderdale, because, like Wigan, other areas have the same problem of old premises which are not attractive to people to move into. We are looking at this scheme to see whether it can be incorporated at lower cost in the new advance factory building programme. If it can be of value and advantage and if it can be put forward at a cost which will be no greater than that of a new advance factory, it will equally apply to Wigan as elsewhere.
  A number of measures which have operated nation-wide also apply to Wigan and give advantages. The 100 per cent. tax allowance on plant and machinery, which is a direct tax inducement to invest in new plant and machinery, applies to Wigan as it does to the whole of the country.
  The employment measures which have been announced by the Secretary of State for Employment—and I have already mentioned the small firms employment subsidy—specifically referred to the textile industry. The Secretary of State said:
  We shall introduce new arrangements to support short-time working in the textiles, clothing and footwear industries. … In addition, we have decided that firms in the textiles, clothing and footwear industries which have exhausted TES in the past or will do so in the period to 31st March 1979 should be eligible for a further six months' support for short-time working where redundancies would otherwise occur. We estimate that a further 40,000 workers will benefit for a period of six months each under this further proposal.—[Official Report, 15th March, 1978; Vol. 946, c. 441–2.]
  As my hon. Friend knows, textiles and clothing still represent some part of the work force in his constituency, and 55 applications have been approved under TES, involving 3,381 jobs in the Wigan area. The Secretary of State has negotiated extremely vigorously with the EEC Commissioners and has managed to preserve the essentials of the TES scheme

  1165
  and negotiate some extensions which will save many jobs. These measures apply to the Wigan area as well as anywhere else.
  When the Government embark on international and national negotiations that might appear to have little relationship to Wigan, the benefits of these negotiations often spread down into the constituencies.
  I refer to the renegotiation of the Multi-Fibre Arrangement. These negotiations were entered into with a strong conviction of their importance to the textile industry, and that arrangement gives further benefit to the industry. The main advantages of the arrangement include the establishment of "global ceilings" for the eight most sensitive products within the EEC. This means limits—both for the EEC as a whole and for individual member States—in imports from all low-cost sources. I know that my hon. Friend has been vigilant about low-cost imports affecting his constituency.
  Other advantages include more comprehensive quota coverage of other products and more comprehensive coverage of exporting countries' lower annual growths with rates ranging inversely to market penetration; more realistic base levels; a safeguard mechanism for products not immediately under restraint; no carryover of under-used 1977 quotas into 1978; new and more precise product categorisation; and stricter monitoring of all imports.
  These measures are important because they are designed to preserve jobs in the textile industry, which has been extremely badly hit, particularly in the MFA negotiated and introduced in 1973.
  Mr. McGuire: I am grateful to my hon. Friend for outlining the many benefits conferred on the Wigan travel-to-work area by the measures that the Government have announced, and those that have sprung from Wigan's enjoying intermediate areas status. However, would he not agree that many of the arrangements that he has mentioned—certainly those relating to the MFA—will apply to all textile areas? They are available on an almost nation-wide basis to all areas that enjoy assisted area status. I want the Minister to deal with the special problems of Wigan because it is surrounded by new towns or those areas enjoying special
  1166
  development areas status. He has not answered that.
  Mr. Cryer: I was making the point that there are national measures which are selective in their application. Regional employment premium has been abolished and therefore is no longer available in special development areas or development areas, so that even if Wigan were granted development area status, the differentiation has been narrowed because REP no longer exists.
  We were strongly criticised for abolishing REP. On the other hand, we have produced the temporary employment subsidy, which has applied nation-wide. The MFA was particularly helpful to areas such as Wigan, because the North-Western textile industry was the most badly hit. Therefore, on a national measure, Wigan has derived a much greater proportion of benefit than any of the areas which are not textile-manufacturing areas.
  It is true—and I accept it—that the points I have been making about TES apply to any assisted or non-assisted area. On the other hand, my hon. Friend's point about Wigan being surrounded by areas which receive much higher levels of assistance is not entirely reflected as being a solution to the problem. Merseyside, in a special development area, has more unemployment than Wigan. Another area in my hon. Friend's constituency, Skelmersdale, has suffered difficulties through the closure of Courtaulds and the Thorn factory for making colour television tubes. Therefore, development area status or special development area status is not of itself a solution of the unemployment problem.
  On a percentage basis, a number of intermediate areas have more unemployment than Wigan—for example, Southport 9·8; Ormskirk, 11·7; Mablethorpe, 14; Skegness, 12·9; Hemsworth, in South Yorkshire, 11·2; and Rhyl, 15·2. Some development areas have considerably higher levels of unemployment than Wigan—for example, Cardigan, 16·8 per cent.; Tenby, 18·5 per cent.; Wrexham 12·5 per cent.; Newton Stewart, 16·4 per cent.; Ilfracombe, 194 per cent.; Helston, 19·5 per cent.
  Taking absolute figures of unemployed people, although not entirely irrelevant, is an extremely dangerous argument to

  1167
  advance. On that basis, Leicester, in January this year, had an unemployment figure in the travel-to-work area of 11,462. The figure in Wolverhampton was 8,811; in Torbay, 7,684; in Luton 7,272; and so on.
  The Secretary of State has to take into account many factors in deciding the development area, special development and intermediate area boundaries. It is often a difficult and invidious task. It is made all the more difficult by the fact that there is universally a level of unemployment which is far too high, and the Government are using their best endeavours, during the worst world recession since the 1930s, to reduce it. We must work for a resurgence of international trade and on the lines announced by my right hon. Friend the Secretary of State for Employment, through the Section 8 schemes and through the assistance which the Government do their best to distribute as fairly as possible.
  As the Secretary of State for Employment pointed out last week, only higher and sustained economic activity in this country and in the world economy will solve the problem of general unemployment. The aim of the Government's policies is to solve it.
  I appreciate the strong representations made by my hon. Friend and I am sure that he will appreciate that the Government are doing everything they reasonably can at regional, national and international level to solve the vexed problem to which he has drawn attention tonight.

  SMALL BUSINESSES (MERSEYSIDE)
  12.50 a.m.
  Mr. Graham Page: I wish to call attention to the last item on page 117 of the Supplementary Estimates 1978. I refer to item Ell, Vote 14, Class IV, and it relates to the small firms employment subsidy, the provision for which originally was estimated at £1,900,000. The increase now required is estimated at £143,000. I wish to relate this to what is happening to small firms on Merseyside.
  I wish first to put on record the history of the subsidy. It was announced in the Budget Statement a year ago and was to
  1168
  come into operation in July last year and to run for six months. The beneficiaries under it were to be the private independent manufacturing firms in the special development areas—firms which employed fewer than 50 persons on 29th March 1977. That was the date when it was announced. The subsidy was to be £20 a week for 26 weeks for every extra job of 35 hours a week and £10 a week for 26 weeks for every extra job of 21 to 34 hours a week.
  By October 1977 950 firms had benefited by creating 1,500 new full-time jobs. It works out at an average of 1½ jobs per benefiting firm. The scheme was extended to 31st March 1978. By the end of 1977 —this appears from the Press statement from the Department of Employment on 30th December 1977–1,428 firms had benefited by creating nearly 3,000 extra jobs. I am not sure from the statement whether those were extra full-time jobs or half-time jobs. But let us assume that they were all full-time jobs or that the figure was calculated on that basis. It means about two new jobs per benefiting firm. In January 1978 the scheme was extended to 5th March 1979.
  We now come to some rather peculiar figures. In exactly one month—that is, during the month of January 1978—the number of extra jobs leaped, according to the Secretary of State for Employment, from nearly 3,000 to 5,338. That was a statement by the Secretary of State which appeared in Hansard on 30th January 1978 at columns 64 to 65.
  It is a rather extraordinary jump from 3,000 at the beginning of the month to a figure of 5,338. The firms which benefited jumped from 1,428 to more than 1,500. It seems to me that somebody thought that the figures were not showing enough full-time jobs and added up the half-time jobs. Therefore, we are hardly comparing one thing with the other.
  However, on 15th March 1978 the terms of the extension of the scheme up to next year, 31st March 1979, were announced. As from July next the subsidy will be available to manufacturing firms in all assisted areas, inner city partnership areas, London docklands, inner Birmingham, and to firms with fewer than 200 employees.
  However, that is for the future. We are now concerned with the 1977–78

  1169
  estimates and the £143,000 increase on the estimated £1,900,000. On any reasonable interpretation of the figures, that £1,900,000 cannot have been spent upon actual subsidies. After all, the subsidy lasts only six months for any one job. It seems that the whole of the supplementary estimate of £143,000, and part of the £1,900,000, must be going into administration expenses, which is a substantial amount.
  The subsidy seems to be a very expensive way to increase the number of jobs. It covers only manufacturing firms, which in my view is one of its failures. During the 10 months from July 1977 to January 1978 the scheme produced only 1,353 new jobs in the whole of the North-West. Some part of that number of new jobs went to Merseyside, but that did not make up for the jobs that were lost during the same period. I have in mind especially men working for small firm who had to terminate their employment for various reasons. I submit that that applies particularly to small businesses on Merseyside.
  On Merseyside the small firms employment subsidy seems to have been like a trickling tap running into a bath in which the plug has been removed. The plughole is bigger on Merseyside than elsewhere in the country for several reasons.
  The first reason is that in the past few years Merseyside has become so heavily dependent on Government help in almost every enterprise that individual effort has been stifled. The situation at the docks may be taken as an example. Since the Mersey Docks and Harbour Board went into statutory liquidation and became almost entirely financially and managerially dependent upon the Government, the docks have been run to the dictates of the Government and the trade unions. There is no way in which a private firm can move in to undertake and develop work ancillary to dock work. The private hauliers, stevedores and ships chandlers are almost extinct. The few who remain do so only at the pleasure of the trade unions.
  I admit that the example that I am about to put before the House is not that of a manufacturing firm, but it shows the attitudes towards small firms on Merseyside. It may be that the subsidy should have helped such firms as well
  1170
  as manufacturing firms. I refer to a haulage firm in my constituency that has been in the same family for over 70 years. It started in 1905. It is now run by the son and two grandsons of the founder. A substantial part of its work was to take goods to and from the docks. The firm has five vehicles and a year ago employed six union men to drive those vehicles.
  Work dropped off for a time and two men had to be made redundant. The two grandsons—one had been doing office work and the other repair work on the lorries—occasionally drove the spare lorries after those two men became redundant. The grandsons were not union men. The union officials refused them access to the docks. They immediately said "May we become members of the union?" That request was refused. Instead, the union blacked the firm and the other drivers employed by the firm because they were driving with the two-non-union proprietors. Yet they were willing to join the union.
  I wrote to the general secretary of the T and GWU setting out these facts. I wrote not to the local man, because I could not get any sense out of him, but to the head office. I received a courteous reply:
  "Dear Mr. Page,
  I have asked our North-West Regional Secretary to look into the matter you raise urgently and to reply to you direct.
  Yours sincerely,
  J. L. Jones".
  That was in November. I have not heard a word since and the firm has remained blacked. The firm's business is now down to one-fifth of what it was before this unreasonable blacking.
  That is an example of the determination of the trade unions on Merseyside—on the docks in particular—to destroy the family business which is connected with dock work. There is a fantastic rule, concocted by the unions, that haulage business owners must not drive their own vehicles, even though they may be union men, if the firm has more than three vehicles. This fantastic rule is aimed purely and simply at the family business. Any appeal by the little man to the Government-sponsored undertakings or to the trade union headquarters seems purposeless.

  1171
  It would appear that very few of the major decisions for Merseyside undertakings or the unions are now taken on Merseyside. Such organisations are run from headquarters outside the area. A survey undertaken not long ago by Plesseys of 80 firms taken at random on Merseyside to find out where the decisions for those firms were made showed that fewer than a dozen were run from Merseyside. Absentee employers have little sympathy with truly local problems. The same applies to what I call absentee trade union leaders.
  Mr. Deputy Speaker (Sir Myer Galpern): Order. I wonder whether the right hon. Gentleman can help the Chair. I have been listening carefully to his development of a constituency matter. But, as he said at the beginning of his speech, we are dealing with a Supplementary Estimate of £143,000 on a £1·9 million Estimate. Will the right hon. Gentleman explain how what he has said has anything to do with the Supplementary Estimate? "Erskine May", in page 740, clearly lays down, as I am sure the right hon. Gentleman knows full well, because he is well versed in these matters, that we cannot discuss policy. Where the Supplementary Estimate is small compared with the original Estimate, we can discuss only the reasons for the Supplementary Estimate. What has all this to do with the matter under discussion?
  Mr. Page: The point that I was endeavouring to make was that the subsidy does not serve a purpose—
  Mr. Deputy Speaker: Order. We are not supposed to discuss policy. That is what I am trying to establish. "Erskine May" lays down that we cannot discuss policy in relation to a relatively small addition to an original Estimate.
  Mr. Page: In my opening remarks I pointed to the discrepancy between the numbers of new jobs created and the amount required.
  Mr. Deputy Speaker: The right hon. Member was on an even keel when he was trying to establish that the administrative cost in relationship to the work done was too high. I thought that he was going to say that there was no need therefore for the Supplementary Estimate. Up to then he was in order. Now I hear
  1172
  about a particular situation which has, in my opinion, no relationship with the matter under discussion.
  Mr. Page: I am saying that the money requested is not being correctly used. It should be applied to firms which find themselves in difficulties, as I have tried to explain.
  Mr. Deputy Speaker: There is a slight difference. I thought that we were discussing the administration of a particular scheme. I thought that the right hon. Member was saying that the money which is now requested is unjustified by virtue of that. But now he is saying that the money is not being applied properly. That is a matter of policy. "Erskine May" says that that may not be discussed.
  Mr. Page: I am sorry if I have not explained myself clearly. If the subsidy is not helping the type of firm of which I have given examples, surely there is no justification for asking for an increase.
  Mr. Deputy Speaker: I shall quote from page 740 of "Erskine May", which states:
  "if the supplementary estimate is merely to provide additional funds of a relatively model -ate amount required in the normal course of working of the services for which the original vote was demanded, only the reasons for the increase can be discussed and not the policy implied in the service."
  Mr. Page: The original Vote was for £1,900,000. As I have tried to establish, that does not tally with the figures for jobs provided. There is a question about whether that sum has been spent on subsidies or on administration, because it has not been spent on assisting firms such as those that I have described.
  This is a subsidy to certain types of small firms which employ fewer than 50 people. The figures given by the Government in a Press statement show that the subsidies of £20 per week for 26 weeks or £10 a week for half-time jobs do not add up to £1,900,000. If that is so, there is no point in asking for a further £143,000, unless it is to be allocated to firms that are in difficulties.
  Mr. Deputy Speaker: It is ten minutes past one o'clock. I feel in a generous and sleepy mood, so I shall let the right hon. Member continue.
  Mr. Page: I am very much obliged to you, Mr. Deputy Speaker. It is my point to endeavour to show that if the increase is granted, the subsidy could be applied to those firms which need the amount for which the subsidy was originally to be given. There seems to be no point in giving this subsidy if it is not to assist the firms that it was intended to assist.
  There have been occasions on Merseyside when small firms have been prevented from carrying out their work and prevented from asking for the subsidy because they have been prevented from expanding. They have been prevented from expanding by the attitude of trade unions on Merseyside. That is why I was endeavouring to give one example, and perhaps if I give a further example that will help to explain the case that I am trying to make.
  I have a constituent who runs a technical kind of business. He produces a product which later is mass produced by another manufacturer and eventually put on the market. It was found by the union to which his employees belong that two of them were in arrears with their union subscriptions. As a result, the firm was blacklisted with the manufacturers to whom the article goes, and black listed with its customers. Although my constituent has at all times expressed his willingness to take union labour, and although those in his employ who are not unionised have expressed their willingness to become union members, the union has blacklisted this firm. The result is that a firm that could expand because it is a modern technical firm and could ask for these subsidies is being prevented from doing so by the attitude of the trade unions.
  The fear among small firms on Merseyside is that if they endeavour to show any initiative to expand, or even to continue in being, they will be faced not just with union opposition, but with what seems determination to obliterate them. What point is there in asking for this small firms employment subsidy? If that is the case, what is there in the Government's asking for an increase of £143,000?
  This is a serious matter as it affects the small firms on Merseyside which might wish to take advantage of the subsidy if only they were not prevented from
  1174
  expanding by the attitude of the trade unions. There is a great fear not only that small firms will go out of existence, but that no new ones will start up and that therefore this subsidy will be purposeless because no one will be able to take advantage of it.
  That is all that I wish to say, Mr. Deputy Speaker. I am grateful to you for allowing me a certain amount of latitude, but I think that my argument relates directly to the item in the Supplementary Estimate to which I referred when I began my speech.
  1.9 a.m.
  The Under-Secretary of State for Employment (Mr. John Golding): The reason for the Supplementary Estimate is the success of the scheme. Since 1st July 1977, more than 2,000 firms—500 on Merseyside—in the special development areas have applied to join the scheme, and more than 1,800 have been accepted. As at 28th February, 5,784 extra jobs had been provided, 1,477 on Merseyside.
  Mr. Graham Page: Before the Minister sits down—
  Mr. Deputy Speaker: Order. The Minister has sat down.

  OVERSEAS AID
  1.10 a.m.
  Mr. Malcolm Rifkind: This debate has come on a little earlier than expected and the Minister who is to reply is not yet in the Chamber.
  Priorities in overseas aid are obviously an important topic and overseas aid plays a prominent part in the Supplementary Estimates before us. The Government's policy towards priorities in overseas aid can be found in the important 1975 White Paper, which covered the whole sphere of overseas aid, and the criteria in the White Paper found wide support on both sides of the House whenever overseas aid was debated.
  The White Paper pointed out clearly that the main priority for the Government and the Ministry of Overseas Development was that aid should be concentrated on the poorest in the world and that this should be the main criterion before the ODM when considering expenditure on

  1175
  aid-related matters. Since the publication of the White Paper, it has been clear that a substantial proportion of the aid provided to many countries throughout the world has been given on the basis of the White Paper criteria. In that time the provision of aid under the overseas development programme has expanded at a substantial rate.
  I am pleased that the Minister has arrived. He does not need to worry too much about what I have said so far. I shall be concentrating on the fact that the main priority for the Government is to be found in the White Paper "More Help for the Poorest". I have said that a large proportion of overseas aid in the last three years has been provided on the basis of the White Paper criteria.
  I have raised this subject because there is a likelihood that these criteria have been departed from in recent weeks and will be departed from in coming weeks. The Minister will recall that the 1975 White Paper indicated the view of the Government and of many others concerned with overseas development that it was important for the future that aid should be directed not simply to Governments or States, but to the poorest sections of the community in those countries.
  Announcements made in recent weeks, particularly about aid for the purchase of ships by some developing countries, have created enormous problems. For example, we had an announcement on Saturday that our Government were to make provision of £52.8 million out of the budget allocated for aid to India in order to purchase six cargo ships required by the Indian Shipbuilding Corporation. Whatever may be the desirability of providing cargo ships for India, I believe that a powerful case can be made that this particular provision in no way comes under the criteria in the White Paper relating to help for the poorest. In no way can it be argued that the provision of cargo ships will, for example, help the vast majority of rural poor on the Indian sub-continent. No jobs or food will be provided and no homes will be available to them simply because six cargo ships will be available to the Indian merchant marine. Nor will the urban poor of India benefit.
  1176
  Although it can be suggested that some minor employment will be provided on the ships concerned, no one can suggest that that justifies the expenditure of £52 million. Nor can any of the other normal criteria laid down in the Government's White Paper be met by the provision of aid from the aid budget for the construction of cargo ships. The health of the population, population control and urban development will in no way be promoted by this form of misuse—as I would describe it—of the aid budget.
  I know that it has been pointed out by Ministry that the provision of aid from the ODM for the purchase of ships for India has occurred before. No doubt the Minister will point out that there is a precedent for this having taken place. But I would point out that the only precedent which does exist was contained in certain provisions during the early 1970s before the publication of the Government's own White Paper.
  The publication of the Government's White Paper "More Help for the Poorest" clearly changed the criteria which the Government would apply. Since the publication of that White Paper, no misuse of aid funds had been put forward for this sort of purpose. Therefore, it must also be pointed out that, while no one would expect the Government to apply rigid criteria in determining the availability of funds for development purposes and while one might forgive the ODM for allowing a small part of the aid budget to be used for forms of development that do not meet the Government's own criteria, when one considers the Indian proposals one can see that, rather than a marginal departure from the normal rules that apply, there has been a very substantial departure. A sum of £52·8 million has to be compared with the total aid allocation to India of £136 million for the current year —in other words, almost half the total aid that is to be provided to India will take the form of a type of aid which does not come under the Government's own criteria for development purposes.
  Of course, as the Minister has pointed out on several occasions, I am aware that the sums for this particular development are to be divided between two consecutive years. A sum of £26 million is to be provided out of this year's budget and £26 million out of the following year's

  1177
  allocation. But even on that basis we are talking in terms of 20 per cent of the aid budget to Britain's largest receptive country being allocated for development purposes contrary to the criteria laid down in the Government's own White Paper.
  Therefore, with regard to the sums of money that are being made available, I would argue that there is clearly an abuse of the guidelines laid down in the White Paper, of the guidelines that have been pursued by the Government and, indeed, the guidelines that have been accepted by both sides of the House and by all those who are concerned and interested in development policy.
  We must therefore ask ourselves what are the reasons put forward by the Government in support of this major departure from their own aid policy. Why have they decided, in a radical and dramatic way, to depart from their own guidelines and their own policy? One of the latest arguments that has been used on several occasions is that the aid allocated to India in the current year has been grossly underspent, that not only this year but last year the Government and the ODM were simply unable to spend all the money available.
  That may be true and it may be very regrettable that that is the case. I suggest that that is no argument for directing the funds available to a purpose for which they were not intended. If it is proving difficult to spend the sum allocated, that suggests that to much money has been allocated to Indian development, or that the criteria in the White Paper might need to be revised. But in the absence of these two factors the Government's action is clearly indefensible.
  The real reason, which has been admitted by the Minister herself on various occasions, is that the provision of ships for India, while it might make little contribution to solving the severe problems of poverty in India, will make a significant contribution to solving the problems of employment in Sunderland and other shipbuilding areas in this country.
  There is no doubt that the main thrust behind the allocation of these large sums of money for the purchase of ships that even the Indians are not all that keen on having was the need to promote and improve employment prospects in British shipyards. That may be a worthy cause,
  1178
  but it is a gross and indefensible abuse of the aid voted by this House for development purposes overseas. The promotion of employment prospects in British shipyards is the responsibility of the Department of Industry or of those others concerned with regional and other forms of industrial development, and to use overseas aid funds to boost the Government's industrial stock in certain parts of the country is totally indefensible.
  The problem would be severe enough if it applied only to India. It could be argued that it was an exception to the rule and that the Government were not departing from the criteria laid down. But a series of Questions from my hon. Friend the Member for Surrey, North-West (Mr. Grylls) has assiduously discovered that the problem is not restricted to aid for India. The Government have admitted that they are prepared to make a contribution out of the overseas aid budget to promote the purchase of ships built in Britain for use in Vietnam. The Government, we are told, are also undertaking negotiations with the Government of Pakistan for a similar purpose.
  We find, therefore, that overseas aid for three countries suffering from severe poverty—in the case of India a very large proportion of the total aid being made available—will be used not to deal with that poverty but to boost the merchant marine fleets of these States. That is an abuse of the overseas aid budget. It is not only an indefensible policy, but it endangers the whole bipartisan approach to overseas development.
  I hope that the Minister will not only explain the Government's thinking but will give clear assurance that in pursuing their policies his Ministry will use as the sole criteria those laid down in their own White Paper in 1975. I hope that he will give an assurance that, whatever interests other Departments might have in meeting the needs of the British shipbuilding yards, that is not the responsibility of the Ministry or of his right hon. Friend, and that it would be improper if sums voted by Parliament for overseas aid on the basis of the White Paper—that they should be concentrated on the poorest people in the poorest countries—were used for contrary purposes, irrespective of the views of Parliament or the needs of the people concerned.

  1179
  This is a serious matter. I hope that the Minister will not respond in a superficial manner but will give an assurance that this departure from the Government's own criteria will not be pursued in the foreseeable future.
  Mr. Michael Latham: On a point of order, Mr Deputy Speaker. I think that this matter comes within your province. There have been failures of the annunciator in recent debates, in that names of hon. Members speaking, particularly of Ministers replying, have not appeared. That causes grave inconvenience to hon. Members. I hope that this will be considered as a matter of priority.
  May I have your assurance, Mr. Deputy Speaker, that if an hon. Member rises later in the debate, after the other debates have finished, it will be possible for you to call him, on the Question of Second Reading?
  Mr. Deputy Speaker: We had the debate which was third in the Ballot and which was initiated by the right hon. Member for Crosby (Mr. Page), to which the Minister concerned replied in a few words. I know from experience that the annunciator probably takes a minute or two to switch over. I presume that hon. Members have been watching the annunciator, but unfortunately the governing factor is not the annunciator but presence in the Chamber. Therefore, whether the annunciator fails is not the concern of the Chair. We can see whether we can speed up the switchover, but it takes a little time.
  The order of debate will be as follows. We are now on debate No. 9. Then we have No. 11, No. 12 and No. 15, on increased provision for the National Health Service. When we have disposed of that debate it will be in order for hon. Members to raise matters that they wish to raise, as this is Second Reading of the Consolidated Fund Bill.
  Mr. Latham: I am much obliged, Mr. Deputy Speaker.
  Lord James Douglas-Hamilton: On a point of order, Mr. Deputy Speaker. I was in the same position as my hon. Friend the Member for Melton (Mr. Latham). That was the reason for our absence from the Cham-
  1180
  ber. I am most grateful for your guidance that we can fallow on at the end.
  Mr. Deputy Speaker: One little difficulty is that the Ministers concerned went home when they found that the hon. Members were not present. But we shall do our best to get them back again.
  1.33 a.m.
  The Parliamentary Secretary to the Ministry of Overseas Development (Mr. John Tomlinson): I apologise for being a couple of minutes late arriving in the Chamber because of the unusual speed with which we went from item No. 3 to this debate. I understand that just before I entered the Chamber the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) was talking about his broad support for the prorities of overseas aid expressed in the White Paper. I welcome that.
  It is clear that the developing countries, particularly the poorest among them, cannot themselves provide the resources needed to overcome their dire economic and social problems. Many people in Britain, as in other Western countries, feel a moral obligation to help, and successive Governments have by their decisions in establishing the maintaining the aid programme reflected this worthy desire.
  In 1977 the Government, with Governments of other industrial countries, committed themselves to increase aid flows. Overseas aid is now one of the fastest growing public expenditure items in our programme, which is positive evidence of the priority the Government attach to it.
  We must also recognise that it is in our own long-term interest that the present developing countries should have increased trading capacity and that an aid programme commensurate with our economic strength is an important element in ensuring that British interests are given proper weight in the various international forums. The composition of our aid programme depends on many factors including what the developing countries themselves want and what other donors are doing, as well as our own interests.
  It was with these considerations in mind that the Government gave a new direction to our aid strategy as set out in the 1975 White Paper "More Help for the

  1181
  Poorest". Since then there have been minor changes of emphasis, but the basic principles which determine our policy are those laid down in the White Paper. They are, first, that we should give increasing emphasis in our bilateral aid to the poorest countries—not an exclusive priority, not an exclusive interest, but an increasing emphasis. The second principle is that within that we should emphasise aid for the poorest people, both in those poorest countries and in aiding other countries which do not necessarily qualify as the poorest countries, but the poorest people in countries which by other definitions might not be amongst the poorest. The third principle is that we should promote situations in which British aid can stimulate matching contributions of concessional funds from other Governments. Within this policy we pay due regard to comercial benefits and to political implications for the United Kingdom.
  I do not want to labour the details of our present aid policy and the amount of our aid, because hon. Members, particularly those who are members of the Select Commitee, will appreciate that, although the primary purpose of the aid programme is developmental, the Ministry of Overseas Development works closely with other Departments to maximise the benefits accruing to the United Kingdom as a result of aid in so far as it is consistent with the aid strategy.
  Our bilateral financial aid is, therefore, generally tied to the procurement of goods and services of United Kingdom origin. Although exceptions can be made, notably for local procurement hi some recipient countries and for local costs of aid projects, about two-thirds of this type of aid was effectively tied in 1976.
  Furthermore, as I am sure the hon. Gentleman will be aware, a small proportion of the bilateral aid programme—about 5 per cent.—is now available to give higher priority to the commercial importance of a limited number of developmentally sound projects hi developing countries for which there is no aid allocation or where the allocation is already fully committed.
  I turn to the question of shipping, to which the hon. Gentleman primarily directed his remarks. I hope that on reflection, particularly when he hears what I have to say and judges it against the background of the criteria which I have
  1182
  explained and which are slightly different from the way he emphasised the matter, he will perhaps, on more sober reflection, decide not to challenge or threaten the bipartisan approach that there is in the House for our aid programme. To say that the decisions that have been taken in relation to shipping were—to quote the hon. Gentleman's words—either contrary to the developmental criteria set out in the White Paper or an abuse of the guidelines, or to say that they in no way help to solve the problems of poverty, probably over-stated the case, as I hope he will agree on reflection.
  Contracts have now been signed by the Shipping Corporation of India and Sunderland Shipbuilders, which is part of British Shipbuilders, for the supply of six 16,000-ton ships to India. The ships will be delivered in 1979 and 1980 at a price of £8·5 million each and the price will be covered by aid grants from within our existing programme to India. The Shipbuilding Intervention Fund will be making a payment to Sunderland Shipbuilders the amount of which still has to be negotiated.
  The present situation is that India is expanding her merchant fleet and, whether or not we help her to do so with aid funds, her merchant fleet will be expanding. But aid means that some of the shipping orders will come to Britain, and I do not believe that that is either an unworthy objective or one that conflicts with the development criteria I have already explained. Without aid, there is no doubt but that we could have got none of the orders. The benefit of those orders to this country is clear. The six ships will provide work for 1,500 men for two years. The ships are needed in India and would have been purchased in any case.
  The Shipping Corporation of India does not benefit financially from the fact that the ships are a gift under aid to the Government of India. The Shipping Corporation has to pay the full price of £8·5 million to Sunderland. In effect, the corporation buys the £8·5 million of sterling from the Government of India by producing rupees to that amount. This means that the corporation is not given any unfair advantage because of Her Majesty's Government's aid involvement in competing with British shipping lines.

  1183
  The Government of India may make a subsidy available to the Shipping Corporation of India if at the end of the day, as a result of being obliged to operate higher priced United Kingdom ships, the Shipping Corporation of India's financial return on overall assets is unduly affected. I believe that this is a sensible arrangement which is of benefit to India, and that to say that there is no benefit for people in India is to ignore the fact that the creation of a stable asset which is wealth-creating inside India will give the Indian Government the self-capacity and the additional resources themselves to assist the poorer people within their own country. I am surprised that an Opposition from which we frequently hear about the virtues of wealth creation cannot see the merit of this inside India to give the Shipping Corporation of India and the Indian Government the opportunity of a viable wealth-creation opportunity.
  Mr. Rifkind: The Minister had better re-read his own White Paper, where the Government made clear that aid development which was simply used to help build up the economy of the recipient State was not sufficient. It had to meet the criterion of making a direct contribution to dealing with the problems of poverty in the recipient country if it was to meet the guidelines of the Government's own White Paper.
  Mr. Tomlinson: The hon. Gentleman is trying to read into the Government's White Paper—
  Mr. Rifkind: I did not write it.
  Mr. Tomlinson: —a precision that was not written into it. My interpretation of it, having read it several times, is that it emphasises a change of direction. It does not produce an absolute objective and say that all aid will be in this form. It produces a change of emphasis and of direction and a new area of concentration and new objectives that we should be looking at. I believe that we are well within the criteria laid down in the White Paper in the course that we are pursuing.
  The hon. Gentleman also mentioned ships to Pakistan. The position is that at the moment we do not have any commitment to supply ships to Pakistan under aid. Official talks about the whole aid programme to Pakistan in future years
  1184
  did refer to ships. These talks were exploratory and were without commitment on either side in regard to ships. But it is clear that the Government of Pakistan are considering whether they wish to propose using some of the available aid funds for ships. For my part, if they made such a request I should want to consider with my colleagues how we would respond, taking all British interests into account.
  We would respond, as we always do in aid matters, to a request from the Government of the potential recipient. There is no question of our initiating discussions. It is the Government of Pakistan who will consider their need and make a request, and, together with my colleagues, I shall decide how we should respond, taking into account the fullest range of British interests.
  The same applies to ships to Vietnam. Obviously, no one on the Government side makes any apology. We are clearly concerned to help employment in British shipbuilding and to assist British exports. The initiative in this case concerning ships for Vietnam was taken by the Department of Industry and the Department of Trade and not by the Ministry of Overseas Development. In this case the aid will be quite small—about 20 per cent, of the total cost—and would come from the aid/trade contingency provision which I mentioned earlier.
  Mr. Rifkind: Will the Minister indicate why the Ministry of Overseas Development is meeting the full £52 million cost of the ships deal with India, whereas in the case of Vietnam, as he has pointed out, this has been the initiative of the Department of Industry, with the Ministry of Overseas Development—quite correctly, in my view—meeting only a very small proportion of the total cost?
  Mr. Tomlinson: In the case of ships to India we were in a situation where, as the hon. Gentleman himself mentioned, from our existing aid allocation to India there were substantial resources still available for a variety of other reasons which we could go into, but I do not think that this is the most appropriate occasion on which to do so. It was appropriate, in all the circumstances, that we should fund the full cost of ships to India. In this circumstance, which is rare, it is being financed separately from the

  1185
  aid/trade contingency fund, and the amount of the aid contribution would be relatively small. In the case of ships to India there was no doubt that it was the Ministry of Overseas Development which was the main Department involved. We were not a Department responding to a Department of Industry or a Department of Trade initiative.
  On the question of ships for Vietnam, there can be no doubt that the proposals are fully developmentally justifiable. Vietnam is clearly a poor country with great developmental needs, and it is those needs which a programme such as ours exists to meet. This is a fact recognised not only by the Government but by other Western countries. In making our decisions we shall take into account all the usual range of factors, including any factors relating to human rights, as we do in all the other circumstances in which we are involved with aid.
  The hon. Member suggested that perhaps the fact that we were involved in these shipping deals with developing countries might be a reflection—I am sure that he said it knowing that the answer was in the negative—that our aid programme was operating on too generous a level and that the reason why we had perhaps underspent some specific aid programmes was a reflection that we had too high a proportion of our aid allocated to a particular country. I do not believe that, and it is not the Government's view that our aid levels are too high. The Government recognise that aid will be one of the fastest growing areas of public spending. That is a decision which has been warmly welcomed in all parts of the House. Details of the future levels of overseas aid are shown in the Government's expenditure plans which were debated in the House fairly recently.
  The Government rightly expect continued progress towards the United Nations aid target of 0·7 per cent, of our gross national product. That is a target that we have accepted in principle, but without commitment about the date when it should be reached. But I am sure that it is the wish of most hon. Members that we should accept that target as one in respect of which we have to have a clear policy towards attainment.
  The allocation of that aid programme is reviewed annually and, on present plans, we expect the percentage of our
  1186
  bilateral aid programme going to the poorest countries to increase from about 60 per cent., which it is at present, to more than 70 per cent, by 1981–82. That is a reflection of the impact of the principles laid down in the White Paper "More Help for the Poorest" coming into effect.
  In 1978–79 it is planned that nearly half the overseas aid allocation will go to bilateral capital aid, nearly one-third to the multilateral institutions, and rather less than one-fifth in technical co-operation. That is a true reflection of the impact of the principles of the White Paper, principles which are warmly welcomed in all parts of the House. I look forward to that trend continuing. But, meantime, I do not think we should use the words in "More Help for the Poorest" as though they were some kind of absolute criterion and assume from that that we shall not look any further than rural development schemes or schemes in the poorest areas of the poorest countries as being the only ones which are aid worthy.
  That is obviously the increasing focal point of our aid, but, within the principles laid down in the White Paper, there will be substantial other areas where our assistance is needed and asked for by developing countries and where the Government will be ready and willing to respond.

  COAL INDUSTRY
  1.49 a.m.
  Mr. Tim Renton: I wish to raise with the Minister the question of assistance to the coal industry, under Class IV, Vote 9 (E1), a Vote for which the Department of Energy is responsible and which has now risen in the current financial year to a little more than £89 million, in contrast to a figure of £64 million in the original programme in the main Supply Estimates printed on 22nd March 1977.
  I begin by reminding the House that the Secretary of State for Energy told us at Question Time a little less than 12 hours ago, although it must seem a great deal longer ago to many of us, that our coal industry was more efficient and more cheap than that in any other EEC country. He went on to tell us, and these words were repeated on the Telex

  1187
  tape later in the afternoon, that the British coal industry had a subsidy of only 50p per tonne of coal produced, and that this figure was a great deal lower than that of any other coal-producing country of the EEC.
  I ask the Minister how the Secretary of State arrived at that figure of 50p. The National Coal Board accounts for last year show that in 1976–77 the Board received grants under the Coal Industry Acts of £54.5 million, and it equated that amount with a subsidy of 46p a tonne of coal produced. On that basis, it only requires simple arithmetic to calculate that if the NCB is to receive a total of £89 million this year, assuming a moderate rise in coal production, that figure is the equivalent of a subsidy of nearer 80p a tonne than 50p.
  I have often thought that the Secretary of State for Energy was like a first-year economics student. He read his first-year text books with great enthusiasm but, unfortunately, he never moved on to his second-year text books, which often deny the cogent arguments of first-year economics.
  That is why the Secretary of State has not learned that nationalisation is not the answer to all our economic ills, as he preaches it. On the other hand, I would have assumed that he was relatively good at simple arithmetic, but it seems that he is making a mistake about the level of subsidy. Doubtless the Minister will answer that point tonight.
  We are glad to hear of the current increase in the NCB's productivity. Sir Derek Ezra, the chairman of the NCB, appearing a few weeks ago before the Select Committee on Nationalised Industries—of which I am a member—told us that the production figures are now up to 47 cwt per man overall, which is an improvement on recent months. Also, coal face productivity is up to 170 cwt, higher than ever before. We are all very pleased to hear that, and I would hope that the substantial productivity payment being made to the National Union of Mine-workers would lead to genuine increases in productivity.
  One of the comment that Sir Derek made in a public session of the Committee was that overall results for the current year will look reasonably satis-
  1188
  factory. On that basis I raise the question of the level of financial assistance to the coal industry. If the overall results are looking reasonably satisfactory, one might ask why in both Supplementary Supply Estimates presented to the House in the last two or three months the level of grant to the coal industry has been increased.
  Notably, this increase is in one particular item—that described under the benign heading of "Grants towards Operational Expenditure", or more simply "Operational Grants." In the original main Estimates printed in March last year the figure for operational grants was a notional £10. It rose by a multiple of 1,040,000 to £10,400,000. In the most recent Supplementary Estimates it is up from £10·4 million to £18·7 million, from a notional £10 at the beginning of the year. All this has happened in a year which, according to the chairman of the NCB, is going reasonably well for the Board.
  I see a problem which is a cloud no bigger than a man's hand on the horizon but which, I fear, may grow into something much more troublesome if the situation is not corrected immediately. Why has the grant for operational expenditure gone up by this extraordinary multiple from £10 to over £18 million in the course of one financial year? The only reason given in the Estimates is that the grant is for the purpose of stockpiling coke.
  It is interesting that in the many meetings which the Select Committee had with the British Steel Corporation and with Ministers from the Department of Industry we never heard a word about the cut-back in BSC orders for blast furnace coke. On the other hand, when Sir Derek Ezra gave evidence to the Select Committee on 8th March he made it abundantly plain that the BSC normally takes from the NCB 1 million tons a year of blast furnace coke but that in the current period it had ordered nothing— not even 500,000 tons or 100,000 tons.
  Therefore, I must assume that the whole of the £18 million additional grant to the Board is to enable it to stockpile blast furnace coke that the BSC has not taken up in the current year. The reason for that, presumably, is that the BSC is upgrading coking coal in its own coking ovens because, in a period of decline in steel orders, it wishes to put the added

  1189
  value into coal by the carbonisation process of turning it into metallurgical coke rather than buying any part of the blast furnace coke from the NCB. This is an extraordinary way of staying within one's cash limit, and clearly it is in order to stay within the limit that the BSC has done this.
  The NCB is a traditional supplier to the BSC. Sir Derek Ezra made plain to the Select Committee the difficulties in which the NCB found itself as a result of the BSC cutting it off without a single order. Clearly, this is why the BSC stayed within its cash limit. It shows what a blunt instrument the cash limit is. The one compliment that the BSC has been able to pay itself—and this is something to which the chairman of the BSC kept referring at various times in the past year—is that, come what may, it would this year stay within its cash limit of £950 million. But it is clear that British Steel has done this not only by cutting back severely on capital expenditure and eating into the seed corn for future years, but in many ways by running down certain items of current expenditure.
  The Corporation has had to continue to pay the wages, but has it postponed payment of debtors? Clearly, it has run down the stocks of a number of its basic raw materials, and in the case of blast furnace coke it has not taken up material with the supplier which in this case the NCB clearly assumed was committed to it. Therefore, the NCB went on producing, even though the British Steel Corporation was not ordering any material from the Board at all. What a strange and absurd means of staying inside one's cash limit.
  This leads me to the question of contracts. Were there no long-term contracts between the NCB and the BSC which would have enabled the NCB to insist on the BSC taking at least part of the tonnage it was expecting the BSC to order? Then, what about the location of coking coal plants which the Board kept going? Are they in areas of high unemployment? Perhaps the Minister will tell me when he replies. Is this one reason why the coking plants were kept going by the NCB at a time when there was no demand for its product from the Corporation? Were they, in common with some of the steelworks, in "Callaghan country" and was that why they
  1190
  were kept in operation despite the shortage of orders?
  I should be grateful if the Minister would enlighten us on the subject of EEC assistance to the NCB for this stockpiling exercise. It is true that the European Community is generally short of coking coal and that there are permissions from the EEC for the stockpiling of coking coal and of that same coal in carbonised form as metallurgical coke. What is not clear is the degree to which the Community pays for the stockpiling to take place in respect of stocking aids. What I have been unable to pick up from the NCB accounts or from the Supplementary Estimates is the degree to which money is coming from the EEC for vast stockpiling. There is no reference to such a flow of money in the NCB accounts.
  I should be grateful if the Minister could enlighten us whether the Community is paying for part of the stockpiling because it is its wish that this should happen, and, if so, where the money is going. Could it be one of the cases where the Treasury is keeping the money that comes from the EEC while another Department, in this case the Department of Energy, supplies under its Vote the necessary grant to the NCB?
  Then there is the question—and this is the most serious of all—of the long-term future of metallurgical coke. Whatever one may think about this substantial increase in grant to the NCB in this one year, obviously the most fundamental point is the degree of structural change that is taking place in the coal industry at the moment as a supplier of metallurgical coke to steel companies. It must be clear that there are a number of things happening in the steel industry that could lead to that industry buying less coke from coal producers in future than in past years.
  The first of these things is the overall reduction in the rate of growth in steel production. Secondly, there is the growing use of direct reduction for iron making and the fact that that will require the supply of coal in a form different from that in which it has been supplied in the past. There is also the factor that for some years ahead it seems that Britain will be a much smaller exporter of steel products than in previous years. In consequence, less iron will be made here. The

  1191
  natural corollary to that is that there is clearly a development towards much more iron being made in overseas countries, which often have their own coking coal deposits as well as iron ore deposits. Australia is a natural and prime example of that.
  I ask the Minister whether in his view the imbalance in supply that has taken place in the current year is merely a short-term situation, or whether there is likely to be a long-term excess of supply over demand of metallurgical coke in Britain. I fear that the latter may be true. In that event, how long shall we continue giving stocking aids for coke even if there is no market for it? Stocking may be useful as a temporary measure, but there are difficulties if we face a long-term imbalance, and in the coke industry we see no change taking place in the market.
  Can we be sure that no permission will be given to the BSC for it to build new coke ovens when there are old and depreciated coke ovens available at the NCB to supply the BSC with all the coke that it requires? We need to be satisfied that there is proper co-ordination between the two nationalised industries, and from the remarks made by Sir Derek Ezra at the Select Committee three weeks ago I must wonder, in respect of the supply of coke this year, whether there has been that sort of co-ordination.
  It will obviously have occurred to the House that if in the original Estimates for this year a figure of only £10 was allowed for as operational grants to the NCB, in February 1977 there could have been hardly any intention to stockpile coke or coal under this heading in the Supply Estimates. Was it not already clear at that time that the steel industry was in a period of acute depression? It was known that the BSC was already forecasting a loss at that time, albeit quite a small one. It would seem that if there were no provisions made for any stocking grants 12 months ago, the NCB had not received the up-to-date information from the BSC that it should have received, and that the NCB may have been in a mood of too great optimism as regards the sales of its metallurgical coke to the BSC in the months immediately ahead.
  In summary, it may seem to Ministers—notably to the Secretary of State for
  1192
  Energy, who is a great spender—that the £18 million that I have been talking about in the form of operational grants to the NCB is not a large sum. It is the sort of sum that the right hon. Gentleman spends before breakfast. However, it is a fact that it is all part of the £3 billion that has been spent by the Government on aid to industry and employment. All of the £3 billion is a direct cost to us as consumers and taxpayers. It is all money that could otherwise have gone to reduce taxation.
  I end by quoting some very apt words of Thomas Jefferson:
  "I place economy among the first and most important virtues, and public debts as the greatest of dangers to be feared. … To preserve our independence, we must not let our rulers load us with public debt. … We must make our choice between economy and liberty or profusion and servitude. …
  If we run into such debts, we must be taxed in our meat and drink, in our necessities and comfortts, in our labour and in our amusements. … If we can prevent the Government from wasting the labour of the people, under the pretence of caring for them, they will be happy."
  It is my aim to make the taxpayer and the consumer a little more happy. It is for that reason that I have raised this subject at this otherwise rather unattractive hour of the night.
  1.12 a.m.
  Mr. Jim Lester: I am grateful to my hon. Friend the Member for Mid-Sussex (Mr. Renton) for raising this subject, if for no other reason than that it gives me my first, and possibly last, chance to speak from the Opposition Dispatch Box.
  Those of us who come from mining areas are aware that this time of night is not unusual in terms of work. We refer to it normally as the mid-shift. I am happy to be on duty on the mid-shift, because my hon. Friends, who are part of the Conservative Party's energy team, prefer to be in their beds at night and in that may maintain the happiness to which my hon. Friend referred.
  My hon. Friend has raised one of the intricate problems which affect our major energy industries. I rise basically to support his questioning, particularly as he has put it in the thoughtful and intelligent way which is developed through our Select Committee procedures.

  1193
  It is natural that from time to time questions arise as to the way in which we give subsidies not only to our nationalised industries but to industry in general. My hon. Friend referred to the figures, which I still have in mind, which were given by the Secretary of State this afternoon in answer to a question which I put to him relating to the EEC. The British coal industry is subsidised to the extent of 50p per ton. That sounds very little until we think of the number of tons and multiply them by 50p compared realistically with £13·50 per ton for coal extraction in Belgium.
  I make the point that, whilst I support my hon. Friend's questioning, I want to emphasise the Conservative Party's support, of which the Under-Secretary of State is aware, for the "Plan for Coal" and our genuine desire for the success of the industry.
  One of the basic problems of an extractive industry—again, coming from a mining area, I am familiar with this problem—is that the harder people work below ground extracting coal, the more quickly they exhaust the reserves and the more difficult they make it for themselves to maintain productivity figures. That is because they are further away from the bottom of the shaft and the gates. The problems that then arise are not necessarily understood in the coal figures for productivity and the desire for productivity.
  Equally, we realise the importance of long-term investment in the industry. The bulk of production is now coming from coal mines in which the investment was made over 60 years ago. We are now looking to the future and making long-term investments. We realise that these long-term investments may easily bring into production coal which, in the short term, may not have an immediate market. Yet all who study the energy scene in any depth recognise that coal in its basic form is a source of hydrocarbons which will be invaluable in future in many ways.
  At Question Time today we pointed out that this short-term productive difficulty raises the subject of vigorous marketing. We have tended to regard our coal production as being absorbed by our own natural industries—steel and electricity. But we may be entering a new phase in which we shall have to con-
  1194
  sider more positively what we are producing and how we market it.
  All countries with coal reserves see them in a positive light and the Governments of those countries are involved, as we are, in plans for future extraction and expansion. When one sees the plans in America, China and Russia for major expansion, one knows that we should have similar plans, particularly in the European context.
  My hon. Friend the Member for Mid-Sussex raised the question of the long-term future of metallurgical coke. This is interesting, because the steel industry is in a trough which might be long term. In terms of overall world demand, the rarest coal is metallurgical and provides coke for the steel industry.
  When I was in America in September I heard from the company that I visited that it had just concluded a 20-year contract to supply metallurgical coal to Romania, which finds it cheaper to ship this coal all the way from America than to extract it at home. Naturally, my colleagues and I will be interested to hear the Department's plans for dealing with the emerging problems of the steel industry. In particular we should like to hear what plans have been made for marketing and what consultations have taken place with our European partners to overcome short-term production difficulties and to maintain a constant supply of this valuable fuel, which may be in short supply in future.
  Anyone who has taken an interest in the coal industry will have seen that over the last 10 years, and longer, there has been a complete reversal from pit closures, the problems associated with unemployed miners and the need for new industries in mining areas. We have seen a change to massive investment in new fields such as Selby, a major expansion of production and a shortage of manpower. Many people believe that the long-term problems involve not reserves but the maintenance of a work force to extract them.
  There has been grave anxiety about the inability to supply the basic needs of the country. There has been a fear that there will not be enough coal to keep the steel and electricity industries going. We have seen coal stocking programmes—which we have supported—to maintain competitive production by moving coal from the

  1195
  pit-head into store. We have seen the whole gamut of change in supply and demand in the last 10 years.
  The House and the Department should team from experience. We should begin in the early days, when the troubles start to become apparent, to question how we can maintain and support an industry without having the massive peaks and troughs that cost so much. In that context I support my hon. Friend the Member for Mid-Sussex.
  I shall be interested to hear what the Under-Secretary of State says in reply to my hon. Friend's questions. I can assure him that we have an understanding and concern for the long-term future of the industry.
  2.20 a.m.
  The Under-Secretary of State for Energy (Mr. Alex Eadie): I congratulate the hon. Member for Beeston (Mr. Lester) on his formidable speech. It is one of which he can be proud, because there was no note of cynicism in it. He was forthright in putting forward his ideas about the future of coal in this country. Before I forget, let me also congratulate the hon. Gentleman on his debut on the Opposition Front Bench.
  Let me try to reply to the debate in the order in which the hon. Member for Mid-Sussex (Mr. Renton) put his case. He asked a number of questions of a financial nature. I wish that he could have framed his questions in the spirit in which the hon. Member for Beeston put his.
  I shall deal first with assistance to the coal industry because I think that there might be a better understanding of the problem if I deal first with this aspect of the case. I refer the hon. Member for Mid-Sussex to the final report of the coal industry examination, where it was made clear that the Government were prepared to assist the National Coal Board both in respect of its heavy social burden arising from the past and to counteract the effects on the Board of short-term fluctuations in demand.
  I have not seen the hon. Gentleman at many mining debates, but let me bring him back to what has been done. The classic example is the 1974 tripartite agreement among the unions, the National Coal Board and the Government that
  1196
  we would not be put off by any short-term fluctuations in the market. I said today that we would keep our nerve over certain things that would happen in the market for coal.
  Since taking office, the Government have assisted the coal industry with more than £400 million of grants. We have also approved a considerable stepping up of the Board's investment programme. This was necessary to counteract the effects of the low level of investment in the industry in the 1960s, and to reverse the contraction of the industry. Since 1974 the Board's capital investment has been £1 billion. To put it in the language that I generally use when I meet the miners at the pit head, this industry nearly came under the jurisdiction of the undertakers. It was saved from them because, in the nick of time, we realised that the contraction of the industry had to cease.
  In the interests of the nation—not just in the interests of the miners and ancillary workers—we have ploughed massive capital into the industry. We now have the most modern technological coal industry in the world, and that is generally acknowledged.
  The hon. Gentleman referred to the evidence given by Sir Derek Ezra to the Select Committee. I do not have time to examine the whole report, but if the hon. Gentleman had questioned Sir Derek Ezra he would have found—and I am sure that his hon. Friend knows this—that people from all over the world come to Bretby to get advice and to look at some of the new technology in the mining industry.
  The way that I often put it—though for a Scot it is perhaps rather a crude way of putting it—is that the new technology has meant more men leaving the coal face. It means that when someone crawls along the coal face, instead of seeing 30 or 40 people he sees a modern shearer representing about £750,000 worth of investment.
  There are a lot of men at the coal face whom I do not see. Let me explain that. The coal industry sustains a massive slice of the engineering industry and provides jobs for people in that industry. That is why I say that at the coal face there are a lot of men whom I do not see: they are there through the machines they make and we sustain them.

  1197
  The recent Green Paper on energy policy reiterated the need for us to be prepared to give operational assistance to the NCB and made clear the difficulties that the United Kingdom would experience in balancing energy supply and demand in the long term without a substantial contribution from the coal industry. We need to maintain adequate capacity and manpower, on the basis of which the coal industry can expand and cope with increased demand in the long run. In the short term, abundant supplies of other fuels, combined with a low total energy demand, may give rise to problems.
  The Coal Industry Act 1977 provides the legislative framework for Government assistance for the industry's operations. Section 2 provides power to make grants for the promotion of the sale of coal to electricity boards. Section 3 provides power to give stocking aid to help the NCB to maintain stocks of coal or coke at the pit head or with certain major customers. Section 4 provides power to make grants towards the cost of producing coking coal.
  To some extent, these operating grants are complementary. There is an interdependence between levels of stocks and the quantities of coal burned in power stations. If stocks are regarded as excessive, it may be preferable to encourage the burning of coal in power stations rather than provide funds to finance stocks.
  The Government have agreed to make £10·4 million available in this financial year in aid for the stocking of coal and £8·3 million for the stocking of coke. In addition, £5 million is being provided this year for coal burning in Scottish and Welsh power stations. While the Government are prepared to provide assistance to the NCB operations, where appropriate, the United Kingdom industry is not heavily subsidised and compares excellently with its European counterparts in this respect.
  The hon. Member for Mid-Sussex challenged the figures. I shall inquire into what he said and write to him to substantiate the figures. My information is that they are factual, but I want to put them on the record so that we know what is being challenged.
  Aids to production to the Board were about 50p per tonne in 1977, compared
  1198
  with £2·6 in Germany, £13·3 in France and £19·8 in Belgium. Most of the grants made by the Government to the industry have been to help with the heavy social burden of the past. Although the number of colliery closures is much smaller than in the 1960s, collieries still become exhausted or geological difficulties make them uneconomic to work. In these circumstances they have to be closed and men are made redundant or are redeployed in the industry.
  Of the £89 million assistance for the industry in this year's Estimates, £13 million is for grants in connection with pit closures. They are paid to the NCB to help with the cost of statutory redundancy payments, provisions for early pensions for redundant non-industrial staff, and towards the cost of redeploying other men within the industry. I thought it was pretty unworthy of the hon. Gentleman to talk about my right hon. Friend the Prime Minister in relation to this matter.
  A further £19 million is for the redundant mineworkers' payments scheme. This is a Government scheme which makes weekly payments to miners redundant between the ages of 55 and 65, supplementing other State benefits. After three years of redundancy, if they are still under 65, these men receive reduced benefit from the scheme, but get paid their mineworkers' pension prematurely. This costs a further £4 million. Men redundant between 35 and 55 get a lump sum under the scheme but no weekly benefit. The hon. Gentleman may be aware that only last week, under a Statutory Instrument approved by the House, we put forward proposals which to some extent will extend these provisions.
  In 1974 it was recognised that the past contraction of the coal industry presented a financial problem for a viable pension scheme because of the exceptional ratio of pensioners to contributing members.
  Mr. Tim Renton: I thank the Minister for saying that he will look again at these figures and write to me if he finds they need revising. The point I was making was that on the basis of the Supplementary Estimates that we are now considering the grants from the Government in the current year appear to be of the order of 80p per tonne compared with 50p for last year. That is the point I

  1199
  was making and I would be grateful if the Minister would look into that particular aspect.
  Mr. Eadie: I thought I gave the hon. Gentleman that assurance. The Government therefore undertook to assist in meeting the deficiency in the pension fund related to those men who were pensioners on 6th April 1975, and also any added deficiency caused by increasing the pensions in line with the rise in the cost of living. The pensions of these men have risen from £3·60 in 1975 to £6·16 now— not a very big sum. The Government contribution has risen correspondingly from £18 million to £34 million per year. Since the hon. Gentleman is obviously quite happy with the financial information, I shall not deal with other aspects, but they are on the record.
  The hon. Gentleman dealt with the subject of coking aid. I should like to say something about the background to the provision of coke stocking aid. The coal industry, because of the long-term nature of its investment, is not able to adjust production rapidly to cope with short-term fluctuations in demand. These effects are noticeable in coal products, such as coke, as much as in coal. Obviously, it is for the coal industry itself, through its relationships with its customers, to do as much as it can to smooth out the effects of these fluctuations and to build into its operations as much flexibility as possible.
  However, the Government have recognised that the effects of short-term fluctuations can be severe and they recognise that it would be against the interests of the country if these effects were to include damage to the long-term capacity for production of coal and coke. It is for these reasons that the Government renewed their powers in the Coal Industry Act 1977 to pay grants to the NCB to enable it to build up and maintain stocks of coal or coke. The National Coal Board produces coke through its subsidiary company National Smokeless Fuels. The company will produce about 3½ million tons of coke this year of which almost 1 million tons will be blast furnace coke, and a further significant amount will be foundry coke.
  National Smokeless Fuels has been particularly affected by the continuing world-
  1200
  wide depression in the steel industry. The main customer for blast furnace coke is the British Steel Corporation. But BSC produces most of its coke itself and NSF is a supplier only at the margin.
  Thus, whilst in normal circumstances NSF has been able to weather the cycles in demand, the current severe decline in the market has hit the company particularly badly. At present BSC is taking no coke from NSF, though the NCB is discussing with it a resumption of supplies.
  Export prospects are little better. There are huge stocks of coke in Europe—some 21 million tonnes, with 15 million tonnes in West Germany alone. The EEC market is saturated. Competition for supplies to countries outside the Community is severe.
  NSF has reduced production to about 70 per cent, of its coke oven capacity and has decided to close down the Glass-houghton coke works and to take permanently out of commission five of the eight batteries at the Manvers coke plant. In the light of the difficulties that the reduction in the demand for coke has caused, the Government agreed that there was a case for providing coke stocking aid to the NCB under Section 3 of the Coal Industry Act 1977. This is the purpose of the provision of £8·3 million in the Department of Energy Supplementary Estimate for 1977–78.
  The hon. Member for Mid-Sussex asked about the facilities permitted by the EEC. Under ECSC rules, stocking aid for coal can be given on usable stocks in excess of one-twelfth of annual production. So far the only aid to production given on a Community basis is for coking coal sold between member States.
  At present the Council has before it three proposals. There is a proposal for aid on up to 20 million tonnes of excess stocks of Community coal and coke. The 20 million tonnes would be allocated to producing countries in proportion to the previous year's production level, and only stocks in excess of one-twelfth of annual production would qualify for aid.
  The Commission has made new proposals for a scheme of aid on intra-Community sales of steam coal. The aid would be at a rate of 10 European units of account, which is £6·30, on 12 million

  1201
  tonnes per year over a three-year period, and funded through the EEC budget.
  There is also financial aid for increased coal-burning electricity generating capacity. This is a scheme for additional coal-fired capacity, giving some preference for projects which would burn Community coal. The original proposal was for a fund of 500 million EUA, and aid at 30 per cent, of the additional cost of a coal-fired system over a comparable oil-fired system. However, the details are under discussion and could be subject to substantial revision.
  These discussions are continuing. I was in Europe not so long ago. We produce the cheapest coal in the EEC, but we are concerned with the question of coal from third countries. We are not asking for any favours, but if the EEC is to mean anything, we should be entitled to ask for action within the bounds of ordinary membership and commercial practice.
  The hon. Member for Beeston mentioned the figures. I think that he suspects that they are nearly correct. I do not think that he is as sceptical as his hon. Friend. But I shall provide the same information to him, because that is only fair.
  The hon. Gentleman gave support for "Plan for Coal" for investment in the long term. He is pledged to back a most modern coal industry. He talked about a vigorous marketing policy. He is correct to do so. I mentioned what we were trying to do within the EEC. He will concede that that is in accordance with a vigorous marketing policy.
  We are always looking for other uses for coal. I hope that this month or next month the report of my working party will be published. It deals with the whole question of research and development—liquefaction, fluidised bed combustion, low BTU gas. These are all markets for the future. To some extent they coincide with what the hon. Gentleman said, that we have to think in the long term as well as the short term.
  If we are to have an industry in the long term, we must invest now, because one cannot sink a pit in six months or plan reserves in six months. When one closes a pit, one closes it for all time. If the nation wants a coal industry, it must invest in the industry now.
  1202
  I was pleased that the hon. Gentleman mentioned his American visit. I was there about a month after him and saw my first coal refinery. This is one of the other future markets for coal.
  I have many times addressed miners at the pithead, where I have described the matter as follows. We are told that we enjoy financial strength now because of North Sea oil. This financial strength comes from a wasting asset that may very well be gone by the 1990s or the end of the century. We can maintain the financial strength of the country by being ready to carry out the liquefaction of coal, the making of synthetic petroleum. I believe that this will be a good legacy that we can leave to our children and grandchildren.
  We talk about gas and oil being wasting assets, tailing out in the 1990s or disappearing completely in the next century. We have 300 years of coal that will be a priceless asset to our children and grandchildren.
  I have tried as best I can to answer the points raised. The hon. Member for Mid-Sussex quoted Thomas Jefferson. I do not know how much coal Thomas Jefferson mined. I want to quote Joe Corrie, the miners' poet, describing the role of the miners today:
  "It was crawling aboot like a snail in the mud,
  Covered with clammy clay who made me the image of God.
  Jings, but it's laughable tae."
  When going for the black diamonds that the country needs, many men have to work uncomfortable circumstances and a very hostile environment. I have felt great pleasure in answering some of the questions raised in this debate.

  ARMED FORCES (PAY)
  2.43 a.m.
  Mr. Julian Ridsdale: My hon. Friend the Member for Beeston (Mr. Lester), who spoke from the Opposition Dispatch Box in the previous debate, spoke of its being the mid-shift for miners. For the Services it is something to which we are quite accustomed. We are used to mounting night operations, some which are extremely distasteful but as far as I can remember this is the first night operation that we have initiated on

  1203
  Services pay. However as a Services Minister I often had to reply in the early hours of the morning to debates on subjects other than pay.
  I particularly want to raise the question of Services pay because it is one of the simmering discontents which, if allowed to continue, could be extremely serious for our country. It was raised by many hon. Members both sides of the House in last week's defence debate. The under-payment of those in the Services is so serious that I regard it as a vital duty for all of us to make the Government aware of our very strong feelings and of how important it is that the matter be corrected at the earliest possible moment.
  The fact that so many of my hon. Friends should be present for this debate, even though it takes place in the early hours of the morning, is further proof of the seriousness with which we regard the matter.
  In a sense, we as Members of Parliament are the trade unions of the Services, but of late we have allowed the Government to treat them in a mean and niggardly way. We must all take responsibility, but no one more so than the Government and the Service Ministers. We expect Service men at a moment's notice to be the nation's emergency force to deal with crises such as the firemen's strike, although Service men receive much less in pay than do the firemen. No one who visited the Service men on duty during the firemen's strike could fail to have the greatest admiration for the fortitude with which they carried out their work, without any grouse except the usual Service man's grouse, expressed with the best of humour, about his pay.
  We expect the Services to be the nation's emergency work force and, indeed, the cheapest. Forces pay deals tend to be economic conjuring tricks. A small rise is given and increased messing charges and reduced allowances take it back. The Adjutant-General, Sir Jack Harman, says:
  "Compared with civilian earnings the Services are between 15 per cent, and 20 per cent, behind. We shall fall behind further if we only get the 10 per cent, which is recommended under the pay policy."
  It is unprecedented for an Army chief to speak out publicly in such matters, but
  1204
  this underlines the seriousness of the present situation regarding Service pay.
  What does this mean in human terms? I was surprised to hear about some of the examples that I shall now relate to the House, but I have written to the Secretary of State to confirm that these are the facts. It surprised me to learn that the average pay of a manual worker is nearly £80 a week and the average pay of a Service man is £23 less. A lieutenant commanding a troop of tanks in Germany gets £80 a week, less than most long-distance lorry drivers. A Royal Air Force pilot piloting a £3 million Phantom gets less than a bus driver.
  We must look after our lower-paid other ranks as well. On some occasions soldiers in Northern Ireland are earning only about 33p an hour. This is a scandal. We cannot be complacent about it. Nearly 5,000 soldiers are getting rent and rate rebates. It disturbed me greatly as an ex-Service man to hear these facts. Sixty per cent, of RAF wives have to go out to work. To make more money, troops are moonlighting. There have been cases of young Staff College majors taking jobs as minicab drivers in Camberley. These examples make me wonder how Service Ministers feel.
  A brigadier responsible for 6,000 men may earn no more than some of the better paid London printing workers, yet he is expected to subsidise official entertainment out of his own pocket.
  My final example is from the case book of the Soldiers, Sailors and Airmens Families Association. It concerns a Royal Air Force senior aircraftsman, a fireman driver, with 11 years' service. He is married and has three children, aged 7, 5 and 1. His weekly gross pay including rent totals £56.80. Rent amounts to £8.26, national insurance £2.75, tax £6.75, gas £4.50, electricity £2, school meals £2.50, hire purchase £2, insurance premium £1, travelling expenses £1.50, and food for five at £4.80, each, £24—a total of £55.26. The remainder for clothes and everything else is £1.54.
  Not surprisingly, this family never goes out and has not had a holiday for the last five years. This really is an appalling story, and one should not have to be speaking in the House about this kind of budget when at the same time we

  1205
  expect the Service man to face all sorts of dangers with fortitude.
  At many camps, wives run second-hand clothing shops. Is it a wonder that family life is breaking down? As my hon. Friend the Member for Stretford (Mr. Churchill) said recently, families are being faced with the choice: heat or eat? In garrison towns the effects of Service pay slippages are painfully obvious.
  I was so surprised to see the statement that I am about to give that I sought to get it checked with tie Secretary of State for Defence. It was not commented upon and was not denied. The statement was: "You can easily spot the Service families now. They are the shabby ones standing outside the shops." That is a comment on the Service town of Aldershot. This is a most disturbing situation, and I am glad to have this opportunity to draw attention to it.
  But what has been the result of all this? It is no wonder that 6,000 Army officers and men have quit during the past year. The queue for RAF pilots wishing to quit is so long that they must wait at least five years before applications are allowed. Last year, 4,718 RAF men left for reasons other than completion of service. That is nearly 6 per cent, of the total.
  It was stated in the other place today that 18,000 out of 100,000 Service houses are unoccupied. What a story this is when we consider, against this background the youth unemployment that there is in the country. The Secretary of State for Defence and the Service Ministers should be encouraging more youth to enter the Services. It is remarkable that at least one of the Service Ministers should not have resigned because of the appalling situation that faces the Services at the present moment.
  What is to be done? First, we must realise that Service men cannot earn overtime, however many hours they work. They are not entitled to productivity deals, or to claims for unsocial hours. No one can conduct wage negotiations or threaten industrial action. It is up to the Armed Services Pay Review Body to make its recommendations, which it will on 1st April. I hope that we shall see an effective pay increase at that time. I hope that the Government will not hide
  1206
  behind the review body because of Government pay policy.
  What disturbs me is that the situation should have been allowed to deteriorate so badly since the last pay review, and that the Service Ministers in particular should have been extremely complacent about the situation that has arisen. Have not they realised that troops are on the poverty line? To have allowed such a situation to arise shows a degree of negligence which is indefensible. Indeed, the complacency of the Under-Secretary of State for Defence for the Army disturbs me. I consider that he should have been far more sensitive to the feelings of the Services than he appears to be.
  It is vital that the review body should set out in its report what increases are needed to restore comparability and thus to restore the military salary to its proper level.
  If, because of a period of pay restraint, it is not possible to pay at once the correct increase, why cannot the Government look at allowances? After all, it is only comparatively recently that rent, food and travel were included in gross pay. When I was in the Services we were allowed rent, food and travel allowances much more than today, and they were not taxable. This is a possibility that the Government should look at with a degree of imagination to see whether any improvement can be made.
  I hope that the review body will say what the proper level of pay for the Services should be and then leave it to the Government to decide how it is to be achieved. For instance, why cannot the allowance for serving in Northern Ireland be increased? The allowance of 50p a day has not been changed for four years. This is a great condemnation of the administration of the Services today.
  If trade unions are allowed productivity deals in the present period of wage restraint, I am sure that they would not object to Service men having certain items of their pay treated as allowances. This would be following the precedent of the past and that of our own pay position as Members of Parliament. In considering a practical matter of this kind, we have to think how we are being treated ourselves and how we treat the Services.
  I am certain that some improvement has to be made in this sector. The

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  Armed Services and the police are unique. The State relies upon them for its security, and they do not have the right to strike. Therefore, the State owes them a special duty. We must find a solution now.
  I welcome the fact that we have had this debate, and I hope that we shall see a degree of imagination from the Government in dealing with this problem which we have certainly not had up till now.
  2.58 a.m.
  Sir Timothy Kitson: The whole House will be grateful to my hon. Friend the Member for Harwich (Mr. Ridsdale) for raising at this late hour the problems of Service pay. As Catterick garrison forms part of my constituency, I welcome the opportunity to speak on the subject.
  There are few problems in my constituency which give me greater concern than the disturbing situation affecting young married couples stationed there. Recently, I have visited a number of families who are living under grave financial strain and whose present position is quite intolerable.
  I begin by pointing out the situation facing a large number of families in the Catterick area. One example that I take is the case of a signalman aged 25, married with two children and living in married quarters at Catterick camp. Before joining the Army, he was earning £85 a week as a labourer. He lost his job and became unemployed. He was drawing £35 a week on the dole. In addition, he had a rent allowance, free milk and free prescriptions.
  As a signalman in the Army, his gross pay is £46·16. He takes home £33, and he draws £2·50 family allowance. But because of the high rent for his quarters and expensive heating, which is done by electricity, all that he has to spend on food is £12 a week. Neither he nor his wife has been able to buy any new clothes for more than a year; they have had no entertainment or holidays, and the last occasion on which they went out together was on their wedding anniversary, last May, before he went into the Army.
  He is now confronted with an electricity bill of £33·48, which somehow or other he has to pay. He has signed on for nine years and his present rate of pay is
  1208
  exactly £7 a week less than that which he received in civvy street, drawing the dole. Yet he was the leading recruit of his intake when he went to Catterick.
  I cannot believe that this situation can be allowed to continue. Like many others in the Army, this signalman is getting further and further into debt week by week.
  Another example I quote is that of a private with a wife and three children, one a small baby a few months old. He joined the Army five years ago, and has had three terms in Northern Ireland. He is £2 a week worse off, with no free milk and prescriptions, than he was before he joined the Army when he was on the dole. Both the signalman and the private spent some time fire-fighting during the firemen's strike.
  These men have no opportunity to earn any overtime to relieve their financial situation and, as both have young children, their wives are unable to go to work to supplement the family income. During the past year, the welfare officers at Catterick have dealt with 406 cases of soldiers' marriages breaking up. While one recognises that there are a number of domestic reasons for this, I am informed that a large number have been brought about by the precarious and insecure financial situation that young soldiers and their wives find themselves in at present. They are quite unable to cope financially. This is a situation that cannot be allowed to continue. The Minister must help them, and recognise their special circumstances.
  After the last pay increase, charges for quarters were increased substantially. At Catterick many of the quarters have electric central heating. In January this year there were 260 final demand notices issued by the North-Eastern Electricity Board to soldiers in Catterick. Many of these were paid, one way or another, but a substantial number remained unpaid. I suspect that when the spring demands come, the situation will be even worse.
  I quote some examples of soldiers' pay, allowances and charges. A signalman who is in the Army for three years, has no children and a B type quarter has gross pay of £41·26, with income tax of £5·60, national insurance of £2·03 and quartering charges of £8·26. His net entitlement is £25·37.

  1209
  A private with 12 years' service, three children and a C type quarter receives gross pay of £53·90. His income tax is £5·26, national insurance £2·76, and quartering charges £9·59. His net entitlement is £36·29. He gets £2·31 rent rebate, £4 allowance for his children, and ends up with £42·60—once again worse off in the Army than on the dole.
  A lance-corporal whose engagement is for nine years, and who has one child receives gross pay of £56·81. His income tax is £8·55, his national insurance £2·80 and quartering charges £8·56. His net entitlement is £36·90. With a rent rebate of £3 and child allowance of £1, his total income is £40·91. Again, he would be better off on the dole.
  The situation in the Catterick area is totally unsatisfactory, as it is in all other military camps. Morale is low, and the number of Service men, particularly at non-commissioned officer level, trying to get out of the Army is quite appalling. Recently one regiment's NCOs met in Catterick to discuss the plans for the next winter operations. There were 106 present. I understand that 90 of them were hoping to have left the Army by the end of this year.
  I am concerned not only about the young married privates and signalmen stationed at Catterick but about the whole structure of pay in the Armed Forces. If the Government feel that a 10 per cent, increase would resolve the situation, they must be out of their minds. The last pay award to the Armed Services was given with one hand and taken away with the other. I know of many families living on the bread line in Catterick. They have young families, but a pram would be a luxury. There are those who buy either newspapers or lavatory paper and are prepared to admit to this. A night out is unheard of. Many wives cut themselves to one meal a day to try to keep within their budgets.
  I have represented the Richmond constituency since 1959, and I know through my mail bag and surgeries and from telephone calls at weekends that the present pay situation at Catterick is quite intolerable, and unless the Minister is prepared to argue forcefully for a special situation, the position is likely to deteriorate even more within the next few months. Something must be done soon, and it must be
  1210
  recognised that Service pay is a special situation.
  3.8 a.m.
  Mr. Geoffrey Pattie: I can well imagine the groans of dismay that went up in the Minister's office when my hon. Friend the Member for Harwich (Mr. Ridsdale) announced that he would raise this subject, because it is a subject which, no doubt to the Government's regret, simply will not go away. No matter how many times it is raised—my hon. Friend pointed out that it was mentioned many times in the debate on the White Paper last week—no matter how close we may be to the report of the Armed Forces Pay Review Body, this subject will not just go away.
  We are very grateful to my hon. Friend the Member for Harwich, as we are to my hon. Friend the Member for Richmond, Yorks (Sir T. Kitson), who made an excellent speech. They have given us some chilling examples of the problems that Service men face. My hon. Friend the Member for Harwich spoke of secondhand clothing shops and of the phrase "heating or eating", which we first heard in last week's debate. We have heard that the Service families in Aldershot tend to be the shabby ones standing outside shop doors.
  My hon. Friend accused the Government of an indefensible degree of negligence. I am thinking of the point that he made about the allowance in Northern Ireland having remained for four years at 50p a day. Not only is that a ludicrous figure; the fact that it has remained at that level for four years is a comment on the degree of priority. No Service man or woman would wish to be singled out as a special case, but the Services do not wish to suffer to the degree they have.
  My hon. Friend the Member for Richmond described the case of a signalman at Catterick who is £7 a week worse off now than he was a year ago, and he added that the man in question was getting further into debt.
  We also heard about the 260 final demand notices from the local electricity board. One can attend meetings in sergeants' messes in which, out of 106 sergeants present, 90 say "I am not interested in the winter's programme, because I hope that by that time comes I shall

  1211
  be out of the Service." It is a fantastic situation. It is right that such examples should be put forward, because the disciplined Services are now facing a deplorable mosaic of suffering. The question that the Government must face is how long those Service men and women will put up with the position.
  If the Armed Services Pay Review Body is to retain any credibility, it must make its report after analysing all the facts. The report must state how much needs to be paid to Service personnel to restore their comparability. In the last three years that comparability has been not so much eroded as destroyed. It is a lack of comparability that is so serious that a sizeable proportion of Service men are now drawing social security benefits. In yesterday's Press we read about a pay reform movement in the Royal Navy. Therefore, it is appropriate that the Under-Secretary of State for Defence for the Royal Navy is to reply to this debate.
  I wish to quote from The Sunday Telegraph of yesterday, in which its defence correspondent said:
  "The wife of a leading seaman, whose husband had been paid the day before, said: 'I have settled the household bills and bought the bare essential groceries. I am left with 30p in my purse to cover everything else for the rest of the week.'"
  The article continued:
  "Others laughed when I asked about buying children's clothes or paying for family outings. 'There is nothing left for clothes,' they said. 'Not even for a bag of sweets for the kiddies. Towards the end of the week we can't afford bus fares.'"
  He continued a little later:
  "Half the wives I met said their husbands had either decided to leave the Navy or were seriously considering it. The next Services' pay award next month would be the critical factor."
  Indeed, it will be the critical factor.
  There are far too many such examples. No doubt it will be said they are rare examples of special cases which could be looked at, but when we have reached a situation when 40 per cent, of the people in the lower ranks are drawing social security benefits, that is obviously the norm rather than the exception. I imagine that most of my hon. Friends—not all—would be ashamed to be Ministers in a Government who presided over such a situation.
  1212
  The recent White Paper, despite its attempted blandness, contained some revealing information in two paragraphs on the subject of manpower. I refer to para 404, on recruiting and para 409, on wastage. Para 404 reveals a serious shortfall in recruiting, especially to the Royal Air Force. In certain grades, such as pilots, the shortage is said to be spectacular, which is the only word I can use for it.
  In paragraph 409 there is revealed a seriously high level of wastage from the Army and the Royal Air Force. I concede that according to the White Paper that is not so from the Navy. However, from the examples that I have given from the newspapers, which one has to take at face value, it is obvious that it will not be long, sadly before the Navy catches up with the record of the other two Services. Premature voluntary retirement, as it is called, is running at record levels. These are all facts that cannot be ignored.
  There has not been a Service Minister who has ever accepted that morale is not all that it should be. Morale is one of those splendid things that is always all right. There is no chart, no graph and no "grinometer" to register the number of people smiling. No one appears on a stage and asks "Are you all happy?" I should fear for anyone's safety who did that. However, the evidence on recruiting and wastage shows anyone who has half an eye to see the whole story about morale in the Armed Forces at present. We are not recruiting at one end, and we are losing men at the other; that is all that we need to know. It is not necessary to be clairvoyant to realise that morale is at a record low level.
  All this means that Service men, with their characteristic restraint and discipline, are coming to attention, turning to the right, saluting and falling out—or, in civilian parlance, voting with their feet. We would have to go a long way back in our history to find a situation in which there has been such bitterness and resentment in the Armed Forces. The difference nowadays is that, unlike some stages in our history, we are not living ing the age of the press gang. Service men are intelligent professionals. They are highly motivated, with a great sense of duty. They join because the Armed Forces are a calling where the pursuit

  1213
  of excellence is still considered desirable for its own sake. They have a sense of belonging—or they had.
  The effect of scandalously inadequate pay is extremely corrosive in putting Service men in an intolerable financial position and in the effect that it has on them in carrying out their jobs. They cannot be expected to do their jobs properly if they are as concerned and anxious as they undoubtedly are about their circumstances.
  The position of Service chiefs and other senior officers is being completely undermined. Senior officers now find it harder to give the moral leadership that is expected of them. By the same token, support for the hierarchy, which used to be automatic, may no longer be taken for granted. These are matters that must not be underestimated. It is the other effect of inadequate pay and conditions.
  Service men look at their pay levels and conditions and say "So this is how we are valued by society". As they are volunteers, and as they are openly pursuing military excellence for its own sake, they say "We are mugs. We are being taken along for a ride". As I have said, they vote with their feet.
  Even gratuities at the end of engagements have felt the icy grasp of retrospective legislation. There is no other group in society that would have allowed itself to be treated as the Government have treated the Services. It is because the Services take on a special liability that they look to Governments to do the right thing by them. It has taken the present Government to achieve virtual unionisation of the police. That would have been unthinkable five years ago. We must no longer take the Services for granted. We must now give them the treatment that is long overdue to them.
  3.20 a.m.
  The Under-Secretary of State for Defence for the Royal Navy (Mr. A. E. P. Duffy): This debate, following closely on last week's debate on the Defence Estimates, has illustrated again the widespread concern which is aroused by the subject of Forces pay. That concern was impressively reflected by the hon. Member for Harwich (Mr. Ridsdale) and by his hon. Friends the Members for Richmond, Yorks (Sir T. Kitson) and Chertsey and Walton (Mr. Pattie). All that they said
  1214
  will be carefully weighed. I shall certainly draw to the attention of my hon. Friend the Under-Secretary of State for Defence for the Army for what was said by the hon. Member for Richmond about his findings at Catterick. There is no question whatsoever about any lack of concern on either side of the House, certainly not by anyone present now.
  I am very pleased that the hon. Member for Harwich took the opportunity to initiate this debate. There was no question of any Minister in the Department being querulous when deciding who should reply to the debate. Frankly, although there was no competition, perhaps that was because I quickly elected to undertake this task, and I was very happy to do it.
  I am always discussing pay. I never visit a Service unit without the question of pay coming up. I am finding that more than anything else nowadays. Therefore, I understand the importance of the subject. In view of my experience in recent months visiting ships and shore establishments—last week I was in Cornwall at a naval air station—I felt that I could discuss this subject with hon. Gentlemen. Therefore, I was pleased to have this opportunity to reply to the debate.
  I want to help the House by clarifying some of the issues involved. I realise that I do not need to clarify them for the benefit of hon. Gentlemen present, because they know as much about this subject as I do. But I should like to make it clear, for those who cannot be with us but who follow the record, that, the debate goes on outside the House. Therefore, I hope that, the House will bear with me if I go over some ground that is all too familiar to hon. Gentlemen who are present.
  I cannot anticipate the contents of the report that the Armed Forces Pay Review Body will shortly submit to the Prime Minister or comment on the Government's consideration of its recommendations. I recognise the strength of feeling on this subject, among not only hon. Members but Service men everywhere. I accept that it has had some effect on morale, high as it nevertheless still remains. Whether there has been the corrosive effect on morale suggested by the hon. Member for Chertsey and Walton, I do

  1215
  not know. I shall want to look at that matter more closely and draw it to the attention of my right hon. Friends.
  I take the point about the significance of recruitment and premature voluntary retirement causing a drop in morale. That factor no doubt influences to a varying extent those who apply to leave the Forces on premature voluntary retirement. Our information suggests that there are other motives as well. However, I do not discount the significance of morale.
  In the light of this information, it is important that this issue be treated with the seriousness that hon. Gentlemen have brought to it tonight and that it should not be made the occasion for scoring party political points. I hope that it will not be made the object of exaggeration. I wondered whether one or two of the illustrations put forward tonight corresponded to reality. Nevertheless, I shall draw them to the attention of my right hon. Friends who will want to look into them.
  I was surprised at the description attributed by the hon. Member for Harwich to soldiers' families in Aldershot standing outside shops being the shabbiest people. I was appalled to hear that that might be the situation, and I shall want to pursue that matter myself. I mention that matter because, in the event that it has been slightly overdone, I hope that we shall be careful not to indulge in exaggeration.
  Mr. Ridsdale: For that reason I sent the information to the Secretary of State before making that remark. I did not receive an answer.
  Mr. Duffy: I shall follow that through, because it is a serious matter.
  It is essential to look carefully at the basis of Service pay and charges and to understand the complicated process and principles involved. We have done this before and in some quarters we have been criticised for being didactic. I have no doubt that we shall be again.
  Without the clearest understanding of how Service pay and charges are fixed, all kinds of misconceptions and misrepresentations arise. Before 1970 Service men received a combination of pay, allowances and benefits in kind which
  1216
  differed for single and married men. In 1970 this system was changed. From that time married and single Service men received the rate for the job.
  Service pay rates were determined by reference to civilian analogues and in general costs of food and accommodation, also based on civilian comparisons, had to be met out of pay.
  Reference is often made in the House and in the Press to the special supplement known as the X factor, but it is not always fully understood. This is a payment to offset the balance of disadvantages over the advantages of Service life. Examples of the advantages are the opportunities to travel, generous leave allowances and job security compared with most civilian employment. The disadvantages embrace military discipline, exposure to danger and turbulence which the family of the Service man experiences as much as does the individual himself. Service men certainly work long hours in those ships that I have visited at sea.
  The balance of the disadvantages over the advantages was originally valued at 5 per cent, of basic pay, but this was increased to 10 per cent, in 1974. This X factor, together with the rate for the job based on civilian analogues, makes what is known as the military salary.
  In 1975 the Labour Government restored the military salary to its proper value after it had been lost under the statutory incomes policy of the previous Conservative Government. Hon. Members will recall the serious national economic situation which led to the introduction of the current pay restraints, under policies based not on statutory compulsion but on a voluntary agreement between the Government and the TUC. The success of these policies has rested on their application to all groups.
  The reduction in the rate of inflation from 30 per cent, to under 10 per cent, and the increasing confidence overseas in Britain's prospects are plain for all to see. A price has had to be paid for this success. Over the last two and a half years most members of the community have suffered a reduction in living standards. Service men have been no exception.
  The review body pointed out in its 1977 report that Service men had fallen behind their civilian counterparts. The

  1217
  reasons for that have been stated frequently and I shall not repeat them. The Government fully accept that this is so. We have promised repeatedly that we shall restore the military salary to its proper level as soon as pay policy permits. As I have said, this is what we did in 1975 and we shall do it again.
  We have been subjected to criticism by some Conservative Members because we have refused to restore comparability immediately without any regard for pay policy. Unlike some of those critics, we on the Government side of the House do not claim any monopoly of concern for the Armed Forces, but I assure the House that we are as anxious as is any Opposition Member that the Services should receive the proper rate for the job that they do.
  Mr. Pattie: Does the Minister accept that when we are talking about pay policy we are talking about something that has been engineered by negotiations and discussions with the TUC, and that one thing that the Services do not have—and we are glad that they do not have—is industrial muscle? Does that not mean that there is a clear case and an opportunity now for the Government to make the exception which everyone in the country would feel was acceptable?
  Mr. Duffy: I do not, and I shall say a word about any settlement that will be arrived at during the next few weeks having to be set within the current pay policy. That does not mean that in the absence of industrial muscle the Services should feel that they do not have political muscle. I assure the hon. Gentleman that all possible representations that could be made on behalf of the Services have been made, are being made, and will continue to be made. However, as my right hon. Friend the Secretary of State for Defence said last Monday, we must also be concerned about the health of our economy as a whole, on which our defence effort and individual prosperity ultimately depend.
  Let me take up briefly the two points that have been put forward by all previous speakers. The hon. Gentleman said that 40 per cent, of lower ranks draw social security benefits. This is not so. The latest figures of the number of Service men receiving rent and rate rebates is about 3 per cent, of the total strength.
  1218
  We do not know precisely how many Service men receive other social security benefits, but the Department of Health and Social Security has produced estimates which suggest that only a handful of Service families receive family income supplement. The increase that has taken place in the numbers drawing rent and rate rebates is due in part to the increase in entitlement. Though I should not want the hon. Gentleman to think I was in any way minimising the trend, it is its strength that we have to be careful to determine.
  On the question of Northern Ireland pay, the hon. Gentleman said that allowances should be used imaginatively when payments cannot be made. I have already explained that the concept of military salary does not allow that to be done.
  The hon. Gentleman mentioned the Northern Ireland allowance. I draw his attention to the exchanges that took place in the House between my right hon Friend the Secretary of State for Defence and the hon. Member for Petersfield (Mr Mates) last week, when the hon. Gentleman suggested that Northern Ireland pay could be increased outside pay policy because
  "Any allowances set against extra expense are not subject to the policy …"—[Official Report, 13th March 1978; Vol. 946, c. 336.]
  My right hon. Friend said that the hon. Gentleman was wrong in his assumption. Northern Ireland pay is not a reimbursement allowance; it was introduced in 1974 in recognition of the long unsocial hours—long even by Service standards—which have to be worked there. As such, it is part of pay and falls to be considered within pay policy.
  Mr. Ridsdale: Will the Minister not be so didactic about military pay and regard it as a gross salary when precedents show that allowances could be increased to get round many of the difficulties faced by Service families?
  Mr. Duffy: Perhaps the hon. Gentleman will leave that with me. I shall draw his remarks to the attention of my colleagues and see what scope exists for doing as he suggests.
  Time and again when talking to Service men and hon. Members I have to stress that the pay review body is free to make whatever recommendations it thinks fit. It is indeed independent. The Government are also free to give whatever

  1219
  advice they think right. However, that does not detract from the body's obligation to weigh that advice and all the other evidence before it and making its own decision and recommendations. It is for the Government to decide on the implementation of the recommendations.
  Mr. Churchill: We on the Opposition Benches endorse what the Minister said. He will be the first to concede that that is not the position that has been understood by the body in recent years. It felt that it was at liberty to make recommendations only within the Government's guidelines. It is of the first importance that it should feel free to recommend the true comparability of salary and leave it to the Government to decide whether it is possible to implement that.
  Can the Minister explain why we saw today on the boardings and billboards around the Palace of Westminster that bus conductors are to be paid £100 a week—more than double what soldiers facing IRA bullets in Northern Ireland receive? How does he explain that?
  Can he also explain why the Government have found it possible to make an exception for the firemen and exempt them from pay policy in the coming year but have not found it possible to make a similar exemption for the Armed Forces? Is it just that they have not been on strike and do not have a union?
  Mr. Duffy: I saw the pay rates for London Transport conductors in the Evening Standard and I was as startled as was the hon. Gentleman.
  On his second point, the firemen's settlement is being phased and is within the pay guidelines. The settlement arrived at for the Armed Forces will also have to be within the guidelines. I know that the hon. Gentleman will not expect me to go further. I cannot anticipate what the settlement might be. The hon. Gentleman has made his point and I do not think that it was improper for him to have done so.
  Sir T. Kitson: We are grateful for the way in which the Minister has answered the debate, but may I ask that when he talks about pay recommendations under the guidelines he bears in mind that one special group—privates and signalmen, particularly the young married men—face
  1220
  special difficulties, and the experience in my constituency is that a 10 per cent, increase will just not cover their problems?
  I appreciate the difficulty that the Minister faces in relation to the Government's guidelines, but they will not solve the problem and should not be taken as an overall increase. Will the Minister go back to the review body, talk on these lines and point out the special difficulties faced by the people to whom I have referred?
  Mr. Duffy: Among the notes that I made during the speeches were two starred items concerning Service families in Aldershot and signalmen at Catterick. I certainly intend to raise both issues with my right hon. Friend and, indeed, with other Service Ministers. In fact, the Secretary of State is most interested in the debate.
  I do not think that anyone will be surprised if I say—without detracting from the other debates—that it is this debate which will get most attention tomorrow and in the days ahead. The depth of feeling behind much of what has been said in this debate demonstrates again the very real appreciation of the country as a whole for the work that the Services do. That appreciation is supremely well deserved and is fully shared by the Government.
  This is a point that it is all too easy for Ministers to make. Ministers frequently make it, but it nevertheless needs to be made again. I am referring to the professionalism of our Armed Forces and to their skill and devotion to duty, which they have demonstrated over recent months not only in the fight against terrorism in Northern Ireland but also during the firemen's strike.
  I, along with my fellow Service Ministers, visited Service units throughout the country during the course of the year. We were impressed again and again—as always—when we visited the Service units. No matter the task or the situation, they always seem to come through with a first-rate job. More recently the Services were involved in the blizzard emergency in the South-West—as the hon. Member for Truro (Mr. Penhaligon) will know—as well as in Scotland. My only regret with regard to the emergency in the South-West was that

  1221
  the Navy's contribution seemed to escape the attention of some people.
  Service men will understand that at this stage—with the Armed Forces Pay Review Body report and the Government's considerations on it yet to come—I cannot make a detailed prediction about the Services 1978 pay award. The increase may have to be phased to accord with pay policy, but I can and do assure the Services, as well as the House, that comparability on pay will be restored just as soon as circumstances permit.

  HOSPITAL SERVICES
  3.44 a.m.
  Mr. Peter Brooke: Some are born great, some have greatness thrust upon them, and some find themselves doing unexpected things in the middle of the night. I might have known that there was going to be a singular and unexpected role assigned to me, as, uniquely in Mr. Speaker's ballot batting order, I am accorded neither an initial nor the final letter of my name. I in no way hold that against you, Mr. Deputy Speaker.
  The first eccentricity is something of a compliment, going back to those days of first-class cricket score cards when amateurs were accorded their initials while professionals were vouchsafed only their surnames. The spelling alarmed me slightly more, because, as the American politician once said of the Press, "I don't mind what they say about me, provided they spell my name right".
  However, here I am—to maintain the cricket analogy—going in as night watchman after my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) has been dismissed under the two-minute rule, playing in his second Test, and after my hon. Friend the Member for Canterbury (Mr. Crouch) has retired hurt.
  I was ill-prepared for the excitement of opening the innings in fading light. I hope that the House will forgive me if I "play in" the debate rather than go for runs.
  The first obligation on me is to establish a framework of numbers. The United Kingdom hospital waiting list figures from Social Trends run to 629,000 in 1974, 705,000 in 1975, and 722,000 in 1976 and, from other figures that I have seen, the
  1222
  1977 figure will be worse. Hon. Members who follow me will no doubt add the urgent element to these figures. The 1976 figures, for the greater part—685,000—are, as one would expect, surgical.
  We speak tonight primarily of people in need rather than of the Government's shortcomings. I must in fairness say as many things as can be said in extenuation of these deteriorating figures. First, at the micro levels the figures can be phoney. They can be like council housing lists, in that they depend on how recently they have been considered, and how many people have died or moved away. In this case they depend on how many are registered at several hospitals. If a consultant team is making a case for another consultant one does not have to be Professor Parkinson to recognise that that element of the list will be built up fast. Equally, if, for instance, a plastic surgeon has given a patient a planned date for an operation, that place on the list is irrelevant to the list's overall performance.
  Secondly, in my constituency I have checked on present levels as against a year ago. At Westminster Hospital, taking all in all, there is no overall deterioration in the list. An increase in general surgical cases is matched by an equal fall-off in orthopaedic cases. At St. Bartholomew's there is no waiting list to speak of in general surgery, but there is a two-year list on certain aspects of orthopaedics and gynaecology.
  Thirdly, time and scatter on the list is more important than raw numbers. An elderly patient waiting for acute assessment or for a bed can be a much more serious case than the generality. Classic waits are two years for varicose veins or hernias. These may be dismissed as simply tiresome, but they are more than tiresome to the patients concerned, and for someone waiting a year and a half for a hip replacement, that can be 18 months of total immobility, while a joint replacement could mean a wait of two years.
  Equally pressing are the cases of short-term urgency. I heard the other day of a geriatric patient who could not be taken into hospital for six weeks. At the end of that period the patient had to lose a leg, because of clotting. No one can tell

  1223
  whether he would have lost it if he had gone in within 10 days. Similarly, malignancies which have to wait for between four and six weeks can be fatal. By definition, the timing is critical on abortions.
  Fourthly, in terms of being fair, I am not critical of the overall level of expenditure. Between 1960 and 1975 Germany increased its proportion of GNP spent on health more than twofold, France increased the figure by 70 per cent., the United States by 60 per cent, the United Kingdom by 50 per cent., which was on a level with Australia and was significantly above Canada, which increased the proportion by more than 33 per cent. I therefore rebut the charge so often levelled at us from the Labour Benches that we are simply in favour of more expenditure.
  Fifthly, I recognise that change occurs within different spheres of medicine. Orthopaedics is an expanding field, and hip and joint replacements are becoming common place, even for octogenarians. Cystoscopy automatically extends the waiting list, because for every new examination for bladder tumour one increases the regular numbers that one will have to do. Ten years ago Bart's was doing scarcely any coronary work; now it is heavily involved in this expanding field.
  All these things can be said in fairness to the Government, but here I must switch from being fair to being critical. I shall use the coronary bypass operation as the means of changing gear.
  RAWP and SIFT—those horrid acronyms created by someone with either too much imagination or too little—distort the resource pattern of the hospitals which practise these operations. On the figures that I have seen of a teaching hospital outside my constituency, the actual cost of performing the coronary bypass operation is £2,500. The RHA average transfer value for which the district gets credit is £322. That hospital handled a case load of about 300 in 1977 from outside the district, so the district is receiving about £100,000 for carrying out the operations, which are costing it £750,000, thus creating a deficit of £650,000, which the hospital
  1224
  must find over and above the ravages of RAWP.
  I am in no position to comment on cause and effect, but the same hospital in the expanding field of orthopaedics, without receiving any extra resources, has seen its waiting list go up from 641 to 800 in the past year. I cannot help feeling that the resource allocation system is not helping reduce the list, let alone hold it steady. It is not a function of surgeons' energy. If there is a shortage of nurses or beds, or if the theatre can be open and working only from 8.30 a.m. to 5 p.m., the waiting list remains round the surgeons' necks like an albatross.
  Secondly, there is the make-up of the list. There are always bottlenecks in the list, and it takes detailed research and creative imagination to remove the constraints. It takes what in other arenas would be called critical path analysis, and the critical path includes GPs, nurses, administrators and consultants. Consultants do care passionately for their patients, as the House would expect, but clearing up the list depends very much on the driving force of consultants, it requires good will on the part of all, but it also requires good management.
  If the consultants are browned off, as the present Government have so effectively caused them to be, that sorting out of the list is less likely to take place promptly. In the present state of morale, the consultants are less likely to let the administrators help them clear it up.
  Thirdly, although I have sought to be fair in examining the micro-aspects of the waiting lists, these distortions must even themselves out year in year out, and thus the underlying waiting list figures are getting worse.
  The shadow £9½ million that the Secretary of State has been brandishing is a sign of the times. I suppose that it passes for a strategic weapon. There have been a number of strategic weapons throughout history, but this is a shadow weapon. One can only assume that the Secretary of State hoped that it would not be noticed that the £9½ million was being double-counted. But it has been noticed, and in being noticed its use has brought attention to the fact that the Secretary of State is clearly on the defensive on this issue of the waiting lists.

  1225
  The importance of the subject is attested to by the number of my hon. Friends and other hon. Members to debate it at this extraordinary hour of the morning. I shall be greatly interested to hear the rest of the debate, particularly in view of the number of hon. Members present from all parts of the country.
  3.54 a.m.
  Mr. Bruce George: It is fashionable to denigrate the National Health Service. In this, its thirtieth year, I unashamedly record my pride in the achievements of the Welfare State and the NHS. Although I am far from being uncritical of its shortcomings, I do not think that the Tory butchery that the NHS could suffer if the Conservative Party were elected would be a solution to the obvious and undeniable deficiences of the Health Service today. If we consider the Tory alternative we are somewhat uncertain about what the public would have in store for them. We cannot go by the 31 lines in "The Right Approach", because that passage is hardly a positive indication of Conservative Party policy.
  An article in General Practitioner—a very reputable journal—entitled "The Tory road to health" points out that what has been suggested by the Conservative Party over the past few months has been an end to health centres, the abolition of one of the NHS administrative tiers, which, incidentally, the Tories themselves established, an increase in prescription and other charges, an end to the concept of the Health Service free at the point of use, and, according to this article, a return to pay beds and privilege in the Health Service.
  Will these provocative suggestions, if implemented, reduce waiting lists? Will they replace out-of-date buildings and equipment? Will these suggestions, if implemented, improve the extent and quality of service and health care? I believe that they will not.
  "Schemes like these are designed to reduce Government commitment to health care, but they are unlikely to reduce overall health care expenditure."
  Those are not my words. They are the words of Dr. Derek Stevenson, formerly Secretary of the British Medical Association. Dr. Stevenson, in General Practitioner of 11th November 1977, goes on to
  1226
  state, looking at some of the suggestions by the Conservative Party:
  "We investigated the potential of an item of service scheme while I was at the BMA. We looked into it several times and there are advantages, but once again there are vast administrative costs to consider."
  If this scheme were implemented there would be a considerable increase in administrative costs and it could lead to abuse, and evidence in the rest of Europe indicates that the advantages of such a scheme are not as great as they may appear at first sight. Certainly the scheme there does not reduce patient demand.
  The suggestion of "hotel charges" was rejected by the Guillebaud Committees 20 years ago and the DHSS's more recent calculations show that this scheme, although at first sight it might have some attractions, is not on. If, after 30 years, we abolish the principle of taxation as the sole means of finance of the NHS and replace it by some form of health insurance, I believe that this would be to the detriment of the Health Service. It would undeniably lead to an increase in spending in the high technology areas of the spectrum at the expense of the more Cinderella areas.
  If health insurance schemes were more widespread, this would be to the detriment of my constituents, very few of whom could raise the money necessary to provide themselves with adequate cover or the high cost of operations.
  The Conservative Party is being rather dogmatic in its proposals, yet in "The Right Approach" it accuses the Labour Party of being divisive and doctrinaire. Its own proposals fall into that category. How the Conservatives would improve the quality of the Health Service whilst cutting public expenditure considerably defies facile analysis. In considering some of the speeches of the hon. Member for Reading, South (Dr. Vaughan)—
  Mr. Norman Fowler: If the hon. Gentleman intends to persist in making this into a party political debate, which is quite inappropriate, will he at some stage say how he is going to serve his constituents, and what solutions he sees to the undoubted problems of the NHS?
  Mr. George: Yes. I have no intention of making this ostentatiously into a party political debate, but a debate on the

  1227
  Health Service obviously revolves round political decisions. I have a number of quotations that I want to make from statements by the hon. Member for Reading, South in which he pointed out the deficiencies of the service. I believe there are very few Conservatives with the approach of the hon. Member for Harrow, West (Mr. Page) who sought in a previous debate to reconcile the dilemma of improving the service with cutting public expenditure. He said that
  "those of us who demand cuts in public spending must have the courage not to bellow when cherished local institutions are up for slaughter on the altar of economy."—Official Report, 20th January 1977; Vol. 924, c. 815.
  This is something of a dilemma in the Conservative Party's policy and one which many people will be looking to resolve in the months ahead.
  In my constituency, which presents a microcosm of the problems facing the Health Service in general, how has the action of the Government since 1974 affected the town's hospital and medical provision, and how will it affect it for the future? Alternatively, what would happen to the Health Service if the Conservative Party's philosophy gained respectability and credence?
  The Walsall Area Health Authority, when inaugurated, was bequeathed with just about the worst hospital system in the country. There can be few hospital systems which rival Walsall for their poverty and lack of quality. That was the situation in which the authority found itself, and one needs only to look at a document such a I have here, publicised by the regional health authority, and headed "Profile of the Walsall Health Services", to see the abysmal state of the hospitals in 1974. The hospitals were grotesquely under-financed, and the consequences were apparent for all to see.
  I recall being with a delegation to meet the then Minister of State—my right hon. Friend the Member for Plymouth, Devon-port (Dr. Owen)—and in the material submitted to me by the Walsall Area Health Authority the following was said, just to indicate the extent of the poverty of the services in 1974:
  "Discussion has taken place over many years regarding the provision of a new District General Hospital to serve the Walsall area; however, progress has not been made beyond various extensive studies and pre-
  1228
  liminary planning stages and the scheme has not found entry into the latest 10 year planning programme. The new authority, faced with a situation which has deteriorated alarmingly over the past few years, feels that positive action must be taken to place a definite scheme in the long-term budget programme and … unless the Regional Health Authority can positively elevate Walsall in the scale of priorities, its position as a deprived area will be further emphasised."
  I had a meeting with general practitioners at around the same time and they presented a brief to me which pointed out the appalling situation in our hospitals—old inadequate buildings, operating theatres out of date and inefficient, the baby unit unsafe, no psychiatric beds, difficulties in attracting specialties, and cumulative neglect going back generations. I could go on almost indefinitely itemising the deficiencies.
  The finger of blame cannot be pointed in any one direction. It was a cumulative neglect.
  Since that time the desperate plight of the people of Walsall has been recognised, and two years ago in an Adjournment debate the Under-Secretary of State for Health and Social Security said that
  "There is no single definition of deprivation against which the circumstances of particular areas can be measured, but whatever criteria of deprivation one looks to, Walsall comes out as deprived."
  I indicated the shocking state of the hospitals, and in that debate the Under-Secretary indicated some hope at long last. He said:
  "It will take three years to plan the Walsall scheme, and the probability is that building will start around 1980. … The broad intention is, however, that the Walsall development will start around 1980, in other words, almost as soon as it is fully planned."—[Official Report, 4th May 1976; Vol. 910, c. 1272.]
  This was most heartening after years of believing that the district general hospital was a pipe dream, a sort of mirage, so often promised but never realised. I have in my hand the actual plans for the new building—the feasibility study, 1977. The scheme is getting off the ground. Site boring will be starting in two months, and at the end of next year, if all goes well, phase 4 of the district general hospital will begin, with 160 surgical beds, 20 medical beds, a pharmacy, fracture clinics, an X-ray unit, and four new theatres. This is really an exciting development, and it is hoped that phase 5 will begin before the end of the next planning period.

  1229
  I should not be eulogistic, even though I have before me the feasibility study. I point out to the Minister that, despite phase 4 of the district general hospital going ahead shortly, the situation is still very critical.
  I pay tribute to the Secretary of State for accepting the principles of the Resource Allocation Working Party, which has ensured that deprived areas such as my own in generally deprived regions such as the West Midlands, ironically, in fact will get a better share.
  The case for Walsall has been recognised. As the Minister wrote to me recently,
  "When the West Midlands Regional Health authority applied RAWP principles in the region Walsall emerged as the area furtherest from its notional target revenue allocation—more plainly in terms of revenue allocations Walsall is the most deprived area in the region. As the RHA seek to redress inequalities over the coming years Walsall will clearly be the main beneficiary, but I must emphasise that this will be a long-term exercise."
  An indication of how deficient the service is can be found in "Towards a Strategy for Health", published by the regional health authority in December 1977. It shows that Walsall, with a target allocation of £20 million, had an actual allocation of £12·5 million and that we in the Walsall area are 32·7 per cent. away from the target.
  I am pleased that the Minister and his Department recognise the problems of Walsall, but I should not entirely subscribe to saying that the solution will be long-term. I hope that this long-term strategy for improving the quality of service in Walsall will be rather less long-term. The distance from target is quite deplorable. It means a continuation of over-long and unacceptable waiting lists. It means a bed deficiency, regarded by the region as "very poor". The bed deficiency is running at more than 300. We are 48 beds short in general medical services, 74 in paediatrics, 108 in geriatric and 64 in orthopaedics. It goes on and on. The problem is serious. There is great difficulty in attracting new staff, consultants, doctors, nurses and others. There are five consultant vacancies at present. It is a tribute to the staff that, despite the fact that they are coming in insufficient numbers, there are any staff at all working in Walsall, in view of the much better quality hospital service on the peri-
  1230
  phery of Walsall. I pay tribute to them all.
  There are chronic deficiencies in St. Margaret's, a hospital for the mentally handicapped, and a number of critical reports have come out. Fortunately, the Department has recognised this fact by making a special allocation of £100,000 with the promise of more next year. One-third of the budget of the local area health authority has been devoted to improving St. Margaret's, and a wander round as I have often done will indicate the enormous amount which has to be done to raise the standard of that hospital to an acceptable minimum.
  We know that an enormous amount has to be done in the area as a whole. We know that considerable progress has been made so far. But even when phase 4 of the DGH is completed, it will only replace the general hospital—Sister Dora—so that even with phase 4 there will not be a significant increase in the number of beds available. Walsall will not be self-sufficient for a decade if the existing plans go ahead. It must be self-sufficient much sooner.
  I am pleased that we are given a high priority by region and the Department. I recognise the public expenditure constraints. But I ask the Minister to speed up the process by which we shall reach the minimum standards which his Department accepts. As emphasised, equalisation with the rest of the region is much too long in my view.
  I accept that additional money given to an authority which is not able to utilise that money might be wasted, but I am certain that in Walsall we are able to spend more money than has been allocated to us. I estimate after my consultation that we could absorb £750,000 per annum development addition, which is substantially in excess of the amount that we have received so far.
  Meantime, a great deal can be done even before the DGH is completed. I ask the Minister whether he will look at the possibility of emergency measures and, prior to the DGH being completed, perhaps consultants temporarily being drafted from areas which are more favourably served. Another possibility is that of advice being given to my constituents about where else to go to get treatment, because there are areas where the waiting lists are much shorter.

  1231
  Walsall is undeniably an area of deprivation—educationally, economically and certainly in terms of health and hospital care. We look to the Government not to decimate public expenditure, as has been suggested elsewhere, but to raise it. By doing this, areas like mine will get the quality of service that they deserve.
  I assure the Minister and my constituents that I shall carry on campaigning, as I have done ever since I was elected to the House, to obtain for the people of Walsall the quality of service that has hitherto been denied them.
  4.11 a.m.
  Mr. Robin Hodgson: I do not want to follow the speech of the hon. Member for Walsall, South (Mr. George) in terms of the party political diatribe with which he began his speech. However, it is fair to point out that there is general agreement that the National Health Service is short of revenue. Quite apart from the philosophy of maintaining freedom of choice, it ill behoves the Government in these circumstances to cut off the pay bed structure which generated between £40 million and £50 million badly needed additional revenue for the NHS.
  In opening the debate my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) carried out a tour d'horizon of London hospitals and referred to the situation in the capital. Then we heard of the situation in the West Midlands, and in Walsall, particularly. Unlike the hon. Member for Walsall, South, I believe that present policies being followed by the Secretary of State are failing to help the situation in the West Midlands in general and Walsall in particular.
  We have heard that the West Midlands is a deprived region—7·7 per cent. below the national average for revenue target and allocation—and how, within that region, Walsall is the most deprived part. The 32·7 per cent. deficiency in Walsall—£7 million to £8 million—is enormous, and it is one that cannot stand to the credit of this Government.
  The result of the shortfall is that hospitals are run down, staff shortages are acute, existing staff are demoralised and waiting lists are lengthening.
  1232
  I shall give a number of specific examples. During the past 12 months the accident department at the general hospital, which is the town's main hospital, has had to be closed on occasions because of lack of staff. This is not something that can be blamed on years of neglect; it is something that has happened over the short term. This accident department covers an area in which 268,000 people live and work. It is an area of major industrial activity, and accidents are unfortunately relatively frequent. Also, it covers between six and 10 miles of the M6 motorway, which is one of the busiest in the country. In the light of those facts it is not good enough to have anything but a 24-hour seven-day coverage in accident and casualty services.
  The main hospital for the mentally ill is St. Margaret's. The hospital is more than 100 nurses under strength, and the patients sleep in such overcrowded conditions that lockers have to be turned sideways in order to give a few extra inches. The weekly amount spent per patient is £47·18, compared with a similar hospital in the region, Lea Castle, at Kidderminster, where it is £76·66. This is not good enough, and again cannot be blamed on years of neglect. Something should be done urgently.
  Bed availability in Walsall is no better. By and large, it is about half the national average of England and Wales. The Minister of State, in a reply to a series of parliamentary Questions that I tabled a few months ago, said that there were 0·6 geriatric beds per 1,000 of the population in Walsall, compared with a national average of 1·2. In paediatrics, general medicine, and acute surgical cases Walsall has about 50 per cent. of the beds available in England and Wales.
  There is an acute shortage of key staff, particularly in the radiology department. The authorised establishment for Walsall hospitals is three radiologists. None of the posts is filled. Currently they have to be covered by temporary staff on secondment part-time from other areas.
  The position about the waiting lists is no more satisfactory. In gynaecology, the patients on the list per available bed number 16 in Walsall as against between seven and eight in England as a whole. That shows once again that Walsall is about twice as badly off as the nation as a whole.

  1233
  The situation concerning non-urgent operations is even more frightening. My right hon. Friend the Member for City of London and Westminster, South, referred to patients having to wait two years for hernia operations. He said that that was a thoroughly unsatisfactory state of affairs. He is lucky that he does not and nor do his constituents live in Walsall, where the waiting period for this operation is three years and 10 months. The period for gall bladder operations is one year and five months.
  This cannot be said to be anything other than a discraceful state of affairs. What is the Minister doing? We have had a promise about the new district general hospital, and we have heard talk about narrowing the gap in the RAWP allocation. But in the current year the additional allocation to Walsall totals £85,000, against a deficiency of over £8 million. By my arithmetic, at that rate of striking, it will take 94 years to make up the deficiency. As the Minister said in a letter to me, this is "a modest start". I can only reply, a modest start indeed.
  The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): I take it that what the hon. Gentleman is saying is that he is in support of the RAWP principle.
  Mr. Hodgson: I am in support of bringing the Walsall Area Health Authority up to certain medical standards.
  Walsall needs a much clearer commitment on the start date for the new district general hospital. We have been waiting a long time for it. I am slightly alarmed that on page 19 of the document to which the hon. Member for Walsall, South referred there is reference to a series of new district general hospitals for Stafford, Telford, Dudley and North Worcestershire. Nowhere does it mention the Walsall hospital. Perhaps the Minister will be able to enlighten us on that matter.
  Above all what sticks in the gullets of people in Walsall is speeches of the sort made by the Secretary of State. I have here a Press release put out by his Department in which he refers to
  "improved planning for more efficient use of scarce resources; redistribution to the deprived areas; higher priority for long neglected services for the mentally ill …; improvements in industrial relations machinery."
  1234
  Walsall has a total of £85,000 a year to solve the problem of redistribution to the deprived areas. The right hon. Gentle man talks of a
  "higher priority for long neglected services for the mentally ill"
  when we have hospitals such as St. Margaret's, and he refers to
  "improvements in industrial relations machinery"
  when last week we had the telephonists on a go-slow and work-to-rule.
  The right hon. Gentleman says that these policies are
  "being pushed through with determination in difficult circumstances."
  That will cause a hollow laugh in Walsall, and it is further evidence to the people in the area of the complacency which has become the hallmark of the Secretary of State.
  Above all, the Secretary of State has ignored the enormous amount of personal inconvenience and human suffering that occur even in minor cases. It may be difficult for us to appreciate the full significance of a figure like £8 million being the deficiency in the RAWP target, but we must not forget that in talking about this huge deficiency we are talking about the effect on a series of individuals. It is they who will suffer, and it is they who must bear the burden of the problems in the Walsall area.
  I therefore conclude by mentioning one such case. Mrs. Gladys Bickley, an old-age pensioner and a constituent of mine, is having increased difficulty in getting about because she has hammer toes. She wishes to have treatment so that she may maintain her mobility. She is keen to be able to travel round and not be confined to her home. She is worried about the increasing inconvenience and discomfort that she is suffering from her hammer toes.
  Mrs. Bickley has aplied for an appointment for treatment, and the first appointment she can obtain is on 2nd September 1980, 18 months away. During that period, Mrs. Bickley will undoubtedly become increasingly crippled and will find it subsequently more and more difficult to get about, even if the treatment is satisfactory.
  Therefore, I appeal to the Minister not just to deal with the major issues but to bear in mind the plight of Mrs.

  1235
  Bickley and thousands like her in Walsall borough. That is why I have sought to emphasise the disgraceful state of the NHS in the Wallsall area.
  Mr. George: Will the hon. Gentleman explain how Mrs. Bickley's life will be improved if Conservative proposals are implemented?
  Mr. Hodgson: Yes, because we intend to make sure that resources are directed towards those who are really in need and are not wasted on doctrinaire moves, such as the ending of pay beds, which deprived the NHS of urgently needed resources and I am seeking to draw the Minister's attention to Mrs. Bickley and the plight of people who are in a similar position because of the Government's lack of attention to them is symptomatic of the problems that beset the NHS.
  4.22 a.m.
  Mr. David Penhaligon: The Minister will not be surprised if I seek to use this opportunity to mention the state of the National Health Service in Cornwall. The matter has received a good deal of attention in the Press in our area recently. One letter was signed by 18 junior doctors from the Royal Cornwall Hospital at Treliske. Subsequent to those 18 doctors having the courage publicly to sign a letter and issue it to the Press, between 20 and 30 other doctors have added their names to the letter. In addition, there is another letter, which has been signed by over 200 nurses at the same hospital, indicating much the same line of complaint.
  There are a number of specific problems in health matters in Cornwall at present on which I should like ministerial guidance. To begin with, all Cornwall's health problems seem to centre on the lack of geriatric accommodation.
  I have turned up the figures given to me by the Department showing the number of beds per 10,000 of population aged over 65. They show that out of 94 area health authorities in England and Wales, there are only three with a smaller number of such beds than Cornwall. Let me point out that Walsall is not one of them. The three that exist are in area health authorities and are on the edge of urban areas. The figures there suggest that there is an intelligent transfer from one area to another. However, in Cornwall
  1236
  there are 57·3 geriatric beds for each 10,000 numbers of the population over the age of 65. In neighbouring counties the figures are as follows: Devon, 77; Dorset, 79; Hampshire, 68; Wiltshire, 71; Berkshire, 73; Gloucester, 85; Somerset, 85.
  Added to the sheer lack of beds available there is a second problem, which I have been unable to quantify but which exists in Cornwall, I refer to the number of people with no normal family support who choose to come to Cornwall to retire. If a person is reaching his latter years in the area in which his or her family lives, his family provides some of the care and attention that he needs in his declining years. That is not the situation in Cornwall.
  My local doctor has produced a figure the validity of which I have not been able to check, but I have no reason to disbelieve it. I am informed that the national average for elderly people with no family support is about 12 per cent., whereas in Cornwall it is about 18 per cent. We have one of the lowest provisions of geriatric accommodation of any area throughout the country, and we have the added problem of no real family support for so many old people.
  A problem for Cornwall that causes me considerable disturbance is that of the summer. I appreciate that it is easier to make up figures than it is to find facts, but I believe that the summer problem is of such gravity in Cornwall that a special investigation should be carried out to ascertain the severity of the problem. In reply to a Question, the figures being based on August 1977, it appears that about 16 per cent. of the addresses given by those occupying acute beds in Cornwall were outside the county. I do not know the accuracy of the addresses that were supplied. I do not know whether some patients gave the address of the hotel or holiday camp where they were staying. Further inquiries could be made on that score, but for present purposes I am satisfied to stick to 16 per cent.
  If the ailment for which the patient requires medical treatment is of moderate severity, the normal procedure is for a fairly quick transfer to be made to the family home when some recovery is made. However, that is impossible when the patient is living 100 miles, 200 miles, 500 miles or even 600 miles from his or

  1237
  her natural home. That means that the average stay in hospital in Cornwall may be above the average for the rest of the region.
  The words "Red Alert" in the health service within Cornwall have become a by-word for July and August. "Red Alert" means that for those living in my part of Cornwall who require operations that come into the so-called non-essential category the hospital is virtually closed down.
  I have asked Questions about the length of waiting lists. On reading the crude figures it seems that the position is quite good. For instance, in 1973 there were about 4,600 names on the waiting list in my part of Cornwall, whereas the present waiting list has decreased to 4,100. That has come about as a result of the initiative shown by those who in 1973 reorganised and made the best use of facilities. That is what has led to the reduction, but at what cost!
  The average stay for a general medical case in the United Kingdom is now 12·2 days but in Cornwall it is 8·5 days. The average stay for general surgery throughout the United Kingdom is 8·6 days, whereas in Cornwall it is 6·8 days. The utilisation of general medical beds in the country has now reached a staggering 99·63 per cent., whereas the average for the United Kingdom is 84 per cent. For general surgery the utilisation is 92 per cent., whereas the national average is 74 per cent. Those are the figures that have been supplied in response to my Questions.
  Far from the hospital at Truro being a place where loving care is administered to those who enter, it is like a factory. People enter at one end and are churned out at the other end in the manner of a factory system.
  I shall make two quotations from the letters to which I have referred. The doctors concerned write:
  "We are sending patients home before they are fully investigated, seriously undermining not only their confidence in us, but also the morale of the medical and nursing staff who know they are dealing with problems inadequately."
  The nurses say:
  "The statistics on bed usage … affect our ability to give that standard of care which is the prime motivation of every professional nurse, and for which we are trained. Our inability to achieve even a reasonable pro-
  1238
  fessional standard of care removes that sense of job satisfaction essential to the maintenance of good morale. The sense of frustration generated by our present situation creates a vicious circle, demonstrated by such factors as continuous high sickness rates, and high staff turnover, all leading to an exacerbation of the situation—in short, the patient will suffer."
  Recently wide publicity was given in the county to a very sad case which centred on a coroner's inquest. A lady in Treliske was sent home before she should have been. Complications set in. When she was readmitted, it was too late. The present situation is bad. With a bed utilisation rate of 99·63 per cent., nothing further can be done.
  Extra money has been allocated to Cornwall—£400,000. That will be very welcome. As the local health authority is running at a deficit of £600,000, it will be seen how necessary it is. In effect, it means that it will now go bankrupt slightly slower than it did before.
  The most amazing economies have been considered and seriously debated. One possibility, which received publicity in the local Press, was the possible stopping of the hospital car service. How such a proposal in a rural part of the country could have been conceived, other than out of sheer desperation, I do not know, but it was seriously considered, cost-analysed and, I fear, nearly put into action.
  The last point concerns Cornwall's peculiar population trends at the moment. I do not know why it is that an economy which boasts 14 per cent. male unemployment should have an increasing population, but that is the position in Cornwall. Apart from areas for which population increases are planned, Cornwall has the fastest growing population of any part of the country.
  The only figures that one can look up—the census figures are meaningless and old—are those of the electorates for constituencies. The five Cornish constituencies had an electorate of just over 295,000 in 1974. The most recent statistics that I could get were for 1977. Between 1974 and 1977 that electorate had increased to 310,000—an increase of 5 per cent. in three years. That fits in with the general figures quoted in the county.
  I have outlined the problems as I see them. I look forward with great interest,

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  as do the doctors and nurses who have written to the Minister of late basically posing the same questions as I have posed, to the answers that the Minister will give.
  I regard an increase in geriatric facility as the key to getting out of Cornwall's difficulty. Clearly, the elderly are still being treated, but in beds which were not designed for them. That is putting great pressure on the remaining facilities.
  I should like a thorough investigation into the effect on Cornwall and perhaps other summer visitor areas—Cornwall is not unique in that respect—of the tremendous increase in population as a result of the influx of visitors during the summer months. I should like an assurance that, even with the pathetically inadequate statistics that exist, population growths of the degree to which I have referred—5 per cent. in three years—are adequately taken into consideration when the funding of the area is considered.
  It is not just a matter of increasing the money per head for the extra 5 per cent. Capital facilities are required which would normally be accumulated over a long period by setting a small amount aside out of current expenditure each year. But for population increases of this size specific capital allowances are required. These are the questions to which the people of Cornwall wish to hear replies. I look forward to the Minister's comments.
  4.35 a.m.
  Mr. David Atkinson: When I made my maiden speech on Thursday I did not expect to be called again so soon, or at this hour of the morning. I welcome the opportunity of drawing to the attention of the House the serious problems of the National Health Service in my constituency, and of hospitals in particular.
  We all know how important good health is to our quality of life. It is the major consideration. For this reason it is easy to become emotional and almost neurotic about health. It is especially easy to create and respond to sensational headlines which indicate that the Health Service is falling down on the job and on the verge of collapse. It is equally easy for those responsible for the Health Service,
  1240
  when faced with such criticism, to overreact the other way and to dismiss it as sensational. It is easy for them to say that there could be a problem, that it is nothing that they do not know about, and that they have it under control.
  On important issues such as the nation's health, I prefer to hear what those who are involved professionally with the problems, the patients and hospitals, have to say about it before I suggest political solutions. When the professionals speak, not a happy picture emerges.
  Last month doctors and consultants from two areas which are geographically far apart—East Anglia and the West Country—sent letters to the Minister which contained the same fundamental message. It was that hospitals are understaffed and that patient care is suffering as a result. In a letter to the Secretary of State the junior staff at Truro maintained that in the last few weeks
  "it has been almost impossible to admit patients from the waiting list.
  "We have had to refuse admission to some acutely ill patients. Those patients who are admitted, are done so at the expense of discharging others who should ideally have stayed."
  Another letter, from 45 Norwich district consultant staff, refers to three consultants resigning to take up posts abroad because of the deteriorating financial position of consultants.
  Earlier this month my area health authority was told that people in Dorset may have to wait two or two and a half years for surgery. We are told that in January 1974—a significant date—the number on the waiting list was 1,288. Last month it was 1,641. A man who is now almost blind first had an appointment for treatment in 1975. He has still not been admitted.
  It appears that the problem is not necessarily a lack of resources nationally. We frequently hear that criticism, but the problem is caused by the unfair allocation of resources to the different areas. I understand that the allocation is still based on calculations made in 1948 and that it is topped up each year. Since 1948 there have been great shifts of population throughout the country. The result is an unfair distribution of cash in favour of the big cities and at the expense of expanding areas such as mine, which should

  1241
  be receiving £2 million more than it is for health provision.
  The problem is not just one of mismanagement in allocation; it is also one of mismanagement of existing resources, coupled with a lack of co-ordination throughout the entire caring system. This was particularly brought home to me at the weekend, when I was speaking to a local consultant surgeon who informed me that many elderly patients who enter hospital for straightforward operations—for example, a fractured femur—and who normally would be ready for discharge after two or three weeks at the most, often cannot be sent home because they live alone or because they have an elderly partner living at home who cannot cope with them. There are no guaranteed adequate back-up facilities in the form of home helps, health visitors, social workers, and so on, with the result that these elderly patients remain in those beds.
  At the same time, in the same hospital—the Royal Victoria Hospital in Boscombe and Bournemouth—there is a urologist who is working round the clock to clear an in-patient waiting list that stood at 386 last month. The area health authority is prepared to appoint another urologist but cannot do so because there are not enough beds. This is an Alice-in-Wonderland situation, which makes one inclined to believe some of the more sensational headlines referring to a crisis in the National Health Service.
  But we have a more sinister situation to consider, regrettably. Again I refer to the last meeting of my area health authority and the chairman's comments. He said:
  "A lot of the problem has been caused by industrial action of one kind or another. This always builds up the waiting list, and when you are doing as much as you can, you cannot do anything to catch up."
  What kind of industrial action are we talking about which is contributing to these waiting lists? The hon. Member for Walsall, North (Mr. Bruce) referred to the 1,000 telephone operators who are working to rule, which has led to doctors having to queue up in corridors to use public telephones to allocate emergency beds. Last year, we had members of the Transport and General Workers Union in hospitals in the Epsom health area looking through medical supplies to the elderly
  1242
  and mentally ill during an eight-day strike by ancillary workers over a new rota system. Again, in Hackney we had inexperienced NALGO workers left to handle the switchboard and to operate the special emergency telephone system for cardiac arrests after telephone operators and domestic staff walked out of the Queen Elizabeth Hospital for Children. Surgeons had to postpone operations.
  It is events such as those that led one of our most experienced and promising consultants in the service—he is a consultant obstetrician and gynaecologist at King's College and Dulwich Hospital in London—to say:
  "Five years ago, it was a disgrace to cancel an operation. Now it's commonplace … Like any nationalised industry, the Health Service is rapidly being dominated by unionised non-medical staff. The inevitable result is that patients will die."
  It is comments such as that that encourage questions such as who is running the Health Service, and for whom?
  There is a deteriorating situation in our Health Service, and it seems to me that there are a number of sensible actions that the Minister can take to begin to reverse it. First, I hope that he will try to match existing resources to existing needs fairly throughout the country so that declining areas, such as Liverpool and London, do not take more than an equal share of the national cake from the expanding areas such as South Dorset or Cornwall.
  Secondly, if there is a lack of back-up services which is preventing patients from returning home to adequate care, cannot there be a crash programme to return to the pre-Seebohm system of specialised health visitors to deal with particular client groups, such as the elderly?
  Thirdly, we need to discover the full effect on our hospitals of the industrial action, official and unofficial, and to assess the serious effects that this is having on patients and waiting lists. We need to face the reality, that there will never be enough State cash for the National Health Service to satisfy the needs. We need to start encouraging the investment of private money into the service through more pay beds and the building of more private hospitals, because everyone will gain from this. There will be better facilities, shorter waiting lists, more cash to go

  1243
  round, a wider choice of health provision, satisfied staff and, above all, better care for the patient and this is surely what our national health should be all about.
  4.46 a.m.
  Mr. Norman Fowler: I agree with a great deal of what my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) said and I compliment him on his second speech to the House. Since it was made at 4.35 a.m., it must be some sort of record.
  Like many other hon. Members, I shall concentrate on problems in my area but I shall do so in order to point to the evidence of a general trend inside the National Health Service.
  I have in mind the Good Hope Hospital at Sutton Coldfield and the acute problems facing the hospital or, more accurately, the patients. I raised this matter on the Adjournment on Friday and I make no apology for returning to it.
  We have just over 400 acute beds at Good Hope Hospital, which serves a population of 310,000, taking in not only Sutton Coldfield but north Birmingham, Tamworth and Lichfield and parts of Aldridge-Brownhills. For such a population, the hospital should have more than 750 acute beds. The problem is that it is only a little over half a hospital.
  The result is waiting lists in all areas and all specialties. Orthopaedic patients are waiting for hip operations for four years or longer. I have a letter from a consultant at the hospital, Mr. Cozens-Hardy, who tells me that he has 13 patients who have been on the waiting list for total hip replacements since 1974. There is no question but that the delays are causing personal suffering and distress.
  I have a letter from a constituent who, talking about his wife's mother, says:
  "She is 74 years of age and has suffered for a considerable time with arthritis of the hip and is in constant pain and is in need of an operation for the insertion of a plastic joint. Her doctor informs her that there is a waiting period of about four years. I think that it is disgusting that a 74 year old woman is told she must wait until she is 78 or 79 by which time she will probably be too old or unable to stand the operation. I would point out that she lives alone in a first floor flat and is finding it increasing difficult to use the stairs. She has had numerous falls and lives in fear of causing herself more serious injury."
  1244
  That is the sort of letter which is all too common and is being received by myself and other hon. Members whose constituencies are in the Good Hope catchment area.
  The crisis at Good Hope is not confined to orthopaedic patients. General surgery patients can wait for five and a half to six years for operations such as hernia operations. In one of the most serious areas, children needing eye surgery must wait on average for four years. I do not think that the Minister of State would challenge that this is the position. What hope can the Government hold out for the hospital?
  In my Adjournment debate on Friday 17th March the Under-Secretary of State replied:
  "The facilities now available at Good Hope are broadly sufficient for its North Birmingham catchment population. The present difficulties are due to the fact that up to 150,000 people in South-East Staffordshire are also looking to Good Hope, and, on present plans, are likely to continue to have to do so until the late 1980's."
  That, again, underlines the continuing nature of the crisis. Basically what the Minister is saying is that the Government cannot promise any substantial improvement until the mid-1980s at the earliest and very probably the late-1980s. The fact is that on present plans the patients will have to go on waiting and suffering because that is the reality of the lists that we are discussing tonight.
  It was because of that position that Mr. Cozens-Hardy called his meeting of patients 10 days ago, which received a great deal of attention from both the newspapers and television companies. It was the first meeting of its kind where patients actually expressed their feelings about the situation in the NHS. We hear from the politicians, from the unions and from the medical professions, but rarely do we hear from the patients themselves. But that is what the NHS is all about. It is about serving the needs of the patients.
  The message of that meeting was clear. I would point out to the hon. Member for Walsall, South (Mr. George) that it was not a criticism of the people working in the NHS. Even less was it a criticism of the NHS concept itself. It was simply an affirmation that something must be wrong if young housewives, at one end of the age spectrum, and retired people, at the other, have to wait four years or more for

  1245
  hip operations. It was an affirmation that something must be wrong if young children have to wait four years or more for an eye operation.
  It was a meeting which did not proffer solutions but which asked questions. If I were to make one point in this debate it is that we should in no way seek to minimise the problems in the NHS and that we should listen to the kind of questions and problems that are being put forward by the patients themselves.
  Let me add that the meeting which Mr. Cozens-Hardy organised in Sutton Coldfield was certainly an unusual meeting. It was perhaps the first of its kind. Nevertheless, it was quite wrong for the Secretary of State—when questioned about this the following day—to hit out at Mr. Cozens-Hardy and accuse him of being politically motivated. Mr. Cozens-Hardy may have made criticism of all politicians for their failure to be able to respond, but certainly he was in no way, shape or form putting forward a party political case.
  I would say in all seriousness to the Minister of State that it is a great pity that when a sincere man seeks to try to express the frustrations of NHS patients he should be criticised by none less than the Secretary of State himself as being a politically motivated man. That was not the case, and I now ask the Minister of State to take the opportunity of putting the record straight. His hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) took a tape recording of the meeting and delivered it to the Minister. If it has not yet percolated through to him, doubtless it will. I hope that he will listen to it.
  I ask the Minister to do one further thing. Will he consult the hon. Members for Perry Barr, Birmingham, Erdington (Mr. Silverman) and Lichfield and Tam-worth (Mr. Grocott) and ask them whether they thought that the meeting was politically motivated? I think that they will all confirm that it was not. That meeting was a genuine attempt to express some of the concern that exists in the Health Service, and it is up to the Minister now to withdraw the slur on the surgeon who was seeking to do that.
  I hope that the question of the Health Service can be dealt with in as nonparty political a way as possible. I hope that the standard we can use for the
  1246
  debate is not the standard of knock-about party politics. That would be totally inappropriate. The standard to be used must be patient care—the interests of the patients themselves.
  I recognise that Good Hope hospital is part of a much bigger national problem. A waiting list of 600,000 people is a terrifying figure. Above all, it presents a challenge to politicians in this House. There is a great deal of common ground on health matters in the House of Commons, notably a commitment of all parties to the Health Service itself. It should therefore be possible to have a constructive and sensible debate on health, not a party political debate in the worst sense.
  We should now be seeking possible ways forward. Economies are possible in the Health Service, and perhaps funds could be diverted to the treatment of patients. Surely to this end improvements could be made in administration. But we are still left with the crucial problem of getting more resources into the NHS, and it is on that matter that the debate should centre.
  We have had the great education debate. We could now have a debate on health, geared to the question of resources. Some will say that no debate is called for, that the present system of financing the Health Service is correct and that it requires only more public expenditure financed out of general taxation. But I fear that if we pursue that course we shall be debating the same question in five or 10 years' time. The problem will be that the position will by then have got much worse.
  We should now examine all possible ways of supplementing the taxpayers' contribution. A number of options are canvassed, such as moving to some form of insurance-based scheme to provide at least part of the finance of the Health Service, examining where charges could be made without causing hardship. If that is not the right way forward, let us discuss what is. Above all, let us have a sensible discussion of how resources can be brought into the service and how that can be to the benefit of the patients.
  That is not a criticism of the service, which functions as well as it does only because of the magnificent work and devotion of those who work in it. The trouble is that it is now failing to provide for many thousands of patients. We

  1247
  must give some hope to those who are waiting for treatment. On the Government's own statement, that hope is denied to them at present.
  The issue is, what are the interests of the patients? There may be very difficult questions to answer. But we do not serve patients' interests by ignoring the questions, nor should we seek simply to attain a quiet life for politicians. The principles and questions here are fundamentally too important. We should start talking seriously about how we can get more resources into the Health Service.
  5.1 a.m.
  Mrs. Lynda Chalker: This has been a very valuable and interesting debate. The contribution of my hon. Friend the Member for Sutton Coldfield (Mr. Fowler), who said that we had a duty to examine all possible sources of finance for the Health Service, was one of the good things that sometimes come out at 5 o'clock in the morning when we have these long debates.
  I congratulate my hon. Friend the Member for City of London and Westminster, South (Mr. Brook) on raising the question, and I congratulate other hon. Members on joining in at this late hour. My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and my hon. Friend the Member for Reading, South (Dr. Vaughan) regret very much that they cannot be here, which is why I am in a slightly unaccustomed position.
  I have for a long time been extremely concerned with the Health Service, not only in the North-West and the Mersey regions, where we have had particular problems, but across the country. What is bothering people is the fact that this is the first opportunity we have had for some time for a straightforward debate in which we can put the facts on the record clearly and unequivocally.
  The answer about waiting lists given in column 728 of Hansard on 22nd February brought many groups up with a jolt when they saw what had been happening in the Health Service. From 526,000 on the waiting list at the end of December 1970, down to 479,000 in December 1972, then the waiting lists climbed steadily to 607,000 at the end of
  1248
  December 1976. That has shown us just how bad things have become.
  But it is not only that things have become bad. It is also that we have not had the degree of frankness that we would expect in discussing these matters in the House. My hon. Friend the Member for Reading, South alerted the House to the fact that something was wrong when he asked the Secretary of State about the increasing waiting lists since 1974. The right hon. Gentleman the Secretary of State replied:
  "We now have a period of increasing activity in the Health Service, which explains why the numbers on the waiting lists are coming down."—[Official Report, 22nd November 1977; Vol. 939, c. 1292.]
  Whether or not the right hon. Gentleman intended to mislead, he did indeed mislead. In reply to my hon. Friend the Member for Devon, West (Mr. Mills) on the same day he had said:
  "The health authorities are spending £9½ million this year. That sum is designed positively to reduce waiting lists."—[Official Report, 22nd November 1977; Vol. 939, c. 1291.]
  If that was not enough, in another place, in answer to my noble Friend, Lord Sandys, on the question of waiting lists, the Secretary of State's noble Friend, Lord Wells-Pestell, said:
  "I would point out that my right honourable Friend the Secretary of State recently said that £9½ million would be available to help regional health authorities, through their area health authorities, to come to grips with this particular problem. We have been told that, if there could be renovation of operating theatres, the provision of new operating theatres, restoration of wards and the creation of new wards, it would all help—as indeed it would—to reduce the waiting lists. The sum of £9½ million has been made available in the forthcoming year to enable area health authorities to do precisely that."—[Official Report, House of Lords, 28th February 1978; Vol. 389, c. 360–1.]
  We hoped that that £9½ million would start to bite into the problem. However, we have discovered from the recent debate that that was not an additional £9½ million. So the situation has steadily built up to an increasing waiting list without extra resources. We view the issue with grave concern.
  Last Friday, in reply to my hon. Friend the Member for Sutton Coldfield, the Under-Secretary referred to long orthopaedic waiting lists. Many other references have been made to severe waiting lists by my hon. Friends and by the

  1249
  hon. Member for Truro (Mr. Penhaligon). The Under-Secretary said:
  "I do not deny lack of facilities is to some extent to blame for the lengths of waiting lists for both in- and out-patients, and that is certainly true in the case of Good Hope."
  The hon. Gentleman went on to make a more important statement:
  "I am convinced that better management practices can compensate appreciably for lack of resources for the overall expansion of services."—[Official Report, 17th March 1978; Vol. 946, c. 943.]
  It is to that that we must look.
  We have been talking about better management practices for a very long time. That is why I am as concerned about the subject as I am. Back in November 1976, in answer to my hon. Friend the Member for Newbury (Mr. McNair-Wilson), the Minister of State said that about 27 per cent. of those on waiting lists had been waiting for longer than a year. On 10th February 1977 another parliamentary Answer indicated that throughout 1976 the Secretary of State had been reviewing waiting list management. In May 1977 the Secretary of State announced his new offensive against the traditional foe of the National Health Service—the waiting list.
  We do not deny any of this, but we seem to have been doing an awful lot of talking about the subject for a very long time without any appreciable benefit to the service and, above all, without any benefit to the waiting patients.
  One of the problems we know about, although it does not seem to be the case in Cornwall, as the hon. Member for Truro said, is that of bed occupancy and throughput. I know that one Portsmouth gynaecological surgeon increased his throughput dramatically by having day patients, by using five-day wards, and so on. That put the whole of the rest of that hospital's services into utter confusion, because with a high throughput of beds the nursing staff must be appreciably greater. I can speak from some personal experience in this regard from having been a helper to nursing staff years ago.
  Not only must one look at operating capacity and nursing ability to cope with increased throughput, but one also requires extra radiography and pathology and various other ancillary services. Those just are not available to make better use of the existing facilities.
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  Yet this problem seems hardly to have been examined by the Secretary of State. If it has been examined, very little useful guidance has been given to area health authorities and the many hospital teams dealing with their longest ever waiting lists.
  As the position was worsening, we thought it right to bring it before the House. It is no good trying to kid us or the public that all is well. I suppose it was a step forward when we had a release from the Secretary of State last week calling for a balanced debate. We agree with much of what the right hon. Gentleman said in that release. We do not find fault with it, but there are matters on which we need more figures and honesty from the Secretary of State. In an article he wrote, or had written for him, in Pulse on 18th February this year he proudly talked of the
  "steady level of capital spending at about £400 million per annum."
  I remind the House that in 1972–74 capital spending was £600 million per annum and the pressure on resources is not easing up. It is actually becoming greater. That does not seem to emerge from all that I have read. The average rate of NHS spending, taking capital and revenue together, from 1972–73 to 1977–78 was just below 2 per cent. per annum at constant prices. For the period 1977–78 to 1981–82 it is planned to grow at only 1·7 per cent. per annum. Taking revenue alone, the 3 per cent. growth over the past five years will be actually cut back to a 1·6 per cent. per annum growth over the next four years on the figures so far made available. All this is saying to us that we shall not have more money under the present Government plans, and therefore we have to make even better use of the resources which are available.
  Many of us have grave doubts about some of the detail of the Resource Allocation Working Party plans, partly because much of the planning is based on very out-of-date population trends. The Minister will know as well as I the problem that Northampton has faced with the growing population of Milton Keynes, which was just not allowed for in the forward estimates of the area money allocated by the region. Trent Region has had mammoth problems in

  1251
  coping, and the Minister has already received delegations from doctors and Members of Parliament in the region.
  How can we make the available resources stretch any further? This is where I think that the advice from the Department has not been forthcoming at a time when it was so urgently needed. The British Medical Association has criticised the Government very strongly for robbing Peter to pay Paul—in other words, the plan to take money from the acute services to put it towards some of the long-term services.
  The Minister knows full well that I do not deny and have argued consistently that the mentally handicapped and the mentally ill need a better proportion of the resources, but there is no point in cutting the resources for acute care today when it could cause a larger proportion of long-term chronic sick in the future, if they are not dealt with in their acute stage.
  We have to look for new sources of finance and we have to look for much better management. Where do we start? I believe that we have to educate the public about costs and demands. The Minister will agree that the public has no idea of the cost of the services that it is very often using. That is not to say that people should not be using them and having them free when they are ill. But we have to create understanding and not cover up.
  I notice that in some local management there is a call for greater flexibility. One of the administrators in Liverpool was offered another dialysis machine, the money for which would be raised by contributions from work forces in different factories. It was a thoroughly worthy idea, but the problem is that if he had that machine he could not use it. He cannot use subscribed funds to pay nursing staff or technical staff that he would need to put the machine into operation. There is, therefore, a lack of flexibility of spending at the local level.
  There is something even worse, to which my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) referred. That is the lack of trust which exists between the different sections of the health profession. We have seen disruption of all sorts in the last four years,
  1252
  and unequivocally we say that disruption of patient care by any group, wherever it comes from, is wrong. But it took an awful fight to get Government condemnation of one of the prime disrupters in recent weeks—the telephonists.
  We hope very much that the Government will sort this problem out. The point is that the understanding of what is being faced by the patients, and by the surgeons when they cannot make arrangements for their patients, seems to be totally lacking. There is, therefore, a fear and lack of trust. We condemn all industrial action, but let me say that I think greater efforts have to be made on industrial relations at local level within the health services.
  We look to the lead of the Minister, as a member of the well-known union involved in the Health Service, to try to help promote better industrial relations and cut out some of the really niggling disruption, where the only people who suffer are the patients.
  There are plenty of reasons for using every resource and facility which comes the way of the National Health Service. If there are volunteers wishing to help with patient transportation, flowers or books in the hospital, we believe that they should be used to the utmost in order to leave the professional staff to do the professional jobs in the health services. If there are people willing to contribute something towards health care, surely this should be another resource for the health services. We have a mammoth organisation of 800,000 employees spending £6,000 million per annum. It is too large and too vital a service to the country to let it go by default by not taking the necessary action to promote good working relations. There is no doubt that all those who are involved in the caring services want to make the NHS work. It can work. It could work a lot better if it had leadership, the right sort of advice, and much less interference with its day-to-day management, which should be done at local level.
  No new hospital, whether it be for the hon. Member for Walsall, South (Mr. George) or anyone else, will be any good unless we use every resource we have to run it properly. We should seek to get rid of the rush to spend the end of the year's allocation, which is reported in one

  1253
  newspaper cutting after another, because there is no proper system of roll-over of local revenue funds. We should be looking at every way in which the cash limits can be made to work at local level so that people are conscious of the health spending that they are undertaking on behalf of the nation.
  I believe that there is a lot that we can do to cut back the bureaucracy still further through natural wastage—and do not let me hear from the Minister that the 1974 reorganisation was responsible for all of it. If he has read the Select Committee report he will know that from the end of the 1960s the NHS administration was growing steadily. It is true that there was a hiccup in 1974, but it was little more than a hiccup in what had already been established over the previous 10 years as a growing administration.
  Mr. Penhaligon: Do I gather from that comment that the hon. Lady is defending the reorganisation of 1974?
  Mrs. Chalker: The hon. Member gathers from that comment that the reorganisation of 1974 had to be allowed to settle. But there are ways in which it can be improved still further, and in due course, at the right time, the hon. Gentleman will be told about it. I believe that the overall framework is probably going in the right direction—this is a personal view—but that it needs modification, as many hon. Members on both sides of the House have said.
  Mr. Moyle: In that case, if the framework is right, I take it that the hon. Lady disagrees with her hon. Friend the Member for Reading, South (Dr. Vaughan), who wants to abolish the area level.
  Mrs. Chalker: I thought that I used the words "overall framework". I do not disagree with my hon. Friend the Member for Reading, South, but I do not think that the NHS, its employees or anyone else would welcome a major reorganisation. In any event, it would be wise to await the report of the Royal Commission on the NHS, which I am sure will be presented to us before very long.
  We know that the funds are not as plentiful as any of us wish to see. But there is a duty on this House and especially on the Department to make sure that there is wise spending and that no source
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  of revenue is turned down. We know that standards have fallen. We know that something has to be done to improve standards of health care and to reduce waiting lists. Whatever means are used, that requires leadership, and that is the one thing that we cannot genuinely say we feel that we have had in the NHS over the past few years. We hope soon to see a positive change from the Secretary of State and from the whole Department.
  5.20 a.m.
  Mr. Tony Newton: I welcome the opportunity to contribute to the debate. I shall be brief, in view of the number of speeches that have been made already, and the Minister's desire to reply.
  I certainly do not want to take time with a long stream of statistics that almost any hon. Member could give about the problems in his or her area. However, I do wish to refer to some of the problems in my constituency, and particularly in the Chelmsford and Colchester districts of the Essex Area Health Authority.
  I confirm what has been said about the rising anxiety felt by everyone within the NHS and among those using its facilities. One of the remarkable features about the concern felt in the NHS at the moment is the extent to which it appears to be shared by everyone—administrators and professional people at every level in the NHS are deeply worried, just as much as the public.
  Every hon. Member must get a steady stream of people who are concerned about what is happening to them and their relatives within the NHS. Within the last two or three weeks, for example, a constituent has been to see me about a serious waiting list problem affecting his daughter. Last Saturday morning I spent a long time talking to people whose mother was very seriously ill with cancer, and who felt that she had not had the degree of sympathetic care and support that she should have had. I do not pretend to be able to make an instant judgment of all these cases, but they do illustrate the dilemma that we all face.
  Hon. Members are faced with the problem of knowing whether to create the maximum amount of public fuss. If we do we can be accused of undermining morale even further, and appearing to attack the staff, which we do not intend because we know their problems. But

  1255
  what is clear is that if the stops were really pulled out on all the problems that are drawn to our attention, and especially on every case of people who have died and whose relatives are not satisfied with all the circumstances but who for understandable reasons do not want to create a public row, we would need not one NHS Ombudsman but a very large team to cope with all the complaints.
  I have had formal approaches from local authorities, consultants and everyone in the service. The most depressing single thing in the NHS is the fact that in my area, anyway, nobody ever invites one to see how good the facilities are, or seeks to display them with pride. Many industrial firms want to show off their factory or production line. But once one sets foot inside the hospital door, the staff do not say what a marvellous job they are doing; they point out how difficult conditions are and how difficult it is to cope.
  Nothing has done more damage to the NHS than the Secretary of State's appearance of complacency last summer. It would be wrong to say that without this complacency people could put up with the situation, because they are at the end of their tether. But at least, if the DHSS would only recognise and admit the extent of the problem, and give some clear idea how it is to be solved, people could bear the difficulties more easily. I hope that we shall get more from the Minister than we have had from the Secretary of State over the past two years.
  In my constituency there is concern about all the problems raised tonight, but there is one that is particularly disturbing—the deep concern about the state of the casualty services. The main towns in my constituency are Braintree and Witham, which lie between Chelmsford and Colchester. The two districts overlap in many respects, and my constituents have to look in both directions.
  That means two things: first, they have to travel quite long distances, so that there may be long delays in getting emergency casualty treatment; secondly they are looking to two major towns, Chelmsford and Colchester, where the facilities have in no way kept pace with a rapidly increasing population. These problems are compounded by the fact that in
  1256
  Chelmsford the accident and emergency department at the Chelmsford and Essex hospital is located in a position where serious traffic delays can occur at certain times.
  The anxiety about casualty services is great. Local firms write to me about their worries concerning what would happen if somebody was injured at work. They are right to be worried. Local headmasters are in process of raising a petition about the casualty facilities because they are deeply anxious about what would happen if a child were injured at school. They are right to be worried, and they will have any support I can give them in pressing the case. Yet all they have been told is that the new accident and emergency department, together with other developments which should be taking place in Chelmsford have been put back from 1982 to 1984. Their mood is that they will believe it when they see it, because year by year we have been told that something will happen and year by year the dates are deferred still further.
  My constituents—I am talking about professionals as well as lay people—believe that the situation has become a scandal. I share their view. Underlying this—this is the point on which, particularly, I ask the Minister to comment—is what I take to be the undoubted fact, about which there can be little dispute from the Department, that Essex is grossly underfunded as a result of the failure to allow for the increase in population which has taken place not just in the past few years, although the increase is continuing, but over virtually the whole period since the war.
  All the towns that I have mentioned—the two which are concerned with my constituency, Chelmsford and Colchester, which do not lie within it, and Braintree and Witham, which do lie within it—have had enormous increases in population. In several cases the population has doubled or more than doubled in a relatively short time. Yet since 1945 there has been no new hospital project or major improvement in the whole of that part of Essex. Neither Chelmsford nor Colchester has had a new hospital or major improvement since the NHS was inaugurated. In that time the population has increased out of all proportion and includes large numbers of young couples with children.

  1257
  My hon. Friend the Member for Wallasey (Mrs. Chalker) referred to the contribution which better management practices, incentive budgeting, and the possible drawing of funds into the Health Service in other ways could make. I would add that quite a significant and immediate contribution could be made if the Government would abandon their ridiculous policy on pay beds, which is sucking money out of the service at a time when the Government are unable to provide proper facilities for my constituents and many others.
  Apart from those relatively limited points, the Government must give a dearer indication of their intentions, if not about the Resource Allocation Working Party exercise in detail, then about the problem which was the reason for setting up RAWP. We understand why the Government see some difficulties about that at a time of financial constraint, but it cannot be right to leave in their present position areas such as that with which I am concerned, which have had no increase in resources for health to match the increase in population which has occurred over a long period. We have to face up to the need to reallocate resources, whatever statistical basis we use to do it.
  As a general proposition, Essex Area Health Authority needs more funds. There is a problem because it is part of the North-East Thames Region, which on a RAWP basis is over-funded. I sometimes think that the worst thing that can happen is for one to be in an under-funded area in an over-funded region. But that is the situation in Essex, and the Minister must face it. Steps must be taken towards moving resources to where the population has increased.
  The bitterness—and I do not think it is too strong a word—that now exists on this score in Essex, and the fact that the RAWP exercise has not been properly carried through in our area, are compounded by the fact that when it comes to taking money out of Essex to put into London under the rate support grant the Government are prepared to move very fast indeed. For four years the Secretary of State for the Environment has been doing his calculations on how resources should be moved around the country. He has come to the conclusion
  1258
  that Essex is one area that should lose a share of Government grant, and one cannot see the right hon. Gentleman for dust.
  Year after year rate support grant funds are being taken away from Essex. Yet when overall NHS calculations clearly show that there should be some redistribution from London, in which the population is falling, to such counties as Essex, where the population is rising fast, there is back-pedalling, and my constituents are being left in the lurch. That cannot be allowed to continue.
  I do not expect the Minister to be able to comment on every detail of local problems in my constituency, but I hope that he will say something about the pattern of the use of resources in the NHS and tell the House what the Government intend to do to ensure that Essex gets a share of NHS resources commensurate with its population and needs.
  5.33 a.m.
  The Minister of State, Department of Health and Social Security (Mr. Roland Moyle): We had had a long and interesting debate, even if sometimes it has not been as well-informed as it might have been. A large number of points have been made with which I am sure the House would like me to deal. I shall try to deal with as many points as I can and shall take them as quickly as possible at this hour of the morning, but it is a substantial task.
  I think I can put the hon. Member for Braintree (Mr. Newton) out of his misery and say that we recognise that in NHS terms Essex is historically under-funded. We intend to deploy resources towards Essex, and I am sure that the hon. Member for the City of London and Westminster, South (Mr. Brooke) will co-operate fully in that exercise since it is his constituency—and mine—that will have to make some contribution towards this movement.
  Serious problems are involved in the exercise, and we all know that a great many Government resources are deployed in the teaching hospitals. We need the output of those hospitals at its present level, and we hope at a slightly higher level in the country as a whole, to meet NHS needs in places such as Essex in the years to come. Any deployment of

  1259
  NHS resources towards the Home Counties from London will have to be at such a rate that it does not damage the seed corn of the NHS of the future. That is an important point to bear in mind.
  I was pleased to hear the hon. Member for Wallasey (Mrs. Chalker) say that the National Health Service should be free for those who are ill. I entirely agree with her, and in that respect we join forces. I agree that the Health Service should be free for the user. I am glad that that policy has been firmly established. However, that was not always what the right hon. Member for Wanstead and Woodford (Mr. Jenkin) said from a place near the Opposition Front Bench. It is not the sort of thing that the hon. Member for Sutton Coldfield (Mr. Fowler) was saying. However, it is what we always say, and it is the principle that we shall maintain.
  If Opposition hon. Members have an alternative policy, it can only be that they could manage the Health Service better than us. They adopt the approach "Anything you can do we can do better". Surely on no other subject is the credibility of the Opposition so fundamentally strained. The fact is that they have no alternative policy.
  The hon. Lady referred to a hiccup in 1974, which she was most anxious to avoid discussing. That was a reference to the reorganisation of the Health Service. The hon. Lady claims that reorganisation has not affected the main framework of the existing organisation of the Health Service. It must be remembered that she and her right hon. and hon. Friends have not had any responsibility for maintaining the service since 1974. As a result of good electoral fortune, they left office in that year.
  In an article that the right hon. Member for Wanstead and Woodford wrote recently in Pulse he stated that he is aiming at a better management of the service. As both he and the hon. Member for Reading, South (Dr. Vaughan) voted in favour of every dot and comma of the 1974 reorganisation, the Opposition are bereft of any credibility when it comes to organising, running or managing the Health Service.
  The hon. Lady has referred to a hiccup in 1974. If that phrase ever gets round to the employers in the Health Service, it
  1260
  will be one of the biggest jokes in the service in 1978.
  There is a quaint convention that if my hon. Friend the Member for Walsall, South (Mr. George) makes a political remark, that is being political, whereas if Opposition Members make political remarks, it is not. I have had to listen to two personal attacks on my right hon. Friend the Secretary of State. He has been accused on two counts of misleading the House. The accusations are not true. The hon. Lady, supported by the hon. Member for City of London and Westminster, South, said that in the summer of 1977 my right hon. Friend claimed that waiting lists were coming down, and that that was misleading. In fact, that was the truth. It was not misleading.
  At the end of 1976 waiting lists stood at 606,000. By June 1977 they had fallen to 594,000. The latest estimate that I have is 591,000. That was the level in September. If that is not an example of waiting lists being reduced, I do not know what else it is. I am prepared to agree that waiting lists are infinitely too long and that our object must be to shorten them by all the means at our disposal.
  The hon. Lady also said that it was stated that £9½ million has been set aside to take action with a view to shortening waiting lists, and that my right hon. Friend was again misleading the House. Again, that is not true.
  Mrs. Chalker: So that waiting lists could reduce in size they had to increase from the figure that I gave the hon. Gentleman for 1972. I think that he will agree with that. Secondly, if the hon. Gentleman reads Hansard of 22nd November and studies the two columns to which I referred, he will see the passage dealing with the £9½ million. The hon. Gentleman will surely accept that that sum was available to reduce waiting lists. Indeed, that understanding was confirmed by a Government spokesman in another place on a later date. That is why the people were under the impression that there was an additional £9½ million to be used to help the waiting list problem.
  Mr. Moyle: I do not disagree that the hon. Lady formed a misimpression. After all, she has not had responsibility

  1261
  for managing the National Health Service under this reorganised system. The fact is that the £9·5 million was spent by area and regional health authorities directly towards reducing waiting lists throughout the country. There is no denying that, and that is what my right hon. Friend said. Therefore, why, because the hon. Lady formed the wrong impression listening to him, she should get so excited, I cannot understand.
  The hon. Lady said that capital spending between the early and late 1970s had fallen from about £600 million a year to about £400 million a year. I should not deny that. But we cut capital and other spending in the public sector with the agreement of the Opposition. Indeed, they were unhappy that the Government did not cut public spending by the amount that they would have cut it. Therefore, how the hon. Lady can turn to figures such as those and try to prove that anything that we do, they would do better, I do not know. The argument appears to be founded on a misconception.
  Mr. Brooke: Does the Minister agree that, on the basis of what was said by the noble Lord, Lord Wells-Pestell, in the House of Lords, the noble Lord was misled and under a misapprehension about the figure that was quoted?
  Mr. Moyle: I never discuss in detail what happens in another place. The attack was launched by the hon. Gentleman and by the hon. Member for Wallasey on my right hon. Friend the Secretary of State. I have now explained the situation. I see no grounds for any attack whatsoever.
  Remarks were made about taking money away from acute services. That is not true. Next year we shall be spending £86 million more on hospital and community health services than this year. The rate of growth of acute services is likely to increase. Admittedly, we should like to see greater priority given to caring for the elderly and the mentally ill and handicapped. We shall urge those priorities upon the various health authorities within the overall rate of growth.
  A great deal was said about industrial relations. Certainly there is too much industrial action in the NHS. Patients suffer when that happens. We want to
  1262
  improve matters in the NHS in that respect. The NHS has nearly 1 million employees throughout the country. That is a substantial number. I think that the rate of industrial dispute in the Health Service against that very large number—albeit not easy to defend—is very low and compares extremely well with industrial relations in any other comparable organisation.
  The hon. Member for Wallasey said that we were ignoring the problems of places such as the Oxford and the Trent regions. That is not true. When the Oxford Region began to explain its difficulties, I went to Oxford and met the regional chairman, his regional team of officers and the area health authority chairman. I discussed the region's problems with them. I am not suggesting that the Oxford Region has now got wealth beyond the dreams of avarice, but at least I received thanks from the hon. Member for Northampton, South (Mr. Morris) and others who are now more content with the situation in Northampton than they were before.
  The situation is the same in Trent where we have met the regional chairman and his team of officers. We have talked over their problems with them and suggested ways in which their budget can be better balanced and how important hospitals might be brought on stream to provide a good service.
  Much of the discussion has been centred on waiting lists. I am glad that my hon. Friend the Member for Walsall, South came to the conclusion that the trouble is not the amount of resources available. That is common ground. There has been much talk about orthopaedic waiting lists. They are long. When a new technique is developed, it might take 15 years to train the appropriate surgeons. It might take several years to build up operating and other necessary facilities. This is true of orthopaedic surgery. In the meantime, GPs begin to refer patients, whom they know can benefit from the techniques, to those consultants who have mastered them. Naturally, waiting lists build up.
  This is the situation in which Mr. Cozens-Hardy found himself at the Good Hope Hospital. I shall say nothing about the Good Hope Hospital in general because the hon. Member for Sutton Coldfield received a full reply

  1263
  from the Minister on Friday when I was looking at hospital facilities elsewhere. The situation has not changed since then.
  The hon. Member for Sutton Coldfield asked me to comment on my right hon. Friend's remarks about Mr. Cozens-Hardy. The hon. Member stated Mr. Cozens-Hardy's case with more tact, moderation and balance than Mr. Cozens-Hardy did when he held his public meeting. My right hon. Friend did not have the benefit of the hon. Member's contribution when he spoke. All that he had was the report of what was said at the public meeting.
  One of the statements was that some of Mr. Cozens-Hardy's patients would have to wait for 36 years for operations. I believe the hon. Member agrees that that was said. If that is so, Mr. Cozens-Hardy is grossly irresponsible to take someone on his waiting list when he knows he will have to wait 36 years. The only other thing that can be said is that he was not making an accurate statement. It was against that background that my right hon. Friend made his contribution.
  It is clear that Mr. Cozens-Hardy was conducting a campaign—not necessarily political, but a medical campaign. My right hon. Friend has no cause to withdraw any of the remarks that he made on that occasion.
  There is no doubt that orthopaedic waiting lists at that hospital are too long, as they are throughout the country. I understand the reasons for that and why some time will elapse before we can deal with them as quickly as we should like.
  Mr. Norman Fowler: I wish to get the record straight. The Secretary of State accused Mr. Cozens-Hardy of being politically motivated. I suggest that that charge would not be accepted by any of his hon. Friends who were at the meeting. If the Minister wants to say that Mr. Cozens-Hardy is indulging in medical politics, that is not objectionable. What the Minister has said amounts to a withdrawal of what the Secretary of State said.
  Mr. Moyle: No. It is in support of what my right hon. Friend said, and I
  1264
  have given the reasons why I should not condone a medical political campaign in the terms in which Mr. Cozens-Hardy was doing so a few days ago.
  I come now to the general subject of waiting lists. I do not deny that in many cases a shortage of facilities and problems of the kind that I have been indicating are the reasons for long waiting lists, but there are other causes, and I think that we have to worry about those, too. There is the level of morbidity at any one time, which may fluctuate quite remarkably.
  I have mentioned new surgical techniques. There are the referral patterns of general practitioners. Many doctors—quite properly from their point of view—refer their patients to the consultant whom they consider the best man for the job even though that consultant has a waiting list that is vastly longer than that of some of his colleagues who are as good as but a lot more unsung than the first consultant. Demographic and population changes can occur quite remarkably. Apart from Essex, where the population has been building up since the end of the war, there have been quite rapid falls in population in the centre of London and quite rapid rises in the Oxford region where there are new towns. Given the technical pace of planning and constructing new hospital facilities, that is bound to add to the waiting lists in some areas.
  Then there is the management of waiting lists. One area health authority which I visited a few days ago did an exercise and went through its waiting lists. It had not done this before, and it found that 10 per cent. of the population had moved, for various economic and social reasons, to other parts of the country.
  In addition, there are out-of-date lists. The circulation lists might be limited in many cases. It may be that general practitioners receive waiting lists only for their own districts, whereas a waiting list for their area, or for their region—or sometimes the waiting lists are for teaching hospitals in London—would be helpful to them in placing some of their patients.
  Finally, as was mentioned by the hon. Member for Bournemouth, East (Mr. Atkinson) in what, without being patronising, I thought was an intelligent commentary on the Health Service, there is the problem of industrial action. This

  1265
  is bound to push up waiting lists in the service. This is another cause for delay, and it is one on which we must work in order to eliminate it.
  The hon. Member for Wallasey commented on the things that had been said about management and said that it did not seem to be producing any action. I hope I have indicated that it has produced some action. It is not something to which the Health Service takes naturally, and as far as I can gather it is not an old idea in the Health Service. The scope for action in the management and improvement of waiting lists is substantial indeed, and in the educative process will not be a simple or quick matter to put across.
  Mrs. Chalker: I wonder whether the Minister would be kind enough to give the House details of what has happened since May 1977 when the Secretary of State announced this attack on the management of this major foe of the National Health Service. The House lacks details of what has happened.
  Mr. Moyle: The last thing that I want to do is to inflict on the House a reading out of the circular on the management of waiting lists, but I shall give the hon. Lady a copy in case she does not have one in the hope that she will be able to make use of it.
  Mrs. Chalker: I read that circular when it was issued. I do not think that it spelt out in anything like the way that is necessary the help that is needed at area level. Therefore, one circular has not changed the situation.
  Mr. Moyle: That is the last thing that I would claim. The hon. Lady wanted to know what had happened, and I can tell her that we are issuing circulars giving advice to management on the management of waiting lists. Of course, it will not be the last circular. As we learn from experience, we shall issue fresh guidance and advice as part of continual pressure on the administrative and medical personnel in area health authorities to reduce waiting lists.
  My hon. Friend the Member for Walsall, South made another speech in the campaign he has been running for four years to get more facilities for his area health authority. I am glad that he has won a new ally in the hon. Member for
  1266
  Walsall, North (Mr. Hodgson). The only trouble with the hon. Gentleman's speech was that he spoiled his case with some inaccuracy. He said that we were taking money from the NHS by abolishing pay beds. Broadly speaking, that is not true. There were 5,000 pay beds in the service before the pay beds Bill became law and 2,000 authorisations have been withdrawn fairly simply and without too much turmoil because the beds were not being used. The loss to the NHS is minimal.
  The new district general hospital at Walsall is in sight as a result of pressure from local people. It will cost a large sum of money and will be started in 1979. Resources are not the key factor. Design and planning of the hospitals are the key problems which must be solved. Walsall is the next area in the West Midlands for the construction of a new hospital. I was talking to the regional chairman on Friday about the problem. An extra £100,000 has been allocated to St. Margaret's Hospital to help it deal with its problems.
  The hon. Member for Truro (Mr. Penhaligon) adopted a slightly different approach to NHS problems in his area. I have been to his constituency and I visited both hospitals in Truro. One is rather elderly and cramped and the other, though modern, is too small. Perhaps I may cheer up the hon. Gentleman by telling him that an aunt of mine was dealt with at the Treliske Hospital, and that she had nothing but the highest praise for it and, considering that she used to be a matron in a teaching hospital, that is praise indeed.
  In places where there are insufficient facilities, the staff suffer more than the patients because they put themselves out to try to cope with the inadequacies. Geriatric provision at Treliske will be improved by the provision of a 56-bed unit this year, together with a shell for further development, should that be necessary. The Cornwall health authority has also set aside £6 million for capital development on the site in the early 1980s. Treliske Hospital is on the small side and needs developing.
  The hon. Gentleman complained that there was no family support in the area, but this is a matter for the social service departments of local authorities. I know of the good intentions for the

  1267
  future in Cornwall, but in social services I found a fairly bad performance in the past. Cornwall has a lot to catch up on. The hon. Member for Bournemouth, East raised this point in regard to social service facilities in his area. He should direct his remarks to the local authorities in the area and get them to do their job. A tremendous amount has to be done with regard to the development of social services.
  Incidentally, Cornwall will improve its position under RAWP in the years to come because it has been unfairly dealt with in three respects under the RAWP formula. The standardisation of mortality ratios and the allocations to it will be improved because of the high age figure in Cornwall. The growth of waiting for the over-65s will be taken more and more into account as well as the net target position in which Cornwall finds itself. In the future the Cornwall Area Health Authority will find these matters improved under the RAWP formula.
  Mr. Penhaligon: Will the Minister of State say a few words about the effect of summer visitors on the health facilities in Cornwall?
  Mr. Moyle: I am glad the hon. Gentleman raised that point. While the health facilies in Truro, for example, may be reasonably sufficient for dealing with the winter population of Cornwall, there is no doubt that they are under considerable strain in the summer. For that reason they need further development. They are under strain because a large number of people retire to Cornwall. These days, if one is ill one is also likely to be elderly. That builds up the pressure on the Cornish health resources.
  I was very impressed when I went to Cornwall—despite the major problems—with the way in which the health staffs were tackling the situation. I well understand the difficulties which the staffs experience and the difficulties that have been expressed to the hon. Gentleman and myself in recent days.

  BUILDING RESEARCH ESTABLISHMENT
  6.2 a.m.
  Mr. Michael Latham: I must apologise to the Minister personally for this starting time. He will appreciate that the circumstances were somewhat unusual earlier this evening. I shall say no more than that.
  Class VIII, Vote 3 of the Supplementary Estimates deals with the Building Research Establishment of the Department of the Environment. The present provision of £6,355,000 is increased to £6,531,000 and the capital building programme is increased from £1·1 million to nearly £1·2 million. These are not enormous increases, but they are significant and allow us to examine rather more closely the staffing and administrative structure of the establishment.
  As the Minister knows, the BRE contains three separate elements—the Building Research Station itself, the Fire Research Station and the Princes Risborough Laboratory. Between July 1971 and July 1974 there was a static staff position, which varied between 1,203 and 1,215. By July 1975 there had been a sharp increase to 1,304 caused by the elimination of previous recruiting difficulties and added work load. But the following year there was a sharp fall—down to 977 in July 1976, to 914 by January 1977 and a March 1978 target of 10 per cent. below 977, according to the Minister himself in reply to me on 28th January 1977. That would suggest a figure of about 880 as the target figure now.
  My first question to the Minister is, what is the present staffing figure at the BRE, in particular for the building research station itself? Secondly, have the March 1978 target reductions been reached? Are there still further cuts to be made? If so, to what level and when will they be achieved? Since drastic staff cuts have already been partly implemented, why do the Estimates show cost increases? How can it be that at a time of falling staff the revenue budget can be increased by £196,000? Is that solely a pay increase estimate, or does it involve increased staffing provision in some new directions?
  What about the £100,000 capital building increase? What is that for? No

  1269
  doubt it was planned long ago, but it seems odd for the Building Research Establishment to be involved in further capital expenditure when the staff cuts have been so severe. Perhaps the Minister will give details of that.
  I turn to two specific aspects of this Vote that have troubled me in the past, and still do. I argued in an article in the magazine Building in August 1975 that the staffing and administrative structure of the Building Research Station required attention to deal more effectively with the prevention of building failures. As I have argued many times, there have been far too many disasters both of construction and design. The names of Ronan Point, Summerland, high alumina cement, calcium chloride, woodwool slabs and Fair-field tell their own deplorable stories.
  In April 1975 the "doomwatch" functions of the BRS were divided between two materials divisions of the materials and construction department, two of the divisions of the engineering department, and the design division of the environmental department. This is apart from the specialist work done at the Fire Research Station and the work on timber at Princes Risborough. Clearly, such a structure could lead to considerable administrative confusion and overlapping, so I argued in my article that an additional deputy director should be appointed with sole and specific responsibility of initiating and co-ordinating all work on preventive research, into possible faults in new techniques, components and materials, and with sufficient power to insist that a new material is not used until he is fully satisfied with its safety from all angles.
  I was naturally very pleased when the Minister for Housing and Construction announced the setting up of the building integrity division of the BRE on 24th June 1976 specifically
  "as a focus for research on reducing the incidence of serious building failures due to new products or techniques"
  and to
  "seek out potential problems so that further investigation or action can be initiated"—[Official Report, 24th June 1976; Vol. 913, c. 616.]
  This was particularly important from the staffing angle, since only 20 per cent. of the scientific and technical staff of the BRE were wholly or mainly engaged in
  1270
  preventive work or structural or technical defects in July 1975, and only 7 per cent. on identifying why those defects had come to light.
  However, I am unhappy with the internal allocation of staff and financial resources to this department. I hope that some of the financial increase that we are discussing tonight is intended for it.
  The budget allocation for this new department in its first year was £86,000, which the Minister thought adequate in July 1976. But only £40,000 was actually spent. The staffing establishment, which was originally programmed at seven, but rising to 15, was still only four in January 1977 and the target of 15 seems to have been postponed indefinitely. By June 1977, 12 months after the Minister announced that he was setting it up, the staff had reached six, and the plan was to have 10 by March 1978. Has that figure of 10 been reached? If not when will it be?
  The budget for 1977–78 was £105,000 compared with the actual 1976–77 outturn of £40,000. Has that £105,000 been spent? If not, how much was? Is any of the Supplementary Estimate that we arc discussing tonight intended for the work of this division? If so, how much and to what use is it intended to put it?
  In his annual report on the BRE for 1976, the latest available, I believe, the building integrity division was described by the director of the BRE, Dr. Dick, as
  "an area where expansion has been proposed"
  and
  "a priority subject which should go ahead as planned."
  It has not gone ahead as planned, in that the staff target of 15 seems to have been effectively abandoned. Within these limited resources, will the Minister say something about the work programme for the division? It first turned its attention to studies of cladding, roofing and wall ties. When will the results of those be available to the industry, and what research is currently under way?
  It has been argued that the division's role is to draw upon the 40-odd specialist staff in the Building Research Station who are working in structural fields, including that of vulnerability to fire and weather. Doubtless that is true, but any specialist researcher would be less than human if

  1271
  he did not prefer to plough his own furrow of study and put the research requests of other divisions down the queue of priorities. This is why it is so important to see that the building integrity division has the staff and finance to take the lead itself and really get to grips with the horrifying problems which can arise on the frontiers of building technology.
  Of course, the BRE has had to take its share of expenditure cuts, as is right and proper. But I hope that the Minister will agree that nothing could be more important than stopping buildings falling down. If morale is to be maintained, the Government should put their full weight behind this vital work.
  On staffing cuts, I believe that there is scope for some savings within the housing policy and urban planning divisions of the BRE. I hope that neither of these Supplementary Estimates reflects further increases there. In 1976–77 the housing policy division had 14 staff and a budget of £220,000. For 1977–78 the staff figure was still 14 and the budget was £250,000. The urban planning division had a staff complement of 31 in 1976–77 and a budget of £350,000, which became 29 in 1977–78 and £380,000.
  I do not want to decry the staff in any way. Some of their published work is useful and interesting. But it could equally well be done by universities acting as consultants to the housing development directorate of the Minister's Department. For example, the studies of the views of householders on housing standards, on the quality of the residential environment and on living in a mobile home, for which all the field surveys were carried out by market research consultants, should have had a much lower expenditure priority than work on failures in buildings or energy conservation methods and techniques. There is no obvious reason why they should be the responsibility of a Government body primarily concerned with building technology.
  What can one say of the study of urban development, described in page 1 of the annual report in these illuminating and thrilling words:
  "the approach adopted is to construct an archetypal urban area, initially on a mono-nucleated basis, with symmetrical density gradients"?
  1272
  If such stuff has to be studied at all, which I very much doubt, surely the Department should commission a firm of planning consultants or a university department to do it, rather than using the Building Research Station for it.
  How can it make sense to allocate 29 staff and £380,000 to basically sociological research, for which ample researchers are available in the private sector, while giving the "doomwatch" section only 10 staff and £105,000? That cannot be a sensible allocation of expenditure priorities.
  I appreciate very well that the issues that I have raised tonight may seem small and technical compared with Rhodesia, and they are certainly much less glamorous politically. But they are concerned, quite simply, with the safety of the buildings in which people live and work—like the lives and safety of the four people who died in Ronan Point, the 50 who died at Summerlands, and the 18 who died at Fairfield.
  The House has not often discussed such issues in the past, because they are technical and complex. I make no apology for returning to them, because I believe that they are of fundamental importance and involve an area in which, by providing the drive and leadership and the financial and staffing resources, Environment Ministers can and should take a decisive lead.
  It is difficult to imagine any subject which could be less politically divisive. We all believe in safety, and want to improve it. I look to the Minister to assure the House that this is top of his departmental research priorities and that he is determined to keep it there.
  6.14 a.m.
  The Under-Secretary of State for the Environment (Mr. Ernest Armstrong):
  The hon. Member for Melton (Mr. Latham) has raised an important subect. I share his concern that the Building Research Establishment should successfully overcome the problems that have arisen from the recent cuts in staff and funds made by the Government as part of their counter-inflation policies.
  The hon. Gentleman will find that I cover most of his points. If I omit anything, I shall read what he said and write to him.

  1273
  We have tried to apply the cuts to our research establishments in a balanced way. This has obliged us to review research priorities with even more care than usual. As I shall show, certain vital activities have been wholly preserved from the cuts and others partly preserved. The balance of activity has thus been altered as staff strength has declined.
  The steps we have had to take have presented both management and staff with some very awkward problems. I recognise that the staff have found them mostly unwelcome and that this has adversely affected morale.
  The current non-industrial strength of BRE is 854, of whom 605 are scientific and professional staff and 249 provide the various administrative and technical support services which are also needed. There are, in addition, about 330 industrial staff. Most of these resources are concentrated at Garston, near Watford, where work is carried out on materials and structures, building design and processes, electrical and mechanical engineering in relation to buildings, construction economics, urban and environmental planning, and the conservation of energy in buildings.
  Garston is also the base for the highly successful BRE advisory service which, whenever requested, helps the construction industry by bringing the latest knowledge to bear on its day-to-day problems. Located there, too, is the overseas unit, which is concerned with building problems in developing countries and has made important contributions to resolving the special difficulties that such countries face, both on account of climate and of their limited economic resources.
  There is a small but important Scottish laboratory at East Kilbride and separate laboratories at Princes Risborough and Borehamwood respectively.
  All this adds up to a very substantial body of research work. We expect to spend almost £10 million on BRE in 1978–79, and, from a Vote outside the scope of this discussion, another £500,000 on new building work. The former figure is in effect very closely similar to our outturn forecast for 1977–78 but the total level of spending has fallen a little since 1975–76 and 1976–77, when it was about £10·7 million and £11 million respectively.
  1274
  The most recent figures are very similar to those for 1972–73, when the spend in this establishment totalled £10·2 million. These comparisons are at constant 1977 prices.
  The one exception to the general trend shown by these figures is the spend on extra-mural research which the establishment places with contracts. This is an integral part of its research programme and considerably enlarges the amount of ground the establishment can cover without massive growth of buildings and staff. Under this head, BRE spending was about £800,000 in 1972–73 and rose to a peak of about £1·5 million in 1976–77.
  The background is, as I have shown, one of considerable real growth from the early to the mid-1970s. Most main heads of BRE expenditure reached peak levels at various points between 1974–75 and 1976–77.
  I turn now to details of the staff cuts. In most parts of the public service, which includes Government scientists and administrators, the cuts made were in terms of the differences between public expenditure survey strength projections to April 1978 and new target complements fixed at lower levels. There were also staff cost ceilings, designed to maintain structural balance between grades. The gross cut in numbers we were obliged to apply to research was one of 13·9 per cent. in these terms. This percentage was above the average for the former DOE, which includes the Transport Department, but was not as great as that for several other major units.
  Shortly after these decisions were taken, the former DOE was split in two, in September 1976, by the creation of a new Department of Transport. For most purposes, including the Votes of this House, the two Departments are now separate. They have, however, retained common services for personnel management, and also for research. There is now, therefore, under the director-general of research, a research service, which, as well as having a headquarters staff, includes two establishments mainly serving DOE, and one mainly serving the Department of Transport.
  The latter is the transport and road research laboratory at Crowthorne, which is wholly financed from Department of Transport Votes. The Department of the Environment establishments

  1275
  are BRE and the relatively small hydraulics research station, which now has a staff of 188.
  Within this framework, the decisions taken entailed almost identical percentage reductions for BRE and TRRL, though by general agreement HRS, being smaller, was treated a little less severely.
  Two important conclusions follow—first, that it is not true that research work was singled out, over and above all else, for particularly harsh treatment within the two Departments. It is also untrue that, within the research service, BRE was singled out for treatment any harsher than that applied to the other establishments.
  Nevertheless, the practical problems which the achievement of these cuts presented were formidable. Leaving aside industrial staff, strength at April 1976 for the research service as a whole was 2,109. This had to be reduced to 1,895 in less than two years, and it was, especially in view of the cost ceilings, necessary to work out new target complements—group by group and grade by grade. On this basis, the net cut we needed to make across the research service was 10 per cent. It was, of course, an over-riding objective to seek to achieve this if possible without compulsory redundancies.
  The main problems this presented were for the science group, where we could not hope to achieve this in a balanced way by wastage alone. It was therefore necessary to introduce a series of measures for this group which included lowering to 60 the normal age of retirement for the more senior staff, a reduction in the rate of promotions, and provision, on "public interest" terms, for a limited number of voluntary premature retirements. Only the last of these proposals was attractive to the staff concerned, and on that they had reservations about the size of the offer. Lengthy negotiations with the appropriate staff associations were therefore necessary, and these have taken substantially longer than we had expected.
  We have meanwhile had until now to suspend recruitment almost entirely, and in these circumstances have reached—and indeed fallen slightly below—our overall target strength for this group. We have also virtually reached our overall cost ceiling. Throughout the research service,
  1276
  the present science group staff pattern is thus unbalanced, being the product of wastage almost alone. There are various specific difficulties at more senior levels, but the problem common to all these research establishments is a considerable staff shortage at the scientific officer and assistant scientific officer levels where wastage has been greatest.
  These factors have had a particularly heavy effect on BRE, partly because of the age structure of the staff. The number of science group staff there is now some 25 below the new target complement, and strength will fall considerably further during the summer before it begins to recover as a result of resumed recruitment. About two-thirds of these vacancies are at junior levels, but the rest include a number of section heads posts.
  The junior vacancies can be filled only by external recruitment, which cannot make a significant difference before the autumn. The losses in expertise and leadership at more senior level will take much longer to replace, whether by internal development or by external recruitment.
  These staff problems have affected all areas of the programme, but they have been particularly acute in desirable growth areas, the development of which requires expertise not currently available in BRE. They have, for example, slowed down the development of the new and important building integrity division. Many of the staff needed for this work require a background in materials and structures—the very areas which have been most hit by losses in the last year or two. In these circumstances, it has been impossible to reach the target complement of 10 by the end of March, without stopping similar work of comparable priority in other divisions. The present strength is eight, in addition to the division head, and further increase will depend on the resumption of external recruitment. The development of activities in support of construction exports is another desirable growth area which will not attain its target complement for some time to come.
  In short, we are in considerable temporary difficulty, mainly as a result of the unexpected delay in completing what has, both for management and for staff, been an exceptionally difficult and intricate series of negotiations. We have

  1277
  meanwhile, however, been laying constructive plans for the future of the research programme.
  These in particular affect the two growth areas just described, where, notwithstanding the cuts, we have made provision for new complement and are doing our best to achieve strength to match this. We have also decided to maintain the allocation for the much larger areas of work related to fire safety and for offshore engineering. In addition, we have kept to a minimum the reductions in complement made for energy conservation in buildings, for housing and planning and for the advisory service and the Scottish laboratory. We believe we have identified our highest priorities correctly, and in particular I would stress that we attach considerable importance to our analytical work on housing and planning, which deals with major social and economic issues that demand close attention. This inevitably means that slightly larger complement cuts must be made in other areas.
  To achieve a fully effective programme at the new level of staff planned, the Department must now take action in three main ways. First, we must promptly resume recruitment of creative young research workers and the necessary scientific supporting staff. Secondly, we shall seek to return as soon as posible to the rates of promotion current before the imposition of the staff cuts. I expect the promotion situation to be better in 1978 than in 1977, and I hope that by 1979 promotion will no longer be an issue. Thirdly, we must continue to ensure that the research staff are provided with buildings and all the facilities necessary for them to work to full effect.
  By these means, we shall seek to rebuild science group morale, which is at present generally low, for reasons that are understandable but also, I believe, were inescapable. This will be one of our two cardinal aims. The other, which is closely related, will be to seek to ensure that the present transitional problems are overcome as soon as possible, so that our research establishments, and BRE in particular, can realise our revised programme plans with adequate numbers of high-quality staff and all the necessary supporting resources both of manpower and materials.
  1278
  Britain has been facing the worst recession since the 1930s. All parts of the public service have been subject to the most rigorous scrutiny to determine where reasonable economies could be made. At BRE every effort has been made to make savings which would have the minimum effect on the moral and expertise so esential to this service. Our task is to ensure stability and real progress in the future, and I believe that this can be achieved.
  I shall read carefully what the hon. Member said in the debate and, as I say, if there are any matters with which I have not dealt, I shall write to him about them.

  TOURISM
  6.27 a.m.
  Lord James Douglas-Hamilton: I wish to raise the question of increased expenditure on the British Tourist Authority, with special reference to international flights. As we have waited a considerable time for this debate, I shall do my best to concentrate the essence of what I wish to say in a relatively few words.
  The matter is topical and relevant to my constituency. It is topical because, last Thursday, Edinburgh District Council gave planning permission for an exhibition centre at Ingliston, beside the airport. It is relevant because the airport is in my constituency and because the views of the local residents are violently hostile to excessive noise, very naturally, and, of course, I have other constituents working for the Scottish Tourist Board whose headquarters is also just beside my constituency.
  The question that I put to the Minister is whether a balance can be found, when the British Tourist Authority is disseminating information to potential tourists, which will meet the requirements of those constituents of mine who are resident near the airport and represented by the Cramond Association, and also the requirements of those of my constituents working for the Scottish Tourist Board, which is doing so much to promote tourism throughout Scotland. It seems to me that a balance can be found.
  This matter is topical because, with the granting of planning permission for this

  1279
  exhibition hall, this will lead to a completely new development in Scotland, which will have a spin-off both in terms of employment for the service industries and in terms of industries being able to win export orders. I may say that the Under-Secretary of State for Energy—the hon. Member for Midlothian (Mr. Eadie)—in whose constituency this exhibition hall is to be, has strongly supported the venture, and I have been glad to lend my support to his.
  As the Under-Secretary of State has said, there is an undoubted need in the east of Scotland for such an exhibition hall for trade and commercial exhibitions, which would surely make it easier for Scottish industry to win export orders. The airport terminal, being next-door to this proposed exhibition centre, provides easy access for long-distance visitors. That makes sense, if we are to have international specialised trade exhibitions or international conferences to which persons may come from all over the world. Also, if there is the prospect of transatlantic or intercontinental flights, all these may help with employment prospects.
  Many persons throughout the world are well aware of Edinburgh's international reputation. The White Paper, says in paragraph 138, on page 39:
  "The increasing importance of Edinburgh as the capital of Scotland and the industrial development on the eastern side of Scotland both suggest that the relative importance of Edinburgh is likely to increase."
  This raises the question of the relevance of the British Tourist Authority. Should there be intercontinental and transatlantic flights to Edinburgh, including charter flights, provided there is no extension of the operating hours of the airport?
  It seems that there is a case, subject to two very important qualifications. Some years ago the Minister welcomed Mr. Ronald Macintosh, the distinguished representative of the Turnhouse Airport consultative committee, along with the hon. Member for Midlothian, on behalf of his constituents at Newbridge and myself. Mr. Macintosh set out the position of the Cramond Association. He wrote:
  "The Cramond Association does not oppose some increase in traffic at Edinburgh Airport that might arise from direct trans-Atlantic flights. It considers that the granting of permission for such flights must be dependent
  1280
  on there being no extension of the hours of opening of the airport."
  This would imply an acceptance of the fact that any aircraft that was late in landing would be automatically diverted to Prestwick.
  Strong arguments can be put forward in support of this by reference to the views expressed, in paragraph 68 of the White Paper, by the Secretary of State for Trade. Surely it would be unthinkable that when the Government were contemplating restricting night flights in other parts of the United Kingdom they should consider extending them in Scotland. There is strong feeling on this.
  The second qualification is that Prestwick Airport should remain viable. The Minister will have received representations on this point from the trade unions involved.
  Even taking these two qualifications into account, there may well be a case for intercontinental flights, and it is hoped that the European airbus will be a great deal quieter than the Trident. I notice that the White Paper states that British Airways are giving greater priority, in their fleet planning, to the replacement of Tridents with the new quieter aircraft. If the Minister could give the time scale for this, it would be welcome.
  The arguments for intercontinental flights come from a number of sources. All these sources have noted with interest the statement in paragraph 40 of the White Paper:
  "The Government have concluded that existing policies relating to the allocation of traffic among the three Lowland airports should be maintained generally, but that some greater flexibility could be followed in the development of traffic at Edinburgh."
  The key words are "greater flexibility." It is relevant to mention that the travel agent, Globespan and Dixon Travel, is taking bookings for transatlantic flights between Edinburgh and Canada. The airline is Quebec Air. It has been refused permission to operate from Edinburgh by the Department of Trade, and I understand that it is appealing against this decision. I mentioned the matter to show that there is considerable demand in Scotland for intercontinental flights from the East Coast.
  A flexible approach will be welcomed by the Scottish Tourist Board and I would

  1281
  be grateful if the Minister would pass on the essence of its views to the BTA. The Board says:
  "Tourism is an extremely important industry for Scotland. In 1976 Scotland received nearly 12 million visitors, of whom about 900,000 were from overseas. These visitors spent between £350 million and £380 million in Scotland which undoubtedly has had an effect on economic growth in certain areas. The benefits which acrued to Scotland were significant, not only in terms of bringing foreign curency into the country, but also in terms of bringing increased job opportunities for service industries."
  The dissemination of information overseas by the BTA will be a great help, and the authority has the expertise and the network of offices overseas to do the necessary advertising and to deal with the distribution of literature.
  The Scottish Tourist Board is in no doubt that the countries which in particular send tourists to Scotland are North America, Scandinavia, West Germany and France. The STB thinks that efforts overseas should concentrate principally on providing information to guide holiday decisions. In the longer term, it considers that there should be efforts to build up scheduled services and charter traffic to the three major airports for the promotion to operators, licensing and financial incentives.
  The STB points out that nearly 90 per cent. of overseas air traffic enters Britain by way of Heathrow or Gatwick, and that at present there is an overwhelming bias in favour of South-East England. From its studies and those carried out by the British Tourist Authority it thinks that many Europeans believe that Scotland offers equal if not greater attractions than London and the South-East of England. It feels that if the Government are serious about redressing an imbalance in the economy they must accept responsibility to try to influence the shape of air services into Britain from Europe and the rest of the world. It thinks that one reason why Scotland receives such a low percentage of overseas business is that it is much more difficult for European visitors to get direct to the east of Scotland. It feels that increased opportunities exist for the Minister to consider this matter, and it is proposing to have discussions with interested bodies.
  Its case is substantially strengthened by the stance of the Lothian Regional Council, which has the largest population of
  1282
  any region in Scotland with the sole exception of Strathclyde. The council came out almost unanimously in favour of establishing a small group of members from every party to prepare an action strategy for Edinburgh Airport. The group has met, and it is unanimous in its view that the evidence it has so far obtained is to the effect that there is a cases for intercontinental charters and flights.
  The number of aircraft movements into Turnhouse every day is 55. If the Government permit a certain number of intercontinental charter flights, subject to certain safeguards, there will probably be two more landings and take-offs every day, which would amount to a relatively small overall increase in air traffic. I understand that the working group set up by the Lothian Regional Council is likely to receive the support of the chamber of commerce in Edinburgh and of the Turnhouse Airport consultative committee, representing many different interests.
  On 27th January this year the Edinburgh Chamber of Commerce wrote to the Secretary of State:
  "The existing policy is detrimental not only to the entire region but to tourism in Scotland as a whole. The large majority of members of the committee, including the local authorities, are in support of the views of the Chamber".
  In conclusion, I make one request to the Minister. When the working party set up by the Lothian Regional Council has prepared all the evidence and has had the opportunity to consider it with other bodies, such as the Scottish Tourist Board, the Edinburgh Chamber of Commerce and the Turnhouse Airport consultative committee, will the Minister be prepared to consider the evidence, and will he keep an open mind on this subject and, if necessary, meet a delegation on it?
  6.38 a.m.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) has properly paid tribute to my hon. Friend the Member for Midlothian (Mr. Eadie), who is a most zealous Member and an excellent Minister. If my hon. Friend makes representations along similar lines to those outlined by the hon. Gentleman, I shall have to give him a response identical to that which I propose to give the hon. Gentleman.

  1283
  In representing his constituency interest the hon. Gentleman is faced in local terms with a problem not dissimilar from that which I face in national terms. On the one hand, he argues the case for the increased use of Edinburgh Airport—an objective which, I assume, must be desired by the aviation and tourism interests which have approached him. On the other hand, he is, I know, confronted by people living around the airport who object to the prospect of increased aircraft noise.
  It is a curious act that we are asked to perform—the hon. Gentleman on a local basis, I on a national basis. Indeed, there are two acts. One is to ride two horses at one and the same time, and that is made more difficult by the fact that the horses are pulling in opposite directions. Unless the horses can be controlled, the results may be disastrous. Secondly, without any roll of drums, we must try to achieve the greatest balancing feat of all time on a high tightrope. Perhaps in future the hon. Gentleman will have some sympathy with me in the balance that I have to try to maintain in national terms. The hon. Gentleman asserted that the balance can be established, but I do not think he addressed himself, in an interesting speech, to the overall problems that exist, because they will not go away. I think the hon. Gentleman's suggested balance is somewhat illusory.
  The hon. Gentleman raised two matters to which I shall address myself before coming to the substance of his speech. The first is the question of quieter aircraft, which is not just a Scottish issue. He will see in the White Paper that we intend to prohibit the use of non-noise certificated subsonic jet aircraft acquired by United Kingdom operators after 30th September this year. The second leg of the exercise is that we shall prohibit from 1st January 1986 the use of all non-noise certificated subsonic jet aircraft on the United Kingdom register.
  The hon. Gentleman argues for the dispersal of air traffic away from London and the South-East to Scotland in particular. I wish that we were in a position to have some real effect on the coagulation of airports in London and the South-East. But the fact is—and this is explained clearly in the White Paper—that 80 per cent. of people who use airports have their point of origin, or wish to arrive at
  1284
  airports in the South-East. We cannot penalise people for not falling into line with what we want them to do.
  I need not rehearse this case at length because it is set out clearly in the White Paper. What I believe will still stand is a national strategy we have developed which will concentrate resources in a number of airports and will have some effect in causing those regional airports to become more attractive. But the fact is that in Scotland we are retaining the present airport system, and it is virtually unaffected, in this regard at least, by the proposals we have established for the regions of England and Wales.
  I must point out that we have proposed the retention of the present distribution of traffic between Edinburgh, Glasgow and Prestwick, with Glasgow and Edinburgh to cater for short and medium-haul traffic, and Prestwick to continue as the long-haul intercontinental airport for Scotland, primarily scheduled and charter transatlantic services, although charter flights may go to Edinburgh or Glasgow in certain circumstances. The Scottish Tourist Board has not argued for any redistribution of traffic among the three airports on tourism grounds. The board's representations are directed towards increasing the total use of Scottish airports as the point of first landfall in United Kingdom or international tourist traffic.
  I am unable this morning—I am not sure at this hour whether it is a physical matter or otherwise—to comment on suggestions made for increase expenditure on scheme designed to attract more tourists to Scotland. These are matters for the tourist authorities. The promotion of tourism in Scotland is the responsibility of the Scottish Tourist Board. Publicity abroad for Scotland is co-ordinated by the British Tourist Authority. No doubt these those bodies will note what has been said in the debate tonight.
  The Government and the tourist authorities are in complete agreement on the desirability of spreading the benefits of tourism more widely. Far too many foreign visitors come only to London or Edinburgh and see little of the rest of the country. I see present hon. Members representing the Stoke-on-Trent and Newcastle-under-Lyme area, and we all know the attractions of that area—and perhaps the other Newcastle, too, since

  1285
  I see present my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas). Officials of my Department and the Scottish Office will be meeting representatives of the Scottish Tourist Board shortly to consider the possibile implications of the White Paper for the development of tourism in Scotland.
  The hon. Gentleman argues that more international flights should be allowed into Edinburgh, but the more that such traffic is concentrated at Edinburgh the more difficult it is to persuade tourists to go anywhere else. One of the factors that we must recognise is that, even within present policies, international short-haul traffic will increase. That includes, especially, the important European traffic. The BAA survey on the operation of Edinburgh Airport that was published recently shows that that traffic is expected to grow rapidly over the next 10 or 12 years. There will be a substantial increase in the use of Edinburgh Airport.
  It is not the policy of the BAA or of the Government to try to limit the growth of short-haul or medium-haul international traffic at Edinburgh, but for a long time it has been our joint policy to concentrate Scottish long-haul traffic, and especially North Atlantic traffic, at Prestwick. That is a point that was touched on by the hon. Gentleman but not really developed.
  There are valid reasons for that policy. Many of the passengers originate or have destinations on the West side of Scotland. Prestwick has a good weather record and the longest runway of the lowland airports. It is well placed environmentally. However, it has the disadvantage of being not very accessible to Edinburgh.
  We have recently considered whether there should be any change in the policy for the location of traffic between the lowland airports. This is not a matter that affects Edinburgh alone. A former deputy chairman of the BAA, now chairman of the Scottish Tourist Board, once said that Edinburgh, Glasgow and Prestwick were effectively one airport with its runways rather far apart. Certainly they are closely related. It is, for example, impossible to think of allowing long-haul traffic into Edinburgh without allowing it into Glasgow. That is a matter that was not touched on by
  1286
  the hon. Gentleman. The full consequences of such a move cannot be predicted accurately, but it is fairly clear that it would seriously affect the viability of Prestwick and employment in the area.
  The hon. Gentleman says "Let us have a balance". He suggests that long-haul traffic should be allowed into Edinburgh at least experimentally. I do not think that that would be feasible because it would be virtually impossible to put the clock back once the experiment had started, even if the consequences were unacceptable.
  We have, none the less, gone some way towards meeting the suggestion that the hon. Gentleman has put forward. As he said, the White Paper provides for a policy that will operate flexibly in future. I have engaged in correspondence with the hon. Gentleman on this issue, and it means specifically in this instance that if a charter flight has a clear link with Edinburgh—for example, bringing in visitors to the Festival, the Highland Show, a conference or other event—I would expect even a long-haul flight to come into Edinburgh and not Prestwick. Whether a particular flight, or series of flights, comes into that category is something for the BAA and the Department to decide on the merits of the case.
  The hon. Gentleman is wrong in saying that we have refused the application made by Quebecair. An appeal is currently being considered by the Department of Trade, and for that reason, as the hon. Gentleman will understand, I am not able to comment on the matter.
  Another reason why we should not adopt the hon. Gentleman's suggestion is the effect that it would have on the environment of Edinburgh Airport. The hon. Gentleman says that he wants more transatlantic flights, but he does not want those flights to take place at night. Unfortunately, as the BAA pointed out in a survey that the hon. Gentleman has seen, up to 70 per cent. of scheduled services into Prestwick from North America and 35 per cent. of charter traffic land before 7.30 in the morning. That does not happen simply because the passengers want to arrive at that hour of the morning. It is a consequence of the complexities of airline schedules, which, possibly, could be altered only with considerable difficulty.

  1287
  Transatlantic flights imply a number of night movements. This was recognised in the public inquiry into the new Edinburgh runway at which noise was a major issue.
  Lord James Douglas-Hamilton: Will the Minister give way?
  Mr. Davis: I think not. It is very late and unfair to the hon. Member who has the Adjournment debate.
  It is also a matter that affects Newbridge at the other end of the runway. I have to tell the hon. Gentleman that, in any event, the Government are not responsible for matters relating to aircraft noise at Edinburgh Airport. The airport has not been designated under Section 29 of the Civil Aviation Act 1971. There is no reason why it should be. Therefore, the matter rests entirely with the British Airports Authority, and the hon. Gentleman is at liberty to communicate with the chairman, Mr. Norman Payne.
  The hon. Gentleman then asked, why not allow some of these flights from the North Atlantic to arrive or depart during the day? That would be a concession of a quite different order from allowing local-interest charters into Edinburgh. It would create a substantial precedent and, in my view, lead inevitably to complete freedom of movement at Edinburgh. Of course, that would necessarily argue for similar treatment at Glasgow and, for the reasons which I have already adduced, would be bound to rebound to the disadvantage of Prestwick.
  Clearly, this is a matter where there are conflicting Scottish interests. At this time—not simply at this time of the day—I think that it would be ill-advised for us to make a final judgment on these matters. Difficult arguments have to be balanced here, and they are essentially matters for the Scottish Assembly.
  The issues that have to be considered are clear To abandon the policy of successive Governments for the allocation of air traffic among the Scottish lowland airports will undoubtedly lead to a transfer of traffic from Prestwick. That traffic might be expected to move partly to Edinburgh and partly to Glasgow, since it would be quite unreasonable to allow
  1288
  freedom at Edinburgh while at the same time restricting the use of Glasgow. The consequence would be to place seriously at risk the viability of Prestwick and the employment which is provided at that airport. At Edinburgh a build-up of transatlantic traffic, a large part of which arrives early in the morning, would increase the problem of noise disturbance. Let there be no doubt about that. Traffic at Edinburgh is growing at a faster rate than at the other lowland airports, and the Government see no obvious justification for a concentration of traffic at Edinburgh which has no necessary ties with the Edinburgh area when this would be at the expense of Prestwick.
  Against this background we have reached two main conclusions. The first is that the right course is to allow into Edinburgh long-haul charter operations which have clear ties with Scotland's capital but otherwise to maintain the existing policy on the allocation of traffic between the airports at Glasgow, Edinburgh and Prestwick. The second is, in matters which are the subject of different opinions not only throughout the central belt of Scotland but within the Edinburgh area, to defer any irrevocable decisions until the issues can be considered within Scotland by the Scottish Assembly.
  In this, as in other matters, the Government have to strike a balance between conflicting positions. I believe that in the conclusions which we have reached, which involve a flexible response to the points made by the hon. Gentleman, we have adopted a solution which should command a wide measure of support throughout Scotland.
  Question put and agreed to.
  Bill accordingly read a Second time and committed to a Committee of the whole House; immediately considered in Committee pursuant to the Order of the House this day; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read the Third time and passed.

  SELECT COMMITTEE ON SOUND BROADCASTING
  Ordered,
  That Miss Betty Boothroyd, Mr. Robert Cooke, Mr. Clement Freud, Mr. Robert Mellish, Sir Anthony Royle and Mr Nigel Spearing be Members of the Select Committee on Sound Broadcasting.—[Mr. Jim Marshall.]

  EMPLOYMENT (NEWCASTLE UPON TYNE)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Marshall.]
  6.54 a.m.
  Mr. Mike Thomas: I raise at this late, or early, hour—however one likes to see it—from one Newcastle to another, the subject of the employment policy and programme of the Newcastle upon Tyne City Council. I am grateful to the Minister for occupying the Front Bench at this time of day.
  I shall first paint a little of the background of the unemployment problem in the North of England and in Newcastle and Tyneside. In February this year the total unadjusted number of unemployed in the Northern Region was about 121,000, or 8·9 per cent. of the working population. That compared with the United Kingdom average of 6·2 per cent.
  For men, the situation was rather worse. The rate for men was 10·3 per cent. compared with the United Kingdom rate of 7·4 per cent The Northern Region has a higher rate of adult unemployment and has experienced a higher increase in unemployment than any other region. To put it in perspective, compared with where we now stand, in London, in the middle of the most prosperous part of the country, unemployment in the Northern Region is double that in the South-East, and it might well be double that in the other Newcastle.
  One of the real fears that we have is that the upturn which we all hope will come in the world economy and which is beginning might not help us much. Lord Glenamara, the chairman of the North of England Development Council, speaking on 10th March, said
  "Unemployment in the North is deeprooted and still growing. In common with the rest of the country—indeed, the rest of Europe—the
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  region is suffering from the present business recession and the decline of employment because of technological change.
  It is a sad fact that while the national economy can be expected to improve during the next twelve months the more fundamental problems of the assisted areas, such as the North, will not be resolved as part of the general improvement. Indeed, general expansion may actually accentuate the difference between regional unemployment rates in the months to come."
  I turn to the problems of Newcastle and Tyneside. The statistics make grim reading. In February this year, male unemployment on Tyneside was 11·1 per cent. On Wearside it was 14·8 per cent. In Newcastle, 13,633 people were unemployed, 10,374 of whom were men. In pockets of central Newcastle, particularly around the riverside, unemployment was probably 15 per cent. or more.
  I am glad to say that the position for school leavers was a little better. We were worried at the time that the summer term ended, because in July 1977 10,000 school leavers were unemployed in Tyne and Wear. By December the figure had dropped to 3,000. We can be encouraged slightly by that, although we wish that the figure was zero.
  An interesting study in North Shields has shown that of the unemployed school leavers a large proportion—more than two-thirds—had no qualifications to speak of. The Minister knows the problems well. Traditional job centres are declining, and look as if they will continue to decline. In the shipbuilding industry we have had to face over 1,100 redundancies. No one can explain readily some of the problems relating to the Polish order and the industrial relations circumstances that surrounded it, but lack of orders is a serious problem in the industry. There is a desperate need for the order for the third through-deck cruiser. One of the first two orders has been placed with Swan Hunter. I hope that we shall receive the next order, too.
  In heavy electrical engineering the pattern is similar—one of decline. At Parsons, in my own constituency, there have been 500 redundancies over recent months, but the order placed for the Drax B power station and the temporary employment subsidy that has been made available for 500 of the work force has enabled that factory to stabilise at 5,000, and we can see that carrying on for two

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  or three years provided that work starts to come from other sources, too. We must be clear that without that aid—both the TES and the Drax B order—Parsons would now be on its way down to about 2,000 employees.
  As well as the problem of job loss in the traditional industries, we face a number of other problems. I shall raise them briefly and not dwell on them. The rate of new company formation, the rate of entrepreneurial activity in Newcastle on Tyneside, is low. There seems to be a lack of product diversification within existing firms. I know that strenuous and successful efforts have been made at Parsons, for example, to get into other areas of business, but if a firm has large machine tools that are designed to do one job and cost perhaps £500,000 it is difficult to diversify into other products.
  There is a skill problem in the work force. Although we have high unemployment, we also have shortages in some skilled areas. There is a predominance of branch plants which tend not to be well integrated into the regional system and tend to be a little on the periphery of the central management psychology of some of the companies involved, and, in general, investment levels in the region have been extremely low.
  In all of this the Government are vitally important. I list one or two of the things that have mattered to us. There is the shipbuilding intervention fund and the general assistance given to shipbuilding. There have been naval orders. I have mentioned power plant. There is the construction industry, which accounts for a large proportion of our unemployed. For the Tyne and Wear area we received about £1¾ million of the March 1977 £100 million announced by the Chancellor of the Exchequer. Newcastle and Gateshead will get an initial £5 million construction money from the inner city partnership. We benefit from the regional development fund. We benefit from the various forms of regional selective assistance and from some of the NEB's activities. We welcome the formation of the Northern NEB.
  Turning from the Government, my central point today is to say that local authorities are also important, and I hope that my hon. Friend and his right
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  hon. Friend and hon. Friends will bear that in mind. In 1977, Tyne and Wear Council lent about £1·6 million to industry and created 750 new jobs as well as safeguarding existing jobs in that process.
  It is against that background that Newcastle City Council, under the leadership of Jeremy Beecham and Councillor Walter Wilson, who is the chairman of the committee, launched its first employment policy and programme in November 1976. That is now to be updated each autumn. In December 1977 the 1978 programme was approved, and it has been provided to my hon. Friend.
  I want to quote briefly from that programme, because its purpose is admirably described on the first page, where Walter Wilson says:
  "If the erosion of the employment base continues at the rate that Newcastle has experienced over the last 10–15 years the community itself is in danger: selective migration will continue, unemployment among those that remain will rise, the need for community support services will increase while the ability to provide them will diminish."
  The employment policy and programme has had some success. In its first year it saved or created about 1,650 jobs. It has about 11,000 square metres of new factory and workshop space almost completed, and this has been a considerable achievement of the city, working with Tyne and Wear County Council and the English Industrial Estates Corporation.
  There are critical problems which the employment policy and programme is trying to play its part in solving. First, there is the general problem of unemployment and its specific nature in the Newcastle area. Let me give two sets of statistics which make the point. First, seven out of 10 of the unemployed in Newcastle are manual workers, and yet at the moment—and it looks like being the trend for the future—only one-quarter—and it is going down all the time—of the jobs available in the city are in manufacturing industry. That is a terrible disparity. Secondly, 45 per cent. of the unemployed—nearly half—are under the age of 25, and nearly one-quarter—about 23 per cent.—are construction workers, so there is serious unemployment and serious disparities and focuses within that unemployment.

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  The second critical problem is the simple loss of population and jobs. Since 1961, 44,000 people have left the city, and we have been losing jobs at an even more rapid rate. At the moment, we are losing people at a rate of about 1 per cent. of the population a year and jobs at a rate of about 1.5 per cent. of the jobs a year.
  The third critical problem relates to the availability of development sites. This is partly in the nature of things in a crowded, congested inner city area, but there are two needs—modern factories—we appreciate the help that is being given through advance factories—and nationalised industry land. The largest tracts of available land for industrial development in Newcastle upon Tyne are owned by nationalised industries and they appear reluctant to release them. The Government should help in this.
  The last problem to which I wish to refer is the shortage of skills. Too many young people leave school with minimum qualifications or without qualifications at all. That is an important factor in attractting industry into the area and getting the employment rates up again.
  The city has been trying to make a cooperative approach to the problem. We have been using the term "inner city partnership" in our discussions on the Inner Urban Areas Bill and the Secretary of State for the Environment's programmes and Newcastle's approach is that unless we bring together trade unions, employers, the Manpower Services Commission, the National Enterprise Board, local authorities and the Government to work in partnership, there is no way in which the problem can be solved.
  We are also promoting the city to make clear through promotional and marketing activities that Newcastle upon Tyne is the regional capital of the North-East and that 45 per cent. of the jobs there are filled by people who live outside the city boundaries. We are going out to attract new firms and enterprises, keep existing firms and encourage growth and diversity of the city's economy. A major step will be taken on 4th April when our programme to promote and sell the city with more vigour will be launched in London.
  The third aspect on which the employment policy and programme is focusing
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  is development. We want a revitalised inner city and an improved environment. The Inner Urban Areas Bill, which I hope will soon become law, and the Tyne and Wear Act are important steps.
  We want to make the best use of existing industrial sites and buildings. We have declared three industrial development areas and we want to develop new sites. The city's target is 60,000 square metres of new factories or workshops by 1981.
  Lastly, I wish to refer to the question of matching skills to jobs. We attach importance to training, particularly for unemployed young people, and to retraining, particularly for unemployed manual workers. These are critical areas for us. We need local support and co-operation—I am not suggesting that it is not there—and support too from the Training Services Agency. I hope that my hon. Friend can give assurances on that point.
  We feel that there is a great need for co-operation with the Government. That is important to us. The sort of approach that we have in Newcastle upon Tyne, with the bringing together of all sorts of different groups, as we have done with the priority areas programme, could be usefully applied to the drive to solve the employment and economic problems of the city.
  The general distribution of responsibilities between local authorities and Government Departments on economic development policies are confusing and, at times, counter-productive. Even if we understand them, it is plain that they are not clear to those whom we wish to take advantage of the available aid—whether an individual unemployed person or a new firm that is starting up.
  We believe that the planning agreement process needs to be revitalised and we should like to see built into it a provision that a firm that closes a factory in an inner city should not be allowed to develop in a green field site somewhere else without doing something for the city where vital jobs may be lost and never replaced.
  It may be that the Tyne and Wear Act and various pieces of private legislation, together with the Inner Urban

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  Areas Bill, do not provide a comprehensive enough set of powers to give assistance to manufacturing and service industries. There may be a need for legislation to tidy up this situation.
  I am grateful to the Minister for his tolerance at this late hour.
  7.10 a.m.
  The Under-Secretary of State for Employment (Mr. John Golding): I am grateful to my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas) for the eloquent and persuasive way in which he has put the case for his city. I say "city" because I represent the Loyal and Ancient Borough of New-castle-under-Lyme. Therefore, it would be difficult for me to say just Newcastle through this debate with any sense of meaning. I shall use the term "city" instead.
  I have twice visited the North-East within the last six weeks. I shall visit it again shortly because we in the Department of Employment realise the very great problems of employment and training that are faced in the North-East. I was received very well on my recent visit to Newcastle upon Tyne and was delighted to meet the Lord Mayor, Councillor Collins, who himself spoke very eloquently of the problems facing the city.
  I read with great interest the report to which my hon. Friend has referred. It shows great enterprise on the part of the local authority to prepare such a detailed and overall plan for employment, because I believe that local authorities generally have ignored the employment implications until very recently.
  I do not agree with all the figures that are given in the report. For example, I am told that since 1966 there has been only a small decrease, of about 1,488, in the numbers working. Indeed, Department of Employment figures show that between June 1971 and June 1976 total employment increased by more than 1,000. I am not interested however, this morning in nitpicking about the figures. The report is so important, I do not want in any way to understate the problem or to draw attention from it.
  The problem is very serious. In February in the city alone 13,633 people were unemployed, of whom 10,374 were
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  male. Most seriously, 46 per cent. had been unemployed for more than six months and over a quarter had been unemployed for more than a year. That is a disaster. More than half were under 30 and in the city itself there were still 2,338 school leavers unemployed—youngsters who had been given no chance or opportunity at all with regard to work or training since leaving school last year.
  Let me say that I regard the bulk of the remedies in the city's report as practical. Let me begin by saying to my hon. Friend that I would welcome close co-operation between the city and the Training Services Agency, because the North-East has traditionally been the home of skill. I recognise how worrying it is that the opportunity for apprenticeships and skill are thought to be diminishing in the North-East.
  My attention has been drawn to the TOPs courses in the city which are many and valuable but which are mainly non-manual. There is room for talks with the Training Services Agency and I assure my hon. Friend that as a result of his representations I shall ask the Agency to get in touch with Walter Wilson.
  On my recent visit I was delighted to see the job creation project at the Hancock Museum. I was also interested in talking to the dedicated careers officers in the city. On my visit I learned that over 6,400 workers have benefited from the Government's special measures. TES has preserved 1,461 jobs. The job creation programme has helped 2,585 people, and 287 people have been given work experience. The youth employment subsidy has placed 1,135 youngsters, and the recruitment scheme for school leavers 591. Less important, perhaps, has been job release of which 415 people have taken advantage. Community industry has been very important, providing 150 places for youngsters who would normally find it difficult to obtain work.
  We hope that full support will be given to the new youth opportunities programme. I am certain that the people of Newcastle upon Tyne will give that support, because they have the interests of their young people at heart.
  We realise that many of our schemes are only an alternative to unemployment, but they are a worthwhile alternative. As a Government we are dedicated to provide increased work for the people. We

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  hope that the increase in the amounts we shall pay under the job release scheme will be helpful because we think that the £35 which will be payable on 1st July to a man of 64 or woman of 59 with a dependent spouse will be attractive for them to leave work a year early. We also believe that the increase to an upper limit of 200 for the small firms employment subsidy will bring jobs to the city. In an effort to provide opportunities, the Government have also made £41 million available for training. It is important that the city should talk to the industrial training boards to make sure that sufficient skilled apprentice and technician training takes place. We are very concerned that the North-East gets its share of the money that the Government have poured into maintaining skilled training during the recession.
  But of course we want jobs to which those who have been trained can go. That is why Tyneside has had so much help from the Department of Industry and why it has had special development area status. That is why £10·2 million has been offered under Section 7 of the Industry Act to save 5,000 jobs and create 12,000 new ones. That is why there have been 12 offers under Section 8 totalling £2·8 million, which has been used for modernisation. It is why, since July 1974, four advance factories have been completed and allocated and six finished, with 15 still under construction. That is why the blocks of small units have now been authorised. When all these factories are completed and occupied, they will provide 1,900 jobs.
  I appreciate the importance of land, and my right hon. Friend the Secretary of State for the Environment has written to all the statutory authorities asking for details of unused land in the cities. But as a result of my hon. Friend's representations I shall ask my right hon. Friend whether more urgency can be attached to this question in the case of Newcastle upon Tyne. In the meantime, there is the Tyne and Wear Act, which my hon. Friend mentioned. The Local Employment Act is also available to assist.
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  The Government have taken the situation in the North-East seriously. Under the dispersal policy they have allocated 500 Department of Health and Social Security jobs to Newcastle upon Tyne, The headquarters of British Shipbuilders has been sited there. That is right, because of the presence there of the shipyards to which my hon. Friend referred.
  We have been involved in job creation. We have also been concerned to defend existing jobs. I am already referred to the importance of temporary employment subsidy. My hon. Friend mentioned Parsons and Drax B. I represent workers who work in GEC, Stafford, I have had to tell them of the problems of Tyneside. There was competition for that work, but the Government determined to give assistance to an area so badly hit. The Government have been active in the shipbuilding industry to give all the assistance that they could.
  For the future, much depends on the partnership arrangements. I pay tribute to my hon. Friend for the way in which he pushed the claims of his own city and of Gateshead to get partnership arrangements. I pay tribute to the part he is now playing on the Inner Urban Areas Bill Committee to ensure that it does the job that the Government hope it will, to help revitalise some of our cities.
  The policy has already been effective An extra £5 million for construction was allocated to the city last year. There will be an extra £1¾ million for 1978–79 and £7 million a year from 1979 to 1980 money which is much needed in the city to bring about the necessary revitalisation. We in the Government look forward to the inner city programme, which we hope will be ready in July.
  I appreciate the importance of this subject. The Government realise that Newcastle upon Tyne is a city that has played a great part in the history of Great Britain, and we look forward to its playing a full part in the future.
  Question put and agreed.
  Adjourned accordingly at twenty-two minutes past Seven o'clock a.m.

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

BRITISH CALEDONIAN: HOUSTON SERVICE
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a Statement on the British Caledonian Houston service.
Lord ORAM: My Lords, under the agreement with the United States of America on fares and charters, announced on 17th March, British Caledonian is able to offer a new range of low fares on its service to Houston.
The Earl of KINNOULL: My Lords, I am sure that the House, indeed air travellers, will be grateful to hear that settlement has been reached on the outstanding points that were being discussed in Washington. Can the noble Lord say for what period of time the settlement will last? Will it affect all the North Atlantic routes as well? Finally, is there any danger of a second American carrier being nominated on the Houston service?
Lord ORAM: My Lords, the discussions which took place in Washington in recent days covered more routes—indeed all the transatlantic routes. Would the noble Earl remind me of the first point in his supplementary question?
The Earl of KINNOULL: It was about the period of time.
Lord ORAM: My Lords, it was agreed that the arrangements reached in Washington would be reviewed in the autumn. So there is the summer during which experience will be gained. On the last point, I am afraid that I must ask the noble Earl to give me notice of that.
Lord AVEBURY: My Lords, was not the original idea that, when Laker started operating with very low fares on the North Atlantic, we and the Americans would wait for about 12 months to see the result of this initiative before extending the concept to many other cities and airlines? Have we not now reached the situation where the proliferation of low fares to multitudes of American destinations is likely to result in profitless growth, as the chairman of British Caledonian has called it, with perhaps some of the weaker airlines going out of business altogether?
Lord ORAM: My Lords, the noble Lord is quite right; the original expectation was that we would look at the Sky-train experiment for a year before embarking upon further low-fare experiments. That would be, I think, the approach we would have wished to make; but, as I understand it, there has been considerable pressure on the other side of the Atlantic—on American airlines—and this has led to the need for the recent negotiations. We are satisfied with the results of those negotiations, although possibly we would have wished to proceed rather more slowly than was, in fact, the case. On this matter, although the consumer will obviously have some direct benefit, we have to maintain a balance between the desire of the consumer to have low fares, and the viability and profitability of our airlines. That is an important point which the noble Lord has made, and it will of course be taken into account in the review in the autumn.
Lord WIGG: My Lords, is it not a fact that in Washington British interests got a very rough handling indeed? Will Her Majesty's Government give the House an assurance that on future occasions—unless we have lost all our spine through contact with Europe—British interests will be very much in the forefront, even to the point of disagreeing and saying, "No, no"?
Lord ORAM: No, my Lords, it is not the case that British interests had a rough deal. If one compares the agreement which was reached with the original position put forward by the Americans, one sees that it is the case that we can, as I said in reply to the noble Lord, take satisfaction from the outcome of these discussions. We had these full consultations with the United States of America,

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as provided under the Bermuda 2 agreement, and we have secured limits on most routes to the number of seats to be sold at the low fares. Most importantly, we have secured terms under which British airlines will be able to compete more fairly throughout the United States of America. The original United States position put British airlines in a most disadvantageous position. So our negotiators really had a success, rather than the reverse which my noble friend suggests.
Lord TREFGARNE: My Lords, what is the position on the Braniff service which precipitated this recent difficulty? Is it now operating, and what are the fare scales applying?
Lord ORAM: Yes, my Lords, that service is operating, and Braniff will be allowed to offer low standby fares without any restriction as to number. I understand that Braniff has filed much higher fares than British Caledonian; namely, £132 and 250 US dollars. The agreement, however, will allow Braniff to match British Caledonian's lower fares, if it wishes.
Lord MACKIE of BENSHIE: My Lords, would the Minister care to tell us what is the total take by airlines crossing the Atlantic since the Laker initiative? I know that the Laker initiative has raised the number of people who wish to cross the Atlantic. Can the noble Lord tell me whether it has lowered the amount of money taken by the airlines, or put it up?
Lord ORAM: No, my Lords, I am afraid that I could not give that information without notice. The noble Lord's supplementary question goes considerably wider than the Question on the Order Paper, and I should appreciate notice of it.

LESOTHO: AID AND FOOD SUPPLIES
2.43 p.m.
Lord BROCKWAY: 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 will support (1) the appeal
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of the Government of Lesotho to the Security Council of the United Nations for action arising from the blockade of Lesotho's frontiers by the Republic of South Africa and (2) the provision of emergency supplies of food to Lesotho by the EEC Commission.
The LORD PRIVY SEAL (Lord Peart): My Lords, the Government are not aware of any appeal by the Government of Lesotho for action by the Security Council. The Government of Lesotho have asked the United Nations Secretary-General to despatch a fact-finding mission to the area of Lesotho where restrictions have been imposed at three border posts. We support this request. We also support the decision by the EEC Commissioner to expedite the despatch of food aid to Lesotho.
Lord BROCKWAY: My Lords, while greatly appreciating the action of the EEC, and in particular of Commissioner Cheysson, may I ask my noble friend this question: In view of the fact that Lesotho is surrounded by South African territory and is suffering from an absence of food supplies and from difficulties in relation to its cattle trade, and in view of the fact that it is so courageously standing against Bantustan and apartheid, would not the United Nations be justified in giving assistance to it in this situation?
Lord PEART: My Lords, I must be fair here. I am advised that there is no evidence that, for example, the South African Government are involved in these measures, which have been taken by the authorities in the Transkei. In any case, this is not a matter for the British Government. But I must say this to my noble friend. We have given considerable aid to Lesotho. British capital aid for the triennium 1976–79 amounts to £11.5 million. In addition, we have offered £2 million in response to a report, made by a United Nations mission which visited Lesotho in March 1977, recommending international aid amounting to 113 million dollars. We cannot be ashamed of our policy here. We have done the right thing.
Lord CARRINGTON: My Lords, would the noble Lord the Leader of the House not agree that, if in the future any form of action by the United Nations took

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the form of economic sanctions against South Africa, this would be wholly disastrous for Lesotho?
Lord PEART: My Lords, I accept that, because Lesotho relies so much on economic links there. May I also say that there is a possibility that a further United Nations mission will be sent to Lesotho to follow up the two previous missions which visited the country in 1977. So we are well aware of the importance of this area.

SERVICE MARRIED QUARTERS
2.45 p.m.
Baroness VICKERS: 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 of Her Majesty's Forces' married quarters are at present lying vacant.
Baroness STEDMAN: My Lords, about 18,800 Service married quarters were vacant in the United Kingdom on the 15th January of this year.
Baroness VICKERS: My Lords, while thanking the noble Baroness for that Answer, may I ask her whether she would convey to her noble friend our sorrow that he is ill and unable to be here today. Can she say whether consideration can be given to the question of rents? When you find that Servicemen have to pay anything between £33 and £43 a month, and officers anything between £52 and £89 a month plus their mess bills, surely consideration should be given to this matter. Perhaps the noble Baroness will draw the attention of the Secretary of State to this matter.
Baroness STEDMAN: My Lords, this is a matter which will be covered in the next report of the Armed Forces Pay Review Body. In the meantime, I will certainly make the views of the noble Baroness known to my honourable friend.
Lord GISBOROUGH: My Lords, could the noble Baroness give some idea of the rents which might be considered
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to be fair in the case of similar, comparable properties in local authority areas? Secondly, could she take into account the fact that civilians at comparable rates of pay to those of officers are able to spend their lives purchasing their houses, while officers, because they have to move so often, are restricted to rented property and, therefore, are not able to start buying until they retire? Therefore, is there not justification for their having specially cheap rates for their houses when they rent them?
Baroness STEDMAN: My Lords, when the rent allowances were consolidated with pay in order to put the Servicemen into, as it were, the civilian pay policy category, this was one of the points which was taken into account; and my understanding is—and here I speak as the substitute for my noble friend, who is ill today—that the rents which are charged are comparable to those charged by local authorities within the areas. I also understand that there is a growing tendency among Servicemen to buy their own houses, and not to have the married quarters which are available to them.
Lord MACKIE of BENSHIE: My Lords, is the noble Baroness aware that, in agriculture, a tied house is charged at about £1 a week, and that this would be a reasonable rent to charge for a Serviceman living in a tied house?
Baroness STEDMAN: My Lords, that is not for me to say; that is a matter for the Armed Forces Pay Review Body to consider.
Lord MACKIE of BENSHIE: My Lords, I trust the noble Baroness will bring that matter to the attention of her honourable friend.
Baroness STEDMAN: My Lords, I am sure that my honourable friend will read what has been said in this House with very great concern.
Lord SHINWELL: My Lords, is my noble friend aware that we seem to be expecting too much from the proposed review by the Armed Forces Pay Review Body? Meanwhile, if there are as many cases of married quarters being vacated as the number she has given your Lordships' House, is it not possible that married

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quarters are being vacated because of the inability to pay rent? That is a matter which ought to engage the attention of Her Majesty's Government, and some remedy ought to be devised.
Baroness STEDMAN: My Lords, it may be possible that that is a contributory factor to people not taking up married quarters, but it is not the whole answer.
Lord AVEBURY: My Lords, I wonder whether the noble Baroness could say what proportion of the total stock of dwellings this figure of 18,800 represents? And if, as I suspect, it is very much higher than the equivalent for a local authority, is there not something to be said for an interchange of lettings between the Department of Defence and the local authorities in the areas where these houses are located?
Baroness STEDMAN: My Lords, the proportion is about 19 per cent. of the total stock of the houses in the United Kingdom. We have a total stock of about 100,000 houses in the United Kingdom, and at the moment 18,800 are available. About 7,000 of these are vacant for normal management reasons—because they are being modernised, because they are being redecorated between tenancies, and so on. There are about 4,000 which are being held pending known or possible future deployments of Armed Forces, and there are 1,100 which are held for requirements such as reserve camps. When we have surplus accommodation it is offered, through the Property Services Agency, to the local authorities in the areas. Unfortunately, many of the properties which we offer are in isolated places and are not taken up by the local authorities because they do not help to meet their needs. Where they are available, they are offered to the local authorities for them to take over on either a leasing or purchasing basis.
Lord ROBBINS: My Lords, would not the noble Baroness agree that, speaking broadly, if there is an excess of 19 per cent. of supply over demand, it would suggest that some alteration of price was called for?
Baroness STEDMAN: My Lords, as I have said, that may be one of the contributory factors, but it is not the whole answer.

TERRORIST ORGANISATIONS IN BRITAIN
2.51 p.m.
Lord JANNER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the involvement of the Palestine Liberation Organisation in the recent massacres of men, women and children in Israel, Her Majesty's Government will take steps to prevent the continuance in the United Kingdom of that organisation and the establishment of branches of other terrorist organisations here.
Lord PEART: My Lords, the PLO itself is a political, not a terrorist organisation. Neither Fatah which perpetrated the latest attack in Israel nor any other of the terrorist groups affiliated to the PLO has branches in this country. Her Majesty's Government would take appropriate action against anyone engaging in terrorism here.
Lord JANNER: My Lords, is my noble friend aware of the fact that the PLO stated immediately after this terrible massacre that it was going to encourage further actions of a similar nature and that, as long as we allow any representative of the PLO to remain in this country to encourage this kind of thought, it will be disastrous not only in respect of Israel but in respect of the terrorism that is being created throughout the world?
Lord PEART: My Lords, I accept what my noble friend has said. We condemn terrorism. That is the policy of the Government. We condemned the terrorist attack on 11th March. It is true that a PLO representative has worked from the Arab League Office since 1971, but we must remember that Said Hammami was a moderate who wanted an accommodation with Israel. We will condemn any terrorism.
Lord WIGG: My Lords, will the noble Lord the Leader of the House bear in mind that the terrorist of one generation is the great statesman of the next? If anyone doubts that, he could have a word

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with Prime Minister Begin, whose own terrorist record is just about as bad, or as good, as that of anyone else in the world.
Lord PEART: My Lords, I do not want to raise tension in this House on this matter. As noble Lords know, fighting continues in the Lebanon and I understand that Israeli forces control most of the area South of the Litani river; but Her Majesty's Government are deeply concerned at the loss of life there and we have played an active part in the United Nations in promoting the two resolutions which the Security Council has adopted and whose effect should be to halt the conflict. We hope that there can be peace.
The Earl of HALSBURY: My Lords, will the noble Lord the Leader of the House extend his anathema of terrorism to condemn explicitly not only Palestinian but Irish, Basque and Zimbabwean terrorism or any other kind of terrorism?
Lord PEART: My Lords, speaking on behalf of the Government, I do that. Terrorism of any kind is cowardly and disgraceful. I abhor it. We want peace.
Lord JANNER: My Lords, while I agree with my noble friend that terrorism is a terribly serious matter, is he aware of the fact that A1 Fatah is the main portion of the PLO and that the PLO is linked with other terrorist organisations? Will he make full inquiries into the activities of this particular organisation not only in regard to Israel but in regard to other terrorist organisations and see whether he is satisfied that representatives of that organisation are not wanted in a civilised country?
Lord PEART: My Lords, there is no PLO office, as such, in London. As I have said, it is true that a PLO representative worked with the Arab League; but he was a moderate man. I am saying that we condemn terrorism. I cannot go beyond that.

EEC COUNCIL of MINISTERS: APRIL BUSINESS
Lord STRABOLGI: My Lords, a Statement is being made today in another
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place about business to be taken during April in the EEC Council of Ministers. With the leave of the House, I will, as usual, arrange for the Statement to be made available in the Official Report.
Following is the Statement referred to:
"With your permission, Mr. Speaker, I will make a Statement about business to be taken by Ministers of the European Community during April. The monthly written forecast was deposited on Thursday, 16th March.
"At present six meetings of the Council of Ministers are proposed for April. Finance and Foreign Ministers will meet jointly on the 3rd, Agriculture Ministers on the 3rd and 4th and also on the 24th and 25th, Foreign Ministers on the 4th, Finance Ministers on the 17th and Development Ministers on the 25th. Heads of State and Government will also attend a European Council meeting in Copenhagen on the 7th and 8th.
"Finance and Foreign Ministers are expected to discuss the Commission's assessment of budgetary problems.
"Agriculture Ministers are expected to resume their discussions on CAP prices for 1978–79 and Mediterranean agriculture. They are also expected to consider agrimonetary matters, proposals for Milk Marketing Boards, producer groups, market arrangements for mutton and lamb, and external fisheries questions.
"Foreign Ministers are expected to discuss preparations for the European Council meeting, direct elections to the European Assembly, Japan, the European Foundation, Greek accession, steel imports, staff regulations and GATT multilateral trade negotiations. Foreign Ministers will also meet in the margins of the Council for a discussion on political co-operation.
"Finance Ministers are expected to review progress in insurance co-ordination since March 1977.
"Development Ministers are expected to discuss aid to non-associates, reciprocal implications of development co-ordination policy and other policies, and the volume and distribution of aid. They may also consider the legal basis of food aid".

BUSINESS OF THE HOUSE
Lord PEART: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order No. 43 (No two stages of a Bill to be taken on one day) be dispensed with for the purpose of taking the Civil Aviation Bill through its remaining stages this day.—(Lord Peart.)
On Question, Motion agreed to.

NORTHERN IRELAND (EMERGENCY PROVISIONS) BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that the Commons Amendment be now considered.
Moved, That the Commons Amendment be now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[References are to Bill (58) as printed for the Commons]
Clause 21, page 14, line 37, leave out subsection (9).
The LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment. The Amendment deletes subsection (9) from Clause 21 of the Bill. Subsection (9) amends the Criminal Injuries to Property (Compensation) Act (Northern Ireland) 1971 while Clause 21 is in force. However, the Bill now takes effect on 1st June 1978 and the Criminal Damage (Compensation)(Northern Ireland) Order 1977 repeals the 1971 Act in relation to acts occurring on or after 1st April 1978. Accordingly, subsection (9) of Clause 21 of the Bill is no longer necessary.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

CIVIL AVIATION BILL
2.58 p.m.
Report received.
[Establishment and purpose of Aviation Security Fund]:
Baroness BURTON of COVENTRY Baroness BURTON of COVENTRY moved Amendment No. 1:
Leave out Clause 1.
The noble Baroness said: My Lords, in rising to move this Amendment, I thought that it may be for the convenience of the House if I were to suggest that in speaking
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to this first Amendment I might also include Amendments Nos. 3, 4, 5 and 8. This, I think, would save the time of the House and when we reach the other Amendments they could be dealt with formally. I set down these Amendments to delete Clauses 1 to 4 because I saw no other way. My position—and I think the same applies to both noble Lords who have added their names to these Amendments—is that this levy should be imposed neither upon the civil aviation industry nor upon the air traveller. We believe that the Government should continue to meet the cost which is, after all, incurred by the Crown discharging what is a basic duty under our Constitution of the Crown, as was stated by the noble Lord, Lord Boyd-Carpenter, in Committee.
If the Government are able to suggest any other way by which this might be achieved, I should be relieved because my submission to the House is that the Government are completely wrong on a matter of principle. The House is aware of the issue at stake. Everyone, and certainly every air traveller, would ask for, and expect, the best possible security checks. But similar expectations apply to the community as a whole. They apply to people in Northern Ireland, they apply on our streets, in our trains, on our Underground, in our shops. They apply everywhere in these troubled times.
My Lords, to my mind the question is this: Who should pay for this security? I will put the case as succinctly as possible. In view of what transpired on Second Reading and in Committee, I think I can summarise what I have to say in seven points—and I hope that these points will remove most of the contents of the brief of my noble friend the Minister who is to reply.
The first one—and I want to be fair on this; I think that the country and both Houses of Parliament have no idea how strongly the civil aviation industry, the airlines and the airport authorities object to what is being done. My noble friend the Minister was fair and, on Second Reading at col. 976 of Hansard for 9th March, he said that this decision was not expected to be popular with the industry. But I think everybody has a right to be heard and to have their case considered.
The House may not be aware that in January of last year there was a meeting at the Department of Trade called to discuss the proposal that charges should be imposed for security at United Kingdom airports to recover the cost of aviation security. Present were representatives of IATA, British Airways, British Caledonian and all other British airlines. Also attending were representatives of the British Airports Authority, the Aerodrome Owners Association and the Joint Airports Committee of Local Authorities, together with representatives of three trade unions and BALPA. I am informed that the general view of those attending was that, because of the nature of the threat from terrorist activities, which was aimed not at the industry but at Governments in an endeavour to influence their policies, it was on this score alone inequitable to charge the airlines or their passengers in order that the Government might protect themselves.
There was solid opposition to the proposals on the part of the airlines present and by the various airport authorities represented and, in particular, by the non-BAA airport authorities. I gather that the chairman of the meeting attempted to sum up by saying that there was a consensus agreement, but that this was strongly opposed, particularly by British Airways who refused to accept that there was any consensus whatsoever. I should like to add here in view of my last remark that my information has not come from British Airways.
My Lords, the second point: the remark that we hear so frequently, that 80p is little enough to pay for security. My noble friend Lord Oram said at col. 977 of Hansard on 9th March that 80p per arriving passenger is a small price to pay for protection. I hope very much that my noble friend will not repeat that statement when he comes to reply because price is not what we are discussing and it is not what we have been discussing all along.
The third point: on Second Reading I asked the Minister if it was not true that no EEC country deals with its security in such a way, and if it was not correct that our partners in the Community were somewhat surprised at this proposed action. In replying, the noble Lord, Lord Oram, said that none of our partners in the EEC had introduced an aviation
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security levy on these lines. He then went on to say something which I regarded as alarming, and this brings me to my fourth point. My noble friend said at col. 1000 of Hansard:
"However, it was put to us by the representatives of the international airlines that other countries might well follow our example, and that possibility was taken into account in reaching the decision."
I am sorry, my Lords, I do not accept that. I think that the Government had made up their mind.
What disturbed me was that I had been able to pay a compliment to United Kingdom policies when saying that I believed it to be true that the United Kingdom is widely regarded as one of the few States whose aviation policies are trend-setting. In the past, these policies in the United Kingdom have been largely instrumental in curbing the inclination of some States to impose aviation security charges in breach of their international obligations. Any reversal of United Kingdom policy in this field, such as is now contemplated, is certain to be widely followed. I said that on Second Reading. I regret that that prophesy of mine seems, according to the Minister, likely to be true. Upon reflection, I would hope that the Government and my noble friend would regard any such action as a retrograde step and would not wish to be the trendsetter on such a slippery slope.
Point 5: my Lords, we do not tax workers at airports, and many air travellers are workers going about their business every bit as much as anyone else. We do not tax visitors at airports; and I suggest that it is quite abnormal for persons living in or passing through problem points to be subject to a special tax.
Point 6: I would ask the Minister, Is it then the intention of the Government to tax sections of the community which may be at risk? If so, are they going to tax all of them or is this to be done on a selective basis?
I come now to my seventh, and last, point. I believe it is unanswerable that neither the airlines nor their passengers are responsible for creating the security risk at airports, and that they are merely the victims of terrorist attack. In these circumstances, what special justification exists for discriminating against this particular section of the community and of the

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public by requiring them to pay for the protection to which they are entitled and which is provided free of charge to other members of the public?
On Second Reading, at column 986, I quoted from a confidential letter sent to IATA by one of our EEC partners. I wish once more to use a very small section here:
"The levying of such a tax is unacceptable: the States have the obligation of ensuring personal security on their territories and more generally of making certain their laws are observed. Their expenses in doing so are properly included in the overall budget of the nation and/or the local communities."
The aim of hijackers and terrorists is to bring pressure on Governments. Surely that is undeniable. Passengers do not create the need for this service. The threat is directed against the community at large and against Governments in general. It is a function of government to provide such protection. It is not something that has to be bought by individuals. I beg the Government, even at this late stage, to look at this dangerous procedure again and, in the light of what has been said, to withdraw the proposed charge on a matter of principle. I beg to move.
3.9 p.m.
Lord HILL of LUTON: My Lords, I rise to support the noble Baroness, Lady Burton of Coventry, who has put up a formidable case at the Second Reading and Committee stage of this Bill. As she said in her concluding remarks today, the nub of this issue is a straightforward question: is it a sound principle for the Government, having quite rightly laid down the security measures to be followed at United Kingdom airports to prevent hijacking, to impose a levy upon airports and so upon airlines and passengers to meet the costs? To put it more simply: is it right to increase air fares to raise the £19 million which such security costs the Treasury today?
The Minister at earlier stages argued that the owner of the premises, the private property, should be responsible for meeting the costs of any security which is necessary. To use his own quotation, restaurant owners, shops, jewellers and, in reply to a question, banks have to make their own security charges. But, my Lords, in these cases the assaults are made by criminals on the property of individuals or bodies, be they banks or
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cafés. In the case covered by these clauses, as the noble Lord, Lord Boyd-Carpenter, stated so emphatically at an earlier stage, the assault is made by the Queen's enemies on the nation, and it is the nation's responsibility and the Government's responsibility not only to lay down the standards to be followed but to meet the cost.
Incidentally—and I agree, of course, that this is a secondary consideration—the way in which this is to be done leads to inequities. The average has been taken of the cost of security measures at existing airports. They range from less than 30p to over £2. They vary according to the character and surroundings of the airport, and the average of 80p has been reached which, when it gets to the passenger, on existing evidence becomes £1. That may be regarded as an insignificant addition to the air fare. It is certainly an insignificant addition to the air fare from, say, Sydney or Hong Kong, but it is a 10 per cent. addition to the fare from Ostend to Southend. What is more, in this country, owing to the mode of calculation and of application of the charge, if you travel from London to Newcastle or Edinburgh it is an extra pound and if you travel back it is another pound; so that is an addition of £2 to the internal fares. Incidentally, no other member of the European Community adopts such a system. If they did, there would be an addition of £2 to package holidays within the Nine countries.
The noble Lord who replied for the Opposition said that 50 per cent. of those coming to this country are foreigners, and he seemed to think that disposed of the issue. But I hope he will not repeat that point, for this reason: the mode of calculating the charge to be made to passengers, charging them on arrival, is a matter of convenient arrangement, as the noble Lord who spoke for the Government said. Indeed, power is taken to change the arrangement to a charge on the outgoing passenger, if that proves more convenient. My contention is that it is the obligation of the Government not only to control but to pay for the security measures at British Airports, whether they are being used by United Kingdom citizens or by foreigners.
In fact, there is a little arithmetic here: the Treasury have obviously been busy.

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They have taken an average of the existing cost at airports, as I said, varying from under 30p to over £2. That comes out at 68p, not 80p. But in order to support the higher figure, the noble Lord who speaks for the Government was good enough to supply a break-down, and it is rather interesting. For good measure, certain other elements are added—not only "security at the point of departure" but "aviation security training". "Protection of air navigation is another item, and "Navigation installation", "Administrative costs", "Contingency for future measures" have been added—and that makes it only 75p. So it is rounded up for convenience to 80p and when it gets to the passenger it has become 100p. It is an odd business, this matter of Departmental arithmetic, to average out and to secure a nice round figure.
Lord TREFGARNE: My Lords, would the noble Lord allow me to intervene? Can he say whether, in the figures that he has given us, he has taken account of the changes that have been agreed and which will form part of the regulations, and in particular that the first 2,000 passengers through any airport will not be charged?
Lord HILL of LUTON: My Lords, I did not, of course, work out the figures for myself. I relied on the material circulated last week in a letter that was also received by the noble Lord.
Lord TREGFARNE: Yes, my Lords; that information was conveyed to the House by the noble Lord, Lord Oram, during the previous debate on the subject.
Lord HILL of LUTON: No, it was not, my Lords. He declined to read out the letter to the noble Baroness. He circulated it to those who had taken part in the debate. I just want to be accurate on this point. There is another point also here—
Lord ORAM: My Lords, would the noble Lord allow me? He will be aware that my noble friend put down a Question for Written Answer soliciting this information: that was given and is on the record.
Lord HILL of LUTON: My Lords, quoted accurately from the material that I was supplied to me. If anyone denies
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that in fact the average at present is 68p and that with these additions it becomes 75p, and by Departmental arithmetic it becomes 80p, and by the airlines' activities it becomes 100p, then I shall be glad in due course to hear. But there is another point here. It has been announced already on behalf of the internal airlines that as from 1st April fares are to go up—the figure quoted was £3—and it was officially stated that it embodies this element. But this Bill is not yet launched and the regulations have not been produced. It really is an affront to this House for action to be taken and for an official announcement to be made that fares are to embody that element in future before in fact this Bill has received the approval of Parliament.
However, I come back to the basic principle, which is really this: Is this form of terrorism to be a national responsibility, paid for out of the national Exchequer, or is it to find its way in an augmented form as a flat increase in passenger fares, in some cases involving a microscopic percentage and in others an appreciable charge? I submit that, important as other sections of this Bill are, this part of it is wrong in principle. It is not a matter of Party politics: I suggest to your Lordships it is a case for wisdom and not whipping. The basic principle is wrong, and I hope that this House will reject these clauses as involving a principle that is wrong and unfair to the air travelling public.
3.19 p.m.
Lord BOYD-CARPENTER: My Lords, the noble Lord, Lord Oram, will, I think, be more than well aware by now of the strong feelings of principle which this proposal arouses in all quarters of this House, and the only reason why I do not seek to take any time of the House to put forward further arguments on this point is that I think he and the House are fully apprised of them.
I would only, on a question of principle, venture to add that the noble Lord made, as he always does, the most gallant efforts last Thursday to argue the unarguable. It is always one of the most agreeable spectacles of this House to watch him doing so, and he tried to cite examples and precedents for this proposal. But, with respect, there are no exact precedents.

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I think the noble Lord himself accepts that internal protection by traders in this country against ordinary crime, over and above that which is provided by the Crown, constitutes no precedent.
On the other hand, no one, apparently, so far has suggested—and I hope that the Government will not—that, when our fisheries are menaced by attacks by foreign naval ships or others, they should have to pay for the protection of the Royal Navy. No one has suggested that the inhabitants of Northern Ireland, being subjected to constant onslaught by the Queen's enemies, should pay extra for that. Indeed, as we know, the boot is on the other foot and the British taxpayer has put forward very substantial subventions indeed to sustain the Northern Ireland economy and the Northern Ireland taxpayer in the grim situation which they are facing. While the noble Lord can, at least, claim to be an innovator, what I am suggesting to him is that this is a bad and a dangerous innovation.
I shall not weary the noble Lord by repeating the earlier argument, but he will recall that protection of the subject against the Queen's enemies was the reason for which society and the State came into existence. It was because the Crown promised protection that the Crown received allegiance. I hope the noble Lord will appreciate that some of us, who feel that there is quite a considerable principle here involved, are very disturbed indeed at the suggestion that that principle should be eroded, and that the Crown should sell its protection to those of its citizens who are endangered by foreign enemies.
As the noble Lord knows, most of those involved in the industry hate this proposal. The noble Lord, Lord Hill of Luton—I must not call him my noble friend, but since he was a friend of mine for so long, when we were colleagues in Government together, I am tempted to do so—drew attention to the calculations which the Association of British Chambers of Commerce have made and circulated to noble Lords. I do not, myself, attach great importance to those, save that they demonstrate the muddle which the Government get themselves into once they depart from the clear-cut grounds of principle that the Crown should not sell its protection. In fact, it looks as
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if the Government have made every effort to load every possible cost on to the costs of security.
I shall be interested to know whether the noble Lord challenges the statement made by the British Association of Chambers of Commerce, which is a responsible body with considerable resources, that only 68 per cent. of the amount obtained by the levy would be required to pay for security. The rest would be the Government's collection charges, an additional payment to the Government for some unascertainable reason and very generous costs of collection for the airlines. But it illustrates—and this is the only reason why I quote it—the muddle into which the Government get themselves.
Similarly there is the question, which the noble Lord answered, put by his noble friend Lady Burton of Coventry. I cannot say that the noble Lord answered it willingly. He was subjected to those pressures by the noble Baroness of which, having been once myself on the receiving end, I have a very fine appreciation. It was only in response to those powerful pressures that the noble Lord, to that extent—if he will pardon the colloquialism—came clean on this.
Lord ORAM: My Lords, will the noble Lord allow me to interrupt? He will, I am sure, if he wishes to be fair, agree that I showed instant and full willingness to supply the information for which my noble friend asked. It was only the length and complicated nature of it that made me suggest that it could best be put on the record by another means. It would have taken a full 20 minutes to spell that out, and that would have been, I suggest, showing disrespect to your Lordships' House.
Lord BOYD-CARPENTER: My Lords, I can only say that it took about a full 20 minutes for the noble Baroness to extract the promise from the noble Lord, so that we are about 50/50 on that. I am not expressing any ingratitude to the noble Lord, because the answer is very revealing. I do not know whether noble Lords have looked at this. This is a Question asked by the noble Baroness, Lady Burton of Coventry, and answered at column 1468 of the Official Report for 15th March. The items are really surprising. There is

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£3½ million for the police. Perhaps the noble Lord would tell us whether, in the present undermanned state of the police force, those police would be disbanded if hijacking were to stop, which, hopefully, one day it will. If not, it would appear that this is quite an entertaining attempt to put £3½ million of the necessary costs of the police on to the airline traveller. There is £500,000 for contingencies, which is a comfortable margin, even for a Government, to seek.
Here, again, we have a very clear confirmation of what I ventured, perhaps rather uncharitably, to suggest last Thursday; that is, that basically this is an exercise in order to enable the Department of Trade to satisfy the Treasury that they are reducing their estimates, without actually reducing their expenditure. These figures—for which I give the noble Lord credit, because he produced them: and I beg noble Lords to look at them—are an indication that everything possible, and perhaps some things that are not possible, have been loaded on to this, which sustains my suggestion as to the real purpose behind this proposal.
There are only two other points on which I wish to detain your Lordships, but they are both important. The noble Lord, Lord Hill of Luton, referred to the argument, which I believe was originally put from the Opposition Front Bench, though with becoming half-heartedness, that this was quite a good thing, because a good deal of it fell on foreigners. Not all that much will fall on foreigners. Because of the system, which the noble Lord, Lord Hill of Luton, explained, 45 per cent. falls on domestic flights, which are mainly used by our fellow countrymen and half, if not more, as a rough average, of the remaining 55 per cent. are probably British subjects on British airlines.
But that is not the point. The point is that if this system is started, it is inconceivable that foreign countries will allow us to pay for some of our security at the cost of their nationals, without retaliating in kind; and, indeed, there is every indication—and I challenge the noble Lord, Lord Oram, to deny this—that if this goes into law some, at any rate, of our colleagues in the European Economic Community will do the same. That will, of course, entirely destroy the argument
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that foreigners are paying. What is more, it is an area of imposition where we in this country are particularly vulnerable, because of the large proportion of our aviation which goes abroad. One of the objections to our adopting these proposals is the near certainty that other countries will follow suit, and British aviation in particular, and international aviation in general, will be loaded with these further charges.
Given all those objections, it is necessary for a moment to look at this proposal in proportion. Is it really necessary? We are talking of £20 million a year, give or take a few pounds. That is about one-hundredth of the amount which, according to the public prints, the Chancellor of the Exchequer is considering remitting in his Budget next month. It is one two-hundredth of the amount which he has been asked by the TUC to remit. It is, on any calculation of a contemporary British Budget, within the margin of error. No Chancellor of the Exchequer would pretend that he could forecast revenue precisely within a limit of £20 million. It is simply a marginal figure. Given that the Chancellor of the Exchequer—and I make no complaint about it—is contemplating, on any view, very substantial remissions of taxation, does it really make sense first to violate an important principle, which once violated will almost certainly be further extended? Does it make sense to risk repercussions on British aviation? Does it make sense to impose specific—and in the case of local flights—quite severe burdens on a limited number of people for a sum of money about which the Chancellor of the Exchequer would not lose five seconds' sleep, which he would not even reckon he could calculate precisely in his forthcoming Budget? Surely the good sense is to drop it.
3.31 p.m.
Lord SHEPHERD: My Lords, because I travel a great deal this is a matter in which I take a particular interest. I must say that my noble friend has made a very strong case in principle for the deletion of the clause from the Bill. My noble friend thought that if the Bill was to go forward as it now is it could be a trend setter for other countries. I say to my noble friend that in one respect I hope it is a trend setter. If other countries would spend as much as we do and provide the

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same efficient form of control in surveillance at airports, many of us who fly would do so with a greater sense of ease and comfort than we now do.
When I have travelled and seen some of the forms of control—I will not mention the airports—sometimes I have felt like getting off the aircraft and trying to fly with another airline that demands proper surveillance. It is a question of money. I have no doubt at all that for many years, until human nature has changed itself, the sort of surveillance we see at the airports will have to continue. It may well be that we shall have to spend more money, perhaps a greater percentage than we now do, in order to have more sophisticated forms of control. The potential hijacker is learning all the time ways and means by which he or she can get round the various controls. Naturally I should like to see air fares come down; nothing has given me greater satisfaction in recent months than to see certain trends—though I can say they are only trends—in those flights where there is very great competition. I would wish to see the Singapore and Hong Kong air fares come down at the same rate as they have come down on the routes between London and New York. I have no doubt at all that very large sums of money will have to be spent at United Kingdom airports if we are to maintain our present standards. Flow is the money to be raised?
I am surprised that the noble Lord, Lord Boyd-Carpenter, spoke so lightly of a sum of £20 million. When I was in Government I could think of quite a number of causes, which even the noble Lord, Lord Boyd-Carpenter, would happily have put his name to, requiring expenditure of £20 million. In a period of stringency £20 million is quite a considerable sum of money. I must recognise—and I hope the House will recognise—that air passengers, in percentage terms of the general population are still a relatively small number. They enjoy considerable privileges by flying. Much of our aircraft has been subsidised in one way or another by the taxpayer.
I wonder therefore whether the principle to which noble Lords, and my noble friend in particular, attach so much importance is one which we could support, or whether we should not look at the situation logically and say that £20 million
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is a lot of money. With the passing of time it may well need to become more, and the special services that are required because of the nature of flying which makes aeroplanes so vulnerable should be a cost and a charge upon the passenger. I accept that if one is flying internally on a day flight between London and Glasgow and Glasgow to London the cost is something of an anomaly. I do not know whether that is something that can be looked at. I believe that if we take air flights in general this is a fair charge upon the passenger and a charge that a passenger will not object to when he knows that as a consequence he is receiving proper security at the airport.
Lord BOYD-CARPENTER: My Lords, would the noble Lord allow me to intervene before he sits down? How does the noble Lord reconcile this imposition on the air traveller with the fact—I believe it is a fact—that the services of the Royal Navy in a very similar situation are given free to our fishing industry?
Lord SHEPHERD: My Lords, may I suggest to the noble Lord that it is quite different. The Navy are providing a service which they have always provided—
Lord BOYD-CARPENTER: So are the airports.
Lord SHEPHERD: —for the protection of the waters and the free movement of ships, the service available to others; but this is a special service, in terms of the general public, of a limited number of people. It is not a very heavy charge, but I think it is a charge which it is right should be borne by the passenger.
Earl AMHERST: My Lords, I give way to no one in my admiration of the indefatigable perseverance of the noble Baroness in pursuing any matter that she pleases—a perseverance that amounts to dedication—but I must admit this afternoon that her perseverance does not persuade me to change my mind. I shall not weary your Lordships with the arguments that I raised at the Second Reading of this Bill in favour of putting the cost of airline security on the industry, so that it will trickle down in one way or another to the passenger, rather than lumping it upon the general taxpayer, so many of

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whom never fly at all. Sufficient to say that if the noble Baroness is determined to press her Amendment to a Division she will not have support from these Benches.
Lord ROBBINS: My Lords, I do not wish to detain your Lordships' House for more than a few moments. I agree with what has been said by the noble Lord, Lord Shepherd, that £20 million is not an insignificant amount. We move in astronomical regions these days, but, in the general context, I certainly do not think that £20 million is negligible. What moves me to rise in my place on this occasion is that what is at stake is not the source of £20 million—whether it should come from the general taxpayer or whether it should come from the consumer of a particular kind of service—but rather the principle which is involved. Personally and professionally, I am in favour of charging to the consumers of goods or services the costs, direct or indirect, to which those goods or services give rise. I should certainly be wholeheartedly in favour of charging the consumers of products whose production inevitably causes pollution the costs of the pollution involved, but I suggest that these things are not at all in pari materia.
Airlines—in whose defence I find myself directly speaking perhaps for the first time in my life, because I am not entirely favourably impressed by the services which are provided at Heathrow for instance, which I use not infrequently—do not give rise to offences against the general security of the public. The object of the terrorist is not the discomfort of consumers or the profits of the airline. His object is to coerce the Government into making certain concessions. Whether it costs £20 million or £40 million, it seems to me that it is a matter of principle that the Government should, as the noble Lord, Lord Boyd-Carpenter, has reminded the House on more than one occasion, pursue the object for which Government exist; namely, the maintenance of general security, and should foot the bill rather than shift it on to a particular group in the community.
I will add only that if the contrary principle be adopted, and an attempt be made by Government to charge different groups of consumers and producers with
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the costs of general policing according to the risks to which these services are particularly liable, they will find themselves in a very controversial muddle. Surely in this case we should stick to the plain and elementary rule that the maintenance of general security is a function of Government and should be paid for by Government and not surreptitiously shifted on to the expense accounts of particular bodies of producers.
Lord BALFOUR of INCHRYE: My Lords, does the noble Lord, Lord Trefgarne, wish to speak? It is usual for Front-Benchers not to shut out Back-Benchers.
Lord TREFGARNE: My Lords, I am obliged to my noble friend for giving way; if he wishes to speak now, he is very welcome to do so.
3.43 p.m.
Lord BALFOUR of INCHRYE: My Lords, I certainly do want to speak now. It is usual for Front-Benchers to allow Back-Benchers a short period of time in which to speak. Perhaps the noble Lord will learn later. I have listened at every stage of this Bill to the arguments put forward so eloquently on every occasion by the noble Baroness, Lady Burton of Coventry, reinforced as she is today most powerfully by the noble Lord, Lord Hill of Luton, and by the noble Lord, Lord Boyd-Carpenter. I have listened also to the very powerful and convincing arguments for their case which have been put forward by the Government.
A balance of considerations is involved, and I do not honestly know on which side I come down. I am reminded of a very old music hall song of years ago when the girl in question sang:
"You lift me up and you knock me down And I don't know where I am."
I feel rather like that. Nevertheless, I believe that it would be entirely wrong, upon different grounds about which I shall speak in one moment, for the noble Baroness to divide the House. I believe also that it would be entirely wrong for the House to support the noble Baroness and her Amendment. All noble Lords who have spoken in favour of the Amendment have admitted that it deals with principle. Not to put too fine a point

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upon it, it is a wrecking Amendment. If this Amendment and the other Amendments are carried, the Bill is worth nothing.
Lord BOYD-CARPENTER: My Lords, I wonder whether my noble friend would allow me to say a word? The Bill contains a number of most important additional provisions—for example, in respect of the borrowing powers of British Airways, the British Airports Authority and the CAA. The Bill contains many valuable provisions and I hope that it will pass into law.
Lord BALFOUR of INCHRYE: Yes, my Lords, but the main part of the Bill—this levy—will be killed, and that is one of the Second Reading principles of the Bill. The Bill had its Second Reading in another place and then went through all its stages. Constitutionally, this House does not, as a rule, vote against the Second Reading principles of a Bill which has been brought from another place. I submit with all humility to your Lordships that it is a very dangerous precedent for us virtually to kill this Bill in the Lobbies. I sincerely hope that the noble Baroness will think better of dividing the House. If she does divide the House, I hope that every noble Lord will realise that we shall be killing the main parts of a Government Bill which have been passed by another place. I admit, of course, that certain parts of the Bill will continue. However, the main part, the levy, will be killed, and it is not constitutionally right that we should so do.
Lord GLENKINGLAS: My Lords, if I may detain your Lordships for just a very short while, I happened to be in charge of civil aviation at the time of the hijacking of those aircraft to Daltonsfield and of the infamous Leila Kahled. It was from that moment on that the Government realised the amount of extra money, time and effort which would be needed to develop the best available security service in order to help civil aviation to carry on its business in the normal way.
I could not help smiling gently to myself, bearing in mind our past position, when I listened to my noble friend Lord Boyd-Carpenter who, in the days when he was Chief Secretary to the Treasury, was certainly as avid in promoting what he
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thought was right as he was in getting his pound of flesh from everybody whom he thought could reasonably provide it. My noble friend was not Chief Secretary to the Treasury at the time of which I am speaking. However, at that time the Treasury began making noises to the Board of Trade, to the effect that if it were necessary to support the security system which was gradually becoming more and more obviously needed, perhaps somebody else ought to pay for it.
Lord BOYD-CARPENTER: My Lords, in view of my noble friend's very kind personal reference to me and his confirmation that I was not at the Treasury at the time that these conversations took place, perhaps he would allow me to tell him that when I was Chief Secretary to the Treasury I should have regarded myself as wholly incompetent if I had allowed a fiddle of this kind by which a Department reduced its Estimates without reducing its expenditure.
Lord GLENKINGLAS: My Lords, I am delighted that my noble friend has, I have no doubt, established in your Lordships' eyes the high reputation which I always had for him when he was Chief Secretary to the Treasury. Be that as it may, the fact remains that the noble Baroness, Lady Burton of Coventry, and my noble friend who have spoken about this matter are right on one essential point: that this is not a cost which ought to be borne by the airlines or the passengers concerned. There is no question about it whatsoever. It may be that we have prisoners on our hands who have created trouble in some way or another, perhaps for political or other reasons, and these hijackings take place in order to force the Government's hand. This problem has nothing whatever to do with whether or not any of your Lordships or I want to fly to Majorca, Glasgow or anywhere else. It is simply and solely, because flying happens to be of the nature that it is, a very easy way, particularly from some airports, for hijackers to get on to the aircraft concerned and create the sort of problems they do. It is in no way comparable to other industries having to pay for their own security where they have jewellery or pictures or something of high quality to protect. If the noble Baroness wishes to divide the House I, unlike my noble friend Lord Balfour, will have no hesitation whatever in coming with her.
3.50 p.m.
Lord SHINWELL: My Lords, I have listened with careful attention, meticulous attention, to the observations of the noble Lord, Lord Balfour of Inchrye, and I am inclined to follow him. It is very difficult to form judgment or to reach a reasonable point of view as a starting point. But then he proceeded to search around for a strong argument to support his contention, if one can regard it as a contention, not being able to form a judgment. He managed to get an argument. It was remarkable, and it causes some confusion in my mind. He asked how we can vote against something when the other place gave the Bill Third Reading. But then the other place is in a rather peculiar situation in this context, because its Members receive free warrants when they travel by air and they do not have to pay anything extra. So I think we ought to exclude the reference to the decision of the other place, for, after all, it is not very impartial in the matter.
In fact, I would interpret Lord Balfour's situation as similar to an observation by the mayor of a particular local authority who was anxious to ingratiate himself with his constituents; when he was appointed he said his intention was to be neither partial nor impartial. I think that is the best conclusion we can reach.
One idea occurs to me: that we are threatened not only by potential hijackers but by muggers. You walk along the street, you go to Picadilly Circus—you can go, but I do not go—and what happens? You may be attacked by a mugger. Are we to be asked to pay a special sum as protection against mugging? It is precisely the same principle. I am bound to say that, much as I dislike voting against the Government, particularly when we are approaching a General Election, nevertheless I do agree with those who say that the principle that the Government must be held responsible for the protection of the community is one which it is difficult to argue against. Either the Government must be held responsible or must be held irresponsible. I prefer to regard the Government as responsible. I am bound to say that if the noble Baroness, Lady Burton, decides to divide the House, I shall find myself on her side.
Lord HARMAR-NICHOLLS: My Lords, this is one of the rare occasions
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when I find myself at odds with my noble friend Lord Balfour; it is on the particular point he made about what is the convention or constitution as to how this House should operate. I think he used the word "constitution". He said that, because the Bill had had a Second Reading in another place and here, we ought not to attempt to amend it on Committee or Report stage. I do not think that can possibly be the case. I am very confused because I remember that, as recently as last week, when the noble and learned Lord, Lord Wilson of Langside, wanted to deal with what he thought was a matter of high principle on Second Reading, we were told in no uncertain terms from both Front Benches and from all sides of the House that the convention was that we gave the Bill a Second Reading and then dealt with it in Committee.
Here is an ideal case, I should have thought, where the second convention—the one I always thought was the accepted one—would work. The Bill was given a Second Reading and now at Report stage there is a chance, without dealing with the overriding principle affecting all the items in the Bill, to amend one part of it which argument has shown justifies change. While on so many occasions I find my noble friend's judgment very sound indeed, on this occasion I think it would undermine the ability of this House to be of any use at all in helping to frame the legislation of this country.
Lord MACKIE of BENSHIE: My Lords, I did not intend to supplement anything that my noble friend Lord Glenkinglas, who knows about civil aviation, has said, but really air travel is the biggest nuisance we have had in history to hundreds and thousands and millions of people who do not use it. Hundreds of thousands of people live beside aerodromes and they are constantly awakened late at night by aircraft flying in and flying out. Aircraft are used by a minority of people. The Government come and offer them a subsidy to insulate their houses against noise, so that if they are inside they do not hear it; but if they happen to be outside there is nothing they can do unless the Government supply them with earplugs.
I travel by air a great deal. The Government pay for my travel up and down

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from Scotland to this House, but I pay for a lot myself. I think it is only reasonable that we should pay because the nature of the beast lays it open to terrorism. If you take motoring, it is exactly the same; it injures enormous numbers of the citizens of this country who never get in a motor-car. The Government do not pay; they force every motorist to pay for third party insurance. That is what the Government do to protect the lieges against a danger that has arisen because of modern technology. It is exactly the same with air travel, and I am perfectly certain the passengers should pay.
The Earl of SELKIRK: My Lords, the principle of this has been fairly well established today, and the question, to my mind, is whether the Government have overcome this principle; whether they have put arguments which deal with it. They started the argument with things like football grounds and dockyards, which, to my mind, have no conceivable relationship with the sort of problem we are dealing with. They do not contain the element of blackmail of Governments. Indeed, the most dangerous place to be today is in a motor-car. In Cologne a senior industrialist was murdered; in Paris one of the senior industrialists is still held by hijackers; in Rome an ex-Prime Minister is held today by terrorists of some kind. There were also the recent events in a motor-car in Israel. Very soon you could extend this to some sort of extra insurance for motor-cars.
To my mind, this is no serious attempt to overcome this problem. The significant statement is the one made by the Parliamentary Secretary to the Board of Trade during the Second Reading in the other place:
"I would never pretend that these things would not have arisen had we not been obliged to make financial savings".—[Official Report: Commons, 16/1/78; col. 162.]
In fact, are there any savings at all? It is pure cosmetics. The savings may be in the Government Budget; they may be referred to as such, but they are not real savings at all so far as this country is concerned. I hope the Government will look at this issue very carefully indeed. I think we feel that this is a dangerous way to start—and I think particularly of the speech made by the noble Lord, Lord
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Shepherd. The sum is going to increase enormously. Is it wise to pass this on to the airlines?—because, with great respect to the noble Lord, Lord Mackie of Benshie, everybody in this country benefits from the very considerable invisible earnings of our aviation industry. I shall certainly support the Amendment.
Lord THOMAS: My Lords, I must declare an interest as I have been an executive of airlines for many years past, and I am currently. I support the Amendment of the noble Baroness, Lady Burton of Coventry, which was so ably put forward by herself, the noble Lord, Lord Hill of Luton, and my old Minister and noble friend Lord Boyd-Carpenter. The Bill as it stands is discriminatory, unfair, wholly objectionable to the airlines and particularly badly balanced as between the long-range and short-range passenger.
4.2 p.m.
Lord TREFGARNE: My Lords, if there are any other noble Lords who wish to intervene they are more than welcome to do so. I feel a bit like Daniel in the lions' den. I am a junior Member of this Front Bench facing the onslaught of not only the noble Baroness, Lady Burton of Coventry, and a distinguished Member of the Cross-Benches, but so many ex-Cabinet Members and Members of the Privy Council who choose to sit on this side of the House. However, I shall do my best. I shall do my best because, despite their eminence, I happen to disagree with them.
The Civil Aviation Bill 1971 provided in principle for the industry to stand on its own two feet. The proposal under consideration is, in some respects, I believe, a continuation of that wholly desirable policy. It must be said that if the airlines are not called upon to pay for these charges someone else will have to do so. There are arguments which I acknowledge and to which I have listened, as to who else ought to pay. However, the fact is that if the airlines are not called upon to pay, as proposed under the Bill, then the Government will have to pay. They are, of course, already paying to some extent, but if the facilities are required to be improved or increased then, of course, Government expenditure in this regard will also have to be increased.

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It has been consistently argued from the Opposition both in your Lordships' House and in the other place, that every possible means ought to be taken to contain and control public expenditure. The proposal is, I believe, a step, in that respect at least, in the right direction. I accept that, as my noble friend Lord Boyd-Carpenter said, this is simply some form of disguised taxation. But it is, I believe, a form of indirect taxation which is better than direct taxation, and to that extent at least it would have my support.
The noble Lord, Lord Hill of Luton, and, I believe, my noble friend Lord Boyd-Carpenter, disputed the assertion which I made at a previous stage that this charge would largely or to some extent at least, fall upon foreign nationals who cannot necessarily claim the protection of British police services. I find it difficult to accept what they say in that respect. I am persuaded that foreigners who choose to use our facilities, especially those who are only in transit through United Kingdom airports—and there are a very great number of those travelling through Heathrow—ought not necessarily to be entitled to expect these facilities especially since they must be applied particularly to flights coming from or going to very sensitive points: they ought not necessarily to expect that these facilities are provided gratis or for nothing.
My noble friend Lord Boyd-Carpenter, and the noble Lord, Lord Shepherd, raised a very interesting point which I should like to emphasise; namely, the question of retaliation. The noble Baroness, Lady Burton, quoted the noble Lord, Lord Shepherd, and said that it could be expected that European countries, and indeed others, may well introduce similar measures if this measure becomes law. However, the noble Lord, Lord Shepherd, reminded your Lordships that at very many airports in Europe the facilities are minimal or non-existent. If one result of this Bill is to persuade these inadequate Governments to provide better facilities, even if they have to charge for them, I should think that that was a wholly admirable and desirable thing.
Lord BOYD-CARPENTER: My Lords, will my noble friend permit me to return to my argument? How can my noble
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friend ensure that, if overseas administrations in areas which he says are lax impose a charge of this kind, they will use it for the application of effective protection?
Lord TREFGARNE: My Lords, I confess that I cannot direct any particular Government to spend their funds in a particular way, but it must be said that those Governments that do not provide very good facilities at present always claim that it is the cost that is holding them back. If they were given a facility for making a charge, then hopefully they can be expected to improve the facilities. There are, after all, pressures available to be applied to these people, other than debates in your Lordships' House, which may have beneficial and desirable effects.
Baroness BURTON of COVENTRY: My Lords, I should like to ask the noble Lord, Lord Trefgarne, from where he quotes when he says that there are other airports in other countries where they say that they cannot install security because of cost. I have not read that and I should be glad if he could give your Lordships a list.
Lord TREFGARNE: My Lords, I shall not follow the noble Baroness on that point, because by saying where the Governments have denied or refused to install these facilities because of cost, in the same breath I say where the facilities are bad, and it would be wrong for me to say such a thing in your Lordships' House.
Much has been made this afternoon of principles. Nobody holds dearer the principles espoused than I do. However, I should like to offer your Lordships some other principles which I think are equally valid in this context. For example, the railways provide their own police service, which they pay for themselves and the cost of which is part of the fare which we all pay to travel on the railways. Mention has been made of football matches. I think that the noble Lord, Lord Oram, mentioned football matches in a previous debate. The cost of additional police services as regards football crowd control falls upon the clubs. Jewellers who are in a particularly risky situation have to pay themselves for the cost of Securicor or other security organisations.

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Airlines are now asked to bear additional security costs and the noble Baroness and others complain that that should be so. Airlines are also required to train their crews properly, and nobody suggests that they should not have to pay for that. Airlines are also required to maintain their aircraft properly, and nobody objects that they should pay for that. However, when they are required to police the passengers going on and off the aircraft and to pay for it then, for some reason, we now all complain.
Lord GLENKINGLAS: My Lords, my noble friend is really totally ignoring the whole point of the argument. Whether it is the football crowd, the jeweller or anybody else, they are protecting their own interests. The aircraft industry is being asked to pay for this to protect the Government's policy in a whole range of different things. It is a totally and absolutely different point.
Lord TREFGARNE: My Lords, the noble Lord is entitled to his view and I believe that I am entitled to mine, and mine is different from his. One final analogy that I should like to suggest really takes up the point that several noble Lords have made, that this is in some way different because airlines are being compelled to adopt these standards of security. However, that is a principle that has long since been breached. On this matter I would yield only to my noble friend Lord Balfour of Inchrye, who, for example, has consistently opposed in your Lordships' House the suggestion that seat belts ought to be made compulsory. However, unhappily, crash helmets, for example, have long been compulsory for motorcycle riders and nobody suggests that motorcycles riders should not pay for their own crash helmets; but they do.
I now have to consider what advice I should give to noble friends sitting behind me who have yet to make up their minds on this matter. This is not a matter on which we would seek to whip; it is a matter on which they have to make up their own minds; but I see no reason to oppose the Government.
4.10 p.m.
Lord ORAM: My Lords, this debate has, indeed, given us yet another opportunity—and there have been many—to go
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over the arguments concerning the major purpose of the Bill. Whether or not we accept the arguments of my noble friend Lady Burton of Coventry, I think we would all agree that she admirably summarised the case in favour of her Amendments without any waste of words. We have had other summaries of the cases that have been deployed on earlier occasions, although I can not always say that there has been no waste of words.
Essentially, we are dealing with Clauses 1 to 4, which are all based on the principle of transferring the burden of aviation security costs from the general taxpayer to the industry. When this Bill was debated in another place this principle was not called in question by the Opposition. Although it has been questioned in your Lordships' House today and previously, I acknowledge that the noble Lord, Lord Trefgarne, on behalf of the official Opposition in this House has reiterated the support for the principle which was given to it by his colleagues in another place, and I appreciate the spirited way in which he put forward his arguments.
It would be idle to attempt to deny that there are important arguments in favour of the costs of aviation security being paid for by the Government—that is, ultimately by the taxpayer. No one can have listened to, or have read, our debates at earlier stages of our consideration of the Bill without recognising that this is not, as the noble Lord, Lord Balfour of Inchrye, said, a clean-cut, one-sided issue, and I do not attempt to pretend that it is. There are arguments on both sides and it is a matter of judgment where the balance lies. Indeed, I would suggest that that is acknowledged by the very fact that hitherto it has been the Government's policy to pay for the special measures required to meet the threat of international terrorism. Incidentally, one of the advantages of that policy is that if the Government pay for the measures, that makes them easier to enforce.
However, I must point out once again that although it is a fact that hitherto the Government have paid for these special measures, that has been the exception rather than the rule in matters of security. The noble Lord, Lord Trefgarne, has given parallels which are now familiar to us in our discussions and which were deployed extensively in the debates in

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another place. Railways, restaurants, football grounds and other property owners pay for the protection of their property and of the people who use its facilities. I accept what the noble Lord, Lord Boyd-Carpenter, said when he said that in this matter there are no exact precedents, and I recall that the noble Lord, Lord Robbins, on an earlier occasion pointed out that these things shade from one situation into another.
But in reaching our judgment we must weigh up even more generally comparable situations in other areas. Although in some of these cases of course the problem is not nearly so severe as it is in the case of the hijacked aircraft, I believe that they contain principles which help us in reaching a judgment on the particular matter that we are considering this afternoon. I would remind noble Lords that in earlier situations airports and airlines have also paid for their security and policing. Before 1974 the British Airports Authority Constabulary and the Manchester and Birmingham Airport Police were wholly paid for by the airport authorities. Until now the Exchequer has paid only for the additional costs attributable to the special measures required to meet the threat of international terrorism. The Bill proposes that in future the fund—that is, the industry—will pay for these additional costs instead. Putting the cost on the industry is, in fact, reverting to the norm. I believe that we must recognise—it is a most unfortunate fact of life, but it must be recognised—that hijacking must now be regarded as a crime to which aviation is likely to be habitually subject.
A number of noble Lords—notably the noble Lords Lord Hill of Luton and Lord Boyd-Carpenter—have referred to the information which has now been published about the costs and have made their analyses. The noble Lord, Lord Boyd-Carpenter, directed one particular point to me when he quoted the estimate of the chambers of commerce that only 68 per cent. of the sum to be raised will be spent on security. I must tell him that that is not true. In fact, 78·3p of the 80p is the present estimate for next year.
Lord BOYD-CARPENTER: My Lords, when the noble Lord says 80p, surely what the passenger will pay is £1?
Lord ORAM: My Lords, not necessarily. It is entirely a matter for the Civil Aviation Authority to decide how the 80p is passed on. The Government and this Bill do not in any way make it into £1. The Bill provides for and the regulations will provide for, an 80p levy.
Lord BOYD-CARPENTER: My Lords, when the noble Lord speaks of the Civil Aviation Authority does he not in fact mean the British Airports Authority?
Lord ORAM: My Lords, I mean the authorities that determine fares.
Lord BOYD-CARPENTER: My Lords, it is not the CAA at all.
Lord ORAM: My Lords, those that determine fares. The point is that under the regulations and the announcement that we have made the levy that will be charged under the authority of this Bill is 80p. Of that, 78·3p is the estimate for next year. Moreover, if this is exceeded, the deficit will be carried forward; if it has been over-estimated, it will be corrected in subsequent years. It is not for me to comment on what, as I have said, is eventually passed on by way of fares. I am dealing with the powers that we are asked to legislate for in the Bill. Other authorities will exercise their powers with their own judgment.
Of course, it is no surprise that the industry has not welcomed the proposed levy. It was pointed out by my noble friend Lady Burton of Coventry on Second Reading—and she has done so again today—that various sections of the industry have indicated their opposition to it. But that should come as no surprise The noble Lord, Lord Boyd-Carpenter, and I agreed at the Committee stage that the Bill does not reduce expenditure. We are not arguing on that. It imposes a charge—let us make no mistake about that—or call it a levy, or a tax, or what you will. Any tax or levy is bound to be unpopular with those who have to pay it, although I must say that, so far as one can judge from Press comment at the time that the levy was announced, the general public reaction was not unfavourable. I believe that there are many who would wholeheartedly agree with my noble friend Lord Shepherd when he says that air passengers want to be sure of security

1597
measures, and that they believe that it is worth paying a levy to achieve that.
As I have said, this is a matter of judgment, and I do not expect to be able this afternoon to convince those who have already made up their minds and have taken a contrary view. But I have felt it necessary to repeat the arguments which have been deployed a number of times before and which, in another place, were categorically accepted on behalf of the Opposition by Mr. Norman Tebbit, as they have been here by the noble Lord, Lord Trefgarne.
There is one other aspect of this matter. It is new. I have not introduced it before, but I think it is important that I should put it before your Lordships. If these Amendments are carried, and if these four clauses should be omitted from the Bill, it would not necessarily have what I presume to be the desired effect of making the Chancellor of the Exchequer find another £19 million in his Budget and of making the general taxpayer pay. After the Government's decision of principle had been notified to the industry—and that was at Christmas 1976—the Department of Trade held consultations with the industry to determine the best method of administration.
For example, one idea which has been touched in on our debates and which was put forward was to put a levy on each passenger which he would have to pay in cash as he checked in for departure. That proposal was quickly rejected in the discussions. But another method based on existing powers in existing legislation was much more attractive; it is what we have come to call non - reimbursement. Section 23 of the Protection of Aircraft Act 1973 says that the Secretary of State may reimburse aviation security costs. Equally he may not. He could simply announce that he would cease to reimburse costs incurred after a certain date.
This course had two strong attractions: it would not require any legislation such as we have been discussing in this Bill, and it would save the administration from having to collect a lot of money and pay it out again mainly to the same people who had paid it in. Views in the industry on this question were divided, but there was a substantial body of opinion in favour of non-reimbursement. There were two main reasons why the Government eventually decided to reject that course, and
1598
those arguments were based on equity and security.
The costs of security measures at each airport vary widely one from the other. This is not, in the main, because one airport is more efficient than another but because of circumstances outside their control, such as the design of the airport, the proportion of high risk flights, the amount and pattern of traffic and the level of threat. The degree of security provided for air passengers is uniform throughout the country, though the measures may vary. For example, the cost of security at Luton airport, which we have quoted before, is a little over 30p per passenger, whereas at Liverpool it is as much as £2. Naturally Luton airport would prefer the non-reimbursement system, which we did closely consider, but if we were to adopt it I do not think it would be long before my right honourable friend would be receiving a deputation from Liverpool airport stressing the difficulties they would have in finding the money to finance their security measures. We think—and this was the conclusion that we reached when deciding to introduce this Bill—that spreading the load is the fairer system.
However, the security point is perhaps more important. The Protection of Aircraft Act gives power to the Secretary of State to make directions about the security measures which must be taken. But, in a typically British way, we have hardly ever had to use these directions. The security advisers of the Department of Trade visit airports and recommend the measures which should be taken. Their advice is always accepted because they virtually have a cheque book in their pockets. The measures which they advise will be paid for, and naturally this makes for a very happy relationship.
If, on the other hand, the costs were to be borne by those who incurred them in the first place, we should have to increase the staff to make much more regular inspections; we should have to make many more directions; and sometimes there would have to be prosecutions. I am not saying that this is an impossible system. Indeed, this is largely what happens in the United States where all measures are laid down legally and the costs fall on the airlines, or the airports. But we think that the system provided for under this Bill, which admittedly has no precise precedent, is much preferable.

1599
No one in another place or here has at any stage questioned the unhappy necessity for taking these security measures. These four clauses, which have been approved by all Parties in the House of Commons, essentially provide for the method of financing these measures.
Baroness WARD of NORTH TYNESIDE: My Lords, will the noble Lord give me one moment? Does he not think that, if the noble Lord, Lord Boyd-Carpenter, had been in the Commons instead of having been translated to the Lords, something might have been brought up and that that would have been to the benefit of the Amendments that we are arguing today?
Lord ORAM: My Lords, if the noble Baroness is suggesting that the ranks of the Opposition in another place have deteriorated in recent years, I should feel inclined to agree with her. I want to conclude by urging the whole House to think very considerably about what the noble Lord, Lord Balfour of Inchrye, said on the constitutional point. He speaks with considerable experience and authority in this matter. If I may say so to my noble friend Lord Shinwell, he gave an entertaining comment on Lord Balfour's speech but it was scarcely at the same level of statsmanship as that from the noble Lord opposite.
I would urge your Lordships to think seriously on this matter before making any such fundamental change in this Bill as to leave out these four clauses. I agree with the noble Lord, Lord Boyd-Carpenter, that there are other important parts of the Bill; but these four clauses are the hub of a very major part of the Bill and therefore to reject them would be tantamount to emasculating the Bill.
If your Lordships follow the course, which I hope you will not, of following my noble friend into the Division Lobby if she divides the House, then I feel sure that the Government will of course have to give great consideration to the situation and I have little doubt that my honourable friend the Parliamentary Under-Secretary in another place will advise the House of Commons to disagree with your Lordships' House in these Amendments.
I believe that this House should get into that kind of conflict with another
1600
place only on matters of very great moment and very high principle indeed; and, frankly, although this is an important Bill, it is not of that measure. Therefore, I very much hope that noble Lords have a due consideration for the rightful place of this House in the Constitution of this country will make sure that that situation does not arise and that your Lordships will vote decisively against the Amendment.
Lord O'NEILL of the MAINE: My Lords, is the noble Lord aware that the reason why I and many of my noble friends, in the past, have had the honour of supporting the noble Baroness, Lady Burton of Coventry, is because she speaks for the consumer? Surely one of the raisons d'être of your Lordships' House—which, incidentally, the Party opposite wishes to abolish—is that we should speak for the consumer with an independent mind. That is why, if the noble Baroness divides the House, I shall, as I have so often done in the past, have the greatest pleasure in supporting her.
Baroness BURTON of COVENTRY: My Lords, we have had an excellent debate and I thank all noble Lords who have taken part, whatever their views. I shall not detain the House for many seconds. At the outset I wish to take up the point made by my noble friend Lord Oram and the noble Lord, Lord Balfour of Inchrye. When Lord Oram says that, if we pass these Amendments, the other place might send back a Reasoned Amendment, I accept that, and of course that is the process We opened business this afternoon by agreeing to a Commons Amendment; there is no question of getting into conflict with another place. I submit that, if this House is to have any standing whatever, it must be able to suggest Amendments to Bills which come to us from another place; anything else would not be tenable.
Probably I am biased, but in my view the Government have made a very bad case on this issue I noticed that Lord Oram got back to the 80p per passenger point by invoking my noble friend Lord Shepherd through another door; but we are not discussing price. I was sorry to hear Lord Shepherd say it was a matter of money; I went out of my way at the very beginning to say it was not a matter of

1601
money. If I remember correctly, when he was asked about naval protection being given to fishery vessels free of charge, I think Lord Shepherd said, in effect, "That has always been the case". Equally, it has always been the case for the unfortunate people living in Northern Ireland that we all pay out of general taxation for protecting them, and I should have thought that the two were on the same level.
I really do not think—and I do not think the noble Lord, Lord Mackie of Benshie, thinks this, either—that whether or not this levy is approved will make any difference to the noise, so I pass on from that to the point at issue between us, which is whether or not the Government of the day are responsible for the protection of their citizens against the Queen's enemies. I do not think that a football match or the trains or the
Underground represent an external threat from the Queen's enemies. Lord Oram tried very hard to explain the point and he told us how the Exchequer had paid for additional measures since 1974, and I am merely suggesting that they should continue to do so. I believe very much that, whatever the result of the Division, it is the duty of Government to protect their citizens from external terrorist threat, and I therefore hope very much that your Lordships will follow me into the Division Lobby.
4.33 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 75; Not-Contents, 77.

CONTENTS

Aberdeen and Temair, M.

Fortescue, E.

Mountgarret, V.

Adeane, L.

Fraser of Kilmorack, L.

Northchurch, B.

Alexander of Tunis, E.

Gainford, L.

O'Neill of the Maine, L.

Alport, L.

Gisborough, L.

Porritt, L.

Ampthill, L.

Glenkinglas, L.

Rankeillour, L.

Auckland, L.

Greenway, L.

Robbins, L.

Balerno, L.

Henley, L.

St. Davids, V.

Bledisloe, V.

Hill of Luton, L. [Teller.]

St. Helens, L.

Boothby, L.

Home of the Hirsel, L.

Selkirk, E.

Boyd-Carpenter, L.

Hood, V.

Sempill, Ly.

Brockway, L.

Hornsby-Smith, B.

Sharples, B.

Burton of Coventry, B. [Teller.]

Hylton-Foster, B.

Shinwell, L.

Caccia, L.

Ilchester, E.

Sligo, M.

Chelmsford, Bp.

Inglewood, L.

Somers, L.

Craigavon, V.

Kinloss, Ly.

Spens, L.

Cromartie, E.

Lauderdale, E.

Stamp, L.

Daventry, V.

Loudoun, C.

Thomas, L.

de Clifford, L.

Lyell, L.

Trenchard, V.

De Freyne, L.

Macleod of Borve, B.

Tweeddale, M.

Dundee, E.

Mancroft, L.

Vernon, L.

Ebbisham, L.

Merrivale, L.

Vickers, B.

Effingham, E.

Mersey, V.

Vivian, L.

Elliot of Harwood, B.

Monk Bretton, L.

Wakefield of Kendal, L.

Emmet of Amberley, B.

Monson, L.

Waldegrave, E.

Exeter, M.

Mottistone, L.

Ward of North Tyneside, B.

NOT-CONTENTS

Airedale, L.

Colville of Culross, V.

Greenwood of Rossendale, L.

Alexander of Potterhill, L.

Cooper of Stockton Heath, L.

Grey, E.

Amherst, E.

Cottesloe, L.

Hale, L.

Amory, V.

Crook, L.

Hanworth, V.

Amulree, L.

Davies of Penrhys, L.

Harmar-Nicholls, L.

Ardwick, L.

Denham, L.

Harris of Greenwich, L.

Aylestone, L.

Donaldson of Kingsbridge, L.

Hawke, L.

Bacon, B.

Douglass of Cleveland, L.

Henderson, L.

Banks, L.

Dowding, L.

Houghton of Sowerby, L.

Beaumont of Whitley, L.

Eccles, V.

Jacques, L.

Bernstein, L.

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

Janner, L.

Blyton, L.

Evans of Hungershall, L.

Kaldor, L.

Boston of Faversham, L.

Gaitskell, B.

Leatherland, L.

Castle, L.

Gladwyn, L.

Listowel, E.

Champion, L.

Gordon-Walker, L.

Lloyd of Hampstead, L.

Lovell-Davis, L.

Pannell, L.

Strabolgi, L. [Teller.]

McCluskey, L.

Peart, L. (L. Privy Seal.)

Strathspey, L.

Mackie of Benshie, L.

Peddie, L.

Swaythling, L.

Maelor, L.

Ponsonby of Shulbrede, L.

Taylor of Mansfield, L.

Meston, L.

Raglan, L.

Tenby, V.

Molson, L.

Sainsbury, L.

Trefgarne, L.

Morris, L.

Shepherd, L.

Wallace of Coslany, L.

Mowbray and Stourton, L.

Snow, L.

Wells-Pestell, L.

Nugent of Guildford, L.

Stedman, B. [Teller.]

Willoughby de Broke, L

Oram, L.

Stewart of Alvechurch, B.

Wise, L.

Paget of Northampton, L.

Stone, L.

On Question, Motion agreed to.

Clause 2 [Contributions to the Fund]:
4.44 p.m.
Lord ORAM Lord ORAM: moved Amendment No. 2
Page 4, line 13, leave out paragraph (b) and insert—
("(b) the regulations first so made may, if not made before 1st April 1978, be retrospective to that date so that the first period prescribed for the purposes of subsection (2) above shall begin on or after that date;")
The noble Lord said: My Lords, This is an Amendment to make it clear that the regulations may provide for the security levy to be made by reference to passengers arriving from 1st April 1978, even though the regulations may not have been approved by both House of Parliament and made until some later date, which I hope will be very shortly after the Easter Recess. There is no change of substance or intention. The Amendment is necessary merely to make it clear that there is power to make regulations after 1st April 1978 which will be retrospective to that date. The possible retrospective effect of this subsection was made quite clear, both by my right honourable friend the Secretary of State for Trade and by my honourable friend the Parliamentary Under Secretary of State, during the Second Reading debate in another place, and there was a lengthy discussion of it during the third sitting of the Standing Committee. However, the point was raised again by the noble Lord, Lord Boyd-Carpenter, during the Committee stage last Monday and this caused us to have another look at it, to see whether the wording was quite clear, and we were advised that it was capable of improvement. Consequently I have put down this Amendment.
The date of 1st April 1978, was in fact chosen for the convenience of the industry, because that is the date when nearly all airport authorities increase their landing charges. They normally give several months' notice of such increases to the airlines, so that they can take them into
1604
account in the complicated processes involved in fixing their fares; and the tour operators need even longer notice, since their brochures for summer holidays go to press during the previous summer. Those were reasons why 1st April was chosen. I am grateful to the noble Lord, Lord Boyd-Carpenter, for having stressed the point about retrospection. As I have said, this gives us an opportunity of suggesting an improvement in the wording to your Lordships. I beg to move.
Lord BOYD-CARPENTER: My Lords, I rise mainly to deny paternity. I should not like to leave the noble Lord or the House under the impression that I had done anything to facilitate the almost indecent haste with which the Government—flushed, no doubt, by their enormous majority on the last Division—are proceeding with this measure. It seemed to me—and this is why I raised the point at an earlier stage—that one needed a very strong case in principle for retrospective legislation, particularly where that legislation imposes taxation, as this does. I still see absolutely no reason why the Government are in such haste to apply this levy that they have not only to introduce this Amendment at this stage but have also to operate the tax even before the regulations can be either published or, certainly, approved. It is indicative of the whole rather shabby way in which this transaction has been handled. On the whole, as between the Government and Shylock, I prefer Shylock.
Clause 8 [Power to make byelaws in relation to noise, vibration and pollution]:
[Amendments Nos. 3, 4 and 5 not moved.]
4.49 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 6:
Leave out Clause 8.
The noble Lord said: My Lords, this is simply a probing Amendment. I raised this point at a previous stage. I am anxious to know how it is the Government proposed to implement the undertaking given in the White Paper on airport policy, which said inter alia, that noisy aircraft—for want of a better, more technical definition—are to be removed from the British register in 1986, and indeed no further examples of these types are to be permitted on to the register, which is a slightly different point, from October of this year. I think this may require new legislation, and I am wondering whether the noble Lord could tell us how the Government propose to deal with it. I beg to move.
Lord ORAM: My Lords, the noble Lord, Lord Trefgarne, indeed asked the question which he has just repeated, and I wrote to him on the point. I hope he has received the explanation.
Lord TREFGARNE: No, my Lords.
Lord ORAM: It will be coming; it went some time ago. I am sure it would to the convenience of your Lordships' House if I were to summarise what is contained in the letter which the noble Lord will receive. At present, certain aircraft are not covered by the Air Navigation (Noise Certification) Order 1970, either because the order does not cover subsonic jet aircraft weighing 5,700 kilograms or less or because they are aircraft exempted by the CAA from the noise certification requirements under the order. Therefore, a further order is at present being prepared to introduce new or revised standards for new types of aircraft that have been agreed by ICAO. Among other things, this new order will extend the application of the orders to subsonic jet aircraft weighing 5,700 kilograms or less. The main effect, however, will be achieved by the CAA's narrowing of the existing exemption to take account of the Government's decision. I hope that gives the noble Lord the information for which he asked.
Lord TREFGARNE: My Lords, I am obliged to the noble Lord. There are certain points arising out of that which would wish to put sue with the noble Lord, but they are not, I think, a matter for your Lordships now, and I can perhaps correspond
1606
with the noble Lord. Unless any other noble Lord wishes to speak on the matter, I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Minor, consequential and consolidation amendments]:
4.52 p.m.
Lord BOYD-CARPENTER Lord BOYD-CARPENTER moved Amendment No. 7:
Page 15, line 10, at end insert (""In subsection (2) of section 1 for the word "twelve" there shall be substituted "fifteen"."")
The noble Lord said: My Lords, this is a small point which I raised at Committee stage and on which the noble Lord, Lord Oram, after consulting the present chairman of the Civil Aviation Authority, has been good enough to reply to me by letter. He told me——he will not mind my quoting the letter—that the present chairman of the CAA regarded 12, which is the present maximum number, as "a good working number". Apart from the fact that I have the highest respect for the judgment of the present chairman of the Civil Aviation Authority, I would not myself dissent from that. However, I think that, from that answer, I draw a different conclusion from that which, by implication, the noble Lord, Lord Oram, drew. If 12 be "a good working number", it must surely from time to time be inconvenient that it be also a maximum. It would certainly be much more flexible to have a margin, so that if, for example, one member is due to retire in some months' time, and it is desired to bring on another member, the number can rise above 12 by a moderate degree in the interim period.
My Lords, if one were looking at this from the point of view of practical efficiency, I am perfectly certain the noble Lord would accept the Amendment, because it makes sense and there will be no opportunity, probably, for a great many years more to do this, for hopefully there will not be another Civil Aviation Bill for another six or seven years. I rather suspect that what really lies behind the noble Lord's attitude is that he does not want to delay the Bill by having to go back to the Commons, even very quickly, to take one Lords Amendment. But I would ask him, before I decide what line I will take on this Amendment, to

1607
consider the argument whether, if both he and I accept, as I think we do, the judgment of the present chairman of the CAA that at present 12 is "a good working number", then the necessary inference to be drawn is that it would be desirable to have some margin over that, be it 14, be it 15 or be it 16. I beg to move.
Lord ORAM: My Lords, I acknowledge at once, as I think I did at Committee stage, that the noble Lord has brought forward some cogent arguments, particularly the one that it would give a certain flexibility in making appointments if we were to have a larger number than 12. But he I think agreed that it would be wrong for the Government to legislate in this matter, or to accept his Amendment, without consulting the present chairman of the CAA; and, as he has indicated and as I indicated in my letter to him, the present chairman. Mr. Foulkes, has rather firm views on the matter. That being so, although I do not wish to reject by any means the whole case that the noble Lord has put forward, I am sure he will feel that we could not go against the advice that we have received during the course of the week.
However, I believe he has raised not only an interesting but an important point. It may be that there will be an earlier opportunity than he projects for a reconsideration of this matter. But in any case I hope he will concede, in the light of the brief history of this matter since he raised it, that we need to have an opportunity to study it further before making any such change. I therefore hope he will see fit to withdraw his Amendment.
Lord TREFGARNE: My Lords, what my noble friend decides to do with his Amendment is a matter for him, but if he chooses to take a robust line he will certainly have my support. I take the view that 12 is the minimum reasonable number for the Authority; and, while I accept what has been reported as the views of the present chairman of the Authority, I think the point made by my noble friend—that, after all, this is only an enabling provision—is an almost overwhelming one. I wish the noble Lord, Lord Oram, could accept this Amendment with rather more alacrity than he seems to be showing.
Lord BOYD-CARPENTER: My Lords, I remain unconvinced by Lord Oram's argument, and I feel tempted to put the matter to the arbitrament of this House; but I feel that, having given the Government Chief Whip as near as may be a heart attack earlier this afternoon, one would probably be hauled before the International Commission for Human Rights if one were to press this further, because Chief Whips, as we all know, are an oppressed class for whom everyone has the greatest sensitivity. Therefore, while I shall not in fact seek leave to withdraw my Amendment, I shall not put in Tellers and should the House in its wisdom or lack of it (and I would think lack of it) see fit therefore to negative the Amendment, I should be, in that technical sense, content.
On Question, Amendment negatived.
[Amendment No. 8 not moved.]
Then, Standing Order No. 43 having been dispensed with (pursuant to Resolution):
4.58 p.m.
Lord ORAM: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill he now read 3a.— (Lord Oram.)
Baroness BURTON of COVENTRY: My Lords, before we part finally with this Bill, may I express the hope to my noble friend that, as we came within—I was going to say an ace, but I do not know whether it is two aces—of victory, and as we had, I am told, the Front Benches of both the main Parties against us, he will see that the Secretary of State reads our debate most carefully and takes into consideration what a very large number of people in this House felt.
Lord BOYD-CARPENTER: My Lords, I had not intended to intervene but what the noble Baroness has said expresses so well what I have in mind that I should like merely to say how very much I agree with her. I think, in all seriousness, that the earlier debate, about which I was light-hearted a moment or two ago, showed how noble Lords in all parts of the House who were free of official trappings or trammels, or whatever they may be called, had the gravest doubts about this measure.

1609
Therefore, if the Government intend to take advantage of their narrow victory to operate it—and to operate it, as I said earlier, with really quite indecent speed—then I hope that they will do so with the knowledge in their minds that it is, on the whole, a step which is at the best a dubious one and that it is a bad precedent. This will be watched with great care and trouble by a good many people to see whether or not it creates a precedent and whether that precedent is followed.
To the rest of the Bill, as I said at a much earlier stage, I am more than prepared to give a great deal of support: the borrowing powers for the Civil Aviation Authority and the improvements generally in the law are excellent. For that reason I should not wish to sec the Bill founder; but I think that we should kid ourselves if we let this Bill go forward to the Royal Assent without having put down a marker to the fact that in one way—and that one way is the introduction of this levy—its passage marks a bad day for good administration in the United Kingdom
Lord ORAM: My Lords, I should not wish to reiterate the arguments but, since the noble Lord has referred to the narrowness of the recent vote, I would remind him that Winston Churchill once said that one vote was enough; and by that measure two votes are doubly enough.
Lord BOYD-CARPENTER: Over-whipped, my Lords.
On Question, Bill read 3a, and passed, and returned to the Commons with the Amendment.

EEC: AGRICULTURE REPORTS
5.3 p.m.
Lord RAGLAN Lord RAGLAN rose to move, That this House takes note of the Reports of the European Communities Committee on EEC Farm Prices 1978–79 and proposed changes in Green Money, and on Milk. [Fourteenth Report (H.L. 97)(R/3200/77, R/3295/77 and R/2601/77); Fifteenth Report (H.L. 98)(R/2648/77 and R/27/78). The noble Lord said: My Lords, this is the first debate which has been held by your Lordships' House on a report from the Select Committee since the death of our noble friend Lady Tweedsmuir. I think it is right that I should say how much
1610
we loved and admired her and how so much the poorer we feel for her passing.
I beg to move the Motion standing in my name on the Order Paper. As acting-chairman in the absence of my noble friend Lord Walston of the Sub-Committee which produced this report for the Select Committee, I think that I can say without diffidence, because I did not draft it, that this is a good, clear report and that it is not too long. I am sorry that it has been available for only a comparatively short time partly because of difficulties with printing but also because it might have been ready earlier if we had not decided to discuss it very fully in Committee when its emphasis was altered somewhat from taking a neutral line to one of making a positive recommendation that British agriculture should be allowed to expand—something which would be both healthy for farming and in the long-term interests of consumers.
As a farmer, I do not mind the Committee's saying that my operations should be allowed to become more profitable, but being chairman of the Committee too, I should feel shy in making such a proposition myself; I would only say that the Committee accepted the observations of non-farming Members who felt that things had slid rather too far, that British agricultural production was being held back for short-term reasons and that consumers' interests would benefit from home expansion.
My Lords, let me say that I think that few farmers are in penury. The great majority in any case will always survive by pulling in or cutting back. I have done it myself. What you do is to tie your gates together with string and your tractors with wire; you do not erect that shed, you do not drain this field or dig that ditch and you keep your head down until times get better. But one consequence of that kind of operation is to depress the industries which depend upon supplying agriculture—and they are very many and they employ a lot of people, probably as many as farming itself does directly. Then there are the associated food manufacturing industries. Encouraging the importation of manufactured foods by maintaining an artificially low green pound depresses them, too; and perhaps the noble Viscount. Lord Trenchard, may have a word to say about this.
Keeping food prices low therefore decreases economic activity over a wide slice of home industry. It has a kind of domino effect. If an industry is poor, it depresses an industry which is either directly or indirectly dependent upon it. If some farmers—perhaps they have bigger farms or they are better farmers—make more money out of higher prices than it is thought they deserve, the Inland Revenue is there to cope. I remember my accountant reproving me one year when I expressed pleasure at not being eligible to pay income tax. He said that it merely meant I had not made any money: at which my face fell back into place and the Chancellor of the Exchequer was disappointed as well. At any rate, we are saying in the report that we think it wise, by a progressive lowering of the level of the green pound, to allow British agriculture to expand because it produces competitively; and we are also repeating that there is more likelihood of being able to hold down prices in the Community in the long term if production is encouraged in those areas best suited to it by climate and by soil as well as by farm structure.
My Lords, in saying that, we must remember that this rationalisation which has been going on slowly for a long time will cause, as it has caused, social problems in parts of the Community. Therefore, it can still be allowed to occur only slowly. When we say that the moderation of the proposed price increases is a sign of growing realism from the Commission, we realise that the Commission would not be proposing higher prices than they think they can get the farm Ministers to accept. Mr. Gundelach and his men must have been applying a lot of pressure this last year.
The worry is not surpluses. We should all be grateful to have more than we need. It is paying for the surpluses. But, allowing for inflation, the Commission are, in fact, proposing what I was intrigued to hear described as a negative price increase; and we say that farm support prices in real terms are likely to fall and we will have to see over the coming year whether this fall will be enough either to reduce surpluses or to cause no increase in them.
As your Lordships are aware, the Commission face two complications in
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their price setting. These are the movements in the values of the national currencies, and the setting of the green money rates. The Commission's proposal, recently endorsed by the European Parliament—where I was interested to see that the rapporteur of the Agricultural Committee argued against his own Committee's report—of a 2 per cent. increase is insignificant beside the alteration in farm prices which can be obtained by changing green money rates, as the two have become so far out of line.
The Commission are hoping that the agricultural rates of exchange can be brought back more or less into line with reality over a period of about seven years. Whether this happens will depend upon national policies and developments which we cannot yet foresee. If the Nine countries believe in an economic Community, they ought to keep trying as a matter of policy to get the two to come together. In the British case, a steady devaluation of the green pound will on the one hand help British agriculture while with the other hand we shall help to exert a downward pressure on Community prices. That may appear to be a chauvinistic thing to do but it is one of these cases when chauvinism, the national interest and, I suggest, the Community interest may all agree.
I do not think that I should speak for much longer on the Farm Prices Report. In a way, mine is the easiest task this afternoon because the report does my speaking for me—and much better too. On the other hand, I am inhibited from making comments which I should like to make about the food and farming scene, and I hope that other noble Lords, even if they are Members of the Sub-Committee, will not feel so constrained and will use this opportunity to range widely over general or specialised topics. I hope, too, that they will have no hesitation in criticising the report if they feel like it, as this can only help the Sub-Committee in their considerations next year. We have a good list of speakers and I am sure that we shall have a useful debate during which noble Lords look forward to hearing the maiden speech of the noble Earl, Lord Fortescue.
I shall now turn briefly to our report on the Commission's proposals as to how they might assimilate the British Milk

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Marketing Boards into the CAP. These Boards have come a long way since Lady Elliot of Harwood's husband (who started them) was hanged in effigy in a street in Edinburgh. The Boards underpin the whole structure of milk production and distribution in this country. The dairy industry would be in a fine state of chaos without them. I think that is agreed. It would be pretty reckless so to weaken them that they could no longer perform their function effectively. Their structure does not agree with the CAP way of thinking up to now, and they have thought up some ideas for accommodating them which the Committee do not think fully fills the bill.
The trouble is that in this country we have acquired a reputation for being awkward. The drawback of getting such a reputation is that people begin either not to listen to you or, if they are experienced bargainers, to affect not to listen to you. I do not know into which of those categories the Commission's response falls; but our response to theirs has to be to say: "These things work and we have had a lot of experience with them. If we adopt your suggestions, they will stop working because you are knocking away some of the essential props. Why not try to slot these Boards into the CAP? Besides, they may hold some useful lessons for us all for coping with, let us say, the wine surplus, which is such a worry to us all."
I do not suppose that, in order to work, the Boards have to have exactly the same structure as they have now, but I hope that there will come about a better appreciation in the Commission of how they work. In paragraph 16 of the report on the Commission's proposals, we say that three key issues remain to be resolved. We have come a long way. The Commission have swallowed a lot of prejudice on the journey and if we progress just a little mole I think we may be all right. I thank the Sub-Committee for their hard work and good temper during the preparation of both reports. I know that I speak for them when I express gratitude for the assistance that we have had from people too numerous to mention. I bee to move.
Moved, That this House takes note of the Reports of the European Communities Committee on EEC Farm Prices 1978–79 and proposed changes in Green Money,
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and on Milk. [Fourteenth Report (H.L. 97)(R/3200/77, R/3295/77 and R/2601/77); Fifteenth Report (H.L. 98)(R/2648/77 and R/27/78).]—(Lord Raglan.)
5.16 p.m.
Lord SANDYS: My Lords, the House will be grateful to the noble Lord, Lord Raglan, for introducing this debate and especially for paying another tribute to our late noble friend Lady Tweedsmuir of Belhelvie, to whom the House and indeed the nation owe a deep debt of gratitude for pioneering the whole field of European legislation scrutiny in such a meticulous and careful way. Few people outside Parliament recognise the full nature of what has taken place. As part of the decision-making process, I should like to quote from a book by Zara Steiner, called the Foreign Office and Foreign Policy 1898–1914. In her introduction, Zara Steiner says this:
"How are decisions made, what complex chain of intuition and reason, of ignorance and awareness relates the initial dim intent to the final formulation."
All those matters concern us so much this afternoon. We have before us the final formulation which is to be presented to the Council of Ministers early in April. We hope that the Government will actively consider this report, and its recommendations and recommend certain changes to the Council when they meet very shortly.
The noble Lord, Lord Raglan, referred to Milk Marketing Boards in one of the two papers. A major step that has taken place in the past 12 months is that the EEC now recognise the vital role which all the Milk Marketing Boards in this country play. Therefore we welcome the view adopted by the Commission that the Boards should continue, though in an amended form. It has been strongly recommended that the terms of the poll of members should be changed, and the five-year rule for repetitive polls should be struck out or amended in such a form that there is perhaps only one initial poll, and one taken at the behest of Members.
I think that there are certain structural changes which are desirable but which are not specifically referred to in the report. One which is felt within the trade, I think, is the need for an independent chairman of the Joint Committee and, in conjunction

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with that, there is a need for more consultation and advance notice of declaration of surplus supply. This is all part and parcel of the feeling that buyers should be on a more equal footing with producers, and some safeguards may be desirable for the buyers.
In the paper referred to, entitled Milk, which is Document R/27/78, special reference is made to the producer-retailer in paragraph 12. I should like to draw your Lordships' attention to what the Committee says about the producer-retailer. The recommendation has been, to date, that any producer-retailer with fewer than 150 cows, selling milk direct to the consumer, would be able to remain outside the system. That is not felt to be a desirable exemption by the Committee, and some revision is thought to be necessary.
So far as prices are concerned, the noble Lord, Lord Raglan, referred to them, and of course the 1977–78 prices are already well-known. The levy fixed at 1·5 per cent. from 16th September last holds good, and the target price was raised by 3·5 per cent. For 1978–79 the Commission propose that the levy should remain the same, but the target price should be increased by 2 per cent. Your Lordships will have noticed that the European Parliament decided that it would be very much better if commodities in surplus—and, of course, milk is one of the principal ones—had their target prices frozen at the existing level.
It is very clear from interests in this country—principally among the National Farmers' Union and other interests—that there is a difference of opinion here. For instance, the Dairy Trade Federation is strongly opposed to any increase in the target price. When consumption has dropped and continues to drop, the surplus will clearly continue. I think the point is very well made by them, and indeed by others, that higher price increases mean higher milk surpluses. I should like to quote from paragraph 26 on page 11 of the report on EEC farm prices 1978–79:
"It is most likely that as a result of the prices package and the 7·5 per cent. Green Pound devaluation, there will have to be a rise in the retail price in due course."
That is not thought to be correct, and I think I can explain why. I do not
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believe this was an error of printing: I think it was a mistake which arose in the course of the deliberations.
I think it can be explained in this way: it is a complicated story but, as your Lordships are aware, a 1·5 per cent. devaluation of the green pound is effective from 1st April this year. That is a carry-forward from last year. Then the 7·5 per cent devaluation of the green pound recently agreed to will be effective from 1st May. There will be a 2 per cent. increase in the target price suggested by the Commission, now frozen until such time as the Council of Ministers make a determination on it. That will mean that the price of liquid milk, standing at the moment at 12½p per pint, should remain the same. I think there is a very strong reason why it should do so. The reason is that in 1977 deliveries and sales of milk in this country amounted to £648 million, and the projection for this year, 1978, is that deliveries are likely to amount to £728 million—an increase of £80 million—due to an increased supply of milk and further deliveries. In these circumstances, I cannot believe that there is a case for a price increase.
So far as the co-responsibility levy is concerned, there has been some criticism—and I think rightly, my Lords. Set out for us in documents—of course there are a number of other documents involved, though I think it would be tedious to recite their numbers—is a proposed action programme to increase consumption. This I hope the Government will strongly recommend. A promotional programme based upon market research and further investigation would seem to be most likely.
This was brought out in the debate in your Lordships' House last year, when on 27th April at column 651, my noble friend Lord Onslow said this:
"You cannot get delivered milk in Paris."
Here is a gap which the trades in Europe have not so far filled. As my noble friend said at the time, we have much to learn from them so far as co-operatives are concerned. But, with deference to the French and our other colleagues in the Nine, one may say that they may perhaps wish to investigate further the role of the Milk Marketing Board. Should they choose to do so, I have little doubt that the

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Board in this country would warmly welcome requests for any advice. There is nothing more important in the EEC situation at the moment than the reduction of surpluses, and if a Milk Marketing Board proposal is made by a number of other countries involved in the present situation, it cannot but do good. So far as a reduction in liquid milk is concerned, surely among the best things that could be promoted are long-term contracts either with the manufacturing trade or with industry. I would cite especially pig farmers in this connection; but what are necessary are long-term contracts and not sudden surpluses.
I turn now to other parts of the dairy industry, and perhaps I might quote what the noble Lord, Lord Raglan, rightly said a few moments ago:
"Our country has acquired a reputation for being rather awkward".
That was quite apparent during the negotiations which took place almost exactly a year ago in regard to the butter subsidy. Your Lordships will recollect that at that time the Minister for Agriculture was offered 7½p per pound on the butter subsidy. Eventually, after a great deal of discussion and, if I may say so, considerable ill will, he achieved 8¼p per pound. I suggest that this long negotiation over such a small sum of money was scarcely worth it and was perhaps very counter-productive in the long term.
However, enough of the past. What we are seeking is expansion of the industry, and to this end the ban on the dairy sector investment aids is something on which we hope the Government will have some firm things to say to the Council of Ministers. We believe that this proposal was made last year and was struck out. It has been made again this year and there has been a circular from the Ministry which is felt to be most unwelcome by those involved on the production side.
I feel that to dwell at any length on other commodities would be not particularly welcome, but I should like to say this about cereals. These are the key commodities because they affect so many other parts of the industry. Surely, there is no need today for such high and fluctuating costs within the EEC, which are 40 per cent. higher than costs outside. There is a surplus in this country of about 1½ million tonnes of cattle feed,
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so that the proposals for increasing costs should surely be set aside for the time being.
I turn now to the representative conversion rates in agriculture. I notice that in Document R/2601 a comment is made, which is perhaps redolent of our experience of so many of the documents referred to. It states:
"All calculations therefore assume that the financial situation will remain unchanged throughout the period".
One sympathises with those who have to compose tables. This is very difficult to do, particularly with tables covering a substantial period of time—in this case, seven years. But, surely, no economist will believe a table extended over such a long period, and in circumstances which we know all too well vary and fluctuate most alarmingly. Let us cast our minds back seven years to 1971 and think of the changes since then. Would it have been possible to write that sentence into a document? I feel that it is most necessary here to curtail the period of seven years, when the reduction of monetary compensatory amounts is being considered. It is much too long a period, and the time-scale should be related to circumstances. Probably two to three years would be much more appropriate.
I should now like to refer to the situation in Europe at the present time. We must remember that monetary compensatory amounts have been the means of channelling a flow of fresh income, in the form of payment by the Commission to the foreign exporter to this country sending goods to the United Kingdom to make up the total deficit of 30 per cent. by which the pound fell against other currencies. It is a complicated and difficult situation, but one must note what has been happening.
I note that, recently, within the Irish Republic farmers recorded that they have never had a better year. They have had an increase of no less than 34 per cent. in net income, with a 5 per cent. growth in output. This is a direct result of the workings of the monetary compensatory amounts, which have been very much against the interests of the industry in this country. The Irish are not alone, and there are other countries which have benefited. One need not cite them all, but certainly the Germans, the Dutch,

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the Danes and the French have benefited. We should look into this matter and should attempt to make some move in the right direction. But I feel that very careful consideration should be given to a time-scale different from seven years.
There is another commodity to which I should refer, because, although it is not directly concerned with the document referred to by the noble Lord, Lord Raglan, it is very important to discuss isoglucose. The two documents referred to last year were R/2291/77 and R/2292/77. Isoglucose is in a particularly difficult situation. Your Lordships will, of course, know that it is a syrup which is very widely used in the manufacture of soft drinks and in the confectionery industry. Last year the Commission recommended a levy of £60 per tonne which, after some considerable discussion with Her Majesty's Government, was reduced to £29 a tonne; and here we must congratulate the Minister on his negotiations. This levy is a protectionist move by the Commission on behalf of the sugar beet industry, which at the moment has a surplus of 3·3 million tonnes. But the levy is a very blunt instrument, and a new technology which employs over 3,300 people should not be clobbered. It is a nonsense and an acknowledged nonsense.
In closing perhaps I may be allowed to quote Mr. Gundelach's letter, because it is very welcome that, in his answer of 5th July 1977, he said this about the situation in which the industry finds itself, in regard to isoglucose and starch. He said:
"As this is a new food production technology, the development of which the Commission certainly do not intend to hinder, and as new calculations are involved, we do not maintain that the result we have arrived at is definitely correct. We shall follow the development during the coming months, and if one or other of the claims I have described should turn out to be correct we must intervene and adjust matters. The views of the isoglucose producers are probably going to prove most correct, and we shall then have to employ the means at our disposal to correct the situation. However, for the time being I have to believe that a reasonable balance largely has been achieved. But I shall not stubbornly stick to that point of view in the light of any fresh information".
Here, surely, is a most welcome point of view being expressed. I hope that that view covers a much wider part of the industries that we are discussing today.
5.37 p.m.
Lord MACKIE of BENSHIE: My Lords, I am a member of the Sub-Committee which has produced this report, and I should like to start by supporting the noble Lord, Lord Raglan, and the noble Lord, Lord Sandys, in their tribute to our former chairwoman Lady Tweedsmuir of Belhelvie. On a recent visit to Brussels, I was astonished to find the respect in which the views of your Scrutiny Committee in this House were held by the Commission, and there is no doubt at all that that was largely due to the very hard work of Lady Tweedsmuir. I am most happy to join in tribute to her on this aspect of the many-sided works which she performed.
I do not want to go into a great deal of detail, but I think that I should look at some of the basic points about the agricultural price review in Europe, and the general state of thinking in which we find ourselves. We need to go back to what the policy is all about because at the present time most of us find ourselves talking about how to control surpluses. As noble Lords have already said, surpluses are very beneficial, because they mean that there is enough food in Europe. Particularly in the United Kingdom, we should be very grateful for the Common Agricultural Policy in its general effect, because we are by no means in a world where food is plentiful and overflowing every year. At the moment we may be in one of the seven fat years, which have been known since the time of Pharaoh, but it is not very long ago that two or three dry years put the whole world into a state where the price of wheat rose by over 50 per cent. That can occur again, and I should like to remind your Lordships that we consume every year 30 million extra tonnes of cereals, and have done so for some considerable time past, while the growth in the population of the world is still accelerating.
I think first we should recognise that the CAP basically is doing us all a great service in a country that imports half its food as we do, in seeing that there is an increase in food, and that the potential of agricultural production in the Community as a whole is kept up. In a country like Germany, because they are very prosperous otherwise they are quite willing to pay the

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high prices. They pay their farmers much more than farmers get here because they recognise the stability brought about by the CAP. The other object of the CAP is to see that the rewards for reasonable effort in agriculture are equal to the rewards for industry. That is an objective which is held very strongly in Europe. It cannot be kept up in terms of total inefficiency, and certainly we recognised that in this country many years ago when many people thought that we should be able to support small herds of dairy cows. For example, in uplands Yorkshire there were dairy herds of between 12 and 20 cows and the farmer expected to make a living from that number. Gradually in this country we came to recognise that in return for an agricultural support policy we must inevitably have an efficient industry.
I come now to the Milk Marketing Board. I intend really to leave this subject to my noble friend Lord Swaythling, but since people are telling stories about the origin of the Milk Marketing Board I think perhaps the best one was about the doctor who always advocted breast feeding because (a) the milk was fresh, and (b) it had nothing to do with the Milk Marketing Board. One of the things about the present proposals of the Commission, in spite of certain faults, is that although ideologically they were entirely against the concept of the CAP they have come to recognise that in fact the Milk Marketing Board in this country has benefited both the consumer and the farmer and therefore they have been content to look at it as a practical consideration. With the noble Lord, Lord Raglan, I hope that we can convince them of the one or two points where they are standing out and where we think they are wrong.
Unfortunately, this overall good policy of the Common Agricultural Policy is being mucked up with a tremendous amount of distortion. Because of considerations within our various countries we are not satisfied to accept that in the Community in Europe agricultural production should take place where it is most suitable and most economic to do so. Instead, because of the particular short-term needs of the countries involved we are mucked up by different levels of value of the unit of account.
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The one country that has kept its currency level is Denmark. It suits her very handsomely to do so. Denmark pays the high Community prices for her requirements and then exports all her produce through very favourable monetary compensatory amounts, or export subsidies, call it what you will, to this country, so that it has the best of both worlds. It is a very happy thing for Denmark, but it is a very unhappy thing for the EEC and the CAP as a whole.
I am certain that the noble Lord, Lord Sandys—with whom I find myself very much in agreement—was absolutely right when he said that seven years is far too long before we come to a situation where we remove the distortion caused by the various countries' valuation of the green pound or the green mark or any other European currency. Also in the present situation, when we say in our report that Italy and the United Kingdom were able to raise the prices much more than the EEC intended, we must recognise that we are raising it from a very much lower base than that pertaining in Germany. As I have said several times, I should love to have 1,000 acres producing milk and wheat at their prices, even with their high wages and the higher cost of cereals. There is no question it is infinitely more profitable than it is here. It is a situation about which something has to be done.
We have to recognise that if we are going to have agricultural support it must be allied to the market. I am a farmer and I get my living from it, but I am not a fool. I realise that it cannot go on. You cannot go on having subsidies otherwise your customers get angry and say, "Why should we pay you?", and you suddenly find yourself with the whole support system removed. We must be sensible. It must follow the market. What we say in our report is absolutely true. There is a very large surplus of milk products on the Continent and it is only sensible to say that if there is a surplus the price must come down. If we go on building surpluses, at the end of the day it will kill the system. We do not want to do that because, taken on the whole, it has been extremely beneficial to consumers, both long- and short-term, in the Community as a whole.
I should like to say one or two other things about it. One is the need for your

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Lordships' House to scrutinise the scrutineers. I find myself fascinated by the mechanics on this Committee. I suddenly find that there is an ingenious method of doing something because there is an anomaly. I think how clever that is and I find myself trying to think up clever devices. But there are so many clever devices in this that we are going to destroy the thing. In Brussels at the present time we have a Commission with fewer civil servants than the Scottish Office in Edinburgh, but the signs are that they will breed like civil servants do—I do not mean physically, but they do multiply—and they can find work for themselves and reasons for expansion without any trouble. There are many aspects of the EEC policy which need scrutinising. For example, on quite another point we have been looking at the protection of the consumer against the doorstep seller. It could well be left to the countries involved to legislate for the protection of the consumer. Apart from French onion sellers, I cannot see many Scotsmen plodding round the doorsteps of Hamburg to anywhere else. This is the sort of thing that could well he left to the countries concerned.
We have a very good example of it in cereals, in the support price for wheat. We have now got a two-tier system in that we have a price for bread-making wheat and a price for feed wheat. In our view, and in the view of the Committee, there should be one support price and the millers should be willing to pay for good bread-making wheat. This is the simple way to do it. It is the way it is done with bailey, and it works perfectly well in that you have barley for feeding and barley for the noble purpose of making spirituous liquor, and the maltsters pay up to £10 a ton more for good malting barley. This system is an example of the kind of complication in legislation against which we have to fight all the time—legislation which pours out of Brussels and which is not always to the benefit of consumers throughout Europe.
The Commission are recommending a 2 per cent. increase in the price of food. Germany and other high cost countries believe that this is too large an increase. However, we recognise that the effect of the rise in this country is very small and that in the long term it will help the
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consumer. When one considers the rise in the price of motor cars, children's clothes and shoes as well as the rises in a whole range of other consumer goods which are accepted without a moan, I believe that a 2 per cent. overall rise in the price of food, which is absolutely vital to this country, is receiving too much attention.
I commend the report to your Lordships. I have no doubt that many other speakers will deal with the details. I believe that this House ought to scrutinise what we say in the report and that an endeavour must be made to keep Community legislation simple and to the point.
5.52 p.m.
Earl FORTESCUE: My Lords, I am grateful to the noble Lord, Lord Raglan, for moving this debate and for the opportinity that it gives me to speak today. I intend to confine my remarks to one aspect of farming only, and that is pigs. If this debate had taken place a month earlier, I should have had to declare an interest: that for the last 23 years I had been engaged in specialist pig farming, breeding and fattening some 2,500 pigs each year. Sadly, due to advice from my accountant and very considerable pressure from my bank, all of the pigs have now gone.
I read the Select Committee's Fourteenth Report on EEC Farm Prices, but I could find no mention of pigs or pig meat in the text. Then I cast my eye over the tables in the appendices to the report. When I reached Appendix 2 on page 14, I thought that I was getting warm, but on closer inspection I found that the commodity listed between sugar and eggs was not pig meat, as I had hoped, but pigment. I concluded that this table was intended for artists and those in the decorating trade rather than for those in the pig industry.
Then I turned to the White Paper which was published in January this year, the Annual Review of Agriculture, Cmnd. 7058. I was disappointed to find that this document did not include more than two short paragraphs on this section of the industry, a section which is in dire trouble and which has been in trouble for nearly two years. Paragraph 25 begins:
"The decline in profitability which began in 1956 continued into 1977".
I know that I must not be controversial

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today, and I hope that it will not be considered controversial if I suggest that this paragraph is a little misleading. To say that there has been a decline in profitability is like listening to a forecaster announce that the weather tomorrow will be somewhat less mild and then waking up to find one's plumbing frozen and six feet of snow outside one's front door.
The truth of the matter is that very large losses have been made. The Meat and Livestock Commission produce figures each month indicating the profitability or otherwise of pig production. They refer to this as the net margin. These MLC figures indicate that all types of pig production have been losing money since July 1976, and that during 1977 each bacon pig lost about £3·50, each pork pig lost £5 and each heavy hog lost over £10. These are figures per pig. Such losses are unbearable, unless there is an immediate prospect of profits to offset these losses. I simply do not foresee such a situation arising.
There has been a considerable reduction in the pig herd in this country, and it might be asked why the reduction has not been greater. I suggest that this is only because many pigs are still produced on arable farms and that these pig losses have been absorbed by the rather exceptional profits made on some arable crops, particularly in the 1976 harvest. Again it is often said that pigs have always had their ups and their downs. In my 23 years' experience, pigs have certainly had their ups and their downs—the pig cycle. But during the last 23 years, the low part of the cycle has never reached such a trough before; nor has the trough lasted for so long.
The situation which I have described is bad for pig farmers and it is bad for their employees, but others are involved as well; namely, the very considerable bacon and meat products industry. They, too, are having a very rough time. I have no precise information, but I understand that there is a real danger of plant closures and consequent loss of jobs.
When one asks why the present situation has arisen, the answer is simply lack of stability and subsidised imports. I stress that in general I am very pro-Europe, but the present Common Agricultural Policy is a disaster for pigs, or at least for British pigs.
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Before we joined the European Economic Community, the many Government guarantee schemes had produced a very fair degree of stability. As a result, the British pig improved dramatically in quality and in its ability to convert food efficiently. They key to this stability was feed indexing, or the feed formula as it was then known. As to the subsidised imports, I shall not bore your Lordships with my theories about the green pound or about the way in which the monetary compensatory amounts are calculated. Quite frankly, I do not fully understand them, and I strongly suspect that there is only a handful of people in this country or in Europe who really do. I can, however, state categorically that these MCAs are a vast subsidy to other European countries, mainly the Dutch and the Danes in so far as pigs are concerned, with which no British producer, however efficient, can hope to compete.
Before I sit down, I should like to stress that the trouble in the pig industry is quite different from the trouble or troubles in other industries. Our productivity compares well with that of other countries and our labour relations are good. Our problems are simply lack of stability and subsidised imports, problems which successive British Governments and their guarantee schemes had largely overcome, to the benefit of both producer and consumer. These schemes were swept away by the European rules and regulations. My plea is that we should make further major efforts to teach the people in Brussels the lessons which we ourselves have learned the hard way over many, many years.
6 p.m.
Lord SAINSBURY: My Lords it gives me very particular pleasure to congratulate the noble Earl, Lord Fortescue on his maiden speech. I have known him for many years and in a non-political sense I would address him as my noble friend. He has the most practical knowledge, extending over many years, of the pig industry, the pig sector of agriculture, and there are at least two noble Lords in this House who could vouch for his knowledge. I hope he will participate in many of our agricultural debates because I am convinced he has a most valuable contribution to make.

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Although I attended earlier meetings of Sub-Committee D when evidence was taken, due to my absence abroad I played no part in the drafting of the 14th Report on EEC Farm Prices for 1978–9 which is before your Lordships' House today. I should, therefore, like to take this opportunity to congratulate my noble friend Lord Raglan and my colleagues on the Committee on the balanced report which we are considering.
I would have greatly preferred no proposed price increases at all for surplus commodities, which is the policy of the consumer groups throughout the EEC. But I somewhat reluctantly accept that what is desirable in practical terms is not always possible in political terms, particularly when nine countries are involved, in some cases with conflicting interests. As all your Lordships are fully aware, EEC farm price reviews are irrevocably bound up with the question of the green currencies. What, in my opinion, is particularly worrying is that nothing in these proposals leads to any likelihood of reductions in structural surpluses, which apply to milk, sugar and wine, in addition to the surpluses of feed wheat and barley with declining consumption, increasing surplus of olive oil, and periods of over-production in beef, as set out in Table 2 of this report.
I am especially concerned about the dairy sector, where the price proposal is for an increase of 2 per cent. in units of account, and where, according to the Commission's words, the present surplus will worsen. According to the same source, there is already a 14·4 per cent. surplus in milk products. As regards the supply position in the United Kingdom, according to evidence submitted by the Dairy Trade Federation:
"Stocks of butter in the United Kingdom at the end of 1977 are estimated at 170,000 metric tonnes, and with commitments to import from New Zealand of 125,000 metric tonnes in 1978 we will have sufficient to keep the market supplied until the autumn of 1978 without even selling a tonne of our own production".
During examination of officials of the Ministry of Agriculture, Fisheries and Food on 18th January, the reply to a question I asked was that milk must be the sector where we have greatest concern about the proposed pi ice increase and where we feel there is least justification for any change at all. It is interesting
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to note that milk takes 42 per cent. of Community expenditure; 87 per cent. of skim milk powder is subsidised, as well as 40 per cent. of the butter.
To a trader—and I claim to be nothing more than a retired one—it seems nonsensical to put up the price of a product when you are overburdened with stocks and when inevitably a higher level of prices will stimulate production and reduce consumption. In addition, our consumption is likely to be affected as the Commission propose not to extend the special United Kingdom butter subsidy beyond the end of 1978. And, what is more, I do not share the optimism of the National Farmers' Union that the milk action programme, including the proposal to increase and extend the aid available for the supply of milk and milk products to school children in the EEC, will have sufficient effect on the huge surplus of dairy products. Some may recall the eminent French politician who, by example, tried to convert the French wine drinker to a milk drinker, without any success.
I was much impressed by an article by Michael Shanks which appeared in The Times on 16th February, which some of your Lordships may have read, in which he adumbrated two basic and simple principles for the reform of the CAP. The first is that no increase in common prices should be permissible for a product already in structural surplus. The second is that taxation on competing products should not be used as a means of disposing of food surpluses by compelling consumers to eat the dearer product; for example, the taxation on isoglucose, a sugar substitute, to make it less competitive with sugar, and the earlier, and happily vetoed, suggestion of taxing margarine to make it less competitive with butter.
The CAP is a fundamental element of the Community, and sooner or later there must be reforms. As Michael Shanks suggests, the Community could fix an overall budgetary ceiling on farm price support. If production went above the ceiling, there would have to be a cutback in the following year. It is most important to find a way of preventing surpluses developing in the first place. The disastrous weakness is the open-endedness of the price guarantees.

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In commending this report to your Lordships, may I conclude with a quotation from a recent speech by an eminent authority, Dr. Keith Dexter, Director-General of the Agricultural Development and Advisory Service. He said:
"Whatever short-term palliatives might be devised by the ingenious bureaucrats of Brussels—and their equally ingenious counterparts in national capitals—the tendencies towards overproduction in the Community will only be finally tempered by farm product prices being so low as to force the less efficient farmers out of production".
6.11 p.m.
Lord VERNON: My Lords, as a Member of Sub-Committee D, I, too, should like to pay my small tribute to the late Lady Tweedsmuir. I joined the Sub-Committee shortly after she became chairman of the Select Committee and I think I can say that she was an inspiration to all of us. She was certainly an inspiration to me and I never cease to marvel at the way she used to attend at least one in two of or meetings and was usually better briefed on the very complicated subjects which we had to consider than most members of the Sub-Committee. She will be very greatly missed.
I should like to follow the noble Lord, Lord Sainsbury, in congratulating my noble friend Lord Fortescue on his maiden speech. I am sure that we shall all look forward to hearing his pungent comments on not only the pig industry but all sectors of the agricultural industry in the future.
I come to the subject of this debate. I must start by declaring my interest as a farmer. It seems to me that the package offered by the Commission is very fair, given the realities of the situation. For the second year running the Commission have made a genuine effort to reduce, in real terms, the returns to farmers in strong currency countries who, because of the green money distortions, are paid so much more for their produce than farmers in weak currency countries. That, of course, applies especially to Germany. Unlike ourselves, for example, the Germans cannot supplement the relatively small price increase offered—2 per cent. this year as against 3 per cent, the previous year—by devaluing their green currency.
I say that the package is fair given the realities of the situation. Mr. Silkin does
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not agree. He seems to think that because of the surpluses there should be no increases in price at all and he has said so in what I think are peculiarly tactless terms. However, what Mr. Silkin and some of his colleagues, and indeed many other people in this country so often forget, is that the Commission in Brussels are not just considering the implications of their policy for the United Kingdom; they are having to consider the CAP as it affects eight other countries as well—countries all of which have completely different traditions from ours so far as agriculture is concerned. They have always attached greater importance than we have to self-sufficiency in foodstuffs. They employ a much higher proportion of their labour force on the land. They spend a higher proportion of their income on food and, generally speaking, the farmer on the Continent gets a better deal than he does in this country. For the Commission to have suggested no price increase would have been politically unacceptable, and for the United Kingdom to have made such a proposal was both naive and psychologically damaging to our interests.
The effect of the package is that there will be an overall cut in German farm incomes, because price increases will not adequately cushion them against the cost of inflation. It is not much of a cut, but it is something. When we consider that it is being put forward in conjuction with proposals to phase out the green currency distortions over a seven-year period—and that may be too long, as my noble friend Lord Sandys has said—and also to substitute the European unit of account for the present agricultural unit of account, tied to the joint float currencies, which would make a substantial difference if it could be accepted by the strong currency countries—when we consider all that it can be seen that the Commission are making a determined effort both to cut the level of support prices and to get back to a basis of fair competition between the countries of the Nine. Instant results are not possible and should not be expected. My Lords, this is a field where I believe we must work gradually, and, if I may say so, to some extent by stealth.
The co-responsibility levy in the milk sector, which is discussed in paragraph 15 of our report, is another example of trying

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to achieve results by indirect means. Our Committee has always been somewhat sceptical about the effect of the levy since it meant taking away from the milk producer with one hand what we had given him with the other by way of a price increase. The object of the levy is to stimulate consumption.
We, in this country, through our Milk Marketing Board, have always advertised our milk and it is difficult to see how the levy will benefit us, particularly if the existing expenditure by the Board on advertising is not taken into account in allocating the proceeds of the levy. In any case, it may be questioned whether there is much scope for increased sales of milk and milk products. Admittedly we and the Irish drink more milk, but on the Continent they eat more butter and cheese than we do. Possibly the human metabolism dictates a point beyond which a further intake of milk and milk products is undesirable. Nevertheless, when all is said and done the co-responsibility levy acts as a tax on milk producers, and without it I suspect that the price of milk would be even higher than it is.
Whether the surpluses will, in fact, be reduced by the present proposals remains to be seen. It seems doubtful. Our Committee take the view that in due course fairly severe price reductions in surplus products are inevitable, but such reductions should take place only when the more efficient agricultural countries, of which ours is one, are allowed to compete on a fair and equal basis and, if necessary, to add to the surpluses.
The reasons for this somewhat paradoxical recommendation, which we believe is in the long-term interests of consumers as well as farmers, are explained in paragraphs 24 and 25. I shall say no more about it because I understand that my noble friend Lord Trenchard will be expanding on it in his speech. I trust that our view will be endorsed by the Government and that the updated version of Food from Our Own Resources, which we are told is to be published shortly, will reiterate the need to expand production in the United Kingdom.
I should like to conclude my speech by making a more general comment on our relations with the Community. One cannot visit Brussels, as our Sub-Committee has recently dome, without being made
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aware of the profound distrust with which our country is regarded by its partners. Indeed, one does not have to go to Brussels to find that out; one can do so by reading the Press. It is a most disheartening situation and one that should never have arisen. It is more than disheartening; it is a tragedy when one recollects the high hopes for British memberhip of the Community when we joined.
One is bound to ask who is responsible. The answer is, of course, the Government and especially those Ministers who have never accepted the decisive verdict of the British people in the referendum. Because the verdict went against their wishes, these Ministers are doing their best, and I shall not say to wreck the Community, but at least to change its nature completely from the continuing process of union which was envisaged under the Treaty of Rome. The blatant and aggressive ways in which they pursue our national interests—or what they deem to be our national interests—are, in my view, often counter-productive. The common fisheries régime is an obvious example. I believe that we should have been offered much better terms had we been more amenable on other issues.
The matter was put very succintly the other day by the noble Lord, Lord Thomson of Monifieth, in the Second Reading debate on the Bill for direct elections on 7th March, when, at column 711, he said:
"What often matters in the European Community, in my experience, is not what you say but the way that you say it. Certainly I am the last person to say that Her Majesty's Government should not vigorously defend national interests within the European Community; other countries do that. But a great deal depends on the way it is done".
In another significant passage at column 710, the noble Lord said:
"I sometimes wonder whether Her Majesty's Government have any imagination at all where the European Community is concerned".
Those damning words were not said by a Conservative critic of the Government; they were said by one of their most distinguished supporters who was previously a Minister of the Crown and who has had the unrivalled experience of being one of the two British Commissioners in Brussels. One can only hope that the Prime Minister and his colleagues will pay some attention to them.
6.24 p.m.
Lord COBBOLD: My Lords, the noble Lord, Lord Raglan, and other noble Lords have dealt very fully with the main sections of the report on farm prices which is before us, and the interests of the producers and the consumers have been put with force by various speakers and will I am sure be put by subsequent speakers. I do not wish to go over the same ground or to deal with the effect of the measures under discussion on these various interests. I wish rather to remind your Lordships more specifically of two points which have been made in earlier reports and which have considerable relevance to the report now under discussion.
On page 10 of this report there is reference to the impact of changes in green exchange rates on price negotiations and on the importance of considering these two questions together. On this occasion it was not felt necessary, beyond a brief quotation from an earlier report, to go in any depth into the very complicated subject of green money, because that was done in great detail in the report which was debated here on 21st March, 1977. However, I should like to remind your Lordships that the picture drawn in that earlier report and the conclusions reached therein are, in the Committee's opinion, still highly relevant and should not be lost sight of. As is stated in paragraph 10 of the present report, the Committee see no reason to alter their earlier conclusions. The main conclusion in that paragraph is, I think, of sufficient importance to quote. It reads as follows:
"'to maintain indefinitely the present level of divergence between green rates and market rates would be untenable and runs counter to the whole concept of a common market. … while some formula of adjustment on the general lines proposed by the Commission is to be commended,'"—
as the House will recollect, since the original report on green money, new proposals are before the Council at the moment—
"'the speed and the extent of such adjustment must ultimately be subject to the control of individual Member States through the Council of Ministers'. The Committee continue to support a progressive and balanced programme for the elimination of mcas in conjunction with acceptable decisions on price levels and the CAP generally."
A further argument in support of this conclusion—the recommendation for a
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progressive and balanced elimination of mcas—lies in the Commission's, and particularly in the President's, recent emphasis on the objective of economic and monetary union. It is evident that, while large discrepancies exist between green rates and market exchange rates and while these discrepancies affect so large a volume of dealing between Member States, this must add greatly to the difficulties of any real progress towards monetary union and, indeed, towards any scheme for stabilisation of European exchange rates.
Secondly, at the risk of overmuch harking back, I would remind your Lordships of some points made in the Committee's report on the preliminary Budget for 1978 and in reports on earlier Budget estimates. The Committee then pointed out how heavy a proportion of Community expenditure was represented by agricultural policy—around 70 per cent. of total expenditure—and also drew attention to the increasing burden of monetary compensatary amounts on the Budget. The Committee then emphasised—and I would repeat that emphasis today—that more attention ought to be given to the financial effects of the Common Agricultural Policy and that it was undesirable that price negotiations should be confined to the purely agricultural aspects and to the conflicting interests of producers and consumers. So long as the Common Agricultural Policy takes so large a proportion of Community expenditure—often for purposes, such as support of commodities in surplus which are, to say the least, of arguable value—it will obviously be difficult for the Community to find adequate money for more general and, some will think, more useful purposes, such as the Regional and Social Funds.
I join with other noble Lords in feeling that, even if the final outturn remains unclear, the Commission has made real efforts this year to limit price increases. But I maintain the view which I have expressed in earlier debates that the CAP in general, and its proportion of total budget expenditure in particular, needs very thorough review. Finally, it is perhaps worth observing that the proposed enlargement, by the entry of Greece, Portugal and Spain, will, unless the whole policy is reviewed, add materially to the difficulties to which I have drawn attention, both in the exchange rate and in the budgetary fields.
6.31 p.m.
Lord COLLISON: My Lords, I also should like to pay my tribute to Lady Tweedsmuir. She was a very fine person, and we can ill afford to lose her. As has been mentioned already, she was a meticulous sitter-in on all occasions when the work of her Committee and its Sub-Committees was discussed. I personally feel a sense of loss because of the respect I held for her.
I should like also to compliment the noble Earl, Lord Fortescue, for his maiden speech. He is not in his place now, but perhaps he will read Hansard in the morning. There was no need for him to feel that he might be controversial because, as I am sure he knows, we all agree with him about the problems which affect the pigmeat producers, and it is grand to have another voice for agriculture in your Lordships' House. I also once again have to thank my noble friend Lord Raglan for introducing these two reports, 14 and 15, which he has done with his usual ability and consummate skill.
As we know, the Commission propose an increase of 2 per cent. in units of account, although a study based on the objective method indicated that the increase should be 4·2 per cent. Since that proposal was made and we discussed it originally, a number of Member States, including our own, have made changes in their green currency. In our case the combined effect of the Commission's 2 per cent. proposal, plus the devaluation of the green pound, will be to double the increase in farm prices over that proposed by the Commission.
The Commission feel that their approach is a responsible one, and we have paid tribute to that approach. It was described by the Ministry's representative as "tough". As the report concluded, it appeared that on average throughout the Community farm prices in real terms are likely to drop during the coming year. Consequently the reaction has been immediate and sometimes fierce. The European Parliament, as reported in the Financial Times of 16th March, is split on the issue, and its agricultural committee proposed a 5 per cent. increase. The proposal prompted Mr. Gundelach to describe it as utter folly, pointing out that a 5 per cent. increase would cost the Community 300
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million units of account more over 12 months to decrease, as he pointed out, the production of those commodities in the Community where there is already a worrying surplus; it would further widen the gap, in his view, between the rich and the poor farmers' income. So all is not happy in the state of the Common Market.
The dilemma and the dissatisfaction—because you cannot win here whatever you do—arise because of the conflict of view, and perhaps of need, between the producers and the consumers and the requirement, if one can do it, to reach a balance between these two interests. Unfortunately this seems to be impossible under present circumstances. It is a circle which cannot be squared; it cannot be squared, at least, to everyone's satisfaction. Producers feel, and they have already made their voices heard, that the increases are not enough to meet the increased costs which they have to face in terms of machinery, fertilisers, and the other effects of inflation. The consumer organisations, on the other hand, have made comments which our Committee has described as "too harsh", and certainly some hard words have been spoken on both sides.
Our own Minister has come under fire. I have seen him described as, "A good Minister of Food but a bad Minister of Agriculture". But I have no doubt that if the consumers were to use a similar description they would reverse the order: they would say, "He is a good Minister of Agriculture but a bad Minister of Food". So, "You pays your sixpence and you takes your choice".
But speaking completely non-politically—and certainly my right honourable friend does not need anybody to defend him, least of all me—and speaking as an objective observer of the situation, I feel that the criticisms directed at him from both sides are not justified. In the circumstances in which we find ourselves no one—and I repeat, no one—from any Party of any colour could find an answer which satisfies the consumer and the producer, and bridges this gap between the two. I say this because I think the problem is innate. It is built into the structure and the policies of the Common Agricultural Policy.

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Having said that I repeat that I remain firmly convinced that the Common Market is right for us. I am sure that, given time and patience, the policy will be reviewed and adjusted so that the present apparent conflict between the producer and the consumer interests will be resolved, as they must be, because in the long run the two interests are the same. It is the method of giving support to agriculture which, in my view, creates the problem and presents to our Minister the bed of nails on which he has to lie.
The noble Earl in his maiden speech referred to the system which we used to operate in this country. He spoke of it with regard and understanding. But under that system the United Kingdom consumers were able to buy their foods at something near world prices, and the producers, on their side, were protected by our support system based upon the guaranteed prices arrived at after each year's price review. So there was no direct conflict between producer and consumer, although, as I know very well, the arguments were fierce and long. Nevertheless, our people were able to get their food at something near world prices, whereas, under the Common Market system with its policy of levy at the point of entry, the MCA system, the intervention system, all these have the result that the consumer is not getting his food at anything like world prices but at a level considerably higher.
I am not considering, or suggesting—I would be very stupid if I were—a complete dismantling of the Common Agricultural Policy. That is not possible. But I believe, and I have said this before, that it is a vital necessity that the policy should be kept constantly under review and amended, and that there should be a complete understanding of the reasons why these difficulties arise and why these conflicts always happen between the producer and consumer interests.
If producers feel they are cramped, one cannot cure their ills by cutting off their limbs. Nor can consumers be put on the rack and stretched, certainly not in terms of their pockets, indefinitely. The thinking must go to the heart of the problem and appropriate policies must be evolved from a proper understanding of the problem. As I said, faced with the situation as we know it, the only proper and honest step to take is to try to find
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a compromise, and that is what the Commission have tried to do and what our Minister also has tried to do. Misunderstandings have arisen, but, as I said, they have been due to the innate nature of the conflict being dependent on the structure.
Turning briefly to the proposals for milk, it is clear that the Commission have been receptive and tried hard to accommodate us. The future of the Milk Marketing Board—I hope of the others, too, but certainly of the Milk Marketing Board—seems assured and one must express appreciation of the understanding that has been shown by the Commission and of the work that has been done by my right honourable friend.
I agree with the points made in the 15th Report regarding the frequency of polling. I do not think it is necessary; I feel sure that the 80 per cent. of support of producers is there and will continue to be there and that there is no need to change the present arrangements away from having polls on request If I am worried about anything in particular. I am worried about the proposals for producers-retailers with herds of less than 150; if there were too many of that type of producer-retailer as a result of the scheme, the Milk Marketing Board could have the ground cut from beneath it and lose its position and authority as well as the support of farmers who use it having not liked it when it was first introduced, as I well remember, but now understanding what an important element it is for them.
A word of appreciation is also due from this House to the Commission for their understanding of the Northern Ireland problem about milk consumption, where the percentage level cannot be reached; they have made alternative arrangements in that regard. I entirely agree with what is said in the report about the co-responsibility levy. Having welcomed the 12 per cent. allocation for school milk, it is rather worrying for us and farmers that the use of this money has not been fully explained to us—how it could be used in the interest of farmers, not only in this country but abroad.
Returning briefly to the problems which confront the Commission and the Common Agricultural Policy, in view of some comments that have been made we should

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remember that we are equal Members with other States. I might mention in passing that the problems we face as relatively new Members would not exist had we gone in at the beginning but that is history and, unfortunate though it is, we cannot do anything about it. We, like other Member States, have our own problems and it is only right, as other Member States do, that we should state clearly, and if necessary firmly, what those problems are, Of course we should not expect them to say, "Thank you very much. We will reform ourselves immediately to suit your situation". Nevertheless, it is right and proper that we should be able to, and should, state our problems clearly, and our Minister should not be blamed for doing just that.
It is rather unfortunate that he is known to be, or to have been, an opponent of the Common Market. A great deal too much is being made of that. After all, as a loyal member of the Government and Cabinet he understands and respects the fact that we are Members of the Common Market and he does his best there, as he does in Cabinet in this country; and it is not his fault or the fault of anyone else, as I said that the very nature of the beast presents the sometimes intractable problems to which he must try to find a reasonable, proper and fair answer.
We must also remember that we entered the Common Market with a great deal of experience behind us, and I refer again to what the noble Earl said about our support policy as it used to be following the 1945 Act. It is only right and proper, in view of that experience, that we should be entitled to give, and do give that advice. If that is interpreted as being improper, or if it is said that we are being a nuisance, that is too bad. I would certainly not wish us to be a nuisance in that sense, but to put forward proposals and ideas about which we know and which we have tried out ourselves in an effort to improve the CAP, must be perfectly right and proper.
I am a great optimist and I may be thought to be over-optimistic. However, I have always taken the view, not only for agricultural reasons but for reasons of a much broader order and perhaps even of a more vital order, that our membership of the Community is essential in today's
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world. I believe in the concept and I believe it will work and that, as the years go by, the necessary reforms, on our side, in the CAP will come about; and on that note I thank noble Lords for listening to me.
6.48 p.m.
Baroness ELLIOT of HARWOOD: My Lords, I too wish to add my appreciation of the great work that was done by the late Lady Tweedsmuir of Belhelvie. We were great friends; I knew her for many years, as I knew Lord Tweedsmuir, and it came as a terrible shock to us all when we heard of her tragic death. She has left behind a tradition which it will be very hard for anybody to live up to, and I know that we are all indebted to her for the work she did.
I also wish to thank the noble Lord, Lord Raglan, for his chairmanship of our Committee. He was chairman for two years and then decided to step down in favour of the noble Lord, Lord Walston, but this report—and I think the one before it—was entirlely his doing and I wish to say how much I appreciate his chairmanship, and congratulate him on the excellent way in which he conducted our affairs.
I will not delay your Lordships for long because I have agreed with everything that noble Lords have said, and one cannot go on indefinitely repeating the remarks of others with which one agrees. However, I must comment that the Commission think so much of production that they do not think enough of selling, of the need to find ways of getting rid of surpluses—that is, beyond turning milk into milk powder and feeding it back to the cows, which is not exactly the best way of dealing with surplus milk. I should like to see some inspiring proposals coming from Brussels on the use of, and the need to give encouragement to people to consume, the surpluses which we know exist.
For that reason I am delighted that the Milk Marketing Board has won through. Lord Raglan rightly said that it was started in 1933 by my husband as the then Minister of Agriculture. It went through terribly difficult times to get going at all, but now that it is going, and has been going for 40 years or more, it would be tragic if it came to an end.

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indeed, I believe the Commission would do well to adopt some of the methods which the Milk Marketing Board uses. The Milk Marketing Board sells milk. It encourages people to consume milk, and this is something which is absolutely vital.
Why is it, how is it, that we in this country consume more milk per head of the population than any country in Europe? Obviously this is due to such things as the daily delivery of milk, which is not done in Europe at all. Why do they not try to organise a daily delivery of milk? The consumption of milk products is also a factor here. They are better advertised in this country, and are consumed in greater quantities. We must also remember that the provision of milk in schools scheme was responsible for so much milk being consumed in the old days, and I fervently hope that this scheme will be reintroduced through the Commission in all the countries of Europe, including our own. I am quite sure that that would add tremendously to the consumption of milk. We may have to make reductions, but it is important, I believe, that we should encourage more people, especially children, to drink more milk.
Although I absolutely agree that one does not want to encourage more milk production in areas where it is expensive to produce and therefore is not economical, our own milk production here is extremely efficient, as is the marketing of it. I should not mind seeing a small increase in the dairy industry because it would only meet the increasing costs. We all know that each year we have very little control over these, and they hit all the different sections of agriculture quite severely.
The noble Earl, Lord Fortescue, made a most interesting maiden speech. I remember when we had a pig board and pigs were one of the main items of production in our agricultural world. I find it very sad indeed that, due to different methods, the pig industry has now been so severely reduced that someone of the skill and experience of the noble Earl should have to go out of pig production altogether.
There is one other aspect of the present policy which worries me a little; namely,
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the reduction in the beef breeding herds. I understand from literature I have received from the National Farmers' Union and elsewhere, that in the last two years there has been quite a big reduction in the breeding of beef cattle, and I very much hope that the increase in the hill cow subsidy, which enables us to breed our beef in the less favoured areas, such as the hill areas of Wales and Scotland, will be allowed to reach its maximum, which I believe is £31·38.
There is another activity involving beef which I am not very keen about. I refer to Irish beef coming here heavily subsidised by the monetary compensatory allowances. This is a serious deterrent to our beef producers here. Personally, I do not see why there should be this advantage given to Irish beef to undercut our own beef producers here, due to the fact that there are heavy subsidies paid through the meas. This matter should be looked into because there is certainly a deterrent here to our own industry.
I should like to say a few words about sheep and wool. These are still outside the EEC régime at the moment, but undoubtedly they will come into the régime in the near future. Exports of sheep are subject to the vagaries of the Paris market. This sometimes opens and sometimes closes and does so in an almost completely arbitrary manner. It throws out the sale of lambs and sheep very badly indeed. I should like to see something done in the Commission to regulate to some extent the way in which the French market is operating. The French also allow Irish sheepmeat to enter free into their market, while they tax our mutton very heavily. I should have thought that that was probably a principle which breaks the main object of the Common Market, which is that we should all be dealt with in the same way. If the French allow Irish sheepmeat to go free into France, why will they not allow our sheepmeat to go free into France? This is a matter that we might well look at again.
I want to raise another point about sheep and wool. In the present Commission's price lists, wool prices are left exactly at the same price as they were last year. That is really a reduction, because, as we all know, the increase in the costs of production have been quite

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considerable in the last year, and, over the last two years, have been more considerable still. Unless there is an increase in the price of the commodity one is selling, that commodity has in fact been subject to a reduction in price. It may not appear so on the surface, but to the producer it is a reduction because his costs have gone up while the price of the commodity he is selling remains the same. This, too, I believe is a matter which could be looked at by our representatives at the Commission.
I agree with the noble Lord, Lord Collison; we have a long way to go yet. There are problems to which it is very difficult to find a solution, but I do not think we should be put off by that. We must stick together in the Commission with all the other countries, and I am sure that at the end of the day we shall arrive at a policy which will be advantageous to everyone.
I agree also with those who have said that there should not be this great division between the producer and the consumer. We are all of us consumers, and some of us are producers. If we are producers, it is very important that we should have enough people to consume what we produce. Therefore, in the end, our interests are very much the same. This is a point which we must consider further. I do not think that the Minister should be perhaps quite so enthusiastic about the consumer as he is, though I may be misjudging him. After all, there would be nothing to consume if farmers do not produce. Therefore, fundamentally it is vital that our production should continue, should meet any increases required, and should be as efficient as possible. I believe we can claim that our agriculture is efficient, I hope that we shall continue to increase our production to meet a consumer demand, and I am as interested in this as I am in being a farmer.
6.59 p.m.
Lord SWAYTHLING: My Lords, I wish to support what my noble friend Lord Mackie of Benshie has said, but I propose to confine my remarks to the question of the Commission's recognition of the Milk Marketing Boards in the United Kingdom. Others have spoken about this, but I feel so strongly that I
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hope your Lordships will excuse my doing so. As is well known, the Boards were first established in the early 1930s on the initiative, and by the overwhelming vote, of producers. Acting under the authority of the agricultural marketing Acts, the Boards purchase all milk offered by registered producers, and sell their milk on behalf of the producers. The Boards also organise the collection of milk from farms for delivery to the distributors; and the key of the Boards' success is their mandatory powers under the marketing schemes and the balance that these schemes have created between the consumer trade and the producer interests.
The efficiency of the Boards has drawn the admiration of milk producers and distributors throughout the EEC; and, in fact, it is understood that many of the countries of the EEC are envious of our Boards and would like to imitate them. The Milk Marketing Boards ensure that the consumers in the United Kingdom have regular supplies of milk, and have enabled the milk distribution trade to operate and maintain the daily delivery service. The high demand for liquid milk in this country is unique, and in England and Wales accounts for more than half its total production. The Milk Marketing Boards play a major role in making sure that this demand is satisfied. The level of liquid consumption is maintained especially by the rationalisation of collection necessary to ensure adequate distribution to centres of dense population from remote areas of production.
It must be remembered that the Boards do not fix the maximum first-hand selling price or retail price of liquid milk—this is done by the Government—but the Boards do negotiate the price of milk to be used for different manufactured products. The high reputation of the work of the Milk Marketing Boards is well deserved. They have been able to develop order, confidence and justice in the marketing of farmers' products through highly efficient management and through their relationship to the processing and distributive trades. Thus they have assured that the health and welfare of consumers have also benefited.
However, there are two particular aspects of the proposals of the Commission which jeopardise the future of the

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Boards. The continuation of the Boards, it is suggested by the Commission, as has been mentioned already, should depend upon the assent of 80 per cent. of voting producers taking part in quinquennial agricultural polls. How can anyone continue to run an efficient business if the employees realise that there is a risk that every five years their jobs may come to an end? The retaining of efficient staff or the recruiting of new staff would become impossible. It is already provided under the present schemes that if a given number of producers are dissatisfied they can demand a poll. It is readily accepted that there should be an initial poll of producers before the EEC allow the continuation of the Boards and their powers.
The other main point which the Commission wish to insist on, as was mentioned by the noble Lord, Lord Sandys, and the noble Lord, Lord Collison, is that producer-retailers with herds of up to 150 cows should be allowed to opt out of the scheme. This would no doubt upset the big producers, and they might be induced to refer the matter to the European Court, which would throw the whole question of the Milk Marketing Boards in the melting pot again, with all its dire consequences. The maintenance of the Boards with their powers is a policy which has been supported by all the political Parties. It is to the benefit of producers and consumers, and essential for the survival of doorstep milk delivery services. It is therefore hoped that Parliament will support the Commission's proposals in principle while emphasising the need for the amendments which I have mentioned.
7.4 p.m.
Viscount MOUNTGARRET: My Lords, in 1930 the late F. E. Smith, the first Lord Birkenhead, wrote a book called AD 2030 in which he prophesied what this country and the world might be like 100 years from then. In it—in Chapter 3, I think I am right in saying—he prophesied that there would be no agriculture (which would mean that there would be no need for a debate such as we are having today, which I think would be regrettable); that everything would be produced by scientists; that we would have synthetic food and, therefore, there would be no problem such as that which we are discussing today. Be that as it may, we
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have a few years to go before we get to that date, so the more we can do to improve the agriculture in this country until that date arrives, the better.
As a working, practical farmer I have some knowledge of what goes on in the farming world, and I am bound to say that there are many farmers who are very discontented with the disparity of the green pound, which in my view is dreadful and seems highly likely to remain with us for a very long time indeed. It is of course true that the recent devaluation of even only 7½ per cent. has helped. Anything that is a step in the right direction must be appreciated; but 7½ per cent. at today's currency values is in fact a mere drop in the ocean. The ideal world (which, I admit, is seldom if ever achieved, but which none the less should always be attempted) would be one in which the green pound's disparity, thereby causing low product prices, was balanced by equal subsidies on production costs, so that at the same level of efficiency British farmers enjoyed the same level of profitability as their counterparts on the mainland of Europe. Really, in my view this is the only consistent answer to full European membership in the absence of a devaluation of the green pound by some 30 per cent., which it is presumably not possible to implement. I get the feeling that we are not in fact worried about input costs or output values, but merely the difference between the two.
As I said, this irreconcilable problem is here to stay unless there is a dramatic change of policy. That change of policy I cannot see forthcoming, unfortunately, as the problem is inextricably tied up with that of Party politics. Any Party naturally wishes to obtain the maximum support, and, in particular, in any Election year the maximum votes possible. As the farming vote is less than 2 per cent. of the total electorate, then adverse effects due to the green pound disparity are hardly likely to be of political significance. No political Party would be foolhardy enough to risk the wrath of, and therefore rejection by, the consumer.
What, then, might be done to try to strike a better balance between input costs and output values, and to try to remedy a situation which is highly unsatisfactory and damaging to what is almost our most important industry?

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The noble Lord, Lord Collison, mentioned the difficulties between the Minister of Food and the Minister of Agriculture. He happens to be one and the same person at the moment. I agree with the noble Lord, and I should like to elaborate a little further. I should like to see a Minister of Cabinet rank appointed as Minister of Food, who would be responsible for doing his best in the interests of consumers. The Minister of Agriculture and Fisheries would then be left to deal with all aspects relating to production costs and to do his best to protect and look after the interests of the agricultural community, and consequently other large firms and industry connected with agriculture which to a great extent depend upon a thriving agricultural industry in order to survive themselves.
As most of your Lordships know, there was a Minister of Food during the war—and highly effective he was, too. It might be no bad thing if we had another one now. I can only imagine that our present Minister would be very glad indeed to take off his "food" hat. The position he is in must be quite intolerable. He is rather like Pooh-Bah in "The Mikado". He must spend many sleepless nights arguing with himself over a multitude of problems, and it is only a matter of which hat he has pushed furthest on to his head at any stage of his personal dialogue which determines what answer is effectively reached. His troubles are then far from over, because one half of himself is contented with having won a major battle with the other half; but the other half is acutely perturbed at having lost; so the sleepless night continues while the first half tries to console the second. One shudders to think what would happen or what would be his state of mind if the second half is overruled by the first half's decision.
Seriously, I should be grateful to know what the noble Lord, Lord Strabolgi, might think and what his initial reaction might be to the possibility of implementing such a suggestion of dividing the Ministry of Agriculture, Fisheries and Food into two Ministries; or, at any rate, to know whether he thinks that it might be practicable for this to be seriously implemented. If this were to be done, I think that many of the diametrically opposed interests of food producers and food consumers
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would be better understood and thereby better tackled.
7.10 p.m.
Lord GISBOROUGH: My Lords, I would first declare my interest as a farmer, as I farm from blackfaced sheep on the moors down to potatoes and corn on the vale. I think that one must bear in mind the fact that the 2 per cent. increase in prices proposed by the Commission is less than half of the Commission's own estimate of what will keep pace with the rise in general incomes. The Agricultural Committee of the European Parliament, supported by the farmers' unions, put the required amount at about 5 per cent. There are problems in the market equilibrium in some sectors; but existing stock surpluses do not necessarily imply that these commodities are in structural surplus. Long-term assessments are necessary for the Community food requirements, bearing in mind the possibility of greater world trade, of world stock-holding agreements and of aid to the third countries. But there are a few cases of structural surpluses, such as milk, and probably it is not socially or politically possible to reduce the surpluses by lowering prices.
The Commission propose a 2 per cent. increase in the target price for milk, and this would have a different effect on the United Kingdom farmers than on Continental farmers. The rise to United Kingdom farmers will be affected by the level of Community target prices which govern the intervention prices on dairy products: the green pound, the selling price of milk determined by the British Government and the market situation on dairy products. With regard to skimmed milk, the Commission proposed fundamental changes in support arrangements. The farm support will be replaced by measures encouraging the disposal of skimmed milk. No new schemes, how ever, are currently available, so that there will be a likely increase in market pressures, which will disturb further the product market and make it difficult for the Milk Marketing Board to assess potential producer returns and to set price schedules. The likely result of this increase will be a producer price increase of 5p per litre and this will be substantially below what is needed to improve net margins to the standards of the early 1970s.

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It is important that manufacturing returns should be increased to achieve a better balance between the liquid and the manufacturing markets by adjusting the green pound and the Board's selling price. There are great increases of costs which have overtaken everybody including the farmers; in machinery and in repairs. But it is unjustified that, as at present, the agricultural producers of this country should be the lowest paid of any in the Common Market.
The noble Lords, Lord Sandys, Lord Swaythling, and others have talked about the Milk Marketing Board, so there is no point in going through that again. But I think that it is true that farmers are worried about the proposals that the Commission are going to make and that these proposals do need some amending so that there is no uncertainty about the future of the Board.
There is also the question of the larger producer-retailers being allowed out of the Board. I think that this would undermine the fine balance within the industry at the moment and distort competition in the liquid market. I should have thought that they could be, and should be, made to stay within the Board as they are now, but with the possible exception of those who sell to the consumers direct at their farm gates.
The Commission have proposed an increased guide and intervention price by 1¼ per cent. on beef and veal; but for the farmers a much larger increase is needed, something like 5 per cent.—but in two stages, one soon and one perhaps in October, to encourage an even pattern of marketing. Not only an adequate level of target price is necessary but it must be spread seasonally to reflect quickly the costs of over-wintering.
Beef, as the noble Baroness, Lady Elliot, mentioned, is causing concern in the United Kingdom. There is 6 per cent. less breeding herd now than there was last year, and 15 per cent. less than in 1974. This is due partly to contraction of livestock numbers in the hills. This could be remedied by increasing the hill cow subsidy to the maximum of £1·38 and I think that this would help to enlarge the contribution of United Kingdom meat suppliers from the hills. The prices here have been undermined by the high mcas which have encouraged subsidised imports, resulting in a lack of
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confidence. The census of December 1977 showed that cattle under six months old were 8 per cent. less than in the previous year. The green pound devaluation will help; but further mca reductions are necessary.
Turning to sheep, the 10 per cent. rise is welcome and should maintain the present production levels; but, regrettably, wool has been left out at 110p per kilogram. The wool cheque is important for the hillmen and an increase in the hill sheep subsidy is now even more necessary than it was before. The noble Earl, Lord Fortescue, dealt with pigmeat. United Kingdom producers have experienced great financial difficulty over the last two or three years. Pig breeding has declined ever since the United Kingdom went into the Common Market. The Commission have proposed a 3 per cent. increase in basic price, but this, by itself, will do no more than aggravate the difficulties of the United Kingdom producers. It would simply raise mcas on pigmeat imports. No rise in basic price should be agreed without recalculation of the pigmeat mcas. There is one proposal that they should be calculated at 70 per cent. instead of 85 per cent. of the basic price. This is in the right direction but it is totally inadequate. The base calculations should be calculated on the differences between the cereal foodstuff support prices, as with eggs and poultry meat.
So far as wheat is concerned, to ensure orderly marketing, provisions for mandatory intervention for breadmaking wheat at the beginning and end of each season should be instituted. Provision was made for this in 1977–78, but it needs to continue for 1978–79 to give adequate assurances to the producers. Regrettably the Commission have not proposed any increase in the size of monthly increments applied to institutional prices. Despite the reduction of interest rates and the revised green pound which will take effect from 1st August 1978, there will be some increase necessary to compensate for costs of storage. Our most important need is the reduction and dismantling of monetary compensation amounts. They distort the flow of trade and of foodstuffs in the Community, and the larger the mcas the greater will be the distortion.
There are three reasons for this. First, the amounts relate to intervention prices

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and not the prices of traded products. Secondly, the method of assessment results in gross exaggeration of the amounts needed to compensate for currency changes. Thirdly, the beneficiaries are not in fact always the consumers and producers, as they should be, but all too often there are other interests manipulating the system to their own advantage. The MCAs at this review should be reduced to 20 per cent. and thereafter phased out over three years. It would only add l½p per pound on the food prices each year and ½p on the retail price index each year for the next three years. It seems the most important factor and these should be firmly tackled and dismantled as soon as possible.
7.20 p.m.
Viscount TRENCHARD: My Lords, I shall try not to repeat too many of the things that have been said already by the long list of speakers. May I start by congratulating my noble friend Lord Fortescue on a first-class maiden speech in which he showed his great and detailed knowledge of one aspect of farming, and his ability to state it so clearly. I hope we will hear from him often again.
I accept, as the last-but-one Member of Sub-Committee D to speak, that we are guilty of gross failure in failing to mention pigs in our report and making a typographical error in describing it as "pigment". I think that the reason why this happened was that we were discussing primarily the price proposals and concentrating on the commodities where surpluses existed. We inevitably touched on the green pound because it overlaps the subject to such a degree. But let me assure my noble friend that every Member of Sub-Committee D is fully seized—as are all the Ministry officials and our permanent officials in Brussels—of the fact that the distortions of the green pound affect pigmeat more than any other commodity. This is partly because there are no offsetting factors in this case where there are in others, and partly due to a long list of technical factors, including the type of régime that it is. There is hope that things might be put on a basis whereby the cocas would apply only to the grain element in their cost. This applies to poultry today.
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This would have the effect of halving the pigmeat mca at the present time.
It was in a sense sad to listen to my noble friend recount his experiences of pigs; but it is not surprising that, if one pays 25 per cent., 30 per cent., and at one stage up to 35 per cent., subsidy to the products of one's competitors on import, the home farming industries, where 5 per cent. is a good profit margin, will be in a position where they cannot compete. It is not of course the CAP itself that brings about this situation, but rather the British operation of the CAP, following the fall of sterling and the very high rates of inflation in this country which caused it. This of course left my noble friend and many others of the farming community with the need to pay for the costs which were rising at a high rate of inflation without being able to recover those costs in the market because we held the green pound above the level of the real pound. So it is to a degree a self-inflicted wound so far as our farming is concerned.
As I have said before, I have spent a great deal of my life on the other side of the farm gate enjoying the practice of "farmer-bashing". I have tried at times to suggest that farmers should be more consumer-orientated or more marketing-orientated. Therefore, it would be quite natural and easy for me on this occasion to be advocating yet lower prices—EEC prices particularly—and I do so; and also to be advocating that we should hold the green pound. But I do not do that. I shall come later to the reasons why I agree with other speakers on the green pound.
There is muddled thinking at work here among those who advocate very gradual movement of the green pound. They do so for two reasons: one is in order to restrain the effect on the consumer price. I understand that and shall return to it later. But the other is to avoid the buildup of surpluses within the EEC. It is this second reason that I think is muddled thinking. I think so because the whole of the EEC is supposed to be about producing the right things in the right places, and this is just not happening. It is for this reason that I prefer the proposals of the Commission for an automatic phasing out of the green pound. I go further and support my noble friend Lord Sandys

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and the noble Lord, Lord Mackie of Benshie, in pressing for it to be done faster than even the Commission proposes. It cannot be done, so to speak, at a stroke without causing chaos.
However, we need a nearly automatic and progressive movement out of the MCA situation. Why do I say that? Farmers will not invest in expansion unless they know where they are going to be. They will in my experience invest before things are really as profitable as they hope eventually they will be. They will not invest if the subsidies paid to their competitors' products are not under any commitment to be phased out on a progressive basis so that they can see where they stand and where they will stand.
We could produce in this country—and there have been many surveys on it—over £2,000 million more of temperate foodstuffs than we are producing; food-stuffs that our climate and agriculture are well suited to produce. In virtually all of these, our efficiency, as international surveys show, is higher than the average for the EEC—in many cases it is a great deal higher. This does not mean that there are not efficient farmers in Holland, Denmark and some parts of Germany and France, but the overall position is that our productivity and efficiency are higher than theirs. Therefore, economically, we could make this further contribution to the balance of payments. It would take some five to 10 years to achieve. The sum of £2,000 million is of course less than the figure we talk about that we shall gain from oil and gas in the North Sea. But the oil will run out and our farming efficiency—if we do not impair it with oher things like CTT and wealth tax, and do not break our units up—can go on. I have always believed, as a businessman, in reinforcing success. We find it in Britain, with our history of agriculture being in a depressed state before the war, and it is rather hard to take in that our agriculture is relatively efficient compared with that of our competitors in the EEC. There is an article in The Times today which suggests that we are more efficient in beef and milk. From all the statistics that I have seen, superior efficiency covers a wide range of products.
The noble Lord, Lord Raglan, mentioned that farmers can get through a poor
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patch with string for the farm gate and wire for repairing the tractor; but we heard from my noble friend Lord Fortescue that some—perhaps not so widespread in their activities as others—cannot. However, we are talking about expansion and we cannot expand on string and wire. Farmers have to buy new tractors and to make new investments.
The noble Lord, Lord Raglan, also mentioned that rationalisation of production within the EEC has been going on for a long time and that it must go slowly. I question whether it has been going on. Across the broad front, it is really not happening. The high-cost countries are still producing as much or more as they were. We, on the other hand, even allowing for the drought and other factors which have nothing to do with price, have gone back in a large number of areas—and we are an efficient area for agricultural production where, within the Common Market concept, we should be expanding.
None of this deals with the objection of those who would urge moderation or gradualness in devaluing the green pound: because of its effects on short-term prices. It is true that consumer prices in the United Kingdom will go up. Paragraph 26 of our report suggests, on Ministry estimates—and I do not doubt them, though all estimates are likely to err on one side or the other by varying amounts—2 per cent. plus one-third of a percentage point, if we are right about milk, which my noble friend Lord Sandys says that we are not, and with 2 per cent. to 2⅓ per cent. on the price of food; this is under 1 per cent. on the retail price index. These will be the results of the 7½ per cent. devaluation.
Therefore let us keep that in perspective in terms of the other benefits that I have mentioned. In the long term, I suggest that those other benefits outweigh this short-term disadvantage. It must be in the consumer's interest as well as in the taxpayer's interest to produce in the right places in the lowest-cost countries. We are not moving towards that situation. It must be in the interests of taxpayers and of the strength of sterling, which in turn can affect consumer prices, to improve our balance of payments.

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It is for those reasons that I believe the very well-intentioned suggestions of the Consumer Association and some elements of the food processing and distribution trade in regard to a very gradual phasing-out of the green pound, are wrong. Even in the short term, the consumer is likely to be favoured by the build-up of surpluses if increasing United Kingdom production does so augment those surpluses. This of course, is not a good thing from the taxpayer's point of view, although probably the German taxpayer will be more affected than the British.
That brings me to the question of how we actually get EEC prices down in the higher-cost agricultural countries—the strong currency countries—and in Germany in particular. We have mentioned in paragraph 12 the contradiction in the German pressure, on the one hand, to remove some of the costs of the CAP by getting the surpluses down—and, of course, they pay a very large proportion—and, on the other hand, their absolute refusal to agree either to a prices standstill or to what is really needed, a price reduction in D-marks. All the evidence we heard here and in Brussels suggests that at the moment that is a political impossibility and that the overriding factor of the German contradiction is that, politically, they cannot afford to lower their prices and must indeed increase them in D-marks.
That contradiction is a reflection of a wider contradiction within the CAP itself. The main purpose of the CAP—and I hope very much that it will triumph progressively—is that there should be free and fair trade in agricultural products and, with that, a movement of production to the most efficient areas for those products, But the contradiction is provided by the statement also included in the CAP that one of the objects is to raise farmers' incomes to the level of other national incomes of their individual countries. These two, as your Lordships can readily see, are not compatible. If farmers' incomes in Germany are to be lifted to the level of those of factory workers, their prices would have to go up very much further even than they do.
I believe that we shall get EEC prices down only if the more efficient agricultural countries and the weaker currency countries,
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who should produce more at home, will let their farmers go ahead. That will contribute to the surpluses and it will be a cost to the Community of which we shall have to pay our share; but only in this way will the EEC face up to giving overriding priority to the essential part of the CAP, which is to secure free and fair trading in agricultural products and to get production taking place in the most efficient parts of the Community. That must be in the long-term interests of consumers and taxpayers. Other means have to be found to supplement the incomes of the small peasant-farming areas such as Bavaria, much of France and elsewhere.
7.37 p.m.
Lord MONK BRETTON: My Lords, may I express my gratitude to the noble Lord, Lord Raglan, for giving us this opportunity to debate these matters today. May I also congratulate most heartily my noble friend Lord Fortescue on an excellent speech and one that I believe is somewhat apt to what I have to say, which will primarily concern the Milk Marketing Boards. I at least still have an interest to declare. I only hope that this continues to be true of myself and of other dairy farmers.
I think I should emphasise the point of the Milk Marketing Boards. My noble friend Lord Trenchard has talked about the vital fundamentals of our agricultural policy and I feel he has done that so well that there is no need for me to deal further with that subject. I should just like to underline one point concerning the prices and the Boards that we have been talking about today: that is, that the Boards are of the most vital importance because dairying was always regarded—indeed, I believe, it still is—as the sheet anchor of British farming. So the view of the European Commission is certainly unreservedly welcome to me. So far, so good. I trust from here on, with the modifications which have been mentioned—I shall not mention them again: they are all modifications with which I would agree—that this matter may proceed successfully in the right direction. The ability of our Minister for Agriculture for gladiatorial effort is notable. One hopes there have not been too many gladiatorial conflicts already, because this one is the one that has to be won.

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We do not contribute to the milk surplus, in my view. We have approximately one dairy cow to every 10 people in this country. Unfortunately, my figures are not very up to date, so I am using an approximate guide like that. The French have double that number, and the Dutch have 60 per cent. more per head of population. The overall figure, with which one ends, is that with a population of about 250 million, the 10 nations in the EEC now have 30 million or 31 million cows; and, according to my ruling, if their proportions were the same as ours they would have only 25 million.
Most of the milk is produced on the northern maritime plain, so that we produce it under fairly similar climatic conditions. There is no reason why we here should not be perfectly competitive in that situation. It is primarily a situation that should produce liquid milk for Europe, with a suitable buffer of manufactured milk, and it is likely that there will be other areas outside Europe which can do better in producing milk for milk products.
My view is that my noble friend Lady Elliot never said a truer word than when she said that the Europeans should also look at the Milk Marketing Board system as a possible solution, and I should like to underline that. She mentioned a number of reasons why, and there is just one more which I should like to add. I believe that that system would satisfactorily provide the liquid milk and the sales effort that is most necessary, and would also enable the means of keeping the production of manufacturing milk within bounds in Europe. That is a highly sensible proposal, and I hope that it has something to do with the reception given to this problem by the European Commission.
So far as our milk boards here are concerned, there is no doubt that, if they are now weakened, with the green pound and the MCA situation which we are in, there will be a major disaster in the dairy industry in this country, which I very much hope will not happen. It is a vital matter for the Minister and, even if no other reasons—economic or agricultural reasons—apply, it must be remembered
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that in time of war milk is the cheapest protective food. We resorted to it heavily in the last war. But it is not something that can suddenly be produced from nowhere. For that long-term reason alone, it is very necessary that we do not allow the liquid milk market in this country to be lost to the British farmer. If anything like that happened, even temporarily, it would mean that a bridgehead was built in the market over here, which we should have great difficulty in getting rid of. That is all that I need say, and I trust that we shall see success in these negotiations.
7.45 p.m.
Lord MOTTISTONE: My Lords, I should like to join with those noble Lords who have paid tribute to my late noble friend Lady Tweedsmuir. Not only did she recruit me on to Sub-Committee D, but I found, as did other noble Lords, including the noble Lord, Lord Collison, that her leadership was an inspiration. The extent to which she contributed to the development of these Sub-Committees, and indeed of the Select Committee itself, cannot be overestimated.
I should also like to pay tribute to my noble friend Lord Fortescue. I must confess that I found his story, if I may so describe it, an extraordinarily tragic one. It seems quite disgraceful that somebody who had 2,500 head of pigs should be advised by an accountant to sell the lot, just because of the Common Market and its rules. If that is the case, then my attendance on Sub-Committee D must be seriously at fault, because I had not realised that matters were quite as bad as that. However, his delightful way of putting his point across, and his very skilful speech, make me hope that we shall hear him very much more in this Chamber in future.
I must declare an interest as a director of the Cake and Biscuit Alliance. This will lead me not entirely to agree with my noble friend Lord Trenchard on some of the points he made. I find one or two distressing points in this paper, which have not been fully referred to. In Table 1 on page 5, your Lordships will find that, invariably since 1974, the Council's average price decisions have been in

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excess of those recommended by the Commission. This I find distressing and, presumably, it means, once again, that in trying to strike a balance and an agreement the Council of Ministers will exceed the Commission's recommended price increases. I should like to join with other noble Lords who have said that they think the Commission should be congratulated on being so cautious, and on taking as low a politically acceptable increase as they can.
However, if your Lordships will then look at Table 2 at the bottom of page 5 you will find that all the commodities which are in surplus are recommended to have an increased price, which will obviously have some effect in encouraging a yet larger surplus, in many cases. At the bottom of page 9, we learn about sugar, for example—and I am taking sugar, because it is a commodity in which I have an interest and it has not been fully covered—though the Community consumption will stand at a mere 9·3 million tonnes, we are expected to produce a total Community supply of 12·6 million tonnes. That is one-third as much again. When my noble friend Lord Trenchard said that he thinks that surpluses are a good thing and should be encouraged, I hope that one-third as much again as we need, when we know we cannot export the product, is not what he has in mind.
Viscount TRENCHARD: My Lords, if the noble Lord will forgive me, I certainly did not intend to say that surpluses were a wonderful thing. I said that it is possible that the only way that we will be able to bring adequate pressure on EECprice levels to bring them down and get out of structural surpluses would be by allowing British agriculture, through the mechanism of the green pound, to go ahead to a greater degree, even though that would contribute to the surpluses, which might have the beneficial effect I described.
Lord MOTTISTONE: My Lords, I take the point, and perhaps one can take some surpluses as being within the remit of my noble friend while others are not. But to come back to sugar, when we visited Brussels we learned that since 1968 the average prices have been some 25 per cent. higher than they would have been if the
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normal laws of supply and demand had applied to that product. We also learned that when the Ministers took fright in 1974–75, when there was an apparent temporary shortage of sugar, they introduced regulations which gave them the sole power to decide on the future of sugar. Since then they have consistently over-ensured so that the over-stocking of this product has gone up still more and the price is still a great deal higher than it need be.
Ironically, the other day, when attending a sugar fair in Paris, I learned that the French claim that the harvesting of sugar from beet—which is behind what I am advancing to your Lordships—was introduced by Napoleon at the turn of the 18th-19th century, due no doubt to the efficiency of the blockade instituted by the Royal Navy at the time; so perhaps it is all our own fault that we are landed with too much sugar. But I rather suspect that it is due to had management by the Council of Ministers and it is about time that they tackled their problem in a more efficient fashion. I see that the noble Lord the Leader of the House is here and he has been a Council of Ministers man in his day. I rather get the impression that the Commission are fully aware of what should be done, but perhaps they have fooled us into thinking that they are the "goodies" and the Council of Ministers are the "baddies". Whether or not this is so, it is not a thing which one can take with equanimity.
I got the slight feeling that because of all the difficulties there was a general tendency in the debate for noble Lords to say "Well, this situation is a lot better than it has been before and we have to congratulate everybody concerned". I am not sure that I like that. As my noble friend pointed out, and as is pointed out in paragraph 12, on page 8, the people who are principally to blame for the continuance of the present state of affairs are the Germans. One car, see their problem. The Germans, having got themselves into the position where their farmers are very much better treated than they should be, cannot now unhook themselves so that their farmers are treated reasonably, so that there is an even balance of agricultural production throughout the Community—which is where I come into line with what my noble friend is perhaps seeking to achieve.

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Until we can somehow persuade the Germans that it is not in their own best interest for their farmers to be given abnormal preference to the extent that they export farm produce to Denmark—something that apparently has never happened before in history—it seems to me unlikely that we shall solve the problems that are facing us.
I suppose there is another way; that is, that production in this country outside the agricultural field could improve so very much that our pound would gain in value and the gap between the real pound and the green pound would be dealt with in that fashion. Perhaps that is the solution. Whatever it may be, I do not think there is any ground for complacency. I do not believe that we can say too strongly—though I know as a Member of Sub-Committee D I support this argument—that the Commission have done jolly well in view of the circumstances, or words to that effect. I think we must continue to encourage our representatives on the Council of Ministers to press for a movement of the total agrimonetary and price control picture in such a way as to work toward greater harmony and less massive differences, many of which are caused by artificial means which in the passage of years have got worse rather than better. I hope therefore that the Government will be able to give us some answer to show that they are tackling the problem in that way rather than with an air of complacency.
7.58 p.m.
Lord STRABOLGI: My Lords, we have had a most interesting debate and I have had the good fortune to listen to every one of your Lordships' speeches. First, I should like to congratulate my noble friend Lord Raglan for having initiated the debate and for his admirable speech which was short but succinct and an admirable introduction to this debate. It is also my pleasant duty to add my congratulations to those of other noble Lords to the noble Earl, Lord Fortescue, for his maiden speech. The noble Earl, if I may say so, comes from a distinguished family that has given great service to this House, and, if I may echo the words of my noble friend Lord Collison, we are very glad to welcome him to our debates
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and to have a new voice speaking on agriculture, particularly as he has spoken with such expert knowledge of the pig sector.
We have examined in some detail the important questions which arise on the EEC Commission's proposals for farm prices and their thinking on green currencies and of course the separate issues which affect our Milk Marketing Boards. The clarity and thoroughness of the Select Committee's reports have given us considerable help in examining these complex subjects, and I should like to pay a tribute to the hard work which has gone into them, and to all members of the Committee. I should also like to join in the tributes to the late Lady Tweedsmuir of Belhelvie, who has given such great service to the House and who is so sorely missed.
My Lords, one of the problems in looking at the EEC price-fixing is that the picture is always changing. I agreed very much with the noble Lord, Lord Mackie of Benshie, when he asked who should scrutinise the scrutineers—a sort of modern version of who shall guard the guards. The Commission presented their proposals on prices and related matters to the Agriculture Council in mid-December. In February, France, the United Kingdom and Italy all devalued their green currencies. In March, the Commission presented their second tranche of price proposals, France devalued the green franc further and changes were made on an experimental basis in the green currency arrangements. Against this background of intricate developments, I shall try to be as clear as possible in my presentation of the many issues which have been referred to by your Lordships.
Our debate on the price-fixing is most timely. As I have explained, it follows publication of the second stage of the proposals but it precedes the meetings at which negotiations will take place in earnest. I have in mind that, while discussions have continued steadily in the January, February and March Councils, little overall progress has been made, but we do expect to see some developments in the next Council on 4th and 5th April, and I am sure that my right

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honourable friend will take full account in these important negotiations of the careful and considered advice which has been offered today by your Lordships.
Regarding the Milk Marketing Board discussions, these likewise continue and my right honourable friend will again bear in mind all that has been said today in this House. I shall have a little more to say about the problems of the Milk Marketing Board. I want now to deal with the specific points which have been raised, but before I do so I must answer the proposal of the noble Viscount, Lord Mountgarret, that the Government should consider splitting the Ministry of Agriculture, Fisheries and Food into separate departments dealing with food and agriculture. The Government note what the noble Viscount has said, but it is, of course, a matter for the Prime Minister. My right honourable friend the Minister of Agriculture has made it clear that he would see no advantage on either the agriculture or the food side in dividing this responsibility, but the Government will certainly take note of what the noble Viscount has said. My noble friend the Lord Privy Seal is sitting beside me here, and I am sure that what has been said will be noted carefully in the right quarters. I must say, however, that there is a possibility of conflict and the Government's present thinking is that it is better for the responsibility to be combined in one Ministry. We shall also take note of the interesting remarks that have been made by the noble Viscount, Lord Trenchard, on the general aspects of our agricultural policy in a European context.
Turning first to the Commission's price proposals, it may be helpful if I summarise and comment on those proposals as a whole which are set out in the documents that are being considered this evening. The Commission's objective method calculation implied that a 4.2 per cent. price increase was necessary this year, but they sensibly regarded this calculation as only a starting point and proposed a smaller price increase of approximately 2 per cent. on average, including increases of 4 per cent. for most oil seeds, 3 per cent. on the pigmeat price, 2 per cent. on the milk target price, 1.25 per cent. for beef, 1.16 per cent. For
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sugar, and proposals for the cereals sector which vary but give an average rise of nearly 2 per cent.
The Commission wisely pointed out that Community agriculture is sheltered from the worst effects of the economic recession and that structural surpluses exist for milk, wine and sugar, with a dangerous situation developing in some other sectors. As my noble friend Lord Raglan said, the problem is not surpluses but paying for them. Against this background, the Commission adopted quite a tough approach, taking account of the economic dffiiculties of the Community generally and the problems of imbalance in agriculture between supply and demand.
At the same time, the Commission had it in mind that the Member States should make certain green currency changes in accordance with proposals they had made earlier for phasing out monetary compensatory amounts over a seven-year period. The Commission's second stage proposals presented at the March Council do not affect the basic price recommendations, but include proposals for the continuation of the variable beef premium system, for adjustments to the arrangements for intervention for beef and skimmed milk powder and for certain other measures. The Commission's price proposals, if adopted, would add a further 2 per cent. to support prices overall in the United Kingdom. In cash terms, that is an addition of something of the order of £30 million to £40 million to producers' returns, net of feed costs when the effects have worked through. The effect on food prices in a full year of the Commission's price proposals is about ½ per cent.
It may be appropriate here if I comment generally on the Government's approach to the price-fixing which has been mentioned by so many noble Lords. The immediate need of the agricultural industry in this country, which was for help in the livestock sector, has been met by means of the 7½ per cent. phased green pound devaluation. The devaluation adds just over 8 per cent. to support prices in the United Kingdom when the effects have worked through. Overall, producers' returns, net of feed costs, will rise by something of the order of £150 million to £200 million in a full year.

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These developments enable the Government to concentrate in the price-fixing negotiations on the main issue, which is to seek improvements in the Common Agricultural Policy, with particular emphasis on the need for price restraint. Indeed, our central objective in price fixing is to restrain price increases to the minimum, because it is setting price support at too high a level which results in unduly high levies on imports, provokes structural surpluses and leads to excessive refunds and disruption of third country markets.
My right honourable friend has accordingly welcomed the Commission's recognition in their proposals of the need to hold down prices but has consistently and powerfully stressed the need for an even tougher policy. In particular, my right honourable friend has urged a prices standstill for cereals, milk, sugar, wine and fruit and vegetables. In this connection, we shall take careful note of all that has been said by my noble friend Lord Sainsbury.
We have to recognise, however, that all Member States do not take the same view as the United Kingdom, as the noble Lord, Lord Vernon, implied. The Benelux countries in particular, and Ireland, would all like to see bigger price increases than the Commission propose. Germany wants a price increase which is at least adequate to accommodate a small green D-mark revaluation, while the other Member States are most unlikely to stand out against proposals for bigger price increases. We therefore stand alone in our pressure for stronger price restraint and we have to recognise that at the end of the day we shall not achieve all that we seek.
The noble Lord, Lord Vernon, said, I thought, some rather hard things about my right honourable friend the Minister. I should like to say in reply that the European Assembly has endorsed the view of the United Kingdom that there should be no increase for surplus commodities. Obviously this tough line is not popular but it is surely right. I may say in passing that the Conservative Party has welcomed the view of the Assembly, which shows that the noble Lord, Lord Vernon, is out of step. Here I agree very
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much with and welcome the remarks of my noble friend Lord Collison on the speech made by the noble Lord, Lord Vernon. I think that my noble friend's remarks put the matter into perspective.
Lord MACKIE of BENSHIE: My Lords, will the noble Lord not agree that it is possible to be both tough and amiable at the same time?
Lord STRABOLGI: Certainly, my Lords, and that is what my right honourable friend is being. I shall now discuss a little more fully the proposals on milk. Against the background of the continuing structural surplus, the Commission have taken a fairly tough approach. The increase in the target price would be limited to 2 per cent. and there would be corresponding increases of 1·9 per cent. and 1·6 per cent. in the intervention prices of butter and skimmed milk powder. The Government do not believe, however, that this goes far enough for what is, after all, the major surplus commodity in the Community. The Commission themselves estimate the surplus at over 14 per cent. of all milk delivered to dairies even before account is taken of imports, as was mentioned by my noble friend Lord Sainsbury. Intervention stocks of butter in the Community are now at some 146,000 tonnes and of skimmed milk powder at some 832,000 tonnes, but an increase of 2 per cent in the common price could generate production of, say, a further 80,000 tonnes of butter and 160,000 tonnes of skimmed milk powder beyond what would be produced with no increase in the common prices.
It is not surprising that expenditure in the milk sector is about 40 per cent. of all guarantee expenditure in the Community agricultural budget. An increase of 2 per cent. in common prices, quite apart from the other proposals put forward, would cost the Community agricultural budget about another 100 million units of account. In these circumstances, my right honourable friend has told the Council repeatedly that there should be no increase at all in the common price, and here I very much welcome what the noble Lord, Lord Monk Bretton, said.
The other proposals in the milk sector are complex, although not as complex

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as they were last year. The Commission's thinking is that the co-responsibility levy should continue at its present level at 1·5 per cent. of the target price, that there should be a 50 per cent. increase in the EEC contribution to school milk, where the arrangement would also be extended to other products, and that there should be a gradual elimination of our butter subsidy. However, the Commission have also proposed the injection of Community funds of the order of 50 million units of account to help disposals of butter. The Commission have resurrected their proposal for a ban on investment aids on the farm, which we firmly oppose. They propose changes in the scheme of premium payments designed to encourage milk producers to quit. And they want to see suspension of intervention on skimmed milk powder from 1st October. All these proposals will be studied further and discussed in more detail in Brussels.
The Commission's price proposals on milk together with the agreed green pound changes do not of themselves necessitate changing the United Kingdom maximum retail price of milk for liquid consumption, as was implied in some quarters in the Press last week. They are just two of a number of factors which need to be taken into account by Ministers in determining the maximum price for milk sold for the liquid market.
Mention has already been made of the co-responsibility funds. I cannot comment in detail on all the proposals put forward for the milk sector, but I should like to say a special word about these. Under the terms of the agreement setting out the co-responsibility levy the Commission was charged with drawing up a programme of measures which would use the yield of the levy to expand the markets for milk products inside and outside the Community, to search for new outlets and to improve products. Here, I am very glad that the noble Lord, Lord Sandys, speaking for the Opposition, welcomed the proposed programme. The Commission undertook to consult interested parties through its own Advisory Committee in drawing up the programme and to notify the Council of the outcome. It was this last communication which the Select Committee recommended for debate.
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There has been some concern that our industry might not get a fair share of the benefits from the use of the funds, but I can assure noble Lords that the Government have pressed very hard for our own very substantial publicity programme to benefit fully from Community assistance. The Commission have come some way towards meeting us on this, but we have to recognise that at the end of the day it will be for them to decide the matter. In the meantime, we shall continue to urge an equitable and sensible use of the levy money. And I am sure that our industry will do likewise through the various channels open to them.
The noble Lord, Lord Sandys, spoke about the ban on aids to dairy farm investment. My Lords, we do not accept that removing the incentive to improved efficiency and working conditions will have any direct impact on surpluses, and we therefore consider that the proposal is irrelevant. The noble Lord, Lord Vernon, also spoke about the effect of the EEC price proposals on the United Kingdom producers' returns and the retail prices of milk. The proposals would lead to increased returns to producers and eventually to higher retail prices for milk products, though the size and timing of the increases would depend also on the level of supply and demand on the milk products market. There would be no direct effect on the retail price of milk, for which the Government will continue to set a maximum. I was interested in what the noble Baroness, Lady Elliot of Harwood, said about school milk. I agree that it makes good sense to attract schoolchildren to drinking milk, and we therefore agree with the broad aim of the proposal. We have already taken action to claim subsidy on our existing programme.
Turning to beef, I should like to make a few points here. The Commission's proposal for an increase in institutional prices of 1·25 per cent. is in line with our own ideas of a cautious price policy. Beef is not a commodity which is in structural surplus. The intervention stock of some 350,000 tonnes is only equivalent to about 6 per cent. of total Community consumption. Moreover, beef is a commodity where a surplus could quickly disappear if consumption increased. On

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the other hand, excessive price support increases obviously act against consumption, as does too great a reliance on intervention. We note what the noble Lord, Lord Gisborough, has said.
The Commission's second stage proposals provide for the continuation of the United Kingdom variable premium arrangement on an unchanged basis in 1978–79 and this development is of prime importance. We also welcome the Commission's proposal to allow suspension of intervention in certain circumstances. This change would make the intervention machinery more responsive to the needs of the market.
The noble Baroness, Lady Elliot, spoke about premium payments to the Irish Republic. It is a long-standing arrangement, dating from the Anglo-Irish Free Trade Area Agreement, to pay United Kingdom premium on beef imported from the Republic that meets our own qualifying standards. The obligation to make these payments was carried into Community law when variable premiums were introduced. It recognises the close integration of the beef market in the two countries.
The noble Baroness also mentioned Irish lamb exports to France and the Franco-Irish arrangements for allowing levy-free access for those exports. We are totally opposed to such bi-lateral arrangements which heighten the discrimination against the United Kingdom. The United Kingdom Government have asked the EEC Commission to act. The Commission have initiated proceedings under the Rome Treaty. With regard to the French import levies and their recent increases, these increases have further increased the discrimination against our exports. A telegram has been sent to the EEC Commission drawing attention to the potential trade distortion and disruptive effects which we regard as totally unacceptable.
The noble Baroness, Lady Elliot of Harwood, mentioned wool. Producers receive the guaranteed price less marketing expenses. Wool prices weakened during 1977 and are, at present, below the current guaranteed level. It was decided to leave the guaranteed price for the 1978 clip at 110p per kilogram, as although prices have
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been weak they have recently shown signs of firming. This also reflects the present credit balance in the Stabilisation Fund.
I should like to turn briefly to the pig sector which was referred to by the noble Earl, Lord Fortescue, and the noble Viscount, Lord Trenchard. Here the Commission has proposed a 3 per cent. increase in the basic price. This would not directly affect our producers' returns, because intervention buying is not normally employed in this sector. In practice it means two things. First, that aids to private storage could be introduced when market prices are a little higher than the level which applies under present arrangements. Secondly—and this is much more important—it means that so long as monetary compensatory amounts on imports are calculated from the basic price, a higher price would increase mcas on imports which are already much too high. Noble Lords will know that the Government have been trying very hard to get a change in the method used for calculating the pigmeat meas. In these circumstances, my right honourable friend is opposed to any increase in the basic price for pigmeat except in the context of an agreement in the Council to change the mca calculation.
The noble Earl, Lord Fortescue, mentioned the position of pig producers as, of course, he is one. As he said, the recent devaluation of the green pound will help to the extent that it is reflected in higher prices for bacon and pigs, and given that it does not apply to cereals until August. However, the need for action on the calculation of the pigmeat mcas remains, and as I indicated we shall be continuing our efforts to secure this. We have been encouraged by the strength of French and Italian support for our point of view.
As regards sugar, the Commission's proposals provide for an increase of a little over 1 per cent. in the common intervention price for sugar and a corresponding increase in the minimum price for beet. In view of the structual surplus in Community sugar production, the Government are opposed to even that increase. Of greater significance, however, is the proposal to cut the maximum quota from its present level of 135 per cent. to 120 per cent. of the basic quota. If accepted in full, this would reduce Community sugar

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production by some 600,000 tonnes or 6 per cent. according to the Commission's estimate. This is an important step towards bringing production into line with market needs and the Government accordingly fully support this proposal.
The noble Lord, Lord Sandys, mentioned isoglucose and asked why there is a levy. The Commission's argument is that there is surplus sugar in the EEC, and the excess has to be exported with the aid of refunds. Because isoglucose replaces sugar, it causes more sugar to be exported, and so it ought to bear the same proportion of the cost of sugar export refunds as "B" quota sugar already bears. The only company in the United Kingdom producing isoglucose has participated fully in the Commission's study. Isoglucose manufacturers, including the United Kingdom company, are challenging the legality of the isoglucose production levy in the European Court. The result of these actions is not yet known.
I turn now to the question of the Milk Marketing Boards which have been mentioned by all noble Lords. The Boards have a most important function to play in enabling daily doorstep deliveries of milk to take place in the United Kingdom. Without the Boards it would not be possible to maintain the delivery system, since a very high degree of organisation is required to carry out the massive movements of milk from production areas in the West of the country to the major consumption areas in the East. The high level of consumption of liquid milk in the United Kingdom depends on this and absolute regularity of supply is essential to it. Successive Governments have recognised the value of the Boards and the present Government are committed to safeguarding their future.
The noble Lord, Lord Sandys, mentioned the question of an independent chairmanship. That does not arise directly from the Commission's proposals, but it is currently being discussed with interested parties in the general context of how the Joint Committee should operate under the proposed new arrangements.
In conclusion, I should like to say how much the Government welcome this debate. We have taken careful note of
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everything that has been said by noble Lords who have participated in it.
8.27 p.m.
Lord RAGLAN: My Lords, first, I should like to thank my noble friend Lord Strabolgi for his comprehensive summing-up of this debate. Indeed, he summed up in the same debate last year. In particular, I am glad to hear a little more information from him about what will happen to the money received from the co-responsibility levy, as regards the fate of which several noble Lords expressed curiosity. I am also grateful to him for reminding me of the Commission's reasons for making stabbing attacks on isoglucose. I did know those reasons once, but I had forgotten them and my noble friend has reminded me. The Commissioner whom we met in Brussels and who spoke about this particular subject felt very strongly about it—just as strongly as the refinery in this country feels about it. So I do not know how it will come out of it at the end of the day.
I should like to congratulate the noble Earl, Lord Fortescue. We are glad that "pigment" which is mentioned on Page 14 covered his remarks. He lamented the lack of stability in the pig market and the subsidised imports. He also lamented that we had not paid sufficient attention to pigmeat in the report as regards which the noble Viscount, Lord Trenchard, I assure him, spoke for the Sub-Committee later.
My noble friend Lord Sainsbury gave us some praise, and praise from him is praise indeed. He, like the noble Lord, Lord Mottistone, wanted no increase in price for any product in surplus. It is difficult to see whether the Commission has actually proposed a price increase or has accepted the fact that because of inflation there will be a price decrease. I find it very difficult to know where I am when, on the one hand, one has a putative price increase and, on the other, at least a 5 per cent. rate of inflation. My noble friend Lord Sainsbury also raised a matter to which we could return at a later date. He referred to a certain extent to wanting surpluses but not open-ended surpluses. I think that perhaps that spells quotas for the Common Agricultural Policy in the long run.

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I have many jottings before me, but I think that I have spoken for quite long enough for a proposer at the end of a Motion in a customary summing-up speech. Therefore, I thank all noble Lords who have spoken.

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