Sitting of 28 November 1978

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: Before we begin Questions I should like once again to tell the House that the character of our Question Time is being spoiled and changed by interminably long supplementary questions and sometimes, long ministerial answers. This practice is thoroughly selfish and unfair to other hon. Members who have Questions on the Order Paper. If arguments are advanced instead of questions being asked, I propose to intervene.
  ORAL ANSWERS TO QUESTIONS
    EMPLOYMENT

      Press Charter
      Mr. Dodsworthasked the Secretary of State for Employment if he will make a statement on the latest progress in the formulation of the press charter.
      The Minister of State, Department of Employment (Mr. Harold Walker): I have been engaged in an extensive series of consultations with organisations and individuals in the industry on the content of the proposed press charter. The outcome of these consultations is under consideration by the Government.
      Mr. Dodsworth: Will the Minister say when the consultations are likely to be completed, bearing in mind the current industrial unrest in the newspaper industry? Has he completed his consultations with the TUC and the Press Council?
      Mr. Walker: No, I have not yet met the TUC, the CBI or the Press Council. The hon. Gentleman will know that I am bound by statute to consult the Press Council. I can give no idea when the
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      consultations will be completed, but I hope that we shall be able to achieve the maximum consensus before my right hon. Friend presents his charter to the House.
      Mr. Madden: My hon. Friend will appreciate that the most immediate matter of concern to many in the newspaper industry is the threatened closure as from midnight on Thursday of Times Newspapers Ltd. Does the Minister think that it would be appropriate to approach the management of Times Newspapers Ltd., to see whether the suspension can be lifted to enable proper and reasonable negotiations to proceed on matters of fundamental importance?
      Mr. Walker: My right hon. Friend has met representatives of the employers and the major unions involved in this unhappy situation. My right hon. Friend the Secretary of State for Trade replied to a similar Question from my hon. Friend yesterday. I have nothing to add to that reply.
      Mr. Brittan: On the subject of the press charter generally, will the Minister assure the House that if such a charter ever appears it will not contain any closed shop provision permitting a single union to determine what appears in the press and who writes it?
      Mr. Walker: I am glad that the hon. and learned Gentleman has assumed Front Bench responsibility for this topic and I was glad to read the reports of his speech to the Newspaper Society yesterday. It showed a significant and welcome shift from the views of the right hon. Member for Lowestoft (Mr. Prior), because the hon. and learned Gentleman obviously now recognises that closed shops exist in the industry and should do so, subject to safeguards. We have a great deal of common ground in that respect.

      Civil and Public Services Association
      Mr. Ridleyasked the Secretary of State for Employment whether the Civil and Public Services Association is registered as an independent trade union.
      The Under Secretary of State for Employment (Mr. John Grant): Yes, Sir.
      Mr. Ridley: In view of the disturbing revelations about elections in the CPSA, what steps do the Government intend to

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      take to ensure that the public are reassured about the correctness of election procedures? Would it not help if the Government were to assist with free postal ballots and matters of that kind, in order to reassure the public that future union elections will be straight?
      Mr. Grant: On the subject of assistance with ballots, if the trade unions made a general request for such help the Government would give it every consideration. Until that happens, we do not think it right to seek to impose ballots on the trade union movement. We think that in that respect lessons should have been learnt from the past. I am sure that the CPSA will give the hon. Gentleman's views the attention that they deserve.
      Mr. Wrigglesworth: Is my hon. Friend aware that the matters to which the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) referred were the result of a regrettable mix-up in the operation of new rules adopted by the union, that new elections are being called, that manifestos have gone out to all members and that a proper ballot will take place shortly?
      Mr. Grant: It is not for the Government to comment on the internal affairs of trade unions. However, what has taken place shows that individual members have the ability to challenge their unions if they feel that the rules have been broken. As I understand it, that is what has happened.
      Mr. Prior: May I press the hon. Gentleman a little further about secret ballots? Will the Government give as much attention to trying to persuade trade unions, both at shop floor level and at national level, to adopt secret ballots as they are apparently prepared to give to applying sanctions to a company such as Ford?
      Mr. Grant: I think the right hon. Gentleman knows that those two matters are in no way comparable. It is not for us to persuade the unions to take that course. I have said that there is no question but that the Government would respond to a request for help. However, persuasion can be counter-productive. Secondly, the right hon. Gentleman, above all others, should have learnt some lessons from the past.

      Unemployed Persons
      Mr. Dykesasked the Secretary of State for Employment if he will give the percentage fall that would be needed to produce a return in the total numbers of registered unemployed persons in the United Kingdom to the levels prevailing at the end of 1972, 1974 and 1976.
      The Under-Secretary of State for Employment (Mr. John Golding): At November 1978 the unemployment rate stood at 5·8 per cent. The proportion of the current work force which would need to be unemployed in order to return to the levels of unemployment prevailing in the United Kingdom at November 1972, November 1974 and December 1976 are 3·4 per cent., 2·7 per cent. and 5·7 per cent. respectively.
      Mr. Dykes: May I half thank the Minister for the rather strange selection in his statistical answer? How does the hon. Gentleman react to the ominous prediction by the Manpower Services Commission in its official report that to reduce unemployment to 600,000— that was the level in March 1974—by 1982 it will be necessary to create 1·7 million extra jobs? How would the Government, with their lamentable record, propose to deal with a problem as monumental as that?
      Mr. Golding: The Government intend to do that by continuing rigorously to fight inflation and by pursuing their industrial strategy.
      Mr. Christopher Price: Is my hon. Friend aware that the unemployment figures will rise by more than 5,000 on Friday if the closure of Times Newspapers Ltd. goes ahead? Is he further aware that the answer given by the Minister of State, Department of Employment was not satisfactory and that there is great pressure for the Government to intervene?
      Mr. Golding: That is a matter that would lead to ACAS and other bodies becoming involved in an extremely difficult situation.

      Construction Industry
      Mr. Roy Hughesasked the Secretary of State for Employment if he has had any recent discussions with leaders of the

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      construction industry, trade unions and local authorities concerning unemployment in the construction industry.
      Mr. Harold Walker: My right hon. Friend had a meeting recently with some of the leaders of the construction industry to discuss manpower matters. My right hon. Friend the Secretary of State for the Environment, who is responsible for sponsorship of the construction industry, has regular contacts with all sides of the industry about employment in construction.
      Mr. Hughes: Will my hon. Friend urge upon his right hon. Friends the need to restore the level of public expenditure, bearing in mind, for example, that so many of our schools, homes and hospitals, especially in Wales, are nothing more than nineteenth century monstrosities? Measures to increase public expenditure would also help reduce the high level of unemployment that has prevailed for so long.
      Mr. Harold Walker: I understand and share my hon. Friend's concern about unemployment in the construction industry. However, large extra amounts of public money have been poured into the construction industry, or into construction programmes over the past two years. Last year the Government added more than £ 800 million to public sector construction programmes, that money to be spent over the next three years. That expenditure is intended to help stabilise the industry.
      Mr. Gwynfor Evans: Should not the council house building programme be greatly accelerated to employ some thousands of the scores of thousands of unemployed construction workers? Is the hon. Gentleman aware that even in Wales about 16,000 construction workers are still unemployed?
      Mr. Harold Walker: The level of council house building is primarily a matter for my right hon. Friend the Minister for Housing and Construction and the local authorities. I understand that many Conservative-controlled local authorities have deliberately cut back on much needed council house building.
      Mr. Kilroy-Silk: Does my hon. Friend agree that it is totally indefensible that there should be thousands of unemployed construction workers on Merseyside and at the same time a great and pressing
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      need in that area for more housing, schools and hospitals? Will he attempt to take some measures to match those two factors?
      Mr. Harold Walker: I understand that the Department of the Environment and other Government Departments have identified Merseyside as an area that requires special attention. Merseyside has been the subject of extra expenditure on construction both currently and in recent years.
      Mr. Peter Walker: Does not the Minister regret that, with so many unemployed construction workers, the number of houses being improved is only a third of the 1973 figure?
      Mr. Harold Walker: I hope that the right hon. Gentleman will bear in mind what I said earlier about the attitude of some Conservative-controlled local authorities.

      Job Creation
      Mr. Skinnerasked the Secretary of State for Employment what further measures he has in mind for reducing unemployment; and if he will make a statement.
      Mr. Wyn Robertsasked the Secretary of State for Employment what further steps he will take to reduce unemployment.
      The Secretary of State for Employment (Mr. Albert Booth): I have already announced an extension of the small firms employment subsidy from 1st January 1979 and it is the intention of the Government to introduce a short time working compensation scheme. The need for further measures will be kept under review.
      Mr. Skinner: Is my right hon. Friend aware that every time he initiates a new temporary job scheme big business, aided and abetted by some of his Cabinet colleagues, introduces permanent sackings, for example, KME? We have seen the movement in the minimum lending rate, and we now have the dispute at Times Newspapers Ltd. Is my right hon. Friend aware that the millionaire owners of Times Newspapers Ltd. are in the throes of putting 4,000 more people on the stones? Why does not he tell them to lift the deadline and start renegotiations?
      Mr. Booth: I am only too deeply aware of the many redundancies that are introduced by employers, for a whole range of reasons. Some of the measures that we have introduced, including the temporary employment subsidy, give us a basis for discussion with employers and enable us to fend off and avoid a certain number of redundancies. By means of the Employment Protection Act we have given unions a status and a right to consultation. I agree that what we are doing by introducing special measures is largely offset on many occasions by massive redundancies.
      Mr. Roberts: Does the right hon. Gentleman agree with the Government Actuary's assessment that in the next financial year the average number of jobless will be greater than the number of jobless in the present financial year?
      Mr. Booth: The figures to which the hon. Gentleman refers are not estimates by the Government Actuary but are figures that were used and produced in a report that was laid before the House last week, along with the national insurance order. They are working assumptions. That was made clear. The Government Actuary draws his figures, for the purpose of working assumptions, from the Treasury. The report said that for the purpose of illustration certain levels of unemployment had been used as working assumptions. The report quoted figures which it said were being used for that purpose in the financial years 1978–79 and 1979–80. I do not regard them as forecasts of unemployment for those years.
      Mr. Watkinson: Has my right hon. Friend's Department further considered the question of early retirement? Is he able to say how successful the job release scheme has been and whether the new terms of the scheme have brought a significant number of persons into the scheme and thus increased job opportunities for the community?
      Mr. Booth: It is too early to make any accurate estimate of the effect of the changed terms of the scheme. On 7th November about 17,000 people were benefiting from the job release scheme. I hope to see that number expanded greatly in the forthcoming months.
      Mr. Emery: What new thinking has the right hon. Gentleman had for pockets of unemployment in areas which have no assisted or development status, such as East Devon where there is a level of unemployment of 10 per cent.? Job creation in these small pockets throughout the country is terribly important, but that matter seems to be getting next to no thought from the right hon. Gentleman's Department.
      Mr. Booth: A lot of consideration has been given to a number of pockets of unemployment which are outwith assisted areas and inner city partnerships. That is why a number of schemes run by my Department are now placed on a nationwide footing; for example, the small business employment subsidy and the job release scheme.
      Mr. Ashley: When considering measures to reduce unemployment, will my right hon. Friend bear in mind that more than 63 per cent. of employers are failing to employ their 3 per cent. quota of registered disabled workers? Is my right hon. Friend aware that, with two exceptions, every major Government Department is failing to employ its 3 per cent. quota? Is it not time that sanctions were imposed on Government Departments and on private employers?
      Mr. Booth: I have recently been engaged in discussions with the Civil Service Department and the Manpower Services Commission about methods by which the Government might improve their performance in the employment of disabled persons. Taking the wider, national scene, we are still trying to bring about a considerable improvement in the employment of registered disabled people through the job induction scheme and special grants for adaptation of employers' premises.
      Mr. Prior: Can the right hon. Gentleman give an estimate of the number of additional jobs that are being lost each month as a result of the increase in the minimum lending rate by 2f per cent.? Is he aware that the unemployment figures are still extremely serious? What is the difference between a working assumption and an estimate, about which he has been talking this afternoon?
      Mr. Booth: I cannot give an estimate of the effect upon employment of the change in minimum lending rate. The change was addressed broadly to the problem of containing and reducing the inflation rate. I trust that the right hon. Gentleman would agree reducing the inflation rate can only be beneficial to employment prospects.

      Unemployed Persons
      Mr. Rostasked the Secretary of State for Employment what are the latest figures for registered unemployed; and how the figure compares with February 1974.
      Mr. Booth: At 9th November, the number registered as unemployed in Great Britain, seasonally adjusted and excluding school leavers, was 1,281,500. This was 731,700 higher than in February 1974.
      Mr. Rost: Will the Secretary of State now try to answer the previous question? How many more people will now never get back to work with Labour as a direct consequence of the Government pushing up the lending rate to record penal levels to try to finance their extragavant overspending?
      Mr. Booth: The largest part of the increase in unemployment, to which I referred in my original answer, can be accounted for by the increase which has taken place since 1974 in the working population. There are now more people in employment in this country than there were under a Conservative Government in 1972 and 1973. As to the effect of Government expenditure, in many cases it has been to sustain and increase employment.
      Mr. Heffer: Will my right hon. Friend explain in very simple language to the Opposition that the United States Government and most of the Governments in the Common Market are not Labour Governments? They are not Socialist in any way, yet their unemployment levels are as high as they are in this country. Will he further point out to the Opposition that the real problem is the nature of the capitalist system under which we live and that, despite that fact, the Government have put more people to work than did the Tories? Would he also accept that there are areas—
      Mr. Speaker: Order. I do not think that the hon. Gentleman was present earlier when I told the House that if hon. Members were advancing an argument during Question Time I would intervene. We must try to get back to the normal character of Question Time. The hon. Gentleman will now ask a question.
      Mr. Heffer: I am trying to do so, if the Opposition will stop interrupting me. Is it not true that there are areas of high unemployment, such as Merseyside, which require special support and protection?
      Mr. Booth: It is certainly the case that there are areas with special unemployment problems requiring special protection. I am rather reluctant to make comparisons between sets of international statistics since different countries compile their figures in different ways. What we can do is to compare the changing rates of unemployment in different countries. There are few countries, with the possible exception of the United States and West Germany, which have had a falling unemployment rate such as ours over the past 12 months.

      Employed Persons
      Mr. Hardy askedthe Secretary of State for Employment how many people were in employment at the latest date for which figures are available and on the same date five years earlier.
      Mr. Golding: At June 1978, the provisional number of employees in employment in Great Britain was 22,213,000, compared with 22,182,000 in June 1973.
      Mr. Hardy: Is it not now reasonable to assume that we shall very soon see more people in employment than ever before in the country's history?
      Mr. Golding: If the country continues to support the Government's anti-inflation policy, and if British industry continues to improve its competitiveness, this will occur.
      Mr. Wigley: Is the Minister aware that there are 14 employment exchange areas in the United Kingdom which have unemployment rates in excess of 13 per cent. and that six of the 14 are in Wales? In these circumstances, will the hon. Gentleman set in motion a comprehensive review of the effectiveness of regional policy?
      Mr. Golding: Since decentralisation, my right hon. and learned Friend the Secretary of State for Wales has accepted responsibility for these matters. I shall draw his attention to the remarks of the hon. Gentleman.
      Mr. George Rodgers: Does my hon. Friend agree that the two factors which affect the level of employment more than anything else are the advance of technology and the vast increase in the available labour force? Is it not time that there was purposeful discussion with the trade union movement with a view to reducing the length of the working week?
      Mr. Golding: The discussions with the trade unions have to take place, first, on the development of technology and the need to protect and increase jobs and, second, on how the wealth created by that technology can be used in the public service sector to provide services and employment, both of which are badly needed.
      Mr. Scott: The Minister will recall that we were promised 100,000 current placings under the youth opportunities programme. Can he tell us how many people were on the programme at the latest date?
      Mr. Golding: I can say that at present the Manpower Services Commission says that it is on target. There is a great need for employers, voluntary bodies and trade unions to offer places to the youngsters most disadvantaged.

      TUC Staff (Pay)
      Mr. Tebbitasked the Secretary of State for Employment what reply he has received from the TUC in response to his inquiries about that body's pay agreement with its staff, which appears to breach the Government's pay guidelines.
      Mr. Booth: As I informed the hon. Member in my reply on 20th November, the main features of the TUC's settlement with its staff were reported to me by the TUC and I am awaiting a reply to my subsequent request for additional information.
      Mr. Tebbit: Since it was possible to take sanctions against the Ford company within a week of its pay settlement, why is it that, 11 weeks after the TUC deal was published in The Observer, the
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      Secretary of State still does not know the details and still has not told the TUC that he will operate sanctions against it unless it comes into line?
      Mr. Booth: The issue of any discretionary action is not related to the obtaining of details in this instance. If the Government decided to do so, they would still have no appropriate discretionary action to take in the case of the TUC.
      Mr. Peter Bottomley: Can the right hon. Gentleman tell the House what additional information he has asked the TUC to supply and what difference it will make to the Government?
      Mr. Booth: I do not think that any additional information will make any particular difference. The TUC has provided the Government with information about all the main features of the settlement. There is some further detailed information, but it is not on that basis that the Government have had to make any decision whether to take action.
      Mr. Hayhoe: Is not the Secretary of State thoroughly ashamed of that abysmal reply? Why is he dragging his feet on this matter? What are the criteria animating the Government in regard to sanctions? Is one of the criteria the fact that trade unions are exempt when demanding high wage increases or when they are granting them to their own employees?
      Mr. Booth: The principal consideration in this case, as in so many others, is whether discretionary actions are available to the Government. In this case discretionary actions are not available.
      Mr. Skinner: Will my right hon. Friend go back to his colleagues at the next Cabinet meeting or before and tell them that the policy with which they have landed him on sanctions and so on is becoming increasingly difficult to answer logically in the House of Commons? Will he tell them that he is at the sharp end of this matter, and that the sooner they get rid of it the better it will be for everybody?
      Mr. Booth: I would be the last to deny to my hon. Friend that there are difficulties in operating the pay policy. But I find no difficulty whatsoever in answering the Opposition's questions on this matter.
      Mr. Tebbit: On a point of order, Mr. Speaker. In view of the patently unsatisfactory nature of the Minister's reply, I beg to give notice of my intention to seek an early opportunity to raise the matter on the Adjournment.

      Employment Protection Act
      Mr. Bulmerasked the Secretary of State for Employment whether he proposes to amend the Employment Protection Act.
      Mr. Harold Walker: I have no present intention of bringing forward amendments to the Employment Protection Act. However, the proposals for compensating short-time working will replace the guarantee pay provisions of the Act.
      Mr. Bulmer: Will the Minister accept his Department's findings that the unfair dismissal provisions are proving a deterrent to small employers? Will he further accept that a recent judgment, which awarded £7,000 to a man dismissed for sleeping on the job, will reinforce their fears of what the Secretary of State has referred to as the industrial tribunal fruit machine? Will the Minister look again at the law on unfair dismissal, particularly in the light of two recent decisions, Seeley v. Avon Aluminium Company and Stock v. Frank Jones?
      Mr. Walker: Before the hon. Gentleman—or the House—decides to criticise the findings of a judicial body, namely, the industrial tribunal, in a way that he would never dream of doing in respect of any other judicial body, he ought to look at the facts of the case to find out exactly why the tribunal to which he referred found as it did.
      As to the wider question of the satisfactoriness or otherwise of the unfair dismissal provisions—and I am bound to say that it was the Conservatives who introduced these in their Industrial Relations Act 1971—we have commissioned research and found that, notwithstanding the criticisms which have been made, the provisions are, in general, working satisfactorily.
      Mr. Greville Janner: When my hon. Friend comes to consider the unfair dismissal rules, will he bear in mind that 69 per cent. of all claims for unfair dismissal brought before industrial tribunals fail, and that, far from employers' rights
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      needing protection, there is a far greater need to protect the rights of unfairly dismissed employees?
      Mr. Walker: My hon. and learned Friend is right. We recently had a full debate in the House on these matters, and I am bound to say that I thought the Government won the argument hands down.

      Merseyside
      Mr. Loydenasked the Secretary of State for Employment how many jobs were lost in the Merseyside travel-to-work area in 1976, 1977 and to date in November 1978.
      Mr. Golding: Information in the form requested is not available. However, I am informed by the Manpower Services Commission that 7,749 redundancies in the Merseyside special development area were notified to the employment service division as due to occur in 1976 and 11,444 in 1977. To date, 13,112 redundancies have been notified as due to occur during the period January to the end of November 1978.
      Mr. Loyden: Does my hon. Friend agree that those figures represent a clear indication that Government policy on unemployment is not working on Merseyside? In spite of the fact that Merseyside is a special development area and lately has probably had more cash from the Government than at any other time, it is not keeping up with the pace at which we are losing jobs there, particularly in the private sector. When will the Government look at the question of unemployment and start to design policies—such as the extension of public ownership—to meet that situation?
      Mr. Golding: The Government are well aware of the grave problem of unemployment on Merseyside and will do everything possible to increase the confidence of industrialists in Merseyside and boost morale in the area.
      Mr. Kilroy-Silk: Does my hon. Friend realise that he has an opportunity to do everything possible to help? Given that we have lost so many jobs on Merseyside, will he now give an assurance that the headquarters and the laboratory of the new National Enterprise Board-sponsored micro-chip industry will be located on Merseyside and not, as presently

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      planned by the NEB, in an area of very low unemployment?
      Mr. Golding: That is a decision to be made, but certainly the Government by, for example, directing the Health and Safety Executive headquarters to Bootle have shown their concern to direct jobs to Merseyside.

      Racial Discrimination
      Mr. Tilleyasked the Secretary of State for Employment when he expects, following his consultations with the Confederation of British Industry, the Trades Union Congress and the Commission for Racial Equality, to begin monitoring the policies and practices designed to eliminate racial discrimination in employment by Government contractors.
      Mr. John Grant: The CBI, TUC and CRE have now been informed of the proposals referred to in the reply which I gave to my hon. Friend on 10th November and have been invited to discuss them. The aim will be to introduce new monitoring arrangements as soon as possible after these consultations have been completed.
      Mr. Tilley: I am grateful to my hon. Friend for that answer, but will he impress strongly on the CBI that all these private firms have an inescapable duty to avoid racial discrimination in their employment policies? Does he agree that the Government might have a better chance of success in this area if we put our own house in order in terms of having effective equal opportunity policies in the public sector?
      Mr. Grant: I very much hope that the CBI and the other interested parties which are being consulted will see this as a worthwhile and progressive step forward. Within the public sector a great deal is going on. We pursue the policy of equal opportunity in the public sector, and all the nationalised industries and other public sector bodies have been asked to review their policies. We shall be looking at the results of that exercise to see what further action might be necessary.
      Mr. Dudley Smith: Will the hon. Gentleman bear in mind that the biggest discrimination applied in industry nowadays is over promotion, and that all too often unions and management together are equally culpable?
      Mr. Grant: I accept what the hon. Gentleman has said. It is one of the matters that we have been looking at within the race relations employment advisory group, which I recently set up.
      Mr. Sever: Will my hon. Friend undertake to make sure that whatever information can be made available in this regard will be provided to chambers of commerce and chambers of trade, and particularly to those working within the inner city partnership area committees?
      Mr. Grant: We want to make as much information available about this as possible. The services of the Department of Employment's race relations employment advisory group are always available to any of these bodies if they want to consult it.
      Mr. Prior: Is the hon. Gentleman aware that the Conservative Opposition regard this as a very important matter and that we would like to do anything that we can to help the Government to make more information available, from Government Departments in particular, not only in regard to jobs taken, but jobs on offer and to whom those jobs go?
      Mr. Grant: I am most grateful for the right hon. Gentleman's remarks.

      Textiles
      Mr. Nicholas Wintertonasked the Secretary of State for Employment how many textile workers are currently unemployed in the North-West region and in the United Kingdom as a whole.
      Mr. Golding: At 10th August, the latest date for which this quarterly information is available, the numbers of people registered as unemployed who last worked in the textile industry were 7,734 in the North-West region and 30,187 in the United Kingdom.
      Mr. Winterton: I thank the Under-Secretary for that reply, but is he aware that in the year ending 30th September 1978, 13,400 textile workers have been made redundant? Is he further aware that output per head in this industry compares very favourably with that in all other industries, particularly the vehicle industry, in this country? Will he pay more attention to the importance of the textile industry and also bear in mind the problems which could result to it from enlargement of the EEC?
      Mr. Golding: The hon. Gentleman has often attacked me for advocating public expenditure. Through the new multi-fibre arrangement the Government have paid a great deal of attention to this industry. We have saved 43,700 textile jobs through the temporary employment subsidy, which has been attacked by members of the Conservative Front Bench, and we have introduced a special short-time working scheme, which again did not receive the acclaim that it should have done from Opposition Members.
      Mr. Cryer: Does my hon. Friend agree that one of the difficulties for the textile industry is that the EEC Commission reduced the amount which this country could pay in temporary employment subsidy, and that an EEC Commissioner, Christopher Tugendhat, a former Conservative MP, is going around the country outlining plans for further reductions? Does not that indicate the severe difficulties of our current membership of the EEC?
      Mr. Golding: Certainly no one on the Labour Benches welcomed the reduction in the effectiveness of the temporary employment subsidy which we had to negotiate earlier this year.

      Micro-electronics
      Mr. Hooleyasked the Secretary of State for Employment if he will invite the Manpower Services Commission to make a special study of the probable impact of micro-electronics on the industrial labour market and in particular its significance for the training opportunities scheme.
      Mr. Harold Walker: A group has been established within my Department's unit for manpower studies to examine the manpower implications of micro-electronics over the next 5 to 10 years. It will work closely with the Manpower Services Commission in planning the training and retraining requirements associated with this new technology. The training opportunities scheme is contributing substantially to the overall training effort on micro-electronics, and possible areas of expansion are being urgently considered.
      Mr. Hooley: Does my hon. Friend agree that there has been a lot of fantastic romancing about the impact on
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      industrial manpower of micro-processors'? Does he agree also that this could have a serious impact on industrial manpower, with regard to both training and employment? I welcome his statement about the working party. Can he say anything about its composition?
      Mr. Walker: It is headed by a team of three, including an economist. I do not think that I can say much more than that offhand. But if it will help my hon. Friend, I shall write to him. [Laughter.] I am not quite sure why the Conservative Opposition find that so funny. Let me add that, whatever fantasising has been done, it will be the task of this group to find out to what extent any kind of reliable and accurate assessment of this new technology has been made. I should tell my hon. Friend and the House that the Prime Minister will be making an oral statement, and tabling a written one, at the National Economic Development Council meeting on 6th December, which will include some of our preliminary conclusions about the possible manpower effects of this new technology.
      Mr. Haselhurst: Has the hon. Gentleman's Department formed any view about the likely level of job loss which could arise out of the introduction of microelectronic processors?
      Mr. Walker: It would not make any sense if I tried to anticipate in any way the findings of the group, or in any way to anticipate what my right hon. Friend will say to the National Economic Development Council on 6th December.

      Job Release Scheme
      Mr. Roseasked the Secretary of State for Employment whether the current job release scheme will be continued beyond its current term; and whether he has decided upon any modifications.
      Mr. Golding: The job release scheme is now being reviewed along with the other special employment measures, and the question of its extension beyond 31st March 1979 is being considered. A decision on its future will be announced as soon as possible.
      Mr. Rose: Is my hon. Friend aware that the Question really relates to the job creation scheme? Will he look at

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      the question of capital investment and the involvement of young people in particular in social work and work within their own communities?
      Mr. Golding: We shall certainly look carefully at the job release scheme and at all the provisions that we are making at the present time for youngsters under the youth opportunities programme. So far, 75,386 places have been provided under the youth opportunities programme. In addition, places have been provided in apprentice training, and places are still being provided under the job creation programme.
      Mr. Prior: Is the hon. Gentleman aware that we hope that the England team in Australia will have more success in keeping the ball out of its stumps than the employment team has had at Question Time this afternoon?

      Prohibition and Improvement Notices (Crown Immunity)
      Mr. Greville Jannerasked the Secretary of State for Employment whether he will introduce legislation to enable prohibition and improvement notices to be served upon the Crown.
      Mr. John Grant: I have nothing further to add to the reply given to my hon. and learned Friend's earlier Question on 24th October.
      Mr. Janner: Does not my hon. Friend consider that the Crown should be just as punctilious in its safety practices, and just as liable to enforcement and prohibition arrangements, as any other employer in the land?
      Mr. Grant: I accept the first part of my hon. and learned Friend's supplementary question. The whole matter of Crown immunity raises important questions of principle, and these are under consideration by Ministers in consultation with the Health and Safety Commission.

      TUC
      Mr. Robinsonasked the Prime Minister when he plans next to meet the TUC.
      The Prime Minister (Mr. James Callaghan): I meet representatives of the general council from time to time, at
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      National Economic Development Council meetings and on other occasions. Further meetings will be arranged as necessary.
      Mr. Robinson: I am grateful to the Prime Minister for that reply. When he next meets the TUC, will he pursue with it the argument that any form of incomes policy is possible only if we have economic growth and that economic growth is totally incompatible with the European monetary system? Does he agree that it becomes him, above all, as a Prime Minister who has taken so many clear-cut decisions on so many difficult issues, to do the same with this difficult issue, to forsake the straddling position of the EMS and to say that it is in our national interest to stay out?
      The Prime Minister: That was a slightly complicated question. But I agree with the early part of my hon. Friend's remarks, namely, that growth and an increase in incomes are interrelated. It is not without significance that this year, because of the restraint in the growth of incomes, industrial production compared with the corresponding quarter of last year is going ahead at about 4 per cent., which is the best for many years.
      As to the second part of the question, this depends upon the nature of the scheme about which my hon. Friend is talking. It is a scheme which needs to be symmetrical and which will have to wrap up both strong and weak currencies if it is to encourage growth. I do not know whether the arrangements which have been published so far achieve that end.
      Mrs. Thatcher: Does not the Prime Minister recognise the blatant injustice of imposing sanctions on Ford, when that company has already suffered the worst strike in its history because it has tried to support the Prime Minister's rigid 5 per cent. pay policy? Is he not aware that the Ford company has one of the best records in Britain for providing jobs, investment and exports and that his decision can only damage all three?.
      The Prime Minister: When the right hon. Lady asked me a similar question last week I said that I recognised the dilemma for Ford. But there is an overriding national interest here. We are not ready to see the big fish get away while we catch only the tiddlers. As to the

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      TUC, I do not propose to buy any motor cars from it.
      Mrs. Thatcher: Is it not in the overriding interest of this country to have companies which provide jobs, exports at competitive prices and investment? Does the Prime Minister recall that about a year ago he was very anxious to persuade Ford to go to South Wales and set up a new plant there? He said that Ford had demonstrated its confidence in Britain and that he must do all that he could to repay that confidence.
      The Prime Minister: That is why we are pursuing our present policy. I promise the right hon. Lady that if every other firm pays an increase of between 16 per cent. and 17 per cent. to its employees—
      Mr. Nicholas Winterton: Out of profits.
      The Prime Minister: —Ford will not be able to hold its prices for very long and we shall find the price of Ford cars going up substantially whether or not Ford wants them to.
      Mr. Bagier: Will my right hon. Friend ignore the hysterical shriekings of the Leader of the Opposition? When he next meets the TUC, will he ask it to think again about pay policy? Will he ask it whether it really believes that increases on the scale given by Ford, and other increases in the pipeline, are good for Britain, for the unemployed and for people who suffered from the steep rise in the inflation rate between 1974 and 1977?
      The Prime Minister: The answer to the first part of my hon. Friend's question is"Yes ". On the latter part, I totally agree. That is why we will pursue this policy, and pursue it as long as we have public support, which at present is overwhelming. Public opinion does not want to see exceptions made just because a company is large or multinational. Everyone will be treated in the same way.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Hannamasked the Prime Minister if he will list his official engagements for Tuesday 28th November.
    The Prime Minister: In addition to my duties in this House, I shall be holding further meetings with ministerial colleagues and others. This evening I shall be host at a dinner in honour of the Prime Minister of Luxembourg.
    Mr. Hannam: Will the Prime Minister take time today to explain why in February 1974 he went around the mining valleys entreating the miners to smash the then Government's pay policy, saying that 16 per cent. was not far too much and that pay restraint to contain inflation was, to use his words,"utter drivel "? Is he not ashamed of that statement today?
    The Prime Minister: I have refreshed my memory. It is clearly one of the catchphrases of the Conservative Party. I made clear at the time that because of the increase in money supply under Lord Barber and the way in which price increases were taking place —[Interruption.]
    Mr. Speaker: Order.
    The Prime Minister: It is all right, Mr. Speaker, I know that Conservative Members have to let off steam now and again. The fact is that price increases were taking place at double the rate of today. Therefore, it was not possible to expect miners or anybody else to hold down their wage claims. Today we are in a different situation. Wages went ahead last year at twice the rate of prices. We are now trying to get these into a proper relationship with each other.
    Dr. McDonald: Will my right hon. Friend take time to study the wages council award for workers in licensed hotels and restaurants? This gives increases which will raise the highest paid in that area to only £42·80 a week and the lowest paid to £33·20. That is well below the Government's minimum wage target. What action will my right hon. Friend take to ensure that employers on wages councils pay their workers at least the minimum wage set out in the White Paper?
    The Prime Minister: This is not a matter to which I have directed my attention today. It is not the case that the Government have laid down a minimum wage. We have proposed a figure of which negotiators should take account when fixing their rates of pay. Whether

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    this particular wages council has done so I am not aware, but I am sure that my right hon. Friend, who has just emerged from 45 minutes' questioning, could give my hon. Friend the answer.
    Mr. Marten: If the Prime Minister has a moment to spare today will he read the document"Britain's New Deal in Europe"on which he and too many of my right hon. and hon. Friends campaigned in the referendum? The document refers, on page 9, to the fact that fixed exchange rates put jobs at risk. Will he bear that in mind when considering the European monetary system?
    The Prime Minister: I should very much like to examine that statement. My own view, held for many years, is that fixed exchange rates are far better than variable exchange rates. The experience of the last few years has surely demonstrated that. Both have their disadvantages, but it depends upon the conditions on which the exchange rates are fixed as to whether they are successful.
    Mr. Frank Allaun: In his duties today, will my right hon. Friend consider immediate plans for introducing grants for 16 to 19-year-olds staying on at school? Would not that help to reduce unemployment? Is not further education far better than the waste, hopelessness and humiliation of"signing on "?
    The Prime Minister: A Bill will be introduced on education which will include references to this principle. However, I cannot undertake that we can meet all the priorities which everyone is thrusting at us at present. There is a fixed limit on public expenditure, to which the Government intend to hold. That is the way to keep sterling stable, preserve jobs and keep prices down.
    Mr. Prior: If the Prime Minister is concerned about sanctions and seeing that justice is done to all, including Ford, will he take time off today to write to the TUC leaders asking them why their own increases are up to 20 per cent. this year and 60 per cent. over three years? Will he report back to the House what action he intends to take against them?
    The Prime Minister: I understand that the same question was put to my right hon. Friend the Secretary of State for Employment.
    Mr. Prior: He did not answer it.
    The Prime Minister: This seems to be a matter on which common sense should apply, but I do not see much sign of it on the Opposition Front Bench at present.

    CHANCELLOR OF THE EXCHEQUER
    Mr. Rostasked the Prime Minister if he will dismiss the Chancellor of the Exchequer.
    The Prime Minister: No.
    Mr. Rost: Why does the Prime Minister punish innocent victims like Ford with penal sanctions, rather than punishing the guilty party, in this case, his own Chancellor of the Exchequer, who created inflation by overspending and overborrowing?
    The Prime Minister: I do not think that Ford is either guilty or innocent in this matter. Nor is the company being punished. We intend not to purchase vehicles from it. Unless the Government are to be compelled to purchase vehicles from a particular company —and I must say that this would be a new rule—Ford is not being punished. Ford is only the example of the national dilemma about which people must make up their minds. Do they want prices kept down or not? The Opposition clearly do not. Therefore they are ready to support every inflationary wage increase that is advanced.
    Mr. Canavan: Instead of sacking my very good friend the Chancellor of the Exchequer, will the Prime Minister organise a slight Government reshuffle? In the interests of official secrecy will he make the Chancellor of the Exchequer the PPS to the Secretary of State for Energy, and in the interests of open democracy will he make me the Chancellor of the Exchequer?
    The Prime Minister: If my hon. Friend is not careful he might very well find himself in that position. But I must say that there has never been anybody who has borne this task for so long with so much physical and intellectual stamina as has my right hon. Friend the Chancellor, and the country owes him a debt of gratitude.
    Mr. Peter Bottomley: Will the Prime Minister recognise that one of the difficulties facing the Chancellor of the Exchequer is that the Government have decided that it is in the national interest to keep down inflation and that it is impossible to do that if pay increases rise about 5 or 10 per cent? On the other hand, however, the Labour Party and the TUC conferences have both voted against this policy. Therefore, from where does the Prime Minister get his support?
    The Prime Minister: I am grateful to the hon. Member for the information that he has given me. The last time that I received support was on the vote on the Queen's Speech, which is the way in which Governments always derive support. It was a big majority then, despite the Opposition's attempt to try to remove the Government.
    Mr. Molloy: Will the Prime Minister and the Chancellor see the leaders of the TUC and the CBI and ask them to state clearly whether they recognise that the policy of the Leader of the Opposition is to have a wages explosion as a matter of political expediency? The right hon. Member for Lowestoft (Mr. Prior) only last week on LBC was encouraging the CBI not to co-operate with the Government. The joint policies of the Leader of the Opposition and the right hon. Gentleman spell grave disaster for Britain and the British people if the Conservatives ever come to power.
    The Prime Minister: I am not sure whether the Leader of the Opposition wants a wages explosion—
    Mrs. Thatcher: Of course not.
    The Prime Minister: The right hon. Lady interjects"Of course not"and I accept that. In that case, I do not understand how a policy of trying to work to an average can succeed in keeping inflation down.
    Mr. Donald Stewart: Is the Prime Minister aware that any action against Ford is grossly offensive to the democratic process, because the company has taken no action against any statute law in the United Kingdom? What legal or moral basis does the right hon. Gentleman have for taking these proceedings against the company?
    The Prime Minister: I do not want to argue morality at the Dispatch Box. It is not a moral question, but a question of how we manage to ensure that the jobs of the people of this country are safeguarded, that inflation does not get out of hand and that prices do not go up. On that basis, we have decided to take certain actions. I am certain that we are right and that, despite the dilemma, the public understand, why we are doing it. That is why they continue to support us.

FORD MOTOR COMPANY
Sir Geoffrey Howe (by Private Notice)Sir Geoffrey Howe (by Private Notice) asked the Chancellor of the Exchequer whether he will make a statement about the Government's attitude to the Ford pay settlement.
The Chancellor of the Exchequer (Mr. Denis Healey): The Government have considered the pay settlement reached by the Ford Motor Company with its manual workers and have discussed the settlement in detail with representatives of the company. In the Government's view, the settlement cannot be reconciled with the pay guidelines contained in the White Paper "Winning the Battle Against Inflation" Cmnd. 7293. The Government have informed the company of this and expressed their regret.
The Government had previously made clear that in the event of the company reaching a settlement outside the guidelines, they would need to consider discretionary action against the company. After considering the settlement in the light of all the relevant circumstances, the Government have reluctantly reached the conclusion that such action should be taken and the company has been informed accordingly.
Sir G.Howe: Does the Chancellor appreciate that this is a matter of some importance and that the House will certainly expect the Leader of the House to arrange an opportunity for us to debate the decision and its implications at an early date?
Will the Chancellor also be a little more forthcoming and tell us exactly what sanctions the Government intend to impose? Does he appreciate that there is very great difficulty in understanding how it makes sense to impose sanctions on a company which, at very substantial cost to itself, has done its best to resist a strike, which was called in flagrant breach of a pre-existing collective agreement, and that to proceed in that way makes as little sense as seeking to punish a householder whose house has been burgled? Does he not recognise the great sense of injustice in that approach?
There is a second matter that is equally important in understanding where the Government are going. If in this case, when the company has done everything
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possible, in fulfilment of the Government's behest, to resist a settlement, it is still to have sanctions imposed on it, notwithstanding the cost it has paid, is it not natural that employers will draw the conclusion that they would be far more sensible to pay up in the first place? Does that not demonstrate that the policy is not merely unjust but ineffective?
Will the Chancellor also address himself to the question the Prime Minister failed to answer, namely, the morality or justice of the policy being applied? Can he not see that the Government's refusal to say or do anything in relation to the TUC settlement —which is 20 per cent. for its employees—while imposing sanctions on Ford is the essence of arbitrary government with no sense of justice at all?
How far will the Government apply the policy consistently? If, for example, the BOC settlement is beyond the Government's guidelines, will they require the British Steel Corporation to purchase no oxygen? If the oil tanker drivers' settlement is beyond the guidelines, will the Government do the same for British Airways, or even the ministerial car pool? What consistency will there be?
Does the Chancellor realise that a policy that started as an exercise in tyranny is rapidly deteriorating into farce?
Mr. Healey: If I can remember them, I shall answer all the right hon. and learned Gentleman's questions. The Government and I regard this as an important matter and I look forward to an opportunity of debating the whole problem in the House. I am grateful to the right hon. and learned Gentleman for giving us a preview of his speech, even though it was rather lengthy.
On the question of the company's behaviour, Ford made clear within two weeks of the beginning of the strike that it proposed to negotiate outside the guidelines. For seven of the nine weeks of the strike, therefore, the company was, on its own admission, negotiating with no reference to the guidelines laid down by the Government.
The right hon. and learned Gentleman asked about the morality of the action that the Government propose to take. Let me remind him that for most of last year he was asking why we had not

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taken action against Ford for a much less serious breach of the then guidelines. He cannot complain that because we are now taking action there is something immoral about it, particularly, as the CBI has reported in today's newspapers, as more than 500,000 people have already settled fully within the guidelines.
For the Government to have allowed a breach of this size to pass without comment or action would have been a betrayal of the confidence that those 500,000 men and women have shown in the Government's policy and would have led, in many cases, some of which I know about, to attempts to renegotiate agreements already made. That would have been hopelessly contrary to the national interest.
The right hon. and learned Gentleman asked what action we were taking about the TUC settlement. The Prime Minister made clear earlier that there are no discretionary actions available to the Government in relation to that possible breach of the guidelines. The right hon. and learned Gentleman cannot have it both ways. He insists that our action should be limited to areas where we have total discretion on whether we buy from a company or not. That is the discretion that we are exercising, unfavourably to the Ford Motor Company because it has taken an action, after a warning from the Government and after seven weeks of negotiation outside the pay guidelines, which can result only in an increase in inflationary pressures within the economy. I believe that the whole of the British people will endorse the action that we have taken.
Mr. Ridley: On a point of order, Mr. Speaker. I submit that the Chancellor of the Exchequer should have declared an interest in his last answer. It is well known that the TUC pays very large sums of money to the Labour Party and the action that has been taken—
Mr. Speaker: Order. I shall try to allow as many hon. Members as possible to put questions to the Chancellor of the Exchequer. A Private Notice Question is an extension of Question Time. Perhaps the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) will wait until we have finished the questions and answers, so that I may deal with his point of order then.
Mr. McNamara: You will be aware, Mr. Speaker, of my connection with the Transport and General Workers' Union. Can the Chancellor explain how, after the Prime Minister said in the House only last week that we were in a free collective bargaining position, he can object to a free collective bargain, agreed by both sides, and how he can justify penalising one of the most successful companies and one of the most productive work forces in this country, which are completely in line with the strategy, laid down by the Labour Party and the Government, of encouraging the successful, reducing our imports and solving our balance of payments problem?
Mr. Healey: I am well aware of my hon. Friend's interest in this matter as a member of the Transport and General Workers' Union. He must recognise that the Ford Motor Company was severely penalised by a nine-week strike by the union while pressing its claim. If my hon. Friend speaks as a representative of the TGWU and seeks to justify a settlement of more than 17 per cent. by Ford's profitability, can he assure the House that, through his union, he will seek a settlement at British Leyland which is commensurate with the profitability of that company?
Mr. Hal Miller: Will the Chancellor of the Exchequer now tell us what the sanctions are? Will he also tell us what is the common sense and what is the national interest in imposing sanctions on a company which says plainly that the deal can be covered by productivity and that it will impose only 5 per cent. on any price increases in respect of labour costs?
Mr. Healey: I apologise, as I did not answer a similar question which was put to me earlier about what action will be taken. First, purchases under some existing Government contracts may be stopped. These are cases where existing contracts do not oblige the Government to continue purchases year by year. Secondly, the Government will take account of the breach of pay policy by Ford when considering the placing of future contracts and the granting of discretionary financial assistance, such as sections 7 and 8 Industry Act grants, temporary employment subsidy and section 2 export credits. This could mean that the company does not get future

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contracts and future discretionary assistance.
The hon. Member asked me about the productivity deal. When the company began to negotiate with the manual workers it made an offer which involved a 5 per cent. increase in basic rates and about 10 per cent. on productivity. The company finally concluded an agreement which involved an 11½ per cent. increase in basic pay, with holiday pay, and an increase of about 6 per cent. which is related to an attendance scheme, the final effect of which cannot be judged at this time. It agreed to make these payments before it had any means of knowing whether they would lead to increased productivity.
Under the productivity agreements payments are not to be made until the productivity is proved. If such payments have been made and the productivity is not achieved, the payments can be clawed back.
One cannot base a wages policy simply on increases in unit labour costs. If that were so, a capital-intensive industry could make awards of 200 per cent. without affecting ultimate prices. But the effect of such awards could be catastrophic on wage claims made by workers in contiguous areas. It would also be possible for a company to give increases of 100 per cent. to a handful of senior managers, again on the grounds that they did not lead to significant increases in labour costs.
Mr. Mellish: Is my right hon. Friend aware that I and many like me are completely bewildered at the Opposition's attitude? They say that they want to bring down inflation but they immediately sneer and jeer at any action that is taken by this Government to achieve that.
Does my right hon. Friend agree that as a result of this settlement it is inevitable that Ford and other companies like it will wish to put up the price of their vehicles in order to recoup this extraordinarily large increase in pay? That has always happened in the past. Will my right hon. Friend give an assurance that he will be equally tough with any attempt to put up prices when the company could meet this increase out of its substantial profits?
Mr. Healey: My right hon. Friend will be aware that the Government have no
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powers to interfere with Price Commission decisions about which pre-notified price increases to investigate, or to interfere with the course of investigation. What the Price Commission does in this regard is within its own power.
My right hon. Friend was right to be puzzled about the Opposition's attitude. They are not interested in bringing down inflation. They want to bring down the Government. That governs all their behaviour on every issue at this time.
Mr. Pardoe: Does the Chancellor of the Exchequer recognise that he is a late but welcome convert to the view that pay policies without sanctions are useless? Does he recognise that all sanctions should be imposed by the force of law and not at the whim of the Executive?
Does the right hon. Gentleman also recognise that a pay policy which is enforced by sanctions on employers alone is also likely to be useless? Is he aware that the President of the United States has imposed exactly the same sanctions on the major companies that the Chancellor is now imposing upon Ford? However, he is asking Congress for tax rebates for those employees who abide by the guidelines. Will the Chancellor do the same and ask the House for those powers?
Mr. Healey: I am always grateful for congratulations from the hon. Gentleman. He will be aware that I have supported discretionary action in support of pay policy since the Government introduced the £6 limit nearly four years ago. I understand his views on using the tax system to support pay policy. On many occasions I have explained to him why I do not believe that that is possible. As the hon. Gentleman admitted, the United States Administration is making this proposal but it has not yet been accepted by Congress. It is unclear how it will operate if it is accepted. I am grateful to the hon. Member for pointing out that the withholding of Government contracts is already part of American pay policy. as it is of pay policy in France.
Mr. Norman Atkinson: Does my right hon. Friend recollect the vote that was taken on the Government White Paper last July and the assurances given at that time by the Leader of the House, that in no way could that vote be misinterpreted

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as a vote authorising the Government to pursue a wage policy based on 5 per cent.? Where does the Chancellor get his authority to impose sanctions on the Ford Motor Company?
Mr. Healey: My hon. Friend is correct to remind us what the Leader of the House said about that vote. My hon. Friend asks from where the Government derive their authority. They derive it from the support of the overwhelming majority of trade unionists and the British people. This was illustrated by the vote at the recent by-election at Berwick-upon-Tweed.
Several. Hon. Members rose—
Mr. Speaker: I propose to call two more hon. Members from either side of the House.
Mr. Cormack: Will the Chancellor tell the House what the Ford Motor Company should have done? On what criteria will the Government base their future purchases of motor vehicles if they are not to take price into account?
Mr. Healey: It is not for me to say how the Ford Motor Company should have conducted its negotiations, thank goodness. We made it clear to the company management, even before the negotiations began, that a settlement outside the guidelines would cause the Government to consider discretionary action. We have kept closely in touch with the company since it made its final settlement. The Secretaries of State for Industry, Employment and Prices and Consumer Protection have seen Sir Terence Beckett on two occasions to discuss this matter in the last few days.
Mr. Fernyhough: Does my right hon. Friend agree that if Ford had been prepared to help bring down inflation it would have reduced its prices instead of amassing great profits? If that company had not amassed great profits the workers would not have been goaded into the strike.
Mr. Healey: The size of the Ford Motor Company's profits last year, which resulted from a substantial increase in prices, was one of the factors which influenced the course of negotiations.
Mr. Geoffrey Finsberg: How many jobs are likely to be lost to the British
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car industry and gained by Japan as a result of the Government's actions?
Mr. Healey: None as a result of this action, but many have been saved as a result of the assistance which the Government have given and are giving, not only to the Ford Motor Company but to other motor companies.
Mr. Robinson: Does my right hon. Friend agree that one of the strangest aspects of this episode is that this company first offered 5 per cent. as being all that it was allowed within the Government guidelines, concluded a negotiation after a nine weeks' strike at 16 or 17 per cent., yet still proclaims that it is within the Government guidelines? Does my right hon. Friend further agree that had it sat down well beforehand and worked out a sensible productivity-based deal with the unions, the company would have had neither strike nor sanctions?
Mr. Healey: I do not think that it is for me to comment on the way in which the Ford Motor Company handled the negotiations. I limit myself to pointing out that at the beginning of the negotiations it was prepared to offer a 5 per cent. increase in basic wages and a 10 per cent. productivity deal, but, in fact, within a week it had decided that it would increase the amount offered on a basic wage increase ultimately to 11½ per cent. and the attendance bonus scheme which was responsible for the other 6 per cent. The consequences of that are still very unclear.
Mr. Speaker: Statement—Mr. John Silkin.
Mr. Ridley: On a point of order, Mr. Speaker. The Chancellor and the Prime Minister have both had pointed out to them today the inconsistency in condemning with sanctions a settlement by the Ford Motor Company which involves a 17 per cent. increase in pay while ignoring a settlement for the staff of the Trades Union Congress which involves a 60 per cent. increase in pay over three years. It must be in everybody's mind that the unions affiliated to the TUC are major subscribers both to hon. Members on the Government Benches and to the party of which the Government form the head. Surely it is one of the rules of this House that where an interest is involved —a financial interest and a substantial

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one—whether it be,personal or party, its is normal for the spokesman to declare that interest
Since there is a cleat and obvious genuflection to the paymasters in this case Mr. Speaker, would you ask the. Prime Minister and the Chancellor.to apologise to the House for not having declared their interest in the partial nature of the exercise,.of their discretion in this non-statutory matter?
Mr. Speaker: Only personal interests have to be declared in this House.
Mr. Loyden: On a point of order, Speaker. I think that you will agree that this extension of Question Time is of vital importance to the House, and especially to hon. Members who have Ford industries in their constituencies. May I therefore ask you to extend Question Time a little further so that those with a constituency interest may ask questions?
Mr. David Price: Further to the point of order, Mr. Speaker. May I add my voice to that of the hon. Member for Liverpool, Garston (Mr. Loyden)? A number of hon. Members on the Opposition Benches have Ford factories in their constituencies and would also like to see an extension of Question Time.
Mr. Speaker: A large number of hon. Members have Ford works in their constituencies, but I am afraid that we must now move on.

EUROPEAN COMMUNITY COUNCIL MEETING (FISHERIES)
The Minister of Agriculture, Fisheries and Food (Mr. John Silkin): With permission, Mr. Speaker, I should like to make a statement on fisheries.
My right hon. Friend the Secretary of State for Scotland and I represented the United Kingdom at a meeting of the Fisheries Council in Brussels on 23rd and 24th November 1978. The Council met to discuss the revision of the common fisheries policy and had before it a new document from the Commission demonstrating a more flexible attitude, which encouraged me to believe that progress could be made provided other member States Showed -understanding of the United Kingdom position.
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In the course of the discussions the United Kingdom was asked to submit in writing its proposals.on preferential access. This we did, and copies of the United Kingdom paper will be placed in the Library of the House., Our proposals were on the' lines I have frequently explained to the House; they were for an exclusive belt out to 12 miles' and for a preference in some of the waters outside 12 miles. We made it quite clear that we were ready to enter into constructive discussion on all these matters.
Unfortunately, no substantive progress was made at this meeting of the Council. It remains our objective to arrive at an agreement on the common fisheries policy by the end of this year. Her Majesty's Government will play their part and I am confident that, given good will and realism by all concerned, an honourable agreement can still be achieved.
Mr. Peyton: I do not want to seem ungrateful, but the right hon. Gentleman has not told us a great deal. First, perhaps he could say what foundations he has for hoping that there might be a settlement by the end of the year. Secondly, does he have any crumbs of comfort to offer to the distant water fleet, whose members, with the ports from which they operate, are likely to be the chief sufferers from this extended stalemate?
Mr. Silkin: The right hon. Gentleman has put his finger on the two main points about this Council meeting. With any series of negotiations, particularly when there are intervals between Councils, as there are in this case, one must consider how the position has changed.
The difference here is that the Commission, for the first time, has put on the table before the Council a working document based on the British framework. That is absolutely new. Up to now, no one—neither the Commission nor any of the member States—has been prepared to consider any departure from the proposals put forward by the Commission. This working document—not as extensive as one would like in certain areas and needing amplification—nevertheless moves a long way, and moves some way towards the question of the deep water fleets, particularly in that it accepts the point about a preferential growth and a preferential

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quota being necessary for the United Kingdom. It is a bit too vague on access. These movements were very clear, and for the first time, as I say, the United Kingdom's basis of conservation was pretty well accepted by the Commission.
Mr. Torney: I congratulate my right hon. Friend on his efforts on behalf of Britain's fishing industry and sympathise with him over the arrogant insults that he has had to take from the German chairman of this Council. What are the Government now prepared to do to help the fishing industry? Will my right hon. Friend recommend the Cabinet to consider unilateral action to save the British fishing industry from disappearing completely?
Mr. Silkin: The basic way ahead is to get an agreement on the common fisheries policy which accepts the basic principles that we have put before our colleagues in the Council and before the Commission. I believe that we are moving towards that position, so it does not reallly matter that one does not get everything one wants at this Council or that. We are moving a great deal faster perhaps than any of us could have envisaged, say, six months ago.
Mr. Grimond: Has the Minister discussed with his colleagues in Europe the question of quotas and licences for fishing? Clearly, even if we get this preferential treatment, there will still be a danger of acute over-fishing in certain areas of the North Sea, with disastrous results for local communities.
Mr. Silkin: This is an important factor. The main question was in the Commission document, and we would have discussed it had we continued at that Council meeting, but it was getting late on the Friday when we broke. But the main point is that it seemed to me, and I think to the others concerned, that it was better to deal with the key problem, that of access—that is the one which dominates everything and it was better to face up to it—and that for the first time the United Kingdom should be allowed to put its proposals on the table. We have never been allowed to do that before. It is difficult, and the details are difficult. If the problem could not be studied immediately, I do not think that that would have mattered very much, but
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we shall certainly come to the i4ght hon. Gentleman's point, and I bear it very much in mind.
Several Hon. Members rose—
Mr. Speaker: I think that I shall be able to call all those hon. Members who have already risen.
Mr. James Johnson: Is my right hon. Friend aware that, following the Anglo-German talks in Bonn, hon. Members representing fishing constituencies expected a little more sympathy and understanding from the Germans, particularly as we are now told that a flexible document was put before the nine Ministers and their advisers by Mr. Gundelach. the Commissioner? I am told that the chairman, Herr Ertl, turned the whole matter down with very little discussion. What happens now? Will there be talks about fishing on 4th and 5th December, when I think the Prime Ministers will be talking together? I do not know where the talks are to be held. Will there be fishing talks then, after the present fiasco? If not, I shall not warn anyone, but I simply say to my right hon. Friend that the latent militancy in the fishing industry will increase. That is no good to him, no good to the House and no good to anyone else.
Mr. Silkin: I think that the most important aspect of the whole of that last Council meeting arose when I asked the Commission whether the objectives clearly enunciated by the United Kingdom were capable of being put in a Commission proposal. After all, it was somewhat unusual to ask a member State to produce proposals. That is not how it is normally done. The Commissioner accepted that that was so. Therefore, it seems to me that that is the way ahead.
It is not for me to defend or attack the presidency of the Council. What I can say, however, is that after we had been asked to submit proposals in a very short time—we worked through most of the night: to have them ready on time—it is hardly surprising that perhaps they were not totally understood right at the beginning.
Mr. Watt: Will not the Secretary of of State acknowledge that the proposals are in themselves a sell-out? He has already backed down far too far. What

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is worrying the fishermen of Scotland is whether they can be certain that the right hon. Gentleman will not be asked to back down even further under pressure from the Prime Minister. That is worrying us all very much.
Can the right hon. Gentleman tell us that after he reaches an agreement, poor as it is, he can be sure that from that date onwards the gross over-fishing by our EEC partners will stop? Is he confident that he has sufficient of a fishery protection fleet to do the job thoroughly?
Mr. Silkin: I shall deal first with the substance of what the hon. Gentleman asked, beginning with conservation. I said, and I repeat, that this matter has unquestionably gone our way. There is now a total disposition by the Commission and most of the other members to accept that the British case on conservation is the right one.
I have often said in the House that the fishery protection service is the finest in the world. If we find that it needs any changes or additions, that is clearly a matter that we shall very much bear in mind.
With regard to the hon. Gentleman's other points, I must remind the House that I remained absolutely clear on the principles. I have not moved from them by one inch ever since, I think in July of last year, I put them to the House, and I do not intend that those principles shall in any way be changed. What can be changed in the course of negotiations is a simple matter of arithmetic, but that is nothing to do with principles
Mr. McNamara: Is my right hon. Friend aware that, following the comments of the German chairman, he is more than welcome into the ranks of the 300-odd other contenders for the leadership of the Labour Party? While we are in that sort of position, my right hon. Friend the Prime Minister will be secure and happy.
Is my right hon. Friend also aware that the fishermen in England, particularly the fishermen who go out and catch the fish as opposed to those people who merely make profits out of the industry, are keenly aware of the strong stand he is taking on these matters and welcome his insistence and obstinacy on these
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matters? Is he further aware that, despite the agreement made by my right hon. Friend the Prime Minister and the German Chancellor earlier this year, we would rather have no agreement than one that sells out our legitimate interests?
Mr. Silkin: I want only to assure my hon. Friend that there is no question of a sell-out. There is a negotiation which at present has in no way been blocked. It is moving much at the pace I should have thought it would.
Mr. Peyton: I do not want to bother the right hon. Gentleman too much, but does not he think that it is a little false to draw quite such a sharp distinction as he appears to have done between arithmetic and principles?
Mr. Silkin: I was using shorthand, and I must apologise to the right hon. Gentleman. What I meant was this. If we are to get—as the Commission now for the first time suggests we should, and I believe that no member State objects—a preferential percentage of growth, there will clearly be an argument about how much of that percentage should be applied to, say, cod, how much to mackerel and how much to herring. I meant no more than that.
Mr. Beith: Will the right hon. Gentleman ensure that the key fishing areas of the North-East and South-West coasts of England remain integral to any settlement that he even contemplates accepting? If they are not, or if the settlement is weak in any other way, will he resist any attempt to force a settlement by the end of the year?
Mr. Silkin: I am grateful to the hon. Gentleman, because his views reconcile totally with my own. I recommend him to read a copy of the proposals that we put in, and he will find that the preferential areas with which we concerned ourselves were—I give them in order going down the coast—Scotland, from Berwick, to below Humberside, then the South-West, Wales, Fleetwood, the North-West and Northern Ireland.
Mr. Austin Mitchell: Will my right hon. Friend accept our assurance that he has the strong support of a united fishing industry in the firm stand that he has taken on behalf of Britain's rights? However, instead of envisaging concessions

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in the process of negotiation, will he now go on not only to introduce further national conservation measures—in particular, the one net rule and an increase in permissible mesh sizes, which would be the most valuable method of securing conservation—but to consider the introduction of a compulsory notification system for all vessels, British, Common Market and third party, entering or leaving our 200-mile limit?
Mr. Silkin: At present all the indications are that conservation measures are working very well. I hear this from the fishing industry and very clearly from other member States.
When it comes to the question of management, my hon. Friend certainly has a point, but working out the management will be a matter of detail. We need the agreement first.
Mr. Nott: May I follow on from the question put to the Minister by the hon. Member for Grimsby (Mr. Mitchell). If our position on conservation is now broadly accepted by the Community, may we expect firmer action from the Minister very soon in the South-West, in a non-discriminatory form, to deal with the severe and continuing problem of the mackerel fisheries? If the basis is to be a percentage of stocks, it cannot be based upon over-fished stocks, such as we have in the South-West at present. Will the right hon. Gentleman now take national conservation measures of a non-discriminatory kind to deal with our mackerel problem?
Mr. Silkin: I am sure that the hon. Gentleman is well aware that I have taken some measures. What he is saying is that I have not gone far enough for the inshore fishermen. I had to make a balance here, and I believe that I made the right one, but the trouble about making a balance is that those on either side of the balance think that one has not dealt them sufficient justice. I shall keep that point under review, but I hope that the hon. Gentleman is aware that what has been added, after all the difficulties that our deep-water fishermen have gone through, is a new fund in mackerel. Provided we do not overfish it—here I agree with the hon. Gentleman—we have something that is of considerable use to the whole country.
Mr. Skinner: Is my right hon. Friend aware that the Government are currently throwing their weight about without the force of law? Would not it be a good idea to use sanctions against the Common Market wildcats that are taking too great a percentage share of British fish? My right hon. Friend would get more support for that set of sanctions than the Government will get for the one that my right hon. Friend the Prime Minister is pursuing.
Mr. Silkin: I have not the figure with me because I did not think that the point would be raised, but I undertake to send my hon. Friend the number of prosecutions which have taken place against foreign vessels infringing our conservation regulations by poaching—
Mr. Skinner: Within the force of law?
Mr. Silkin: —within the force of law—and the boardings which have taken place. These have been highly effective.
Mr. Sproat: Will the right hon. Gentleman say specifically whether the problems of the common fisheries policy will be raised at the summit meeting of Heads of Government on 4th December and what further unilateral conservation measures he has it in mind to take? Will he now reactivate the nephrops measure which he abandoned originally as a good will gesture to our partners?
Mr. Silkin: I must correct the hon. Member. I did not abandon the nephrops measure. I postponed it. I said that I would postpone it for a limited period to see how negotiations went. I am not quite as pessimistic about those negotiations as perhaps some people are. Let us wait and see on that.
As for measures of national conservation, I believe that there is one very important aspect which we must preserve, and that is the ultimate right of any coastal State to take national measures in defence of conservation. Not to do that is to lose the whole basis of conservation. Therefore, this right remains with us. At the moment, I do not believe that there are any vital measures of conservation to be added to what is already a pretty powerful battery of conservation measures. That is a management question; it is not a conservation question. The hon. Member

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should understand this, because I have raised it in the House before.
Mr. Henderson: Is the Minister aware that the proposals which he put to the Council last week represent the very limit which the Scottish fishing industry will be prepared to accept, and that his statement today envisaging that an honourable agreement"can still be achieved by the end of the year suggests to us that there will be a positive dilution of the Government's proposals? May we assure him that, if there is any further dilution of these proposals, we shall attack and oppose him as resolutely as we have supported him in the past?
Mr. Silkin: I beg the hon. Member to do what I am not sure my colleagues in the Fisheries Council had time to do at the last meeting—to read those proposals very, very carefully. If he takes his time over them—and I am not being patronising because they are detailed and, as one of the German delegation said, the devil is in details—he will see exactly the effect of them.
Mr. Clegg: Is the Minister aware that time for the deep sea fleet is running out very rapidly? In the last few minutes, I have heard from Fleetwood that, unless Government aid is forthcoming to help the industry through by 8th December, the fishing vessel owners will lay off the lumpers, which will mean virtually the closure of the port and the loss of 3,000 jobs. I have asked the Minister to meet a delegation. Could he meet the delegation with some sense of urgency?
Mr. Silkin: I was myself informed today about what the hon. Gentleman said. I have asked that urgent—and I mean urgent—consideration be given to the position straight away.
Mr. Buchanan-Smith: Will the right hon. Gentleman confirm that the next formal meeting of the Council of Ministers is very close to Christmas? If he realises his hopes to bring this matter to a conclusion before the end of the year, what opporttunity will there be for this House to discuss the proposals? Will he submit the proposals to the House before they are finalised?
Mr. Silkin: I should prefer to bring any agreement to the House, if possible.
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I must make the obvious reservation because agreements can be made in the small hours of the night and one may have to take it or leave it. But my aim is to see that the House has a chance to examine and, I hope, endorse an agreement if we come to one. There are dates which are left vacant between next week and Christmas. They have not been filled in for a Fisheries Council, and they might be used.
Mr. Maxwell-Hyslop: With reference to mackerel, will the right hon. Gentleman beware of taking 1977 as a base year, for two reasons? First, it was after the rush by many countries to establish historic rights. Secondly, it was a year in which there was a marked difference between the total catch by purse seiners, including dumping at sea, and the records of fish killed by landings. Since the right hon. Gentleman's draft regulation has not been accepted by his EEC partners, will he therefore put in a caveat that he reserves the right to alter the base year, bearing in mind that they did not accept his proposals when they were first offered?
Mr. Silkin: Their non-acceptance of the 1977 base year arose from the fact that they did not quite understand—this is one of the difficulties about reading the document very quickly, and some of the translations were not very good—that, if the total allowable catch rose, so did their capability. That was badly translated. The difficulty really is that 1977 was the first —and also the last—full year in which we had definite knowledge from sightings by our own fisheries protection service of the number of vessels fishing in our waters. There was not a record before; it was only guesswork. That was why we chose 1977. The hon. Member will appreciate that it may be better on balance to take a record which one can justify than one which one cannot justify.

STATUTORY INSTRUMENTS &c.
Mr. Speaker: With the leave of the House, I shall put together the Questions on the seven motions relating to statutory instruments.
Ordered,
That the Prosecution of Offences Regulations 1978 (S.I., 1978, No. 1357) be referred to a

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Standing Committee on Statutory Instruments, &c.
That the draft International Lead and Zinc Study Group (Immunities and Privileges) Order 1978 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft African Development Bank (Privileges) Order 1978 be referred to a Standing Committee on Statutory Instruments, &c
That the Common Agricultural Policy (Agricultural Produce) (Protection of Community Arrangements) (Amendment) Order 1978 (S.I., 1978, No. 1660) be referred to a Standing Committee on Statutory Instruments, &c.
That the Sea Fish Industry Act 1970 (Relaxation of Time Limits) Order 1978 be referred to a Standing Committee on Statutory Instruments, &c.
That the White Fish Authority (Research and Development Grants) Order 1978 be referred to a Standing Committee on Statutory Instruments, &c.
That the Fishing Vessels (Acquisition and Improvement) (Grants) (Variation) Scheme 1978 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

HOUSE OF COMMONS (REDISTRIBUTION OF SEATS) BILL
Order for Second Reading read.
Mr. Speaker: I have to inform the House that I have selected the amendment in the name of the leader of the Liberal Party. Mr. Secretary Mason.
Mr. Kevin McNamara: On a point of order, Mr. Speaker. I heard you call my right hon. Friend the Secretary of State for Northern Ireland to open, the debate. This is an important constitutional matter, affecting representation in this House. Normally on these occasions the debate is Opened either by the Home Secretary or the Leader of the House, and either one or the other replies. I understand that my right hon. Friend the Secretary of State for Northern Ireland is to open the debate on behalf of the Government and that my right hon. Friend the Minister of State is to reply. I understand also that at least the Shadow Leader of the House will reply on behalf of the Opposition. I should like your advice on this.
It seems to me that is a House of Commons matter concerning representation in this House and that we should hear from the Leader of the House on it. It is of vital importance to us. Although I cast no aspersions on either of my right hon. Friends who are due to address the House on behalf of the Government, it seems to me in some ways derogatory to the honour and dignity of this House that on platters concerning representation and sitting in it neither the Leader of the House nor the Home Secretary is to speak in the debate.
Mr. Speaker: As I understand it, the convention is that the Government are one and that any Minister speaks on behalf of the whole Government. It is not for the Speaker of this House to tell the Government of the day whom they must put up to speak.
Mr. James Kilfedder: Further to that point of order, Mr. Speaker. Surely it is insulting not only

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to the House but to the people of Northern Ireland that this debate on additional seats for the Province is in the hands merely of the Secretary of State for Northern Ireland and the Minister of State. The practice has been for the Leader of the House and/or the Home Secretary to open and to close such a debate.
Mr. Speaker: If the hon. Member for Down, North (Mr. Kilfedder) is called to speak, these are matters to which he might refer in the course of his speech. I hasten to add that there is no promise implied there.
Mr. Robert Mellish: On a further point of order, Mr. Speaker. I am not concerned who speaks on this Bill on behalf of the two Front Benches. However, am I right in saying that, this being a constitutional Bill, the entire proceedings will be taken on the Floor of the House?
Mr. Speaker: That will not be decided by me.
Mr. Mellish: Let us hope, then, that we get some assurance about it.
Mr. Speaker: That is a matter that will be decided by the House itself. I have no doubt that if there is a motion, it will be discussed on the Floor of the House.
Mr. McNamara: On a point of order, Mr. Speaker. One point arises on your selection of the amendment in the name of the right hon. Member the leader of the Liberal Party. Some Members would object to any increase in the representation. If that amendment were carried and were to be accepted as a principle, such Members might then seek to say that any increase in representation should be on a proportional representation basis. if the amendment is carried, will amendments in Committee and on Report in favour of proportional representation be ruled out?
Mr. Speaker: Rulings on the Commitmittee stage will be made by the Chairman of Ways and Means.
Mr. McNamara: On a further and last point of order, Mr. Speaker. I am sorry to raise this matter. However, can you
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explain the precise status of the explanatory memorandum on the
"Effect on Public Service Manpower"?
It states that
" The Bill will have no effect on public service manpower."
If the Bill is carried as it is, there will be five extra constituencies. Shall we then have constituencies without returning officers, polling clerks, and so on? What is the effect of the statement that public service manpower will not be affected? Are we to have typically Irish elections?
Mr. Speaker: It is for the hon. Gentleman himself to make that point if he succeeds in catching the eye of whoever happens to be in the Chair.
Mr. McNamara: With respect, Mr. Speaker, I was asking not about that matter, but for a direction on what credence we can place on that statement and how we should approach the explanatory memorandum, because there seems to be a nonsense in that respect.
Mr. Speaker: The hon. Gentleman is directing his question to the wrong person. I never comment on the quality of what is submitted to the House. I have my own views, but I stay alive by keeping them to myself.
Mr. Stan Thorne: On a further point of order, Mr. Speaker. I apologise if I have missed something. I assume that the Secretary of State for Northern Ireland will be opening the debate. That raises a problem for me. I should have thought that the Home Secretary was the appropriate Minister, as this is a constitutional measure.
Mr. Speaker: The hon. Gentleman did miss something. That point has already been dealt with.
Mr. Thorne: Could you bear to repeat the reply that you then gave, Mr. Speaker?
Mr. Speaker: The truth is that I could not.
4.22 p.m.
The Secretary of State for Northern Ireland (Mr. Roy Mason): I beg to move, That the Bill be now read a Second time.
Perhaps I may divert for a moment and tell my hon. Friend the Member for

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Kingston upon Hull, Central (Mr. McNamara) that the main reason why my right hon. Friend the Minister of State and 1 are dealing with the Bill is that, first, electoral matters in Northern Ireland are my responsibility; the issues in the Bill are predominantly Northern Irish. Secondly, Mr. Speaker's Conference dealt exceptionally with Northern Ireland and with no other part of the United Kingdom. The Boundary Commission will report to me. My job will be to lay the Order in Council before the House. Therefore, as I am primarily involved, I thought that I should take the Bill.
The Bill will not have any effect on public service manpower. After the job has been done and the report has been placed before me and an Order in Council has been laid before the House, it may then have an effect on manpower and we shall be able to determine it at that stage.
Mr. Norman St. John-Stevas: I am delighted to see the Secretary of State here. Surely the hon. Member for Kingston upon Hull, Central (Mr. McNamara) made a good point. This is a matter of great constitutional importance to the House. It is a matter on which it would have been helpful to have heard not only the Secretary of State, but the Leader of the House. This is a point of substance. I think that it is much better to have the substance than the shadow.
Mr. Mason: This is a substantial Northern Ireland matter, and I am the substance for Northern Ireland.
The purpose of the Bill is to give effect to the recommendations of the Conference under your chairmanship, Mr. Speaker.
Rev. Ian Paisley: Will the right hon. Gentleman give way?
Mr. Mellish: He has not said"Hello"yet.
Rev. Ian Paisley: Will the right hon. Gentleman help us about the Committee stage of the Bill? Will it be held on the Floor of the House, or will it be relegated to a Committee from which Northern Ireland Members will be excluded?
Mr. Mason: I do not think that either the hon. Gentleman or his right hon. and
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hon. Friends will be excluded from participating in the Committee stage. I am sure that my right hon. Friend the Leader of the House will be wise enough to give Members the opportunities that they are requesting.
Mr. Mellish: It has to be taken on the Floor of the House anyway.
Mr. Mason: The purpose of the Bill is to give effect to the recommendations of the Conference under your chairmanship, Mr. Speaker, which reported in February this year. I am grateful for this further opportunity to express the thanks of the House to you, Mr. Speaker, for having presided over that particularly valuable Conference on the affairs of Northern Ireland.
The report of your Conference, Sir, was admirably short and to the point. The Bill seeks to follow that good example. It contains only one substantive clause, which provides that the number of parliamentary constituencies for Northern Ireland should be
" Not greater than 18 or less than 16 ".
It then goes on to give the Boundary Commission a target figure of 17 at which to aim when it draws up the new constituencies.
The remainder of the clause deals with consequential matters. It ensures that the Boundary Commission can use up-to-date electoral registers in its calculations, and it removes an anomaly which would otherwise have arisen in connection with the supplementary report that the Commission is obliged to make whenever it reviews parliamentary constituencies.
The Bill follows as closely as possible the recommendations of the Speaker's Conference. The House will recall that the conference decided that there should be 17 parliamentary constituencies in Northern Ireland. It also decided that the Boundary Commission for Northern Ireland should be given a degree of flexibility to overcome any practical difficulties. It recommended therefore that the figure of 17 should be open to variation, subject to a minimum of 16 and a maximum of 18.
These recommendations have great authority. They come to us from a Speaker's Conference, which is the traditional source of advice for Parliament when it is considering changes in electoral law. Moreover, they come from

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a Speaker's Conference on which the views not only of the national parties but of both political traditions in Northern Ireland were represented. So the views of both communities in the Province were heard and taken into account before the Conference reached its conclusions.
Finally, the Conference's recommendations were very nearly unanimous. Having taken evidence and heard the arguments, it decided by 22 votes to one that 17 seats were the appropriate level of representation for Northern Ireland in this House. My right hon. Friend the Prime Minister made it clear last April that the Government accepted the recommendations as eminently sensible and fair
But I accept that the Bill is not welcomed by everyone in the House. [HON. MEMBERS:"Hear, hear."] Therefore, I hope the House will find it helpful if I take some time to explain why Mr. Speaker was asked to set up a Conference to review Northern Ireland's level of representation, and why, therefore, we are considering this Bill today.
Northern Ireland's present level of representation was set in 1920. At that time, a devolved Parliament was established in Northern Ireland responsible in both legislative and administrative terms for a wide range of matters. It was then generally accepted that, because of the existence of that devolved Government, Northern Ireland did not need the same level of representation at Westminster as did those other parts of the United Kingdom which did not have a devolved Government. Northern Ireland was allocated 12 seats plus a university seat. If seats had been allotted in proportion to population on the same basis as in Great Britain, Northern Ireland would then have received 17 or 18 seats.
For the next 50 years or more Northern Ireland's under-representation at Westminster was not seriously challenged. It was generally thought fair that Northern Ireland should have a lower representation since so many of its affairs were debate and its laws made in the local Parliament at Stormont, not at Westminster.
But since a devolved Government in Northern Ireland was first established, the
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importance of central government in the lives of everybody has grown. More and more it is by the central Government at Westminster that the crucial decisions are taken and must continue to be taken —for example, on matters such as taxation, management of the economy and public spending.
Decisions taken centrally on these matters must, inevitably, affect the policies and scope for action of whatever devolved Assemblies may be in existence; and they vitally affect the interests of all citizens of the United Kingdom wherever they live. Given that, in addition, central Government also have sole responsibility for such matters as defence, foreign affairs and international obligations, the need for a broadly similar standard of representation at Westminster for every part of the United Kingdom becomes very strong indeed.
It was, I feel sure, against that background that Mr. Speaker's Conference looked at Northern Ireland's representation and considered whether it was adequate. A quick look at the figures may be instructive. At present each of the Northern Ireland Members of Parliament represent on average some 86,000 electors. That compares with a figure of around 66,000 for England, 57,000 for Wales and approaching 54,000 for Scotland. Furthermore, the largest Northern Ireland constituency contains over 125,000 constituents—almost 25 per cent. more than the largest constituency anywhere in Great Britain. Some of us in this House representing Great Britain seats may shudder at the thought of a constituency that size. My own constituency is more than 10,000 above the average for England. Yet the hon. Member for Antrim, South (Mr. Molyneaux) represents nearly 50,000 more electors than I do.
There are three reasons why the representation of Northern Ireland in this House should be increased.
Mr. Gerard Fitt: There There are seven reasons present—on the Unionist Bench. I shall tell the House about them.
Mr. Mason: The first reason, which to my mind is the most compelling, is the simple point of equity. How can it be right that the voices raised and the votes cast in the interests of the Northern Irish

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people here—where the Government's major policies are exposed to acceptance or rejection—should be muted and minimised as compared with those of the rest of the United Kingdom?
If we believe in fair dos all round, I do not see how we can argue that a British subject who happens to live in Northern Ireland should just for that reason automatically carry less weight in Westminster than his fellow citizens who happen to live somewhere else.
Mr. McNamara: My right hon. Friend has made a most important and very telling point. Perhaps he will also explain to the House why, in the Government's opinion, a British subject who happens to live in England should have less representation in this House than someone who comes from Wales or from Scotland.
Mr. Fitt: That is too complicated.
Mr. Mason: No, it is not. My hon. Friend the Member for Belfast, West (Mr. Fitt) wants to jump in very quickly to try to railroad the Secretary of State. The average in England, Wales and Scotland will be very near to the average that we are now allocating for Northern Ireland-17. In fact, if it was based on Scotland, Northern Ireland would probably get 18 or 19 seats. If it was based on England, Northern Ireland would probably get 16 seats. So it is a mean of the averages of the three other provinces of the United Kingdom.
Mr. Mellish: I accept that there are some anomalies in Northern Ireland—and this is only part of the story—but does my right hon. Friend agree that there are also serious anomalies in Wales, in particular, and in England? He cannot just deal with Northern Ireland and say that there are anomalies there.
Mr. Mason: Yes, but England, Scotland and Wales have been generously represented in this House over the past 50 or more years as compared with Northern Ireland. The first point I make is that of equity, fairness, justice and equality. It is right that Northern Ireland should now have its fair representation.
Secondly—and this argument is in some sense an aspect of the first—why should the people of Northern Ireland have their
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access to their Members of Parliament, and the service they can render them, so much more restricted than is the case anywhere else in the country? On average, each Northern Ireland elector has to share his Member of Parliament with some 86,000 others—over 50 per cent. more than his Scottish counterpart.
No matter how hard the Northern Irish Members work—and I appreciate how conscientious they are—there are just not enough hours in the day to do that massive job as fully as I am sure they would like to do it. We ought no longer to put up with this situation because a Member of Parliament today is not only concerned with debates in this House but also acts as a mediator between his constituents and the Government machine.
That leads to the third reason—the grossly unfair burden placed upon the Members concerned. In view of the kind of service constituents now expect from their Members, it is quite unreasonable to ask anyone to represent a constituency of 100,000 people or more; and all the more so when other Members have half that number.
On this question, one must also recognise the logistic problems of the Northern Ireland Members in carrying out their duties, with their large constituencies and the distances that they have to travel. So I say that fair play is fair play for the Members as well as for the constituents We cannot all have absolutely equal-sized constituencies, but it is only right to remove the worst disparities.
Mr. Martin Flannery: My right hon. Friend talks about democracy, but he knows as well as I do that in Northern Ireland politics is communal politics rather than the type of politics that we have here. There is there a minority community and a majority community. Is it not a fact that at present the minority community is represented by one of our friends only? There are two—[An HON. MEMBER:"No—Fermanagh] For whatever reason, does not my right hon. Friend accept that the majority community, on a gerrymandered basis, has 10 Members here to our one? What kind of democracy is that?
Mr. Mason: They have been elected in Northern Ireland on the same basis as Members here are elected, although they

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have much larger constituencies. Of the 12 Members of this House from Northern Ireland, 10 are of the various shades of Unionism and two are anti-Unionists. On the basis of this Bill, there will be 17 seats, and it is possible—
Mr. McNamara: There may be.
Mr. Mason: —once the boundaries have been redrawn, going for an electorate of just over 60,000 per Member, for there to be four or possibly five anti-Unionists out of the 17. Therefore, the minority population in Northern Ireland should be able to get increased representation in the House of Commons. If anyone wants to take time to look at the make-up of the population and examine the breakdown, he will find that that is feasible.
Having said that, I say to my hon. Friend that we are on test, because in two years' time it should be established, and we can see that there is a possibility of an increased number of anti-Unionist Members on the Labour Benches.
Mr. McNamara: Will my right hon. Friend give way on this point?
Mr. Mason: No. I am sorry, but I have been giving way enough, and I must make progress.
Mr. McNamara: On a point of order, Mr. Deputy Speaker. My right hon. Friend has made a fundamental point. Is it in order to ask you, Mr. Deputy Speaker, to ensure that the House has placed before it the documents, papers and workings by which my right hon. Friend arrives at that rather remarkable conclusion?
Mr. Deputy Speaker (Mr. Oscar Murton): It would not be in order to ask the Chair that question. The hon. Gentleman is very ingenious.
Mr. Fitt: My hon. Friend is not as ingenious as the Secretary of State.
Mr. Deputy Speaker: The Chair takes responsibility for many things, but not for the business of the House.
Mr. Mason: This Bill simply increases the number of constituencies in Northern Ireland. It does not deal with the method of election to be used. The amendment in the name of the right hon. Gentleman
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the Leader of the Liberal Party complains about this fact. He is concerned that the scope of the Bill does not allow the House to decide whether proportional representation should be used for the election of Northern Ireland Members. Of course, I understand his concern to get this matter discussed, but I must suggest to him that Parliament's consideration of this Bill is not the right occasion for that discussion
This Bill follows directly from Mr. Speaker's Conference. Mr. Speaker's Conferences traditionally do not give reasons for reaching their conclusions, but, as I read the report of the Conference, it seems clear to me that Mr. Speaker decided that we should be concerned only with the matter referred to in the terms of reference, that is:
"the number of parliamentary constituencies there should be in Northern Ireland "—
nothing to do with the method of election.
I have tried to frame the Bill based solely on Mr. Speaker's Conference. I think that that was the right course. I do not think that this is time to discuss proportional representation, which is a major constitutional issue deserving of quite separate consideration. I know that it has been suggested that the special circumstances in Northern Ireland, which have already been accepted as sufficient reason for the use of proportional representation and the single transferable vote in local and provincial elections in Northern Ireland, as well as in the elections for the European Assembly, would justify its use also for elections to this House. I can understand this point of view, although I do not feel that it would be generally accepted.
I suggest that many people would wish to argue that an election to this House is a very different thing from an election to the European Assembly. The European Members will be returned by a variety of different methods—although for subsequent elections a common system is envisaged which would, incidentally, remove the present difference between Great Britain and Northern Ireland in the method of election used. And, when the European Members sit down together, it will he to do a very different job from that of Members of this House.
The Assembly will not be an executive body and there will not be the same need

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for Members there to be"constituency"Members as they are here. It is not perhaps for me to speculate about the views of other hon. Members, but I imagine that there would be many who, valuing the traditions of this House, would think it very unusual if one method were used for electing some Members of this House and a different method for others.
Mr. J. Enoch Powell: Will the Secretary of State confirm that the terms of reference of Mr. Speaker's Conference were agreed by all the parties in the House before that Conference began work?
Mr. Mason: I cannot confirm in detail what the right hon. Gentleman says, but I imagine that my right hon. Friend the Lord President would have secured acceptance from the parties concerned before Mr. Speaker appended his signature to the terms of reference under which he was to chair the Conference.
Mr. Clement Freud: Will the Secretary of State bear in mind that there were in this House Members for university seats, elected by proportional representation? Does he agree that no great harm—in fact, the contrary—accrued to the House as a result of those seats?
Mr. Mason: That is probably one of the reasons why the House decided to get rid of them.
I do not, however, wish to embark on a debate about PR today. This Bill is not about methods of election. Nor does it pretend to be a means of solving Northern Ireland's constitutional problems. It does not represent a change in the direction of the Government's political and constitutional policy in Northern Ireland.
Let me restate briefly what the Government's policy is. We are as convinced as ever that the only way to find a fair and durable solution to Northern Ireland's political problems is to restore to the Province a devolved Government in a form that is acceptable to a majority of the people in both parts of the community. I make that statement without qualification, and I think it is one that the official Opposition would endorse.
For over two years I have been seeking ways of making progress towards the restoration of such a devolved Govern-
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ment, and I continue to do so. It is no good going about the job with a fanfare of trumpets and in the full spotlight of publicity. That way we encourage extremism and make moderation all the more difficult. I am patiently exploring all possible avenues of advance, and I am seeking to persuade the political parties to come along with me.
I put forward certain ideas a year ago. Unfortunately, for a variety of reasons, the parties held back. That was their decision, but it was no reason for me to give up. I am in no way committed to any particular form of constitutional model, and I have made that clear to the parties.
Mr. Ron Thomas: In his introduction this afternoon. my right hon. Friend said that lower representation for Northern Ireland had been justified in the past by the existence of devolved government. My hon. Friend now tells us that it is the affirmed policy of the Government to bring about once more an acceptable devolved Government there. Would not that justify lower representation of Northern Ireland here? Could we not tackle that problem, if my right hon. Friend feels that it is so important, before increasing the representation? What will the Government do when they have satisfactory devolution to Northern Ireland? Will they get rid of the seven new Members of Parliament?
Mr. Mason: No, and my hon. Friend must recognise the changes that have taken place—
Mr. McNamara: We have. We are in a minority.
Mr. Mason: Scotland and Wales are being offered devolution and are to maintain their existing parliamentary representation. That highlights the injustice of Northern Ireland having no devolution and lower representation. We are trying to straighten that out.
Mr. McNamara: My right hon. Friend did not say that in September 1976.
Mr. Mason: There are a number of ways in which to approach the task of creating a form of government capable of securing the necessary widespread acceptance in Northern Ireland. I told the House on

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9th November that I had already had informal discussions with the leaders of the SDLP, the Alliance Party and the Northern Ireland Labour Party. Since then I have had a similar informal talk with the leaders of the Official Unionist Party. Arrangements are in hand for me to meet the Democratic Unionist Party. These meetings are being conducted without publicity or artificial deadlines, and I am satisfied that that offers the best hope of making progress.
In these discussions, the Government's aim remains unchanged. The restoration of devolved government, acceptable to the parties who will have to work it and the people who will live under it, remains our goal. We shall go on in pursuit of it. I have no time for those who say"You can never win; cut your losses and abandone your hopes; settle for integration ". That is not the answer today any more than it was in 1920 or in 1973; and it is not what this Bill is about.
Some of my honourable Friends have already argued that this Bill is somehow"integrationary ". Of course, I respect that view, but I should like to explain why we do not agree with it. Northern Ireland is part of the United Kingdom and—as this House has laid down in statute—it will so continue as long as that is the wish of the majority of the Northern Irish people. That being the present position, Northern Ireland citizens from both the majority and the minority communities deserve fair representation in the national Parliament. That is a statement of natural justice; it has nothing to do with integration.
While the link with Westminster continues, it is better for everyone, whatever his view about the link, that he should be fully represented at Westminster.
There is no reason why this Bill should make it more difficult to restore a system of devolved government in Northern Ireland. The level of representation of any part of the United Kingdom is not a yardstick against which the prospects of devolution can be measured. There is no rule that high representation equals low prospects of devolution.
Indeed, what have we seen recently? The part of the country with the highest level of representation is Scotland. That
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has not stood in the way of Parliament agreeing—subject to the wishes of the Scottish people to be expressed in a referendum—to devolution to a Scottish Assembly. If the necessary political will can be found on both sides in Northern Ireland, we can achieve devolution there, too. It is that will which matters, not the level of representation at Westminster.
So I hope that the politicians and the people of Northern Ireland—on both sides of the community—will see this Bill for the plain act of justice that it is. Its effects will not be felt immediately and certainly not for the next elections to this House.
Mr. Paul B. Rose: Thank goodness.
Mr. Mason: If Parliament approves the Bill, it will be for the independent Boundary Commission to carry out its statutory task. It may take it up to two years to reach its final recommendations. That is because the Commission's rules of procedure ensure that all objections which may be raised to its first proposals are fully ventilated and weighed, and that impartiality, like justice, is not only observed but is seen to be observed.
When the new boundaries are finally drawn, all the political groupings in Northern Ireland should see the benefits. For with 17 seats rather than 12 at stake, there will be greater opportunities for all parties to gain representation in this House. I have heard it suggested that the new seats will all be in Belfast, or east of the Bann, and that they will therefore all be Unionist seats. I think that is most unlikely to be the case.
The effect of the redistribution will be felt equally throughout the Province: the Boundary Commission is required by rule to draw the boundaries of all 17 new constituencies so as to produce electorates as close to the electoral quota as possible.
In short, this Bill will bring three significant advantages to Northern Ireland. It will afford an opportunity to the representatives of both communities in the Province to increase their representation in this House and to make the voice of Northern Ireland fully and fairly heard. Secondly, it will enable the electors of Northern Ireland to have the same degree of access to their parliamentary representatives as do their fellow

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citizens elsewhere in the country. Thirdly, it will ease the burden on Members representing Northern Ireland constituencies by distributing the work load between 17 rather than the present 12 Members.
All the people, all the elected representatives, and all the political parties in Northern Ireland have something to gain from this Bill—and none of them has anything to lose.
Mr. Kilfedder: On a point of order, Mr. Deputy Speaker. May we have a statement from the Secretary of State for Northern Ireland at the beginning of this debate and an assurance that all stages of the Bill will be taken on the Floor of the House? Since it is such an important constitutional matter, I believe that if it is taken on the Floor it will show respect to Northern Ireland and its people.
Mr. Mellish: Further to that point of order, Mr. Deputy Speaker. I understand that since I raised the matter earlier in the debate there is now a motion providing that the Bill is to be taken on the Floor of the House. That motion has been tabled, I understand, by the Government. If that is the case, I hope that that motion will be carried overwhelmingly. May I be told whether I am correct?
Mr. Mason: Further to that point of order, Mr. Deputy Speaker. I tried to indicate that my right hon. Friend the Leader of the House, who is responsible for business—I do not have that responsibility—would give the opportunity, especially to Members from Northern Ireland, to participate. That was as clear an indication as I could give to the House, although I emphasise that I do not have personal responsibility in these matters.
Mr. McNamara: Further to that point of order, Mr. Deputy Speaker. My right hon. Friend has not answered the question. If, judging by what we have heard from Mr. Speaker, the Government are indivisible and one, may we have a statement from that very diffuse godhead whether the Bill will be taken on the Floor of the House?
Mr. Mason: The motion is on the Order Paper.
Mr. McNamara: It is not.
Mr. Mason: I am advised by representatives of my right hon. Friend the Leader of the House that it will be taken on the Floor of the House.
Mr. St. John-Stevas: Further to that point of order, Mr. Deputy Speaker. If it is any help to the right hon. Gentleman, I wish to make clear that the Opposition want this matter to be debated on the Floor of the House.
Mr. Deputy Speaker: I do not know whether the Chair is required to rule on these points of order. However, I remind the House that, at the end of the Second Reading debate, it is open to any hon. Member to move to commit the Bill to a Committee of the whole House.
Mr. McNamara: I thank you for that advice, Mr. Deputy Speaker, because the motion does not appear on the Order Paper. These things never do appear beforehand.
4.55 p.m.
Mr. Airey Neave: Perhaps we may now get back to the Second Reading of this Bill.
We should like to thank Mr. Speaker for the Conference that he held, for its results, and for the work of those hon. Members who took part. As my right hon. Friend the Leader of the Opposition made clear in April, we shall give our fullest support to the Second Reading of this Bill. We have for some time past acknowledged the inadequate representation of Northern Ireland in this House, and the right hon. Gentleman the Secretary of State for Northern Ireland has fully explained the position. A passage to this effect appeared in our General Election manifesto of October 1974.
On electoral quota alone, Northern Ireland is badly under-represented. This is the central argument on the Bill, and the official figures are worth repeating. While the quota for Scotland is 53,649, for Wales 57,362, and for England 66,434, that for Northern Ireland is 86,142. The quota for the United Kingdom is 64,504. This means that Northern Ireland has 22,000 more electors per Member than England, 31,000 more than Wales, and 36,000 more than Scotland. We believe that the electoral quotas in the four constituent parts of the United Kingdom should be more nearly aligned. By this test, there is no argument against this Bill. The case for it is

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irresistible. In our submission to Mr. Speaker's Conference this time last year, we argued that the view of the report of the Royal Commission under Lord Kilbrandon should be adopted.
There were two recommendations of Kilbrandon with regard to Northern Ireland which we then supported. These were that the level of representation of all parts of the United Kingdom should be determined by the same rules. Representation should be mainly related to population but should take into account also geographical considerations. This guidance has been noted in this Bill, Kilbrandon having recommended that the number of seats for Northern Ireland should be increased to 17, or thereabouts. This is similar to the view of Mr. Speaker's Conference.
The right hon. Gentleman referred to the Government of Ireland Act 1920, when the number was somewhat arbitarily fixed at 13, including a university seat, and in 1948, with the abolition of university representation, the number was reduced to its present level. The electoral quota for Northern Ireland has increased from 50,000 in 1925 to the present level of 86,000. The electorate in Northern Ireland has grown by 500,000 since 1922. Therefore, there must clearly be increased representation because of the increase in the electorate in Northern Ireland since the Government of Ireland Act.
In 1944 a Speaker's Conference recommended 12 seats for Northern Ireland. The present difficult situation appears to stem from the retention of this figure under the Redistribution of Seats Act after the war. This has continued the disparity since in 1948 the quota for Northern Ireland was already 71,000 and 57,000 for Great Britain. This position led to a sense of unfairness in the Province, and there was even talk of second-class citizenship. It also created some huge constituencies in a relatively small geographical area. I believe that the hon. Member for Antrim, South (Mr. Molyneaux) has a huge constituency of over 120,000. Northern Ireland constituencies are, on average, slightly larger in area even than those in Scotland, if one takes total acreage figures, and so forth, of constituencies.
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The second Kilbrandon recommendation adopted by the Conservative Party was that the principle of devolution did not justify serious under-representation of the kind that I have described. I agree with what the Secretary of State said. The position came into sharp relief with the suspension of the Stormont Parliament in 1972. This undoubtedly threw extra burdens on Northern Ireland Members, but we are not supporting the Bill simply because of the absence of devolved government in Northern Ireland. If one takes the case for representation on its merits, Mr. Speaker's Conference must be right, and we do not consider that these extra seats are a substitute for eventual devolution.
The view that one must wait for devolution—it might have been a view at one time—is no longer realistic or fair. I confirm what the right hon. Gentleman said in regard to the Opposition's view. We are not supporting the Bill because we want integration. That direct rule must continue for some time there can be no doubt. There is no immediate possibility of devolution. Like the Government, we in opposition have been trying to work out a form of regional administration in the short term. This would be based on the restoration of certain local powers to an elected regional council.
We have asked the Secretary of State whether he will invite Sir Patrick Macrory to advise on the current situation. I hope that the right hon. Gentleman is giving that request consideration. There is still much patient discussion required before even this small return to a democratic control of local services may be made.
Thus, while there can be yet no certainty about the next step, though our aims are clear, the problem of parliamentary seats is urgent. Extra Members in this place will help the government of Northern Ireland in the short term, as direct rule should be more accountable to the people of the Province, though I do not think that that will be fully achieved until we have considered Northern Ireland legislation in the House —there are considerable problems in that respect—and provided the Province with some widely accepted political forum.
The attitude of the Government and their supporters to the proposed increase had, prior to March 1977, been anything

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but enthusiastic. Some Labour Members are still unenthusiastic. As late as 18th March 1976 the present Home Secretary, who was then Secretary of State for Northern Ireland, said:
" I visited many parts where even to talk about extra representation in this House is to fly in the face of history and cultural attitudes." —[Official Report, 18th March 1976; Vol. 907, c. 1520.]
The right hon. Gentleman said that it was not possible to have extra seats for Northern Ireland. He said that he believed that we had to wait until the divide in Northern Ireland had been healed and the two communities were working together for the good of the Province. No one can honestly say that that ideal has yet been realised, although we are trying hard to achieve it. As recently as 1st February 1977 the Leader of the House ruled out a separate inquiry into Northern Ireland representation. The Government's opposition, however, mysteriously vanished in the next few weeks, between 1st February 1977 and 23rd March.
Then came the night when the Government were threatened with defeat on a motion of confidence. Lo and behold, the Prime Minister suddenly announced Mr. Speaker's Conference, which was warmly welcomed by the Opposition. I think that that is a fair statement of those events.
That volte face seems to have upset some Labour Members. No doubt they will tell us about it as the debate proceeds. It was followed by the Government's acceptance, on 19th April 1978, of the recommendations and the assurance of my right hon. Friend the Leader of the Opposition that we would do our best to ensure the passage of the Bill. We rejoiced, as we do now, at the Government's conversion to a measure to place the representation of Northern Ireland on a more equitable basis in terms of quotas. That is the true test of the Bill. We hoped that the Bill would have been taken in the previous Session. It is still not clear why there should have been delay. However, the Bill is before us and we welcome it.
As to opinion in Northern Ireland, no doubt hon. Members from the Province will be giving their views as well as other hon. Members. I refer to the Liberal amendment, to which the Secretary of
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State referred. As the right hon. Gentleman said, it must be resisted. Our view is that the effect of introducing a proportional representation system for parliamentary elections would be completely against the view that we have always adopted, that there should be one uniform system for all parts of the United Kingdom. All parts of the United Kingdom should be voting simultaneously in a parliamentary election to decide the composition of the United Kingdom Parliament. There is a clear distinction between Parliamentary elections and local elections.
In our view the effect would also be bad because it would isolate Northern Ireland at a time when we wish to support the Union of Great Britain and Northern Ireland. We agree with the right hon. Gentleman in believing that Northern Ireland remains part of the United Kingdom.
Although much turns on the decisions of the Boundary Commission, I was glad to hear the right hon. Gentleman say that only two years would elapse, as against the evidence in the report that these matters would take four years. Everything turns on the decisions of the Boundary Commission and it is to be hoped that its work will be completed as speedily as possible. However, as the right hon. Gentleman said, the Bill should benefit all sections of the population. It is the duty of the Boundary Commission to find an equitable solution to the constituency problem.
We should remember that the constitutional convention of 1975–76, abortive as it was in many ways, established a wide range of support for extra parliamentary seats. We thoroughly support the right hon. Gentleman in saying that the Bill is an act of justice by the only test that is possible, namely, quotas per Member.
For all the reasons that I have outlined, I ask my right hon. and hon. Friends to support the Bill and, if it be necessary, to vote in favour of its Second Reading.
5.6 p.m.
Mr. Clement Freud: I beg to move to leave out from"That"to the end of the Question and to add instead thereof:
That this House, whilst acknowledging that the number of Members of Parliament representing Northern Ireland ought to be increased,

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declines to give a Second Reading to the Bill because its narrow scope fails to provide an opportunity for this House to determine whether or not those Members should be elected according to the principle of proportional representation.
My right hon. and hon. Friends and I tabled the amendment not because we objected to the increase in the number of seats but solely because the Bill is so narrowly drafted that it does not permit amendments in Committee in the way that we wanted. We very much regret the narrow drafting, because it obliges us to decline formally to support the Bill's Second Reading. We were advised that the only way in which we could make our point was to table the amendment. That is why the amendment was drawn in the form in which it now appears.
I shall seek to reply to the earlier intervention of the hon. Member for Kingston upon Hull, Central (Mr. McNamara). If the amendment succeeds there will be no Second Reading. Therefore, his distress or concern is unimportant.
Northern Ireland has had a relatively small representation in the House since the Government of Ireland Act 1920. That is because it was given its own House of Commons. Since the devolution proposals mention no reduction of Scottish and Welsh representation when those two parts of the United Kingdom have their own Assemblies, it is no longer right that Northern Ireland representation should remain at a comparatively low level. Indeed, it has been wrong since the abolition of Stormont and the advent of direct rule.
I wish to make it clear that in spite of the formal terms of the motion we support the proposal that the number of Northern Ireland seats should be increased. We have steadily supported that concept and argued along those lines.
The matter does not rest there. In a newspaper report in The Irish Times on 10th October we read:
" The Secretary of State for Northern Ireland, Mr. Mason, has promised the SDLP that he will seriously consider the possibility of introducing proportional representation for Northern Ireland in future Westminster elections. Such a move, if it did come about, should enhance the chances of non-Unionist parties winning seats."
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The article continues:
" Mr. Mason gave his assurance at a private dinner party with the SDLP's six top officials at Stormont Castle…according to reliable sources in Belfast. His guests, especially party chairman Mr. Dennis Haughey, put up a spirited case for changing the present straight-vote system to PR.
The Secretary of State listened to their arguments then while stressing that he could not promise anything, gave an undertaking to study the proposals seriously."
It seems extraordinary, or odd, to say the least, that the Bill has been drafted in such a fashion that there is no way in which we can introduce what the Secretary of State has said he would consider so seriously.
We know that parliamentary draftsmen can and do carry out most difficult and obstruse instructions loyally and with great skill and ability. The European Assembly Elections Bill was an example. It would not have been difficult to set draftsmen to produce a Bill that would allow PR to be discussed in Committee.
I suppose that the kindest hypothesis is that the draftsmen had no instruction to that effect and that they went ahead on the basis of the report of the recommendations of Mr. Speaker's Conference. However, if the terms of reference of that Conference were narrow—the Secretary of State has said that they were, and I agree with him—surely a Second Reading debate is exactly the time to broaden the circumference of the Conference.
The less kind hypothesis is that deliberate instructions were given to draw the Bill in such a way as to make it impossible to table a PR amendment. That is what has happened. It is possible that what The Irish Times wrote did not happen. However, if it did not happen, surely the right hon. Gentleman would have written to The Irish Times to point that out. In either case the Secretary of State determined to give no serious study to the mode of election. I wonder why that was. Was it because it was part of the Government's deal with the Ulster Unionists?
If the Bill had been drafted to take account of the September accommodation with the SDLP the Unionists might not have been prepared to abstain on the vote on the amendment to the Gracious Speech. The matter can be put right quite easily, if the Secretary of State will withdraw the Bill in its present form,

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give suitable instructions to draftsmen, and reintroduce it in a form which could be the subject of the proposed amendments, aimed at getting proportional representation written in. Alternatively, let the Secretary of State use the device adopted in the European Communities Bill to permit the House to choose the method.
The proposal in the Bill is an important landmark in the history of Northern Ireland. Apart from the abolition of separate representation of Queen's university, Belfast, the number of territorial Members has not changed since the General Election of 1922. The change that we contemplate today gives us the opportunity to consider other matters as well. The House could use this opportunity either to repeat the same kind of mistake made 50 years ago or to make a more constructive contribution to political affairs in the Province. Under the terms of the Local Government (Ireland) Act 1919 and the Government of Ireland Act 1920, local elections in 1920 and provincial parliamentary elections in 1921 and 1925 were conducted on the principle of proportional representation. The Unionists did away with proportional representation in local government in 1922, in time for local elections in 1923. This was clearly of constitutional importance. The question of signifying the Governor's assent was referred to the Cabinet in London. The Governor's assent was eventually given, but this was the only case in which it was not given automatically.
The results of the 1925 provincial parliamentary elections indicated that issues other than that of the border were beginning to emerge. Nevertheless, the Unionists replaced proportional representation with"X"voting, or first past the post, in time for the 1929 election. In the nine elections from 1929 to 1965, an average of 24 of the 52 seats were not contested. There was a change in 1969, about the time the present troubles started, when only seven seats were uncontested and the Unionists showed signs of folding up, even without the influence of proportional representation.
In 40 years the reversion to"X"voting has brought no lasting peace to Northern Ireland. It has, instead, resulted in an increase in tension and dissatisfac-
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tion, culminating in the violent disturbances of the past 10 years. I am not trying to prove that proportional representation is a panacea and that its introduction would instantly stop the troubles. What I am saying is that the fairer the system of voting the better will people feel that they are represented. It is only fair to say—there has been talk about the resentment of the minority—that all Members of Parliament in Ulster look after all constituents, and look after them very well. I believe that feelings of being wronged are felt by an infinitesimal percentage of the population of Northern Ireland.
Doing away with proportional representation within the Province half a century ago was a profound mistake, which we must not allow to be repeated on the occasion of our proposing increased representation at Westminster. Therefore, we must take this opportunity to avoid a repetition of error.
Northern Ireland has an adult majority community twice the size of the adult minority community. The community is divided to an extent which, fortunately for us, is almost unknown on this side of the Irish Sea. Since the end of the First World War, and even before that, the minority has felt itself to be unfairly treated by the majority. The consequent airing of grievances has received widespread attention. Since 1969 much has been done to remedy those grievances, including the application of proportional representation in local, provincial and European elections. The minority fears that the continuation of"X"voting for Westminster elections, when there is a clear and convenient opportunity for a change in method, is a sign that the majority will do all that it can to put the clock back in other matters as well as in elections.
Failure to deal with grievances which can be dealt with leads to political and social weakness, as unhappiness and frustration lead to violence. The grievances about the method of election to Westminster can be dealt with so easily through a system which is manifestly fair to the majority as well as the minority, so that the voters can choose personally those by whom they wish to be represented. We suggest four multi-Member constituencies, each with not fewer than three Members

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of Parliament, which would give the number that Mr. Speaker's Conference suggested. The joyful thing about this suggestion is that it can be taken up immediately, not in two or three years, and not with the expenditure of much Government finance, as has been suggested. It could be done next week. The number of Members of Parliament representing Northern Ireland could be augmented to the numbers suggested by Mr. Speaker's Conference.
The great difficulty here is the tremendous talent that the two sides have for driving each other into a corner. The Unionists cannot see any good in those whose provincial objectives seem to be to destroy the link with Great Britain, though they know that the SDLP will react even more strongly. Nevertheless, they persist. Equally, the SDLP insists that the British should abandon the Unionist majority, well knowing that the Unionist reaction will be even stronger. Both sides are deadlocked and neither gives the public impression that it genuinely wishes to reach a settlement.
The present Bill, suitably amended—and by that I mean amended in the way that my right hon. and hon. Friends suggest—gives the Unionists an opportunity to beat the deadlock. They are collectively the largest group of parties, whose strength has been proved in four provincial elections between 1973 and 1977. There can be no doubt about this. The proportional representation voting figures proved that political strength and political power are inseparable from responsibility. Strength implies responsibility for the whole, beyond narrow selfish interests. Let the Unionists use that strength by agreeing to a far higher standard of democracy than obtains in the rest of the United Kingdom. This will prove that they are not wholly intransigent, thus making it less easy for the SDLP to maintain its intransigence.
Why should the Unionists fear giving a little from a position of strength? Why should they fear being the first to introduce a sensible and realistic method of election? It has been said that it would be wrong for one part of the United Kingdom to use one system while another employed a different one. We agree that it is wrong. We should like the whole
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of the United Kingdom to use proportional representation. But somebody has to start, and what a good time to start when we have more seats. We know that the Unionists and the SDLP can, and do, talk to each other privately on a reasonable basis. Probably they feel impelled in public to take up untenable positions from which they cannot retreat. They both say that it is the responsibility of the other to take the initiative.
Let us at Westminster discharge part of that responsibility at least by not allowing them to put the clock back, as it was put back in 1929. The Unionists complain, with their tongues firmly in their cheeks, that all electoral arrangements must be identical with those in Great Britain—as if that would extinguish the differences between Northern Ireland and the rest of the United Kingdom any more than the use of such tongue-in-cheek phrases such as"equal citizens"and"standards of democracy ".
There are differences and they cannot be extinguished. There is the difference that Northern Ireland has a land frontier with an independent State which, by its constitution, lays claim to the whole island of Ireland and looks toward the reintegration of the national territory. Then, Northern Ireland is separated from Great Britain by the Irish Sea. It suffers from a degree of violence which has been unknown in the rest of Britain since 1745.
For nearly 60 years Northern Ireland has had a separate Government and separate laws. Is not that a difference? The people there are divided among themselves in a manner quite different from divisions that we may have in the rest of Great Britain. Even so, the Northern Irish have been part of the United Kingdom for the best part of 200 years, since 1800. We cannot, we will not and we must not abandon them. What we seek is that there should be enough give on both sides so that they have a chance to settle their own problems. I hope that this amendment will be supported.
5.21 p.m.
Mr. Gerard Fitt: I am not sure how decisions are taken in Cabinet about who should promote a Bill and present it to the House at the Dispatch Box. This Bill has far-reaching constitutional implications, affecting the relationship between Northern Ireland

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and Britain. It will have an effect upon membership of this House and upon future United Kingdom Governments. An extra five seats in Northern Ireland could determine the membership of this House and, consequently, future Governments in the United Kingdom. For that reason alone I thought that it might have been more appropriate for my right hon. Friend the Home Secretary to present the Bill.
On second thoughts I realised why the Home Secretary could not present the Bill. If the Home Secretary ever writes his memoirs, or if the reports of Cabinet meetings taking place now are published in the future, I am certain that it will be shown that my right hon. Friend the Home Secretary found this to be one of the most distasteful pieces of legislation that he had had to put up with throughout his political life. I intend to prove that assertion before I finish my speech.
I do not accept that the Bill was brought before the House with the intention of ensuring equity, fairness and justice for the electorate of Northern Ireland and its Members of Parliament. Again, I intend to prove that. I regard the Bill as being of major constitutional importance, affecting the entire relationship between Northern Ireland and other parts of the United Kingdom. I do not believe that we can discuss in total isolation apart from all the other things happening there, the question of an increase or a decrease in the number of parliamentary seats in Northern Ireland. We have to bear in mind all the events that brought Northern Ireland into being, which led to the creation of that State. These were all part and parcel of the 1920 settlement. At that time the figure of 12 parliamentary seats was arrived at.
I believe that it is of vital importance to the whole of the United Kingdom that there should have been a White Paper preceding the Bill. All hon. Members ought to have had the opportunity to discover the far-reaching implications within the Bill. It is not motivated by a concern for equity, fairness, justice and does not spring from concern for overworked Members representing Northern Ireland constituences. It is motivated by something much less laudable.
The Bill has not been introduced because the electorate has found it difficult
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to get in touch with its Members of Parliament. Anyone who has represented Northern Ireland constituencies knows that the electorate, if it cannot get one hon. Member, will certainly get another. It is difficult for any hon. Member representing a Northern Ireland seat to refuse anyone. The Bill comes before the House because of the political arithmetic—because of the instinct for political survival on the part of the Government.
Since the election of 1974 there have been a number of occasions on which questions have been put to the Secretary of State for Northern Ireland and the Prime Minister concerning an increase in the number of parliamentary constituencies in Northern Ireland. Until recently the answer has always been that there was no need to increase that number. The dates of these questions and answers can be readily obtained from the Library. On 16th January 1975 the then Minister of State, Northern Ireland Office, was asked whether the Government had any intention of increasing the number of seats. The answer was short and to the point. It was"None, Sir." The Government had no intention of increasing the number of seats then.
On 13th March 1975 a supplementary question was asked by an Opposition spokesman during Question Time. During the course of that supplementary question the spokesman said that it was the opinion of his party—and we have heard this from the Opposition spokesman tonight—that there should be an increase in the number of seats. The reply given by the then Minister of State was:
" We are aware that that is in the manifesto. We are also aware that those who sat on the Government Front Bench in the previous Parliament did not necessarily hold that view." —[Official Report. 13th March 1975; Vol. 888, c. 738.]
It would be interesting to know whether, during the period of Conservative Government between 1970 and 1974, any recommendations were made to increase the number of seats. In a background paper which has been drawn up in connection with this debate we have been told that at the time of the debates that took place within the Conservative Party, particularly in relation to the Northern Ireland constitutional proposals, it was the strong opposition from the Labour Party

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that prevented the then Conservative Government from increasing the number of seats.
I ask the Government: is it the fact that the Labour Opposition between 1970 and 1974 used all their powers to persuade and deter the then Conservative Government from increasing the number of seats? We have heard this rumour before, and it is now reported in the background paper. Is it true? It was believed then that Labour's opposition to an increase in the number of seats arose from the fact that it believed that any increase in the number of Northern Ireland Members of Parliament would result in there being more Unionists who would naturally vote with a Conservative Government. Again, that is the politics of survival. If that was the reason for the point of view of the then Opposition, it will be understood why I take a certain view now.
Mr. McNamara: Does my hon. Friend agree that in those heady days of opposition, the Opposition Front Bench was, perhaps, focusing rather narrowly on the situation in 1964 when, had those seats been in existence, Sir Alec Douglas-Home, as he then was, would have formed his second Administration?
Mr. Fitt: I certainly accept that. I had intended to refer to it and to emphasise its importance to the House. Any increase in the number of representatives from Northern Ireland can affect the membership of this House, and consequently the political complexion of the Governments in the years which lie ahead. I believe and I shall be giving reasons for my belief—that the Opposition Members from Northern Ireland who would be elected to this House would certainly not be, as I have been, in support of a Labour or Socialist Administration.
My next reference is to 19th March 1974. At that time Northern Ireland was in the grip of a Fascist-led strike. That was a strike which, a week after it took place, brought crashing to the ground the Sunningdale power-sharing executive which had been so painfully and assiduously built up by people in Northern Ireland, with the support of the Conservative Government and with the support of the then Labour Opposition. It was during that time, while that strike was
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going on, that another Question was tabled to my right hon. Friend the Prime Minister. In a supplementary question he was asked by the hon. Member for Down, North (Mr. Kilfedder) whether he would implement the recommendations in the Kilbrandon report to increase the number of seats to 17. The Prime Minister's answer was again very short and very much to the point. He said:
" I cannot give any such undertaking."—[Official Report. 19th March 1974; Vol. 870, c. 843.]
That executive was brought crashing to the ground by the actions of those very same gentlemen who are sitting in the House today. These were people openly in association with para-military organisations, which brought to an end an edict of this House, of the then Conservative Government. That power-sharing executive had the full support of all parliamentary parties in this House except the Ulster Unionists.
On 4th April 1974, a week after the downfall of the executive, my right hon. Friend the Secretary of State for Northern Ireland, who is now the Home Secretary, said this in answer to a question on the increase in the number of seats:
" I am well aware of the need to consider anything that will bring peace in Northern Ireland, but I ask the hon. Gentleman to bear in mind that Northern Ireland is not Scotland or Wales. It is a split society, and has been so split in social and cultural terms for a long time. Many people in Northern Ireland, whatever we may think about it, look to the South and not this country. The problem that we all face is to bring these two communities together. This is a fact of life that has shown itself in this House. To talk of increased representation in this House in that context is not facing up to the facts of life."
That was my right hon. Friend the Home Secretary. That is why he is not here this evening, and that is why the Bill is being taken at the Dispatch Box by my right hon. Friend the Secretary of State for Northern Ireland.
Later, in answer to a question from the Conservative Opposition whether the Government would increase the number of seats, my right hon. Friend said:
"I do not see any circumstances in which extra representation of Northern Ireland, with its history, would be a means of bringing the peace that we all want. It is facing up to the facts of the real problems of Northern Ireland that is needed. It is a fact that some people march with the flag of the South. In my view,

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if that is what they want to do, they are entitled to do it, however much one may disagree."
There was an intervention by an hon. Member who said:
" They do that in Birmingham."
My right hon. Friend went on to say:
" Yes, but for very different reasons. Northern Ireland is a split society. What we are engaged in doing is bringing the two parts of the population together."—[Official Report, 4th April 1974; Vol. 871, c. 1421-2.]
On 27th June 1974, a month after the downfall of the executive, the question was asked whether there would be an increase in the number of seats. My right hon. Friend the Minister of State, Northern Ireland Office, said in reply:
"I am sorry that I cannot meet the hon. Gentleman's point. I think that hon. Members will recognise that Northern Ireland is in a unique position. The Government feel that to increase representation now would be detrimental to the general political situation. The Government want Northern Ireland people of both communities to start resolving the problems in Northern Ireland themselves. We do not necessarily believe that they can be resolved on the Floor of this House."—[Official Report, 27th June 1974; Vol. 875, c. 1714]
That was the situation then and that is the situation today.
My next reference is one of which everyone in Northern Ireland will be well aware, and I should like hon. Members to take particular notice of the year, 1976, because it relates to the whole content of what I am about to say. On 12th January 1976, my right hon. Friend the then Secretary of State for Northern Ireland, now the Home Secretary, in the debate on the report concerning the constitutional convention, said this:
" The Government are aware of the strong views held by many on the question of parliamentary representation at Westminster. They are also aware that in the past 50 years some Members elected to the Westminster Parliament have not taken their seats—another reflection of a divided community. The Government do not feel able to recommend reexamination of the question of the number of Northern Ireland constituencies returning Members to the United Kingdom Parliament in advance"—
this is very important—
" of an agreement on a system of Government commanding the most widespread acceptance." —[Official Report, 12th January 1976; Vol. 903, c. 56.]
The reasons that my right hon. Friend was then giving were that, if the Government conceded that there should be further constituencies in Northern Ireland,
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it would make it less likely that the Unionist majority, who would perhaps capture practically all the five seats—at least four of the five—would then want to engage in discussions in any way with the minority in Northern Ireland, because it would have achieved its second option.
The Unionist Party wants something in Northern Ireland which it knows it cannot get. That is a return to Stormont, with all the powers that it had prior to its abolition in 1972 by the Conservative Government. It seems at the moment that no sane political party in Britain would agree to that demand. If the Northern Ireland Unionist majority does not get its first objective—a return to Stormont as it was—it will settle for a highly acceptable second option. That second option is an increase of Unionist Members at Westminster, who will then be able to blackmail whatever Government happen to be in power and to carry on with the blackmail until they get their second option, which is the return of power in Northern Ireland to the local authorities. That would be a return by the back door to Unionist ascendency.
Mr. Mellish: The old story.
Mr. Fitt: What have these past 10 years been about? Are we to return to that system under the Unionists? This was the attitude of the Government throughout those years. They did not want to increase representation in advance of an acceptable political solution being arrived at by Northern Ireland politicians in Northern Ireland. But suddenly things changed. My right hon. Friend the Home Secretary left the Northern Ireland Office and was replaced by the present Secretary of State. We then began to see changes. The first change which I noticed—and this is the reason for the change in attitudes—was that the Government began to suffer electoral reverses at by-elections. Throughout those years we had quite a number of by-elections. The one which I regard as very important in relation to my argument was the by-election in Woolwich, West which was brought about by the death of Bill Hamling. He was replaced by a Conservative, a replacement which eroded the Government's voting strength.
The next by-election took place on 4th November 1976 in Walsall, North and was caused by the resignation of

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John Stonehouse. He was replaced by a Conservative. The elevation to the peerage of my right hon. Friend the Member for Workington, as he then was, caused another by-election. He was replaced by a Conservative. Another by-election was caused as a result of the appointment in Europe of Roy Jenkins, and the constituency of Birmingham, Stechford returned a Conservative, too. There was then the by-election in Ash-field. The Labour Party lost that seat. This was followed by a by-election in Ilford, North, and the Conservative Party won that. It was at that time that a change took place in the Government's attitude.
With the honourable exception of my right hon. Friend the Member for Bermondsey (Mr. Mellish), there was a change in the attitude of Labour Party managers. They looked across the Floor of the House and saw at least five, six or seven hon. Members who have been lovingly referred to by the hon. Member for Down, North as"the gang of seven ". But the Labour Party managers did not see the"gang of seven"as right-wing Unionists, or as the men who brought to an end a structure of government in Northern Ireland which gave the best hope for the future of that part of Ireland for 50 years. The Labour Party managers were unconcerned about the past Right-wing activities of those hon. Members. They were thinking about preservation for themselves.
One could almost notice the glances which passed between the Government Bench and the Ulster Unionist Bench. As a result, an illicit, sordid, little relationship evolved between the Government and the"gang of seven"which enabled my right hon. Friend the Prime Minister to take a car down to Brighton and sing to the Trades Union Congress that he would not meet Maggie at the church because he had already come to a relationship with certain people and he no longer needed to meet the right hon. Lady.
Therefore, this Bill has nothing to do with equity, fairness or justice. It has nothing to do with principles. It has been brought to the House for sheer political expediency so that the Government can remain in power. Only last week my right hon. Friend the Minister of State, Northern Ireland Office and I, accom-
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panied by Opposition Members, debated the order dealing with the rehabilitation of offenders, which takes some steps towards rehabilitating prisoners who have been found out in criminal acts. I would refer to this Bill as the"Rehabilitation of Unionist MPs Bill ", because these were men who were involved in open conspiracy with all sorts of organisations.
My hon. Friends can remember very well the events which took place in 1974, and at least one hon. Member—the hon. Member for Antrim, North (Rev. Ian Paisley)—was doing exactly the same thing in 1976, when he was engaged in a strike, which was fortunately abortive, which tried to bring to an end the reign of the Secretary of State for Northern Ireland. One of the slogans which the strikers used was"Mason must go ". But, fortunately for the peace of Northern Ireland, that strike proved to be of no particular consequence.
We then had the setting up of Mr. Speaker's Conference. I knew well that I would be a member of Mr. Speaker's Conference. I allowed myself to become a member on the ground that it would be as well if I were in there watching what was going on rather than being told about it at second hand, particularly when I heard that the right hon. Member for Down, South (Mr. Powell) was a member, because he needs a lot of watching.
To say the least, I was sadly disappointed at the composition of Mr. Speaker's Conference. I notice many of my hon. Friends present this evening. There are my hon. Friends the Members for Kingston-upon-Hull. Central (Mr. McNamara), Feltham and Heston (Mr. Kerr), Sheffield, Hillsborough (Mr. Flannery) and Bolsover (Mr. Skinner). They have all been to Northern Ireland and know what has been happening in Northern Ireland. They are concerned about what has been happening. They ask questions about Northern Ireland. Yet not one was appointed to Mr. Speaker's Conference.
Mr. Dennis Canavan: Cooked.
Mr. Fitt: I accept what my hon. Friend says, and I am glad that he said it. Irrespective of the qualifications of those hon. Members who served on Mr. Speaker's Conference, I said to myself

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" I know what the result of this conference will be." I was not very wrong. The result was 22 to 1, which was exactly the outcome that I expected.
Why was it that my right hon. Friend the Member for Bermondsey, the former Chief Whip, who has consistently taken part in Northern Ireland debates and Northern Ireland Question Time, was not asked to take a place on Mr. Speaker's Conference?
Mr. Mellish: Because I support the minority view.
Mr. Fitt: Exactly. Because my right hon. Friend would have said things and voted in a way that would have been unpalatable to the Government.
Mr. Mellish: That is right.
Mr. Fitt: So we had the setting up of Mr. Speaker's Conference. That was a revelation. On the first day of that Conference we were told that lost of the meetings would be in secret so that this House and everyone else would not know what the discussions were about. I asked why it had to be in secret. I was quite prepared to let everyone in the United Kingdom or anywhere else know my attitude. I remember one hon. Member —I will not repeat his name—saying that he did not want this to go on the record because Members might be intimidated. But Northern Ireland Members are intimidated 24 hours a day. That just shows the air of unreality in that Speaker's Conference. Its members did not want to take any decision for fear of intimidation, yet Northern Ireland needs men of honesty and courage.
At Mr. Speaker's Conference we called, first, the Leader of the House. For many years I have had the utmost respect for my right hon. Friend, so I say with a great deal of sorrow that his responsibility for setting up the conference and putting his name to this Bill has caused me to be greatly disappointed.
I would have preferred that the document of evidence given by the Leader of the House to Mr. Speaker's Conference had been made available to every Member of the House. It was a piece of evidence which was made public on 30th November 1977. The right hon. and learned Member for Huntingdon (Sir D. Renton) asked the Leader of the House
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about the manner in which the Boundary Commission would set about its deliberations. He asked in question 117:
"you would agree that there should be no difficulty about the necessary legislation being introduced in this session of Parliament? "
He then went on in question 118:
" With respect, the question of the work of the Boundary Commission arises only after the necessary statute has been put on the Statute Book, is that not so? "
The Leader of the House replied"Yes, that is right."
Lo and behold, a few weeks later the Prime Minister came to the Dispatch Box and said that the Boundary Commission could begin its work right away before this Bill had become an Act of Parliament. I do not believe that the Boundary Commission should have been given the authority to look into 18 seats which may never come into being. There was no guarantee that this Bill would become an Act of Parliament.
We find in the evidence given by the Leader of the House that 12 seats were apportioned to Northern Ireland as a result of the 1914 Act. When the 1920 Act became law, it said that 30 seats would be given to the Irish Republic, then the Irish Free State—but these were never taken up—and 12 seats would be given to Northern Ireland—which were taken up—with the addition of one university seat.
I asked the Leader of the House whether he would agree that these seats came into being as part and parcel of an overall settlement of the Irish question and whether all sorts of things had to be considered in line with that. The Leader of the House agreed. I asked him if he would produce all the documents and papers relevant to the settlement at that time. He said that he could not. He did not know where they were—he thought they were lost. I wonder whether they ever existed and, if they did, what they said, because I believe that they would have been of the utmost importance in enabling us to take the right decision on this Bill tonight. They were part of the overall settlement.
I asked Mr. Justice Murray, then in charge of the Boundary Commission in Northern Ireland, what criteria should be used in the creation of the number of seats. I asked him whether it was possible to take account of tradition, religion

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and conscience, outside of the number of people involved. His quite clear and distinct answer was"No ". He said that that did not concern him. Therefore, he was not concerned about the real differences existing in Northern Ireland—the differences between the minority and the majority; the facts of history which determined that there should be a minority and a majority—the majority being Protestant and supporting the United Kingdom, and the minority being Catholic and aspiring to the eventual reunification of Ireland.
None of this could be discussed at the Conference. I was repeatedly told by the Leader of the House that the Chamber was the place to discuss these things. He said that these were matters for the House of Commons. But one cannot discuss all these matters on the Second Reading of a Bill of this importance. There are many hon. Members here who will want to make valid contributions to this debate.
The whole way in which this Bill has been engineered is unsatisfactory. I want to make certain that the Boundary Commission does not only count heads if and when it is given the responsibility of creating further constituencies in Northern Ireland.
The hon. Member for Abingdon (Mr. Neave), who opened for the Opposition, said that other geographic measures would be taken. My right hon. Friend the Secretary of State said that the whole of the Six-County geographic area would be taken into account in the creation of new constituencies. I do not accept that. The only basis for the creation of new constituencies is where the population justifies it. One does not bring wasteland into a constituency to make it a particular size.
These seats should be created where the population of Northern Ireland lives —in an area 30 miles around Belfast. People live there because there are more jobs and factories. I cannot see anyone wanting to increase the constituency of Fermanagh and South Tyrone, because the population there would not justify it. Therefore, I believe that these new seats will be taken up by the Unionists if and when they are created. The Secretary of State has said that he believes that the
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SDLP will get perhaps two or three of these seats.
Let me tell my right hon. Friend that even if the SDLP won all 17 seats it would not change the problems affecting Northern Ireland. It is not all about seats; it is about many other things in Northern Ireland. The way that the Bill has been introduced clearly comes down in support of one community rather than the other. That is why it will be a total disaster. [An HON. MEMBER:"There is a bomb in every line."] I hope that that is not true, but I cannot discount that possibility.
Many people in the minority community believe in a united Ireland and want to see progress in that direction, no matter how slow it may be. They want to see Ireland united by constitutional means and not by coercion or the campaign of murder being waged by the Provisional IRA. When those people see the humiliation that has been heaped upon me in the House, they are bound to wonder whether I have been right to try desperately to make politics work in Northern Ireland. I lead a party which has stood between the IRA and the Catholic population and has prevented that population from being forced into the ranks of the IRA. Our supporters will see the Bill as my recompense for loyal support of the Labour Party, not only in the past four years, but since 1966, and they will ask what they have got out of politics. They will wonder whether the other fellows are doing it the right way by using violence. That is the real tragedy of what the Bill will mean to Northern Ireland.
It is only a two-clause Bill, but every-line is riddled with dissension. It will polarise the communities and will create more difficulties. It will do nothing to further the stated aim of the Government and will become a focal point for even more dissension.
This was all pointed out clearly to Mr. Speaker's Conference. The party that I have the honour to lead said in its written submission:
" The original allocation of 12 seats to Northern Ireland in the Westminster Parliament was part of an overall settlement of the Irish problem in 1920 which involved the setting up of two Parliaments in Ireland with the ultimate objective of them finishing up as one. The basic approach has been repeated ever

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since by successive Westminster Parliaments. It would be both foolish and wrong, therefore, to consider Westminster representation in isolation from all the other aspects of the Northern Ireland problem. This is particularly true when all aspects of a settlement are at present under consideration…In terms of SDLP policy for future constitutional structures which emphasise the nature of both the British and Irish dimensions and which coincide with the stated policy of the British Government, endorsed by all parties at Westminster, any increase in representation at Westminster would undeniably tip the scales in one direction and seriously, if not totally, undermine the possibility of an acceptable solution. We are therefore implacably opposed to any increase in Wesminster representation."
If one believed the Secretary of State's argument that the SDLP would get some of the extra seats and the claim of Unionist Members and members of the Alliance Party and other political forces that SDLP members want only power and jobs, one would think that my party would be pushing for more representatives in the House. But the SDLP is not interested in personal gains or extra seats. It is interested in trying to bring the two communities in Northern Ireland together. Extra seats or personal aggrandisement are the last things it cares about.
In its submission to the Conference, the SDLP also said:
" The peculiar circumstances of Northern Ireland are well known to members of the Conference and need no elaboration. We would submit that the Conference would be better employed examining the method of election of the present representation at Westminster."
When the Conservative Government abolished Stormont in 1972, they established proportional representation for local elections and elections to the Assembly. Hon. Members on both sides of the House also supported the decision that the only fair way to ensure that the voice of the people of Northern Ireland was heard in Europe was to institute proportional representation for elections to the European Assembly.
It was proposed that three seats should be allocated to Northern Ireland. Unionist Members displayed their total arrogance by thinking that they could capture two of the seats and that the other would be taken by a non-Unionist—perhaps a member of the Alliance Party, but more likely by an SDLP member—and, when the Unionists decided that they could not win the third seat, they had the audacity, effrontery and cheek to table an amend-
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ment to the Bill proposing that the number of seats allocated to Northern Ireland should be reduced from three to two. They were willing to lose a seat for Northern Ireland rather than have it filled by a non-Unionist. That shows their supreme arrogance. The House rejected the amendment.
I support the proposal of the hon. Member for the Isle of Ely (Mr. Freud). I am opposed to any increase in the number of seats, but, if we are to have such an increase, I suggest that the system of PR should be used in the elections. I repeat what my right hon. Friend the Home Secretary said so often when he was Secretary of State for Northern Ireland: Northern Ireland is not Glasgow, Edinburgh or Cardiff. History has decided that Northern Ireland is different. It is part of the island of Ireland and is not on the land mass of Great Britain. There are 13,000 or 14,000 British troops in Northern Ireland and men were murdered today and yesterday because of the history of Northern Ireland. That does not happen in Glasgow, Birmingham or any other city in the United Kingdom. Northern Ireland cannot be treated like any other part of the United Kingdom. There are exceptional circumstances in Northern Ireland.
The Secretary of State said that he did not think that PR would be acceptable to hon. Members because of the traditions of the House. What a great argument! I have no hesitation in telling my right hon. Friend that I am not concerned with the traditions of the House. I am concerned with bringing peace to Northern Ireland and the traditions of the House mean nothing against that. I do not accept the Secretary of State's arguments for rejecting proportional representation.
I recognise that there are sincere and honestly held objections to PR in Britain. That statement is not the contradiction that some people may believe it to be. I know that many of my close political friends and colleagues on the Government Benches believe that PR in Britain would be disadvantageous to the Labour Party.
What I am about to say might seem to be a contradiction But if I were living in Scotland, Wales or England and a member of the Labour Party I should

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not support PR. Since 1974 I have seen the deals that have been done with the various parties. The ultimate in dirty little deals was that with members of the Unionist Party. That does not make for democracy. Different people have their own interpretation of that word.
I understand the reservations that are felt by many of my right hon. and hon. Friends about PR. I should probably support them if I represented an English, Welsh or Scottish constituency. But I do not. I represent a Northern Ireland constituency.
PR is so necessary because of the basis on which the Six Counties State first came into being. I suggest that hon. Members on both sides of the House go to the Library and read the report of the debate which took place on 13th March 1920. This contains a speech by Sir Edward Carson, who later became Lord Carson. He said that when the Government set out to create a State of Northern Ireland visits were made to every town, village and hamlet in the counties of Donegal, Cavan and Monaghan to see if it would be possible to govern the ancient Province of Ulster from Belfast. He said that it was found that there were 280,000 Catholics in those three counties and only 70,000 Protestants. He said that those poor people had to be sacrificed to the fortunes of a Dublin Government.
What a sad commentary that is on the creation of a State. Northern Ireland was set up on a Catholic and Protestant head count. That is why we have had violence and death in almost every decade since that State came into being.
That is why we cannot hope to have normal elections as we have in the rest of the United Kingdom. The majority that existed in 1920 is still the majority. The people who comprise that majority believe that they have full rights to absolute power, privilege and patronage in Northern Ireland. They believe that those who are opposed to them politically are second-class citizens.
That situation existed when the February 1974 elections took place two months after the power sharing executive was set up. The election was called for reasons of particular interest to he United Kingdom—namely, the miners'
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strike. That was not of everyday importance in Northern Ireland at that time.
In Northern Ireland the election was not about the wages and working conditions of miners. It was not about the three-day week or about Tory philosophy as opposed to Socialist philosophy. The election in Northern Ireland resolved round how to get rid of the executive because some members of that executive were from the minority community. That was just too much for certain people to take.
The election took place in a highly emotional and dangerous atmosphere when mass intimidation was taking place. Members of the UDA were seen on the streets. Neither the former Secretary of State for Northern Ireland, who is now Home Secretary, nor anyone else could travel the roads in Northern Ireland safely because of the road blocks and intimidation. I had to travel to his office by helicopter. Because of the atmosphere at that time, 51 per cent. of the electorate voted against the Sunningdale partners in that executive.
For 51 per cent. of the vote, 11 seats were gained. That was completely disproportionate and unrepresentative of the wishes of the people. I am the sole representative of my party in the House as a result of that election.
I try to use my words carefully. I have always hesitated to say this, but a label has been put on the SDLP. It is known as the"mainly Catholic"Socialist and Democratic Labour Party.
The mass of the people who support the party that I represent are in the minority in Northern Ireland. The Secretary of State knows that members of my party have friends and colleagues throughout Europe and the world. We have a Socialist commitment to the international Labour movement. In no circumstances have we acted as the spokesmen for the Catholic community rather than the Protestant majority.
I would not wish it to be thought that I speak as a nationalist. I speak as a Socialist who knows of the deep cultural divisions that have been created by centuries of Irish history.
I shall now try to analyse the effects of the Bill. It will cause great division. It will polarise the community. It will

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do nothing to help bring into operation community Government or acceptable political structures in Northern Ireland.
Some credit must be given to the right hon. Member for Down, South as a political figure. I do not blame him for the Bill. I blame the Government. I do not blame the right hon. Gentleman for providing leadership for the party with which he is associated. He has made his position clear. He does not want devolved Government in Northern Ireland. He does not want power sharing. He has been consistent in his opposition to that.
Indeed, within 48 hours of the convention failing, the right hon. Gentleman, who was in Belfast, using Cromwell's words said"For God's sake go." That was at a time when many of his colleagues were trying desperately to find agreement in the convention. The right hon. Gentleman has nothing to be ashamed of. I give him credit for his leadership. However, I am opposed to every single issue on which he stands.
The home-bred type of Unionist in Northern Ireland—unlike the right hon. Member for Down, South—wants Stormont back. The right hon. Member for Down, South does not. That is a contradiction. The Unionists cannot have Stormont, so they will settle for a second option—an increase in the number of Northern Ireland seats. They have been successful so far, but the Bill is not yet on the statute book.
The right hon. Member for Down, South made a speech on Friday evening which was reported in the press on Saturday. In his endearing nudge, nudge, wink, wink attitude, he said that local authority power would be back in the hands of the Northern Ireland people much sooner than anyone here thought. He said that there was to be a regional council in Northern Ireland and that local authority powers would be handed back to the Unionist majority.
Has the House any idea what effect that had on the anti-Unionist community? My phone never stopped ringing. All weekend people came to me and said"In the name of God, Gerry, what are the British Government thinking of?"That was the effect that it had.
Mr. Powell: The hon. Gentleman might be interested to know that the majority of
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the people who were listening to me in Warrenpoint were Roman Catholics and the majority probably were not Unionist voters. Not a single voice, question or objection to what I said was raised during one and a half hours of questions that followed my speech.
Mr. Fitt: The right hon. Gentleman must have mesmerised them just as a lot of people have been mesmerised by the right hon. Gentleman over recent years. The right hon. Gentleman has said repeatedly, and it has been said by his hon. Friend the Member for Antrim, South (Mr. Molyneaux), in the press and on television that when they went to Westminster, they had a shopping list. The first item on that shopping list was extra seats at Westminster. The right hon. Gentleman said that the second thing on the shopping list was the return of local government powers.
This shopping list has been granted to the Unionists by an allegedly Socialist and Labour Government. I can only say that any self-respecting shopkeeper who allowed these people on to his premises could not think much about it. It was not a shopping list that they had. I believe they were shoplifting. If they had come into my store, I would have had store detectives keeping a close eye on them.
By this Bill, we are increasing the number of seats. I predict they will be taken by Unionist representatives.
My right hon. Friend, the Member for Bermondsey was in the House in 1946. He will remember that every Unionist from Northern Ireland voted against the National Health Service. I have checked this in Hansard
Mr. Mellish: Of course. What my hon. Friend says about the Ulster Unionists is well known. Until we had civil rights disturbances and what has flowed from them, and until the arrival of the right hon. Member for Down, South (Mr. Powell), not a single decision was taken on which the Unionists (lid not automatically vote with the Tories. I do not know whether they took the Tory Whip. They might just as well have done so. There should be no doubt about that.
Mr. Fitt: My right hon. Friend will have an even clearer recollection of the 1964–66 Parliament when his party had a small majority of three. On each and

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every occasion, the Unionists voted against the Government. I am delighted also to see my hon. Friend for Manchester, Blackley (Mr. Rose), for the Unionists defeated a canal project in his constituency at that time. Unionist votes from Northern Ireland determined what was to happen on a local issue in Manchester at that time. That has been the pattern ever since this Government were elected in 1974.
It has given me great satisfaction, to support the Government, however small their majority, on all the Socialist proposals that they have brought forward, including the Aircraft and Shipbuilding Industries Act and the Dock Work Regulation Act and others, on which the Government were winning by one or two votes. On each and every occasion, the Unionists from Northern Ireland were voting against them.
Then the Government lost their majority. They find now that they have to enter into some form of discredited arrangement to try to keep themselves in power. If the Unionists get their way over this Bill, they will be in a position to engage in even greater blackmail, to the detriment of every trade unionist and working-class person in the United Kingdom. The Bill will have a long-term effect.
I should like to quote from an article in The Guardian of 22nd March 1977 written by Derek Brown, a very competent reporter, who was based in Northern Ireland at the time of a great number of incidents. He said in that article:
" What the Unionists are asking for and what they are perilously near achieving, if their own euphoric forecasts are to be believed, is the total reversal of Westminster policy on power sharing. They will not talk of marginal concessions like more troops, tougher security legislation or increased representation at Westminster. Instead, their aim is the acceptance in one form or another of the principle of restored majority rule in this divided Province."
The article goes on to say:
" They all mean the same thing—majority rule. And majority rule, however contrived or described, means continued and probably increased violence. Others, apart from the Unionists, would prosper. The Provisional IRA, for example, would have what justification it still needs for carrying on the fight against the oppressor, while the Army and the police would find further employment guaranteed."
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That is exactly what this Bill does. In passing legislation of this kind, we should have recourse to history to see what happened to Ireland in the past and to see if there are any lessons which we can learn. I suggest that there are many lessons. I would like the Government to take note of them before it is too late.
My hon. Friend the Member for West Lothian (Mr. Dalyell) is strongly opposed to devolution and has written a book on the subject. I believe that he had some very pertinent things to say. In a chapter in relation to Northern Ireland, when he tried to draw a parallel, or perhaps a distinction, he said:
" Speculating on the might-have-beens of history is seldom a very profitable business, but it is perfectly feasible to argue that politicians like Randolph Churchill who deliberately played the ' Orange Card' in order to frustrate Home Rule were indirectly responsible for the Easter Rising, the Irish Civil War and the eventual separation of Southern Ireland from the United Kingdom, and that had Home Rule been granted, the Republican cause might have died the death and a united Ireland would still form part of the United Kingdom."
I find it hard to disagree with that. I only add the proviso that the 1913 general strike in Ireland, the lock-out and the way that workers and trade unionists were treated by the employers in Dublin had no mean effect in leading to the rebellion that took place in 1916. That certainly was a factor.
In the same book, my hon. Friend, referring to the Leader of the House, said:
" Mr. Foot went on, ' If the Labour Government and the Labour Movement cannot bring the politics of persuasion to success, then very often what we condemn our people to is the politics of violence and force, as we can see across the Irish Channel '."
That was said by the Leader of the House. This legislation, for which my right hon. Friend was largely responsible, will have exactly that effect.
Early this month, at the SDLP annual conference, motion no. 70 was passed by 700 delegates, with two dissenting votes and one dissenting voice. It said that the SDLP regarded it as inevitable that the British must leave Ireland one day, that they should not leave overnight but should stay there and do all they could to bring the communities together and create political structures acceptable to everyone not only in Northern Ireland but in the island

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of Ireland and then leave, because Britain had no long-term future there.
That is right. It is nothing new in SDLP policy. From its very inception, I played a large part in drawing up the constitution of the SDLP. I can remember vividly making it clear that the party stood for the reunification of the island of Ireland—and not motivated by any hostility to the people of Britain. It is not necessary to hate Britain before one can love Ireland. Quite the reverse. I have many friends in the United Kingdom and I regard the British people as the most tolerant people on the face of God's earth. I know that many of my hon. Friends will agree that Ireland must one day be united—not by coercion but by consensus and by the will of the people of Northern Ireland.
Some people say that the Bill will have no effect. I say that it will have an effect. Although the SDLP is tenaciously sticking to its commitment and its ideal of a united Ireland, motion no. 70 would never have appeared on its agenda but for this Bill. We knew the recommendation of Mr. Speaker's Conference and we knew that with indecent haste the shotgun wedding between the Government and the Ulster Unionists had to be legalised. That is why the First Reading came immediately after the Queen's Speech, and the Bill is up for Second Reading today. That was the main reason for motion no. 70, which was carried almost unanimously.
The Secretary of State may say that we should gain some seats and should therefore be pleased. It is all a question of votes. Over the past four years, when the Government were liable to win or lose by a small majority, I was for ever being asked to vote and asked"Do you know, whether Frank Maguire is coming?"As soon as we knew that there was to be a close vote, the gentlemen of the press began to speculate on whether we would win or lose by one or two votes. The question always was"Is Gerry coming?"or,"Is Frank coming?"But then it became unnecessary for Gerry or Frank to come because the Lib-Lab pact was agreed; and when that had run its course, the deal was made with the Unionists.
It is all a question of votes. Does this House never learn? When the Irish Parliamentary Party was represented in this
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House, the then Prime Minister, Mr. Asquith, made a speech in the Albert Hall in which he claimed that he would have the support of the Irish nationalists when they came to Westminster. After the election, in the debate on the Queen's Speech, the leader of the Irish Parliamentary Party, John Redmond, sitting, I presume, on the Opposition side of the House, said:
" I rise to give expression to a point of view entirely different from that of the right hon. Gentleman who has just spoken. And perhaps it is as well that, at the earliest moment in the new Parliament, the fact should be emphasised that the Irish Nationalist Members, though they have been freely included in the calculations of the Government majority by the British Press, in reality stand, as they have always stood, apart and independent and allied to no British party, but prepared to accept what they consider to be good measures for Ireland from any British party in turn."
That was a question of votes. Prime Miniser Asquith was including the Irish Parliamentary Party in his calculation of the votes which would be necessary to get legislation through—just as my right hon. Friends are doing today. The only difference is that they are prepared to settle for a little less: they do not count votes, they count abstentions.
That is why it is difficult to understand how this Labour Government have allowed themselves to get into such a position. I was hoping that my right hon. Friend the Home Secretary would be here, but I was hoping even more that my right hon. Friend the Leader of the House would be here. It is freely rumoured and reported that it was the Leader of the House who arrived at the arrangement under which the Bill has been brought forward so speedily.
In 1953, the ex-Minister of Health, Nye Bevan, perhaps remembering how they had voted against the National Health Service Act, said of the Northern Ireland Members:
" When I consider the deplorable level of Parliamentary representation that Northern Ireland has in this House at the present time "—
I think that he was talking about quality rather than quantity—
" when I consider their meagre contribution to debates, their old-fashioned arguments and the extent to which they are obviously under the influence of vested interests in Northern Ireland, it seems to me that the time has come when we ourselves ought no longer to be oppressed by their presence and our legislative processes interfered with by their votes."—[Official Report, 6th July 1953; Vol. 517, c. 1018.]

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Nye Bevan was always one of my idols and I understand that he was a close friend, political colleague and confidant of the present Leader of the House.
When the Leader of the House was meeting the Unionists, did he stop for a second to think"What would Nye have done in these circumstances?" Would Nye have tolerated such a descent into the gutter? My right hon. Friend is also the biographer of Nye Bevan. I wonder—even yet, does he not have a twinge of conscience about the activities in which he has engaged to enable the Bill to come before us tonight?
It will take all the oratorical excellence and the gifted eloquence of my right hon. Friend to justify what he has done. At the end of the day he will have failed, because no socialist with a drop of red blood in his veins could or should have allowed himself to be part of a deal to bring this Bill to the House.
That is why I oppose the Bill. I intend to oppose it until it eventually leaves the House.
6.40 p.m.
Mr. James Molyneaux: I paid careful attention to what the hon. Member for Belfast, West (Mr. Fitt) said. Much of it sounded strangely familiar. The hon. Gentleman reminded me of a former colleague of ours from Northern Ireland who, when told that we had heard his speech before, confessed"Yes, I know, but I thought I should do it for the benefit of the new boys."
The one part of the hon. Gentleman's speech that puzzled me was that in which he appeared to blame the Government's by-election defeats on the Secretary of State for Northern Ireland. For the life of me, I could not work out whether he regarded the right hon. Gentleman as a greater liability to the Labour Government if he were here in Great Britain or in Northern Ireland. The hon. Gentleman said that there had been a campaign in Northern Ireland that"Mason must go ", but it seemed to me that when the right hon. Gentleman was appointed the hon. Gentleman had a rather different message—" Mason must not come."
The hon. Gentleman also reiterated his complaint that a majority exists in
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Northern Ireland. We have heard all the reasons why he finds that deplorable and objectionable. He has repeated this many times, but he always stops short of suggesting a remedy, because clearly tinkering with the electoral processes will not have the desired effect. One can only assume, therefore, that the hon. Gentleman has in his mind—or perhaps it is in the minds of some of his associates—a final solution about which we may hear one day.
It has been alleged by the hon. Gentleman, and in a rather more gentlemanly way by the Liberal spokesman, the hon. Member for Isle of Ely (Mr. Freud), that the Bill is the result of a pact. I hope to prove conclusively that no such pact was made. But I can assure all hon. Members present that if we ever do engage in a pact the results will be much more spectacular than those delivered by the Liberal Party. If anyone doubts that, let him look at what we have gained without a pact.
I am sure that we would all join in expressing appreciation of Mr. Speaker's chairmanship of his Conference, which produced the basis for the Bill. With his customary fairness, he ensured that the views of all interests were heard and carefully considered, and with his customary skill he guided us towards our various conclusions, by showing just that hint of impatience of which we are all conscious when in the Chamber a colleague discharges the fourth or fifth barrel of a supplementary question. Mr. Speaker was ably supported by the two joint secretaries to the conference, Mr. Chesterton and Mr. Willcox, who processed an enormous volume of literature and facts and figures to assist us in our deliberations during our eight meetings.
Today we are carrying forward a process initiated by the Prime Minister on 23rd March 1977. Contrary to certain colourful and unbalanced reports, some of which have been repeated in the House today, no mystery surrounds that decision. The Prime Minister's words are recorded in the Official Report. He said:
" irrespective of the way in which he "—
the right hon. Gentleman was referring to me—
"and his colleagues vote tonight, it is my intention, with the consent of my colleagues, to refer to a Speaker's Conference…the

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question of the representation of Northern Ireland.
The hon. Member for Antrim, South has made no bargain with me about that. I have no idea how he intends to vote, but I told him and I repeat here publicly what 1 intend to do." —[Official Report, 23rd March 1977; Vol. 928, c. 1304.]
A few minutes later I confirmed what the Prime Minister had said. My intervention is to be found at column 1305 of Hansard of 23rd March 1977.
Towards the end of the debate further confirmation came from the Lord President, who had been present at our talks. Like the Prime Minister, he reported to the House fully and openly on the talks, in which he had expressed the view that Northern Ireland was under-represented in the House, whether or not an acceptable devolution for the Province was achieved. Both the Prime Minister and the Lord President indicated that they would seek the agreement and consent of the parties to what the Government proposed.
Here I wish to express our appreciation of the prompt response from all parties in Great Britain represented in this House, which enabled the Conference to be established and to begin its deliberations. It would be remiss of me to fail to record my own party's gratitude to the members of the three main parties who served on the Conference. We were greatly struck by the diligent attention given to the vast quantity of documents that required detailed study by right hon. and hon. Members and undoubtedly made great demands on their time at a period when their other commitments were very heavy.
Those whom we represent would also wish us to express our gratitude to the Leader of the Opposition and those of her colleagues who have consistently advocated the granting of equal representation in Parliament to our part of the United Kingdom. There is for us and for the people of Northern Ireland great significance in the fact that the legislation before us is being introduced by a Labour Government with the full support of a Conservative Opposition, and backed in principle by every other party in Great Britain. This consensus indicates that the Bill and the principle that underlies it transcend mere party political considerations.
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For that reason, we all have a duty in this debate to remove certain misunderstandings. First, it has been suggested that the granting of equal representation is somehow related to the prospects of restoring some form of devolved government to Northern Ireland. The Lord President on 23rd March 1977 supplied the answer. He said:
" My right hon. Friend "—
he was referring to the Prime Minister—
" and I have on a number of occasions made clear that we accept that Northern Ireland is under-represented in this House, whether some acceptable devolution settlement for the Province is achieved or not."—[Official Report, 23rd March 1977; Vol. 928, c. 1404.]
It has been said that acceptance of the principle of equality would in some curious way lessen the desire for local, elected control over everyday affairs in Northern Ireland. But why should Northern Ireland attitudes be so very different from those in Scotland, where overrepresentation in Parliament has in no way diminished the desire for Scottish control over Scottish affairs?
In Northern Ireland the leader of my own party, Mr. West, is currently engaged in exchanges with the Secretary of State for Northern Ireland in a genuine attempt to establish some form of elected regional authority, which, in the Secretary of State's words,
" can take responsibility for the great majority of those matters which affect the daily lives of the people who live there ".
On behalf of my right hon. and hon. Friends I supported that aim in the House as recently as 9th November this year. Far from discouraging that movement towards devolution, today's recognition of equal status will encourage Ulster people, as distinct from certain political figures, to redouble their efforts to obtain British standards of democracy in all other respects.
The House will have noticed that today's business has been referred to in other places somewhat loosely as a Bill to provide extra seats for Northern Ireland. That is not so. It is not the object of the Bill. For that reason, I have been careful at all times, today and on other occasions, to use the term"equal representation ".
The Prime Minister and the Lord President of the Council proposed to remedy the under-representation of Northern

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Ireland, and the same formula has been placed on the record on many occasions by the official Opposition. The spokesman for the Liberal Party, the hon. Member for Isle of Ely, said in this House on 30th June 1977:
" There seems to be no political party that would not like the people of Ulster more constructively, more properly and more equitably represented in this House."—[Official Report, 30th June 1977; Vol. 934, c. 700.]
I am very well aware—we have heard it repeated here today—that the Liberal Party would favour a system of proportional representation, not just for Northern Ireland but for the United Kingdom as a whole. Perhaps I might point out that, even if one accepted the objectives at which Liberals were aiming, there would be no advantage, no reason and no sense in having proportional representation for Northern Ireland alone to supply representatives to this House where the decisions are taken by 635 hon. Members, excluding Mr. Speaker, you, Mr. Deputy Speaker, and your colleagues. For that reason, I am afraid that it must be for the United Kingdom as a whole or nothing.
I can well understand the reasoning of the Liberal Party. However, our experience of PR in Northern Ireland for local government, for example, shows that, although undoubtedly it spreads representation over a whole collection of parties, it does not alter the balance between the major parties on each side of the Unionist-Republican divide. The only effect of PR has been the continuing fragmentation of the main blocs. The hon. Member for Belfast, West, in a slip of the tongue, conceded that. He said that some of the new seats might be represented by his party or some other party on his side of the fence, so that quite clearly he sees what PR is leading to and what the outcome will be. This continuing fragmentation of both the main blocs in Northern Ireland has been the greatest single cause of failure so far to make progress or even to take the first steps towards devolution.
Some years ago, the SDLP, led by the hon. Member for Belfast, West, used the slogan in an election,"One Strong Voice ". But the application of PR in the interval which has elapsed has already weakened that strong voice on his side as
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well as on ours. It has hampered greatly the efforts of the Secretary of State in trying to assess opinion or even to discover precisely what is in the minds of the various elements in the Northern Ireland community.
In any case, although some people may feel justified in arguing for PR for 12 very large constituencies such as we have at the moment, that proposition is demolished utterly when we come to consider 17 or 18 seats, because the logic is that a greater number naturally will improve the opportunities for more accurate representation.
There is no denying that attitudes have changed greatly since the days when the present Home Secretary was Secretary of State for Northern Ireland. One of the changes is the greater desire, which cuts right across the old dividing lines, to be represented fully and equally in this House which is now recognised as the place where decisions are taken and laws are made. It is in this much more fluid situation that Her Majesty's Government have been able, and perhaps have been persuaded, to meet the reasonable demand for equal representation in the Parliament which represents the whole of the Kingdom.
I may perhaps do the House a service if I deal with the proposed number of seats. The evidence laid before Mr. Speaker's Conference showed that the effect of using Great Britain quotas as a guide to the number of seats in Northern Ireland would result as follows: parity with England would give us 16 seats; with Wales, 18 seats; with Scotland, 19 seats; and with the whole of Great Britain, 16 seats.
I have said already that our claim has always been equal and not extra representation. That is the answer to the allegation made by the hon. Member for Belfast, West about my party's attitude when it came to the seats for the European Parliament. We never said that we wanted extra or unfair representation. By common consent—it was admitted even by the Government of the Irish Republic —Northern Ireland's quota would have been two seats. The fact that artificially we were being offered three seats tended to arouse suspicion and would have left us open—and still does—to the charge of having accepted extra representation.

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I can remember my right hon. Friend the Member for Down, South (Mr. Powell), many years before he became a Northern Ireland Member, saying again and again consistently that what we wanted and what this House ought to give to Northern Ireland was equal representation—no more and no less. That remains the policy of the party for which I speak. I do not think that I am breaching any privilege if I say that the Conference came almost unanimously to the same conclusion.
I suppose that the over-representation of Scotland could be defended on the ground that the largest Scottish constituency is rather more than three times the area of the largest Northern Ireland constituency. Perhaps Wales rather more closely resembles Northern Ireland in area, density and remoteness. The figure of 18 seats for Northern Ireland is in any case likely to be regarded as the most convenient when the independent Boundary Commission appointed by this House begins to put together the district council areas or in some cases perhaps the electoral areas to produce sensible and workable constituencies.
It is a great cause for satisfaction that the Bill has attracted the general support of the major parties and of all reasonable people in this House. Constitutional developments are much more enduring in their effect and much more stabilising when they are backed by general agreement. My party gives its support to the Bill confident that in the future those hon. Members who will represent Northern Ireland can be relied upon to think and act constructively and, together with their colleagues from the three other parts of the Kingdom, to make their contribution to the better government of Ulster and of the nation to which we all belong.
6.58 p.m.
Mr. Robert Mellish: The House will be delighted to know that I propose to speak for only a short time. We have listened to some very long speeches, and I know that many right hon. and hon. Members wish to contribute to the debate.
I declare at once that it is with regret that I speak in the way that I intend to do to my right hon. and hon. Friends. My record in this House is fairly well
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known. I suppose that loyalty to my party has been of paramount importance to me. Perhaps that is one of the reasons why I was given the job of Chief Whip. I always saw that job as making sure that people voted loyally for the party which they had been elected to represent.
However, Ireland and matters concerning Ireland are for me matters of great conscience. I make no apologies for that. I hold my views as sincerely as any hon. Member on the Opposition Benches. I was brought up to believe and have always believed that the early settlement of 1920 was a scandal and a disgrace. When one considers what happened following that settlement in the Province of Northern Ireland to those who made up the minorities, one appreciates that the story is one of shame and disgust.
I have had eaten into my soul the injustice with which politicians gerrymandered and, having done so, made sure that certain elements in the North were allowed hardly to express a view until, eventually and inevitably, in 1968 we saw the growth of the civil rights movement and the riots and then the whole thing blew up in one huge bomb.
Since then, one has felt sick and sorry, and never at any time have I admired or attempted to justify the appalling brutality committed in the name of those who hold the same views as I do. Those responsible are nothing but thugs and murderers. They have destroyed many of the ideals that I hold. The same applies to supporters of the opposite view. They are also thugs and murderers, and have done equal damage.
The House should understand that it is in that context that we talk about the Bill. I understand the approach of the hon. Member for Antrim, South (Mr. Molyneaux), but I found the speech by my right hon. Friend the Secretary of State for Northern Ireland almost contemptuous. He sounded as though he were talking about Scotland, Wales and England. He made the kind of speech that Ministers make when introducing Boundary Commission reports.
This debate is about Northern Ireland. We are talking about a situation from which the past cannot be eradicated. The minority in Northen Ireland have been and will continually be denied

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rights. Willy-nilly in what we are doing today we are in fact perpetuating what I have always regarded as an evil. We are proposing to increase Northern Ireland's representation in this House, but, whether we like it or not, the fight will depend on the question whether one is a Catholic or a Protestant. Elections in Northern Ireland are fought not on economic policies, what is best, whether one should go Left, Right or Fascist, but on whether people are Catholics or Protestants. That is an insult.
I must be as right today as I have ever been. The day must come when there will be a united nation in Ireland, both South and North, and elections will be fought on economic arguments and on whether one should vote Right, Left or Centre.
My right hon. Friend, with a certain amount of smugness and meekness, introduced the Bill as being in the same category as a Bill for Scotland or England. I am not taking that from him. My instinct tells me that my hon. Friend the Member for Belfast, West (Mr. Fitt) was nearer to the ball. I am not suggesting that a deal has been done, in the sense of a written concordat. However, this must have activated the Government to ensure that they are able to carry on in the months ahead. I understand the manoeuvrings of Government—I was part of them for years—but I would never stoop to that. However, that could be the only justification for the grave injustice of Ulster suddenly appearing on the Government Front Bench. All the sadness, the irregularities and the under-representation almost brought us to tears. It was portrayed as a tragic situation. We all felt so sorry. But it is rubbish, and we all know it. There is no sincerity.
The Conservative Party is in great difficulty, too. The record of the Ulster Unionists is famous. My hon. Friend the Member for Belfast, West asked a relevant question. Up to 1968 the Ulster Unionists mingled and intermixed with the Conservatives. That was evident when the Labour Party was in Opposition for 13 years. After all, it was the Conservative and Unionist Party. It was all one and the same, and I always understood that. Whenever anything was promoted by the Labour Party in Opposition or by the Labour Govern-
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ment, the Ulster Unionists automatically voted with the Conservatives. I am not suggesting any wrong motives.
I think that I did a grave injustice to the hon. Member for Abingdon (Mr. Neave) last time I spoke, but I shall not do so this time. The hon. Gentleman's record is very good, The Conservative Party must support the Bill. I know that we shall be smashed in the Lobby tonight. I know that we shall also be defeated in Committee—which must be on the Floor of the House because this is a constitutional Bill—and the Government will win. They will also get their Third Reading. They will then just have to keep their fingers crossed and hope for continued support from the Ulster Unionists in the months ahead in order to stay in office until my right hon. Friend the Prime Minister wisely and sensibly decides to go to the electorate. That is what the Bill is about.
I cannot vote for the Bill. I shall go into the Lobby and vote against it. My principles and loyalties, not only to the Labour Party but to the people who are associated with me, will not allow me to support and perpetuate a system that was started in 1920, with the representation of the Ulster Unionists. I never wanted them, I do not want them now, and I live for the day when they are out of this House for ever.
7.5 p.m.
Rev. Ian Paisley: I am glad of the opportunity to speak on behalf of the Protestant people of Northern Ireland, who have been severely maligned in this debate.
I wish to take up two points immediately. First, the former Chief Whip of the Labour Party, the right hon. Member for Bermondsey (Mr. Mellish) talked about injustice and discrimination going on now against the Roman Catholic minority in Ulster. The Labour Government are ruling Northern Ireland. There is no Unionist of any kind in the Government of Northern Ireland. The Unionists have no say in any decision that is made in Northern Ireland. In 1972 the government of Northern Ireland passed to this House. If there is discrimination against Roman Catholics in Northern Ireland, the guilt is on this House. If there are acts of violence against the Roman Catholic minority, it is the responsibility of this

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House to put them right. No Ulster Unionist has at any stage had any say in the government of Northern Ireland since 1972.
Mr. Mellish: I did not suggest that this had suddenly arisen since 1972. In fact, I thought that I said the opposite. I said that from 1920 onwards, with the power of the Ulster Unionists, the oppression of the Roman Catholics was there for the world to see and none could deny it. However, I admitted that in 1968, because of the civil rights demonstrations, there was a change. There was another change when the right hon. Member for Down, South (Mr. Powell) joined the United Ulster Unionists. But the fact was that the United Ulster Unionist Party was there for the world to see.
Rev. Ian Paisley: When the right hon. Gentleman reads his speech he will find that he spoke in the present tense. He was talking about today. I want to make it clear that if that kind of thing is going on in Northern Ireland, the guilt lies upon the Governments of either the Conservative Party who abolished Northern Ireland's Parliament or of the Labour Party to which the right hon. Gentleman belongs. That should be made perfectly clear.
The right hon. Gentleman is longing for a united Ireland. But what happened to the Protestant minority in the South of Ireland? To where have they been driven? When the border was established, between 7 per cent. and 8 per cent. of the population of Southern Ireland were Protestants. Now the figure is about 2½ per cent. The Roman Catholic population in Northern Ireland is increasing. We are often told about the increase in the Roman Catholic population. But the Protestant population is being driven out of the South of Ireland.
I do not propose to talk at any length about legislation that affects the life of the individual in the Irish Republic, but legislation on the statute book there goes into family relationships. Such legislation is ruled by the hierarchy of the Roman Catholic Church. Nor do I propose to deal with marriage, contraceptives or divorce. However, these are facts which we must face.
Those who oppose the Bill have not replied to the statistical argument for
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equal representation. I do not believe that the Bill will give equal representation, but the argument for an increase in representation has not been answered or refuted, because the facts declare that if we are to do justice to Ulster and say that it is part of the United Kingdom, we must give rights equal to those in the rest of the United Kingdom.
What are the facts? In England it takes 66,434 electors to send one Member to this House. In Wales, it takes 57,362 electors to send one Member to this House. In Scotland it takes 53,649 electors to send one Member to this House. In Northern Ireland it takes 86,142 electors. Those 86,142 electors carry the same financial responsibility, pay the same taxes, and shoulder the same responsibilities as electors in any other part of the United Kingdom. Therefore, there can be no argument by anyone who believes in elementary rights, if we are talking about the rights of the people.
We have very often heard in this House, from both Front Benches, that Ulster is a part of the United Kingdom. In a debate such as this we may be reckoned to be part of the United Kingdom, but we certainly are not reckoned to stand on a plane of equality, and it is evident that Ulster has to be rated in a different manner.
The Secretary of State for Northern Ireland, when introducing this Bill, mentioned the special circumstances of Northern Ireland. He said that we needed proportional representation for local elections in Northern Ireland because of the special circumstances; we needed proportional representation for the Assembly and Convention elections; we needed proportional representation for the European Assembly; but we do not need PR for Westminster.
I can well understand the righteous ire of those on the Labour Benches, because if one is going to follow the logic of the argument one has to say that one should have PR, for it is a special circumstance in Northern Ireland. I do not go with that argument. 1 do not agree that there are any special circumstances whatsoever in Northern Ireland in regard to the strength of the electorate to return representatives to this House, or to local authorities, or to a local parliament in Northern Ireland.

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We should remember that the first Stormont Parliament was elected on proportional representation. There was no difference, numerically, between those who were returned by PR and those who were returned through a first-past-the-post system. If one studies PR elections in Northern Ireland, one finds that in most cases those who come at the top of the poll under PR are usually elected—though not in all cases.
There is no doubt about that at all. Therefore, the suggestion that PR is some kind of ointment that will cure the running cancerous sore of Northern Ireland is nonsense. Even the present Prime Minister of Ireland, when he was talking with the Prime Minister of this country recently, said that he wanted to abolish PR. In fact, he went to the Southern electorate on a referendum trying to abolish PR.
We find that the system of PR is not, therefore, a system that will make any real change. The question of the special circumstances in Northern Ireland is always mentioned. I know what is meant by the phrase"special circumstances ". The special circumstances are that there is a majority of people who do not want to go into a united Ireland. If the majority was the other way there would be no discussion in this House, the border would be abolished immediately, and there would be a united Ireland.
I have heard from the Labour Benches and from the Liberal Bench loud, strong cries for majority rule in Rhodesia. When it comes to Northern Ireland, these same people, arguing a special case, tell us that there should not be majority rule. Their objective seems to be to prevent the wishes and aspirations of the majority of people in Ulster being realised.
The hon. Member for Belfast, West (Mr. Fitt), in a very lengthy speech in which he careered over the past, the present and the future, told us about the bringing down of the executive. In this House I asked the then Secretary of State for Northern Ireland if he would submit the executive to the ballot box and he said"Never ". That executive, he said, would be in power for four years and there would be no elections. It was the election in February of that year which brought down the executive. It was the ballot box that brought down the executive. When this Parliament refused to
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listen to the ballot box, something happened. That was what brought the British Government to their senses. They realised that they could not foist a minority Government on the people of Northern Ireland.
I was at Stormont on the day when the executive took its place. I counted 44 armoured cars parked in Stormont grounds. That was a show of British might well in keeping with the worst type of colonialism—" We will make you take this Government." No one will make the people of Northern Ireland take any Government which a Westminster Government undemocratically foist upon them. They will not surrender their heritage by dictation which is not based upon the ballot box.
The answer to the problem of Northern Ireland is simple. Let the politicians say"All right, let us put it to the vote." Why is there no talk about a referendum for Northern Ireland? Scotland is to have a devolved Government and must have a certain percentage of votes if it is to have the Act which has been before this House for a long time. Wales will have the same. What about the people of Northern Ireland? Are they not going to be allowed to decide, by a referendum, what sort of devolved Government they would like?
I make it clear that I would prefer a devolved Government in Northern Ireland to any increase in representation in this House. It would not worry me if there were a reduction in the number of Members representing Northern Ireland constituencies, if we had a properly devolved Government in Northern Ireland. But, in justice, no one can argue against this case because the facts and the statistics are there to be seen.
One has only to compare some constituencies. There is the constituency of Newcastle, Central. Though not as large as a Northern Ireland constituency for Stormont, it can get a Member elected to this House with about 23,000 votes, whereas the Leader of the Ulster Unionists, the hon. Member for Antrim, South (Mr. Molyneaux) has 125,000 electors, and my own constituency has 103,000. Yet Newcastle, with an electorate of 23,000—a seat the same size as a seat in the old Stormont Parliament—can return a Member.

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One has only to look through the figures. I went into the Library to see how many constituences have fewer than 30,000 electors. There are quite a number. There is Glasgow, Central with 20,000; Western Isles, with 22,000; Orkney and Shetland, with 28,000; Caithness and Sutherland, with 29,000; Glasgow, Govan, with 26,000, and so on. I could go on.
Let us now consider the constituencies in Northern Ireland. Armagh has nearly 94,000 electors. Fermanagh and South Tyrone—the hon. Member for which constituency occasionally comes to this House, and does not stay long when he is here—has 72,000 electors. Londonderry has nearly 95,000 and Mid-Ulster has 81,000. My own constituency has almost 103,000, according to the latest list that has been prepared: South Antrim has almost 126,000; Down, North has 98,000 and Down, South, 89,000; Belfast, East has 76,000; Belfast, North has 66,000; and Belfast, South has 70,000. The hon. Member for Belfast, West, who made a long speech, has the smallest constituency, of 59,000.
However, with all due respect to the right hon. Member for Bermondsey, a former Labour Chief Whip, it should be noted that the Roman Catholic-dominated constituencies are the smallest ones. The Protestant constituencies are the largest. One has only to look at Fermanagh and South Tyrone and at Belfast, West, with electorates of 72,000 and 59,000, respectively, to see that the other constituencies are very large indeed. There is, therefore, a case for extra representation in this House, and that case has not been answered.
The population in Northern Ireland is increasing more rapidly than it is increasing on this side of the water. The electoral lists show that. Is there no time when this House will, on the ground of population rise, do justice to the people of Northern Ireland? They are not asking their representatives to put on a sob story here and say"Please give us our rights." If the House does not want to give Ulster her rights, let it keep these extra seats. We are not here to beg, or to congratulate people on doing something that is a basic act of justice.
Let us consider the Speaker's Conference. It did not represent the opinion on the Northern Ireland Benches in
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regard to Northern Ireland. Two official Unionists were appointed to the Conference. There were other strands of Unionism at that time, sitting on these Benches, including my hon. Friend the Member for Mid-Ulster (Mr. Dunlop), myself, the right hon. Member for Belfast, East (Mr. Craig), who then represented the Vanguard Party, and the hon. Member for Down, North (Mr. Kilfedder), who is not associated in this House with the Parliamentary Unionist Party.
Surely, if the Speaker's Conference had an eye on getting full representation from the Northern Ireland Benches it should have had another strand to put the other side of the Unionist coin. But that was not done. Was that also part of what we have been hearing tonight about a deal done between the Government and the official Unionists, when there were two official Unionists and one representative, and the four other Members of Parliament had no votes whatsoever?
I think that there was a reason for that. The only recently elected body in Northern Ireland for the whole of Northern Ireland was the Convention. The Convention had something to say about this matter. In its terms of reference it was asked to comment on this matter, and so it did. In the report of the Convention, on page 11, we find a whole paragraph concerning representation at Westminster. Here we read that
" The UUUC, UPNI and NILP argued strongly for an increase in Northern Ireland's representation at Westminster ".
I understand that the Northern Ireland Labour Party has friendly relations with the British Labour Party and sends fraternal delegates to its conferences, so the Northern Ireland Labour Party was arguing for this as well. The report also says that
" the Alliance Party was also prepared to give active support to this ".
The reasons that were put forward by the Convention were as follows:
"Northern Ireland, as an integral part of the United Kingdom, ought to be represented in the United Kingdom Parliament on a basis and scale similar to that used to determine the representation of comparable parts of the Kingdom".
That is a reasonable argument, which cannot be gainsaid. Secondly,
" Northern Ireland is taxed on the same basis as the rest of the country and therefore the

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power of Parliament to tax must be balanced by the right to representation ".
We come to the question of taxation without representation. We know what happened in the American colonies when that situation came to a head. We know all about the Boston Tea Party and the other drinks that were forced down the British throats because they would not settle for this basic elementary right.
The next reasons were as follows:
" The allocation of United Kingdom funds, including those spent in Northern Ireland, is determined by the Parliament at Westminster. Parliament legislates for Northern Ireland Devolved Government in other parts of the United Kingdom is held by Her Majesty's Government to be fully consistent with parity of representation in the United Kingdom Parliament."
It was made clear by the Leader of the House that even when Scotland got its devolved Assembly there would be no reduction in the number of Scottish Members in this House.
These were the arguments that were put by the Convention, which was the last elected body in Northern Ireland—elected, incidentally, under the PR system, which seems to give it a greater credibility. The report stated:
" Accordingly, this Convention concludes that the number of Northern Ireland Members of Parliament at Westminster should be increased to between 20 and 24, the boundaries and exact number of the constituencies to be determined by judicial commission on a basis and scale similar to comparable parts of the United Kingdom."
What is more, at the last election, all those who took the endorsement of the UUUC at the time had this on their election address:
" We are determined to obtain equality with other parts of the United Kingdom in parliamentary representation. We should have 21 Members of Parliament if we are going to be treated the way Scotland is."
Here we have a firm commitment, yet that side of the Unionist coin was not available at the Speaker's Conference, which did not hear the views of people who held that to have equal representation we would need more than the seats that are promised and have now been agreed.
I have read carefully the background paper that has been prepared by the Library. There is some very interesting material in it. It points out that there is
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no published record of the Conference's deliberations. We do not know whether the argument was ever put from the point of view of the Convention, but the paper goes on to say:
"However, the Conference clearly put aside what one may call the historical argument for compensation, and also the demands for equality with Scotland, principally argued on grounds of Northern Ireland's similarity to Scotland in remoteness from Westminster, cultural and ethnic differences and so on."
Therefore, we have the Speaker's Conference meeting to discuss whether Northern Ireland should have more Members of Parliament and deciding that it should have more, and then we come to the question of the number. With respect to the hon. Member for Antrim, South, the number is not comparable with representation from the whole United Kingdom taken together, according to the Library document; it is comparable only with representation from England.
According to the background document —not according to what I say, but according to the document—the number of seats now offered in the Bill is not in keeping with those for the whole of the United Kingdom but is comparable only with those for England. Yet we in Northern Ireland have remoteness. We have a large population, which is underrepresented. At present its Members of Parliament have to do the work of local authorities. The whole of the work of the Ministry of the Environment, which takes in those responsibilities which are under local government here, rests upon the Members of Parliament.
What is more, the arguments that were put to the Convention are also listed. I can well understand the hon. Member for Belfast, West making all the quotations that he did, because when the Convention's report was presented, the then Secretary of State—now the Home Secretary—said:
" The Government are aware of the strong views held by many on the question of parliamentary representation at Westminster. They are also aware that in the past 50 years some Members elected to the Westminster Parliament have not taken their seats."
That has nothing to do with it. If a part of the electorate in Northern Ireland elects men who do not want to come here, that is their business. If those men present themselves to the electorate and the electorate say"We return you "—and

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that happened in both Mid-Ulster and South Tyrone on two occasions, when people stood as abstentionists and won through an abstention—that has nothing to do with the question whether they should be here. If they do not want to come, that is their business. But the Government
" do not feel able to recommend re-examination of the question of the number "—
they are not even prepared to re-examine it—
" of Northern Ireland constituencies returning Members to the United Kingdom Parliament in advance of an agreement on a system of government commanding the most widespread acceptance."—[Official Report, 12th January 1976; Vol. 903, c. 56.]
Today the Secretary of State committed himself to an impossibility. If that is his task, I can tell him now that he will never accomplish it. If anyone in this House thinks that it will be accomplished, he can sit here until he rots; it never will be accomplished in Northern Ireland. The right hon. Gentleman said that the Government will secure a form of government that will be acceptable to the majority of both sides in the community. That is an impossibility, because it is nonsense to suppose that one can reconcile the irreconcilable.
The hon. Member for Belfast, West told us that his aim is to get the British out. Who are the British that he wants to get out? The people of Northern Ireland claim to be British. I claim to be a British subject. I am not like the hon. Member for Belfast, West. I carry a British passport. He carries a passport of the Republic of Ireland. No wonder the people of the Province were incensed at the executive.
I was a member of a deputation from the Assembly to the Parliaments of Belgium and the Netherlands. When we boarded the plane, the two SDLP Members went not through the United Kingdom passport control but through the other control, presenting Republic of Ireland passports. Yet these men claimed to be Ministers of the Crown and demanded the right to be in the Government. Even so, they did not have the decency to travel on the passport of the country for which they claimed to hold ministerial office.
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These factors cannot be reconciled. The majority of the people who want the British out of Northern Ireland also want the Protestants out. They want everyone out except themselves. It is not the 16,000 troops who stand between the SDLP and its goal. Neither is it the Royal Ulster Constabulary, the RUC Reserve, or the UDR. The obstacle for the SDLP is the determination of the majority of the people not to go into a united Ireland.
This House can browbeat that majority and change the electoral system. It can tell itself that that majority will be war-weary. But I can tell this House that the determination of the Ulster Protestant people is as strong as ever. If the Secretary of State thinks that he will reconcile the irreconcilable and that he will produce a system that will win the support of a majority for a minority that wants to break away from this country, he has ahead of him a long and fruitless task.
Mr. Paul B. Rose: The hon. Member for Antrim, North (Rev. Ian Paisley) talked about reconciling the irreconcilable. How does he reconcile his alleged loyalty to this House with his threats of disloyalty to any decision of the House with which he may disagree? Is he aware that no one in this House wishes to force the majority or any others in Northern Ireland into accepting a status against their will?
Rev. Ian Paisley: I have no loyalty to this House. My loyalty is to the Queen. That is expressed in the oath that I took when I became a Member of this House. I have no loyalty to the Secretary of State, or to a Labour or Conservative Prime Minister.
Let me take the hon. Member up on one other matter. Is there no effort to try to push the majority in Northern Ireland into a situation that they have rejected? What does the hon. Member think about the Sunningdale agreement, which, according to Mr. Ivan Cooper, the SDLP claimed was the way to trundle the reluctant majority into a united Ireland? How could one say that 22 per cent. of the electorate must have 40 per cent. of the seats in the Government of Northern Ireland? That is what the executive represented.

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The Secretary of State will not reconcile the irreconcilable. If that is his proposition, so be it. There may be friendly talks. We have all talked to him before, and we have made statements. We have told him that the statement that we have presented has been endorsed by the electorate and that there can be no going back on it. Is the hon. Member for Antrim, South saying that we are now to go for a regional council, or something like that? I have not heard that proposition, and I shall be most interested on Friday to hear the new proposals as they were outlined in the speech by the right hon. Member for Down, South at Warrenpoint—at a meeting he says that was attended by many of the hon. Member's Roman Catholic constituents. I am sorry that I was not there to take part in that most interesting meeting.
The issue before the House, therefore, is whether we do justice to the people of Northern Ireland. The Bill does not do justice in terms of securing equal representation. We are not getting equal representation. We are getting representation comparable with that of England. That is the background of the document which has been presented to us by the Library.
Furthermore, we do not have comparable representation with Scotland and Wales, as we should have. The people of Northern Ireland, through an election based on proportional representation to the Convention, made a recommendation to the House.
The document shows that many people made representations. The Ulster Liberal Party, of which we never hear in Northern Ireland, did so. I do not think that that party has even one councillor in the Province. Nevertheless, it made a long representation, with deep mathematical implications. There was then a submission from the party that I lead. That was in keeping with the Convention report and with the views that I express today. The Grand Lodge of Scotland made a submission, as did the Vanguard Unionist Party, which, before its demise, was led by the right hon. Member for Belfast, East (Mr. Craig). That party asked for 30 seats. There is a big difference between what Vanguard wanted and the five or six seats provided by the Bill.
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The people of Northern Ireland feel that if the House meant to do them justice and give them equality of representation it would be providing a figure nearer to that suggested by the Convention report.
I agree with the principle of the Bill and I shall vote for it. I shall table an amendment if I am selected for the Standing Committee—
Mr. Mason: I tried to indicate at the outset that after the Bill receives a Second Reading the Whip will move that it be committed to a Committee of the whole House.
Rev. Ian Paisley: I welcome that, because I feel that all hon. Members, whether for or against the Bill, should have the opportunity to discuss it in Committee and to table amendments. They can then seek to help the legislation, or, if it is the will of the House, to hinder it. There should be a free discussion on the matter, and the freer the discussion the better for us all.
7.40 p.m.
Mr. Kevin McNamara: I shall not follow completely the line of argument adopted by the hon. Member for Antrim, North (Rev. Ian Paisley), but I wish to point out that, whatever he said about the Republic of Ireland—and I hold no brief for the Republic—I understand that it did not hinder the hon. Gentleman in any way in his apostolic endeavours. Indeed, I believe that a number of buildings have been erected in which there occurs that for which he is famous—namely, the usual Sunday silent collection. I wish the hon. Gentleman luck.
I wish to examine in a little detail the Government's attitude in introducing this Bill. They have not thought out the consequences of this legislation. There has been an irreversible twist in the Government's policy in favour of Unionism and the Unionist ascendancy. Whatever lip service my right hon. Friend the Secretary of State for Northern Ireland may pay to the concept of devolution, he cannot deny that there has been a complete and utter change of policy. It would at least be a little decent if the Government were to admit that to be the case.
There has been a change in policy and it has been well documented. Indeed, it has been set out in documentary form

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by my hon. Friend the Member for Belfast, West (Mr. Fitt). In many ways my hon. Friend was a little too kind to the Government and to the Cabinet. There were other people who commented on this situation. We had statements on this matter by my right hon. Friend the Minister for Social Security, who in earlier days had responsibilities in Northern Ireland. In 1974, in reply to the hon. Member for Banbury (Mr. Marten), my right hon. Friend said:
" I am sorry that I cannot meet the hon. Gentleman's point. I think that hon. Members will recognise that Northern Ireland is in a unique position. The Government feel that to increase representation now would be detrimental to the general political situation. The Government want Northern Ireland people of both communities to start resolving the problems in Northern Ireland themselves. We do not necessarily believe that they can be resolved on the Floor of this House."—[Official Report, 27th June 1974; Vol. 875, c. 1714.1
That was an interesting comment.
Out of the catalogue of saints my right hon. Friend the Secretary of State for Northern Ireland was omitted. Perhaps I may remind him of what he said in 1976 in his present office. He then said:
" Northern Ireland is numerically under-represented in this House, but I firmly believe "—
he said that as only the right hon. Member for Barnsley (Mr. Mason), brought up on northern ale, could say it—
" that the most effective way of strengthening democracy in Northern Ireland is for agreement to be reached on a form of devolved Government that demands widespread acceptance in both parts of the community."—[Official Report, 2nd December 1976; Vol. 921, c. 201.]
Therefore, there has been a complete reversal of policy.
Where is the Government's policy now? Let me take the case of my right hon. Friend the Leader of the House. We remember the happy days when, from his seat below the Labour Gangway, my right hon. Friend led the assaults on the then Labour Government's legislation on the Ulster Defence Regiment. We remember his brief and graphic description of the Ulster Unionists of that time to whom he referred as"the parliamentary B-Specials ". Compared with the present representatives, the representatives in those days were as policemen in "Toy Town ". We all remember Mr. Ernest, the policeman, and certainly the representatives in those days were on a par
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with people from Noddy's little town. The present representation in Northern Ireland has completely changed. Perhaps there is one exception, the right hon. Member for Down, South (Mr. Powell). Indeed, I believe that the right hon. Gentleman was not here from 1966 to 1970.
Mr. Powell: Yes, I was.
Mr. McNamara: I beg the right hon. Gentleman's pardon. He was here at that time. I meant to refer to the hon. Member for Down, North (Mr. Kilfedder). I beg the right hon. Gentleman's forgiveness. I was mixing up constituencies but not perhaps attitudes. Apart from the right hon. Member for Down, North, maverick that he has always been, we had a complete change. We had, for example —and I am sorry that he has left the Chamber—the hon. Member for Antrim, North [HON. MEMBERS:"He has gone to eat"] I think that the hon. Gentleman is a good trencherman, but is now adopting the same tactics over Republic marches in Armagh as he adopted in 1967 and 1968. Because of his attitude on civil rights, he brought about the demise of Stormont. The hon. Gentleman certainly has not changed.
Then we must consider the right hon. Member for Belfast, East (Mr. Craig). When Minister for Home Affairs, he had a fine reputation from 1968 to 1969. Now he is in the Unionist Party again acting like a yo-yo—in and out and in and out again. I remember the right hon. Gentleman when he was reviewing paramilitary parades, standing like a latter-day Carson before the marching ranks. We also remember his great addresses from the balcony at Stormont.
They are now all on that Bench—a far harder, meaner group of politicians than anything we had when my right hon. Friend the Leader of the House described them as"parliamentary B-Specials ". With my right hon. Friend's command of language, we must all wonder how he would describe them now—if only he did not depend on their votes.
My right hon. Friend the present Home Secretary and my right hon. Friend the Minister for Social Security worked out Labour's policies on Northern Ireland. We decided not to give increased representation because we wanted to prevent

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integration. We wanted to prevent what will now happen under my right hon. Friend the present Secretary of State for Northern Ireland—a situation which he sought weakly to deny. He seeks to deny that we are drifting into integration. My right hon. Friend shakes his head, but this is what is happening. We have heard the hon. Member for Antrim, North say that there will be no power sharing. We know that the official Unionists will not consider participation in Government as considered by the Tory Front Bench or by the Labour Front Bench. It means that devolved Government will just not happen.
The Unionists do not want this on Her Majesty's Government's terms. They want to go back to the old Stormont days. The hon. Member for Antrim, North said, in effect,"Keep your extra seats, cut down our representation, but give us back our old Stormont." That is what he said and that is what he is after. I understand his attitude. I think it is wrong and it may be the result of original sin. However, it exists as a recognisable concept. At least the Ulster Unionist position is honest. That is more than one can say of my right hon. Friend the Secretary of State for Northern Ireland, who will not even admit that there has been a change of policy.
Mr. Mason: My hon. Friend should not cast aspersions of that nature. I hope that he will withdraw them. I hope that he will not try to prove that in my tour of office in Northern Ireland I have been dishonest. There is not a change of policy. I spelt out in my speech that we are bent upon devolved government in Northern Ireland, hoping that we can get the participation of both communities in the Province. That is our aim. My hon. Friend knows that there is an integrationist bloc among the Unionists and a devolutionist bloc. He pays too much attention to the integrationists.
Mr. McNamara: I said that there was a change in policy on the matter of representation. Then I said that my right hon. Friend was scarcely being honest if he thought that a devolved policy would come about under a devolved power-sharing Government if we grant extra representation, when we know from the very make-up of the Unionists that they will not agree.
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My right hon. Friend should follow the logic of his argument. I do not believe that my right hon. Friend does not want devolved government. I do not believe that he would not like to see devolved government. Of course, if he could achieve it that would be a splendid feather in his cap. However, he will not get it. He knows that. The Government are granting extra representation, but we shall not get devolved government. If we are not to get it, my right hon. Friend's policy is rather like looking for gold at the end of the rainbow. There has been a fundamental change in policy and my right hon. Friend should recognise that fact.
As my hon. Friend the Member for Belfast, West went through the numbers game he spelt out how the present situation arose. The hon. Member for Antrim, South (Mr. Molyneaux) was quick to point out that there is no formal pact between the Ulster Unionists and the Government. I think that that is a fair summary of what he said. He stressed that there is no formal agreement. However, the Ulster Unionists are in a powerful position. They do not have a formal agreement, although I believe that at one time there was the promise of a signed document. No document has been signed that states"We shall do this and we promise a vote here and a vote there ", but the Ulster Unionists are in a less formal, but more positive and strong position.
That is what the right hon. Member for Down, South said on 9th November. The right hon. Gentleman said:
" Nevertheless, I say, that presented in this Session of Parliament with the achievement of that legislative act, an act which we believe in all conscience will be beneficial and peaceable to all classes and persons in Northern Ireland, it must be a compelling duty upon us to see it through on to the statute book. We are duty bound not to suffer, so far as in us lies, this Session of Parliament to be brought to an end until that act of justice of the House of Commons has been enshrined in a statute."—[Official Report, 9th November 1978; Vol. 957,
c. 1256.]
Those are marvellous words for my right hon. Friend the Chief Whip and the Leader of the House. But what would happen next week if we had a three-line Whip on Ford and there came a vote of confidence? It is not necessary to have a straightforward agreement with the right hon. Gentleman and his hon. Friends. The right hon. Gentleman could even have

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one or two of his hon. Friends passing through the Opposition Lobby as long as the rest of his hon. Friends abstained on the nod and the wink principle. If the issue arose, it may be that the Liberals would support us. That might appeal to the Liberals as we are pretending to be tough. That would mean that the Ulster Unionists could vote in whichever way they pleased. The numbers game can continue and we know it.
My right hon. and hon. Friends should remember that the extra seats will not stop the progression. The Ulster Unionists already have a promise from the Conservatives that they will help them obtain more power in local government. They have already had a promise from the Conservatives that they will be given help to obtain power in the new regional councils. They do not have to work on the Conservatives. They have to work on my right hon. Friend the Secretary of State and the Government as a whole.
When the Ulster Unionists take that approach and work on my right hon. Friends the Secretary of State and the Minister of State to get their extra bits and pieces in local government we shall give them a little extra power in various quarters. Perhaps in the next Order in Council that we shove through we shall give them a little more responsibility, for example, for a certain local authority. That is what they all want. The Unionists councillors want it and the SDLP councillors want it. Do the SDLP councillors want to elect a Unionist council? It must be recognised that they are utterly frustrated. However, that is what direct rule is all about. It is meant to make those concerned face their responsibilities and find a form of devolved government.
The Government will be squeezed. Various concessions will be granted. That is the road that the Unionists will take. My right hon. and hon. Friends have fallen into their hands. The former hon. and learned Member for Antrim, South, Sir Knox Cunningham, was fond of quoting Kipling in the House but I shall quote another piece of Kipling which reads:
" And that is called paying the Dane-geld;
But we've proved it again and again,
That if once you have paid him the
Dane-geld
You never get rid of the Dane."
That is exactly the policy that is being followed. That is exactly the policy that
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my right hon. Friend is accepting and to which he is succumbing.
The Government, under the leadership of our former Prime Minister, went into Northern Ireland with the intention of reform. We shall go back and enter a vicious circle. We shall go right back to the time when the Unionists were in control. That is where the Government policy is leading. That is what the policy is all about. It does not matter whether there is another devolved council. If the Unionists have extra representation here and extra power in the local authorities in the North, what reason have they to worry about anything else?
Mr. Fitt: Has my hon. Friend taken note of clause 1(5) in which it is stated:
"For subsections (5) and (6) of section 28 of the Northern Ireland Constitution Act 1973 …there shall be substituted …"
Has he taken that in conjunction with the speech of the right hon. Member for Down, South on 13th November on the Nurses, Midwives and Health Visitors Bill, in which he said that the 1973 Act no longer bore any relationship to what was happening in the House? We find that the right hon. Gentleman's words have been proved absolutely and totally correct by the Bill.
Mr. McNamara: I must say that the right hon. Member for Down, South, on a Bill of that nature, was making a pregnant point.
I am grateful to my hon. Friend the Member for Belfast, West, as he has given me time to consider how I shall finish my speech. Before doing so, I shall draw attention to another matter that I consider to be of importance.
Having changed the rules of the game, the Government are now no longer the impartial referee in Northern Ireland in hoping and encouraging both sides to try to reach an honourable agreement. It now seems that everything is up for grabs. It seems that anything and everything may be discussed.
The hon. Member for Cornwall, North (Mr. Pardoe) has spoken about the withdrawal of troops becoming relevant in the argument. Questions raised within the Six Counties about the independence of the Six Counties become relevant. Observations about trying to engage in some sort of accommodation with the Republic become relevant. These issues cannot

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be disowned as wild or foolish chatter. That is how the comments of the hon. Member for Cornwall, North have been treated in the past. The situation has totally changed because there have been fundamental policy departures. Everything has now to be reconsidered and reexamined. The honourable course of the Government in holding the ring has gone.
We have a sister party in Socialist International called the SDLP. The blow that has gone to that party by the Bill does not involve the prestige of my hon. Friend the Member for Belfast, West. It does not involve his solitary vote. Oh, how we wooed it! Oh, how we telephoned to get that vote when the occasion demanded! These matters do not merely involve my hon. Friend and the SDLP. There is involved the giving of credibility and the maintaining of credibility to a party which, whether we like it or not, and I personally do not, is a last safeguard against violence. It is violence, not just in one community, but in all communities. That means threats to our own constituents, civilians and soldiers alike. We must be aware of that when we speak of these things. A part of their credibility with the minority has been taken away. Not that it could be dictated to by Government, not that sometimes what it said would have been taken into consideration. What certainly should not have been done was to administer the kick in the guts which it has received over this Bill.
The attitude of the minority representatives to this Bill was known. We have come down heavily in favour of the majority. We are reversing the policy started on 14th August 1969. That is the policy that has been changed. There is an "Ulsterisation" taking place in Northern Ireland, It is not merely a question of the defence forces, it is a matter of politics, of politicians. It is an"Ulsterisation"which looks back to what happened in 1920, and not to what should have been happening after the events of 1968 and the leadership my right hon. Friend the Prime Minister gave at that time.
Several 114m. Members roserose—
Mr. Deputy Speaker (Sir Myer Galpern): Order. It is intended to commence the Front Bench speeches at 9.20
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p.m. There are still six right hon. and hon. Members anxious to take part in the debate. They have been present throughout the whole of the proceedings. I appeal for brevity so that I may accommodate all of them.
8.3 p.m.
Mr. John Biggs-Davison: This is a Bill to bring about just representation for Northern Ireland in this House. It is fantastic for the hon. Member for Kingston upon Hull, Central (Mr. McNamara) to make out that this is a Bill to restore or buttress a Unionist ascendancy. Just because all problems cannot be solved on the Floor of the House of Commons—as they cannot—it does not follow that we cannot benefit at Westminster from advice on Northern Ireland and United Kingdom matters, from additional colleagues. Nor does it follow that if we have constituencies in Northern Ireland with fewer people in them it will not be a boon to those people who have recourse to their Members of Parliament.
The debate has ranged fairly widely, so I hope that I may be forgiven if I digress to consider the insufficient representation of Northern in another place. I shall not rake over the failure in the 1960s of the claim advanced by the Irish Peers Association for the admission of all peers of Ireland to the Upper House whether they were British subjects or not, or whether they were resident in British or foreign territory. There was no element of territoriality in the system of Irish representative peers. Yet the claim failed and, that for the time being, was that.
This Bill is about the House of Commons, but the House of Commons is part of a bicameral Parliament. I am not asking Ministers for a statement today, but I ask my right hon. and hon. Friends, who are more likely to be concerned with these matters in the future, to give some thought to the recruitment either of peers of Ireland with seats and service in Northern Ireland, or of new Ulster creations to the other place.
Mr. McNamara: The hon. Gentleman makes an interesting point. Is he sugsentatives, or the selection of everyone by sentatives, or the selection of everyone by right?
Mr. Deputy Speaker: Order. The hon. Member for Epping Forest (Mr. Biggs-Davison) indicated that he would stray, but I doubt very much that what he is discussing comes within the ambit even of the Second Reading of this Bill.
Mr. Biggs-Davison: I defer at once to your ruling, Mr. Deputy Speaker, although it prevents me from replying to the hon. Member for Kingston upon Hull, Central. I shall be glad to deal with that in some other way. The hon. Member is, however, quite right when he says that the Bill represents a change of policy on representation. The consistency has been on the Tory Benches. The Bill is an extraordinary but most welcome change of ministerial minds. It is more welcome to the Conservatives than to some of the hon. Members sitting behind the Government Front Bench.
This change of mind is not exactly a death-bed repentance, but repentance did come with electoral death in prospect. We have a system of collective Cabinet responsibility. I suppose that we now have collective Cabinet repentance. I presume that the Minister for Social Security has recanted. I am not entirely sure about the Home Secretary, since he is not here. The Secretary of State for Northern Ireland spoke of this Bill as being an expression of natural justice, but he must know that a blinding light of natural justice struck the Cabinet when it was threatened by defeat on a motion of confidence in March 1977. That is when its resistance to an increase in representation evaporated, as though it had never been. On this point I entirely agree with the hon. Member for Belfast, West (Mr. Fitt). If the Government are guilty of anything they are guilty of doing the right thing for the wrong reason.
The present Home Secretary was formerly Secretary of State for Northern Ireland and is conspicuous by his absence from this debate. Despite his responsibilities in connection with representation of the people. The hon. Member for Preston, South (Mr. Thorne) raised a point of order with the Chair before our debate. He asked why the Home Secretary was not here. He knows why. The answer is contained in those emotional words uttered in this House on 18th March 1976, and quoted by my hon. Friend the Member for Abingdon (Mr.
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Neave) and the hon. Member for Belfast, West. One is bound to sympathise with the hon. Member for Belfast, West. He has indeed been deserted by the Government that he has supported. The SDLP feels—and I understand it—that it has been let down, just as the Northern Ireland Labour Party at an earlier stage believed itself to have been thrown over by the British Labour Party in favour of the SDLP.
I wish that this Bill could be given an unopposed Second Reading. In the constitutional convention of 1975 to 1976 virtually everyone, except the SDLP—I am not sure about the position of the one-man Ulster Dominion group—favoured an increase in representation. This is a measure required by democracy. It is not what has been suggested in some of the lurid speeches that we have heard—a measure designed to do down the SDLP and the non-Unionist population. If it is enacted—and I hope that it will be—and the Boundary Commission performs its task and elections are held for the new constituencies, the hon. Member for Belfast, West may well find himself facing some competition from other non-Unionist colleagues. Is he against that?
Mr. Powell: Yes.
Mr. Biggs-Davison: The right hon. Member for Down, South (Mr. Powell) says that he is, but I do not know. Surely the hon. Gentleman was right when he said that this matter should not be determined by considerations of party advantage. Surely anyone who believes in parliamentary government should not want any part of the kingdom to be under-represented. This Bill will not decide whether, when, how, or if, there is to be legislative devolution. It will not do the fearful things that are contained in the amendment tabled by the hon. Member for Belfast, West. I dare say that in his present bitterness he will not pay much heed to what was said by the Lord President of the Council in this regard, but if he studies the report of the Royal Commission on the constitution, he will find that Kilbrandon recommended that Northern Ireland representation should be determined by the rules applied to other parts of the Kingdom.
Kilbrandon was certainly favourable to devolution. The Royal Commission

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saw no conflict. It makes no sense to suggest that because one believes in devolution one is opposed to just representation in this House of Commons.
I know that there are Labour Members who do not accept that the Union is permanent, but that the Union should endure is certainly the prevailing will of the people of Northern Ireland. I hope that the Union will endure, as do most Protestants and many Roman Catholics in the Province.
I quite understand the position of the SDLP. It wishes the Union to be ended but, to do it justice, it does not suggest that this should be forced upon the majority in Northern Ireland. Meanwhile, it tells us that it aspires to take part in devolved institutions within the United Kingdom and to win the confidence, and even the partnership, of the majority. But does the hon. Member for Belfast, West really think that the attitude to the Bill evidenced in his speech, and so far adopted by his party, will really help to"bring the communities together ", to use his words? Is it likely that such an attitude will obtain the understanding and co-operation of other persuasions? I fear not.
Whatever the motives of Ministers—I am not the keeper of their consciences, thank goodness—the Bill is surely directed, Mr. Deputy Speaker, to the improvement of the democratic process and of parliamentary government. It is directed to the removal of an injustice that has disfigured the constitution for far too long.
8.11 p.m.
Mr. Paul B. Rose: I pay my respects, Mr. Deputy Speaker, to the hon. Member for Epping Forest (Mr. Biggs-Davison), who now speaks from the Back Benches, because at least he is consistent. Through the period that I have spent in this House he has earned my respect for his consistency, although I disagree with him entirely because of his espousal of minority rule in Rhodesia and of similar injustices towards a section of the community in Northern Ireland. But at least what he has to say is consistent.
Mr. Biggs-Davison: The hon. Gentle-tan knows that it is not true to say that
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I support any injustices in Northern Ireland. Secondly, I am not at the moment in support of minority rule in Rhodesia but of the transitional Government which is directed to the achievement of majority rule.
Mr. Rose: The hon. Gentleman protesteth too much. Those who have read his book on Ulster, and those who have debated with him and heard him in the past, will form their own judgment with regard to that. But that is not the purpose of my intervention today.
My right hon. Friend the Secretary of State for Northern Ireland will, I am sure, forgive me for sharing with others who have spoken a rather unworthy thought, namely, that the timing of the Bill is not entirely unconnected with the mathematics of voting in this House and the state of the parties. The irony is that such expediency cannot even he justified on the ground of expediency. The voting on the Loyal Address resulted in a majority of 12, because seven Ulster Unionists abstained. If we deduct seven from 12 we get five, and if we then add one member of the SDLP, we get six, so that even the Whips did not do their homework very well in that respect. It cannot be justified, even on the ground of expediency, that we have betrayed a party and a principle for which we have long stood. Indeed, we have driven that party into a position which is not very far removed from that of the extremists in Northern Ireland who support the Republican cause.
Here we are proposing an increase in the number of parliamentary seats to be allocated to Northern Ireland. It was not very long ago that I first came to this House. Every time I tried to raise the question of Northern Ireland, it was ruled out of order because we had a constitutional convention, and that constitutional convention prevented us from raising any matter connected with Northern Ireland, notwithstanding the fact that any Northern Ireland Member could vote on a matter pertaining to Manchester or any other part of the United Kingdom. That was justified, too, by the very same people who now justify the increase in seats to Northern Ireland.
In a sort of sense the wheel has turned full circle. Now that we no longer have the autocracy of Stormont, the rule of the tyranny of the majority, perhaps, in

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Stormont, it is sought to compensate for that situation by introducing more Northern Ireland Members into the United Kingdom.
Historically, the two assemblies that were created in 1920 were created in the way that they were because it was envisaged that those two would come together, not that they would grow apart and not that they would become dominated by one faction, as happened in the North. It is an irony, again, that, if democracy has really taken root—and I hold no brief for the governing party in the Republic of Ireland—it has taken root to a greater extent in that part of Ireland than in the other part.
I remember the maiden speech in this House, in a debate which I initiated under Standing Order No. 9, of a rather notorious young lady—
Mr. Fitt: Bernadette.
Mr. Rose: —who made a particularly unpleasant and chauvinist remark in that maiden speech. She was a lady who was prone on occasion to make unpleasant remarks. She certainly was not noted for charming femininity in her approach to the Northern Ireland question. She said that the Englishman had not yet been born who could understand the problems of Northern Ireland or of Ireland. I objected very strenuously to that remark, but in one sense she was right. She was right in the sense that the Minister today, and those who support the Bill, with their so-called argument from equity, fail utterly and totally to understand the background of Northern Ireland, the history of Ireland, and the symbolic way in which this will be regarded in Ireland, and particularly in Ulster.
Symbolism, believe it or not, can be very much more important than fact. Four or six Members more need hardly make much difference to this Chamber. It was a very symbolic gesture which, as my hon. Friend the Member for Belfast, West (Mr. Fitt) said, pushed his party into taking the stance which it did not take before concerning the presence of British troops in Northern Ireland. That is one of the first evil consequences of the Bill.
Ministers and hon. Members in this House all too frequently fail to understand the emotionally charged and long historical memory of people in that part
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of the United Kingdom, which is quite different from Scotland and quite different from Wales. In that sense the lady to whom I referred was right, although I did not particularly appreciate her remarks at the time. I believe that many of my right hon. and hon. Friends fail to understand the historical context in an area in which long memories and symbols still, unhappily, dominate people's thoughts and often dictate the actions of those who live in what is now a part of the United Kingdom.
I wanted to raise earlier the question of past Boundary Commissions. My right hon. Friend had a lot of interventions and I do not blame him for not giving way, but I should have liked to ask the rhetorical question: when has there been a Boundary Commission in Northern Ireland that has been fair? What about 1920? What about the annexation of Fermanagh and Tyrone, the two areas which had voted consistently against Unionism?
Mr. Fitt: Exactly.
Mr. Rose: Those two counties were brought in because the four counties were not viable as an entity. Was that a fair Boundary Commission? Michael Collins would have turned in his grave had he known what would happen after having signed the treaty. The men of moderation such as Michael Collins, who signed that treaty, actually believed that we in Britain would keep our word. We failed to keep our word in that regard.
Were the Boundary Commissions fair when they drew those amazing boundaries in Derry and in other parts of Northern Ireland, such as Fermanagh? It was admitted later that the boundaries were gerrymandered. Does anyone in the minority community have a right to believe that a Boundary Commission will be fair? The very fact that today in this House there are 10 Unionists and two Members on the other side, rather than a ratio of two to one, would indicate something of the same nature. I for one do not blame those hon. Members, such as my hon. Friend the Member for Belfast, West, who have serious reservations about this matter.
What we really did was to create an artificial entity in which we could perpetuate the rule of a built-in majority over a minority. Not only did we do

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that, but in those areas where the minority were the majority we also drew the boundaries in order to see that they did not hold sway at local government level. I am particularly concerned about the remarks which were made about local government. I hope that at the end my right hon. Friend the Minister of State will tell the House whether there is any truth in the rumour that we shall now establish some sort of local government structure which will once again resurrect all the miseries and antagonisms which were caused by the kind of situation which existed before the"Derrymander"and all the rest which was exposed by some of us in this House. That was denied by the Unionists at the time, but ultimately, when they were forced into the open it was admitted to be wrong and they admitted that the boundaries had to be changed.
I am very much in favour of devolution. I see Europe more in terms of regions than of nations. On this I am perhaps a heretic to many hon. Members who share my views over Ireland and other matters. But I rather see a future in Europe where regions become more important than perhaps even the national entity. That may be one of the ways in which the long-standing Irish problem will be solved—within the context of a Europe which is no longer so concerned about national boundaries. It is significant that when more devolution is being granted to Scotland and Wales, and when even the Basques are getting it in Spain, we should at this period be advancing integration in Northern Ireland.
This is not a matter of equity. Those who say that really must say it with their tongues in their cheeks. This is a matter of whether one is looking towards the greater integration of that part of the island of Ireland which is known as Northern Ireland into the United Kingdom or whether one is looking towards some sort of devolution.
Indeed, in the past, although not in the recent past, I have been deeply involved in matters pertaining to Northern Ireland. I have stepped back over the past few years because the men of violence have taken over. Whether they wear IRA berets, or whether they belong to one of the militant Protestant organisations, to me they are equally abhorrent
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because one does not play with the lives of children and innocent people in that way. I have always condemned that violence. In a sense, I believe that the greatest enemy of democratic change in Northern Ireland was the IRA, and that had it not been for the IRA those of us who were in favour of change in Ireland would have won through by now.
Therefore, once the concept of power sharing was destroyed by the hon. Member for Antrim, North (Rev. Ian Paisley) who gave us such a dire warning before, whose role in this is not an entirely honourable one—I put it no higher than that—and who has hardly helped to bring the two communities together, I came to the conclusion that in the long term it will not be what we say in this House that will decide what happens in Ulster. I believe that Ulstermen will decide what happens in Ulster. I have come to a new conclusion. I have stepped back from the arena after a longer period in it and have come to the conclusion that Ulstermen, whether Protestants, Catholics or agnostics, have a common interest, and curiously enough, a common personality, whether their traditions be from the Scottish plantations or from the Gaelic traditions of Ireland.
In a sense, Ulster is an entity of its own. The problems of Ulster will be solved, because more and more people in Ulster, tired of the violence and of what it is doing, will come together to solve their own problems. Therefore, it will not help if we send more representatives to a talking shop at Westminster where debates on Ireland are attended by the vast serried ranks of hon. Members whom we see here today. That is an indication of the interest which people in this country take in Northern Ireland.
Recognising that, all that introduction of more Members from Northern Ireland will do is not to improve the position of Northern Ireland or aid its people, but merely to allow those people, whoever they are and for whatever party they are elected, to influence events in the United Kingdom itself, to vote on matters which do not even touch on Northern Ireland, and to use such power as they may have —as, indeed, we see today in particularly tight situations—in dispensing their favours.

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I believe that devolution, power sharing and confidence in their own institutions is what the people of Ulster now need, whether their allegiances historically have been to the Republic of Ireland or to the United Kingdom.
The Unionists have played the Orange card once again—all seven Orange cards this time—in order to support a minority Government. I regard that kind of expediency, and the acceptance of that bribe, as a debasement of politics and something dishonourable on the part of the Labour Party. I am not afraid to say so from the Back Benches of this House.
As I said, not long ago we could not raise the question of Northern Ireland. There were Ministers, who still sit in their ministerial positions today, who were able to countenance that. Yet those same people are today asking us to have more Members from Northern Ireland. That is the kind of hypocrisy that I have seen during my 14 years in this House. When I put forward the idea of an Ombudsman for Northern Ireland I was told"That is not a practical proposal, young fellow"but it was introduced by the previous Prime Minister only three years afterwards. That is the kind of hypocrisy and expediency that I have come to despise.
What we need are new initiatives, not the cosmetic changes of four, five or six Members more. That is a diversion, because this Government have not taken a single political initiative in relation to Northern Ireland, other than to use methods which only the most insensitive person with regard to the whole history of Ireland would take. The use of special powers and emergency provisions have not helped in the Northern Ireland situation. They have exacerbated the situation. Hon. Members need not take that from me. They should take it from the peace people who came to see us only two weeks ago. They were people without an axe to grind on behalf of extremism. They were trying to bring the communities together. They would say that the actions we have taken to deal with terrorism have exacerbated the situation.
I believe that this very Bill will exacerbate hostility, provoke antagonism and cause a greater distrust of our Government. Above all, how can the minority
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community, and the party which represents it and many of the majority as well, ever trust us again? How can we, who on so many occasions called upon the help of some of our friends from Northern Ireland when we were in a tight spot, ever turn round and look them in the face again having betrayed them tonight?
I believe that this Bill is a complete about turn. We have had the quotations from the Home Secretary. It is an unnecessary and offensive Bill. It is a completely irrelevant Bill in the context of the problems which Northern Ireland faces today. If one wants to be a complete constitutionalist in terms of fairness, but without the slightest understanding of Ireland and Irish history, then, of course, it is logical. But that kind of logic is the lack of logic which stems from a lack of knowledge of the background of the situation. No one in my party with a shred of honour and integrity and the knowledge of the history of that unfortunate part of Ireland should be prepared to accept this shabby compromise, this shabby deal made with the Opposition for the sake of a few votes.
Mr. Robert J. Bradford: In his castigation of his own party, will the hon. Member bear in mind that the Ombudsman—that eminent English lawyer who was appointed to take up operations in Northern Ireland—stated that there was not one single instance of culpable action to be found in the organs of local government? Will he bear that in mind when he not only castigates his own party but tries to reflect the situation in the Province unfairly?
Mr. Rose: The terms of reference of the Ombudsman to whom the hon. Gentleman refers have no connection with the argument that I was putting forward. I do not think he has entirely followed my argument, which was that at each stage in the pathetic history of Northern Ireland, whatever the Government's complexion, everything that was done, was clone two, three or four years too late. Those of us who first raised this matter were treated almost with scorn. When we tried to break the Convention we were unable to do so. It was not until the bombs were flying that the Convention broke itself.
At each stage we have done too little too late, and when we have acted we have

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done the wrong thing—for example, internment was the greatest sin of the Conservative Party. All this has nothing to do with the findings of the Ombudsman. At every stage we have acted too late for that action to have any effect, and, when we have acted, we have usually done so in the wrong direction.
8.33 p.m.
Mr. William Craig: I shall try to abide by the appeal to keep remarks brief. This debate is very illuminating, even if a little wearisome. I cannot avoid the temptation to make some observations apart from the immediate issue before us.
The hon. Member for Manchester, Blackley (Mr. Rose) treated us to one of those eye-opening speeches that has dominated the debate today. I was hoping that his long silence indicated that he had learned something, but his speech showed that he had been silent for another reason and that he had learned nothing.
I did not quite follow his points. He referred to the Boundary Commission in the most reckless way. It sounded as if he was claiming that Boundary Commissions serving this House were guilty of malpractice. But he did not even get the facts on that accurate, because that Boundary Commission was never allowed to report. The Government of the Irish Republic, having been warned in advance that the Commission was to make recommendations increasing the size of Northern Ireland, had it silenced effectively.
There has been a strange alliance between those opposing the Bill, which is an elementary step in justice and democracy. I wish that hon. Members opposing the Bill would not try to put labels on us. The hon. Member for Kingston upon Hull, Central (Mr. McNamara) had no hesitation in putting labels upon us. However, I would much prefer the label that he attached to us than the one that I could put on him.
Somewhere in this unholy alliance is a group that could be described as"the red brigade ". In that brigade there is the Republican platoon. The red brigade, with all its faults, has maintained or sought to maintain the banner of freedom and democracy, standing for the rights
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of the individual. I shall be interested to see how many of its members take a stand tonight on the basis of one man, one vote and fair play throughout the country, because that is what the Bill is about.
Another matter of great illumination was a new understanding of the word "diarrhoea"— particularly verbal diarrhoea. Diarrhoea is accurately described as a great outgoing. As I listened to the speech of the hon. Member for Belfast, West (Mr. Fitt), I could only describe his speech as a great outgoing or a great outpouring. But I wonder whether he realised how much came with that outpouring. Sadly, his speech differed from the other kind of diarrhoea, which is usually over quickly and without too much fuss. The verbal diarrhoea of the hon. Member for Belfast, West was all too long, and contained the most startling revelations.
I cannot believe that the majority of his constituents believe him when the hon. Member says that his party stood between the Roman Catholic community and the IRA. I have a much higher opinion of members of the Roman Catholic community than he has; there was never any question of their rushing to join the mad violence of the IRA. It is absurd to claim that but for the SDLP they would have done so.
The hon. Member enlightened us when he said that he stood for the reunification of Ireland. He does not stand for that. The only time that Ireland has been united has been under the Crown, and that is the last thing that he stands for. Whatever sort of united Ireland he may want, it cannot be described as reunification of Ireland.
I was interested in the hon. Member's reckless willingness to ascribe motives to the Government. He has long experience of ascribing motives for one reason or another. I was more intrigued when the supporters of the Government joined him in making these allegations. It is strange that those who made these allegations of the Government doing a deal are the very people who have been complaining about their votes not being bid for.
I am happy that my leader has put the facts before the House. There has been no deal, and no buying of the Ulster Unionist votes. I accept completely the

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sincerity and honesty of the Secretary of State, who said that he brought the measure forward to improve the standard of democracy in Northern Ireland. That is long overdue.
I pay tribute to Mr. Speaker and the Members of his Conference for their work. Unlike some other hon. Members, I shall not cast doubts or aspersions on the integrity of Mr. Speaker or his Coference, which set about a difficult task in an admirable way. That is not to say that I am not a little disappointed. I had hoped for a much more generous recommendaiton, but it is a matter of judgment and I accept that the Speaker's Conference carried out its duty according to the customs and practices of the House. People can quote figures until the cows come home, but the decision was reached honestly and fairly by people acting according to the practices of the House.
I had hoped that more regard would have been paid to the well-established practice of comparison. As the background paper says, the recommendations do not take that factor adequately into account. We cannot complain on a purely statistical basis. Statistically, the recommendations are in line with the position in the rest of the United Kingdom.
On the basis of the English quota, Northern Ireland would have been given 16 seats. On the Welsh quota, we would have 18 seats. The Scottish quota would give us 19 seats and the average quota would give Northern Ireland 16 seats. However, inherent in these figures is the fact that other parts of the United Kingdom have different quotas, which arise not just out of an historical sequence of events but because of special circumstances in those parts. The smallness and remoteness of Northern Ireland should have entitled it to a much more generous quota, but I am happy to accept that the recommendation has been made in good faith, and it represents a real step forward for the people of Northern Ireland.
Indeed, I would almost go as far as to describe today as a red-letter day, but bearing in mind the colour of some of the remarks of Labour Members that might be an inappropriate description. It is, however, certainly an important advance for the people of Northern Ireland. A
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long-standing injustice has been put right and it will enable those who come to the House to play a much more effective part not only in representing the people of Northern Ireland, but in contributing to the work of the House.
We are here not only in the Northern Ireland interest but in the United Kingdom interest. The smallness of our representation has imposed an enormous burden on us and our contribution has necessarily been limited. I have the privilege of being on the delegations to the Council of Europe and Western European Union and I am conscious that in attending to those duties I am increasing the burden on my colleagues who have to stay here. It is a disproportionate burden, and I welcome the proposed increase in the number of seats because it will enable Northern Ireland Members to discharge their duties to the House, the country and their constituents much more effectively.
I do not want to spend too much time on the amendment moved by the hon. Member for Isle of Ely (Mr. Freud). It is most unfortunate that people should play party politics with the difficult circumstances in Northern Ireland. Whatever the merits or demerits of proportional representation, it is not right that they should be advanced on a basis of discrimination in the United Kingdom. There is no special circumstance that justifies changing the rules of democracy within the United Kingdom.
Like many other people in Northern Ireland, I resented the approach in determining our franchise and constituencies for the elections to the European Parliament. An effort was made to rig the democratic process in order to ensure that a minority party would have a chance of representation. There was no other reason, and such a reason can never be good enough for advocating a change in the democratic franchise. I hope that the House will bear in mind that the amendment does not relate only to Northern Ireland. It should be seen in the context of the electoral practices of the United Kingdom.
Not only do I support the Bill; I welcome the way in which the Secretary of State introduced it. It was characteristic of his whole approach to the administration of Northern Ireland. He has been

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full and frank in meeting the situation. He has not doubted that Northern Ireland is part of the United Kingdom. We were happy to see the dictates of expediency thrown aside and the situation described as it really is. In doing this he has not fuelled the fires of violence—far from it. This sort of plain and honest approach to the problem will help to bring peace and stability. The Secretary of State's approach to the Bill will reinforce the good work that has been done already to bring peace and stability to Northern Ireland.
It is sad that in that step we have once again succeeded in highlighting how difficult it is to achieve a consensus of the different sections of the community that will enable Parliamentary democracy to function.
The words of the hon. Member for Belfast, West have underlined that difficulty. Whatever hopes I had of the Ulster Convention arriving at a formula that would bring about an all-party agreement were not well founded if what he said today represents what his party stands for in the Convention. It is a sad situation. Those of us who wish to see a devolved Parliament will not give up our endeavours. We cannot be asked to subtract from the fundamentals of parliamentary democracy. We shall do what we can within that framework. We shall not be helped by those who wish to stand on its head the normal rule of parliamentary demo-affairs of the United Kingdom.
I had hoped that that lesson had been learned. Today's debate leaves me wondering how much has been learned. The proof of the pudding is in the eating. If the House sets the Bill on a fair course I believe that the Bill will prove to be a useful step towards democracy in Northern Ireland, not only for the majority but for the minority parties.
It is astonishing to think that the SDLP, which built itself up on the slogan of"One man, one vote"should today be represented in the House by an hon. Member advocating a policy that would deny Northern Ireland a full vote in the affairs of the United Kingdom.
8.48 p.m.
Mr. John Watkinson: It is sad to hear the confession of
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the right hon. Member for Belfast, East (Mr. Craig). He has turned his back on any prospect of co-operation, participation and power sharing with other Northern Ireland parties. I hope that in time he will reconsider that position.
I speak as a member of Mr. Speaker's Conference. I do not associate myself with the remarks which have been made by several of my hon. Friends. The matter that we are discussing goes to the root of democracy. If there is not fair representation, one cannot have a proper democracy. One of my colleagues asked why, without power sharing, we should give this Bill to the Northern Irish. For me, it is a simple matter because it goes absolutely to the root of democracy itself.
I accept that Northern Ireland is an exceedingly difficult part of the United Kingdom. But so long as Northern Ireland is part of the United Kingdom and so long as it remains difficult, does that give us the right to deny to Northern Ireland what we cede to all other parts of the United Kingdom? I cannot see that it does. I represent an area of the country that is predominantly Tory. I would like to see many fewer Tories in the South-West of England, but I would not think it right to come before this House and suggest that, because I do not support the Tory cause, it would be right or proper for there to be a lessening of Tory representation in the South-West of England.
My hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) suggested that the passage of this Bill might open new doors, doors which Opposition Members might not wish to be opened. I would argue that if the passage of this Bill does involve the House in a reconsideration of its position vis-a-vis Northern Ireland, and does involve it in a reconsideration of the relationship between the North and the South, so be it. It is the principle that is important. Certainly, I support that principle.
The Speaker's Conference found little difficulty in coming to its conclusions. As soon as the issue was posed and as soon as it was accepted that Northern Ireland should be taken as an integral part of the United Kingdom, it did not take long for any of us to see that the under-representation was so obvious that something had to be done about it. One merely has to look at the constituency of Antrim, South, which has already been mentioned, and

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to recollect that the constituency is larger than Glasgow Central, Glasgow, Govan, and Glasgow, Queens Park, put together. to realise the basic inequity which exists within a certain part of the United Kingdom.
The right hon. Member for Belfast, East referred to the options available to Mr. Speaker's Conference. In considering the paper put before us by the Northern Ireland Boundary Commission, it was clear that we had an option basically of granting Northern Ireland representation comparable with England, which would be 16 seats, or with Wales, 18 seats, or with Scotland, 19 seats, based on their electoral quotas. Some of the arguments relating to the remoteness of the Province no longer hold water. Now that travel to Aldergrove airport is so easy, there are hon. Members in Northern Ireland who can reach their constituencies faster than I can. I do not think that that argument can be tolerated any longer. I accept, however, that there are certain geographical limitations in the form of rivers which may force a boundary to be drawn differently than it would have been on a simple electoral quota basis.
Representing a rural constituency, I believe that I am the only Labour Member who can speak with any authority on this issue. I represent about half a county, and I can say that it is very difficult to try to represent adequately a large area. Therefore, consideration must be given to the physical size of the constituency. Accordingly, I was driven to the conclusion that the suggested figure of 17 Members should be adequate, with a little leverage either way. I was prepared to endorse the findings of Mr. Speaker's Conference.
I very much agree with what has already been said about the Liberal amendment. The Social Democratic and Labour Party, in its representations to Mr. Speaker's Conference, made a telling point about the 1974 Election after the breakdown of the power sharing executive, when the Ulster Unionists effectively swept the board, though the voting figures showed that the margin between those who supported power sharing and those who opposed it was much narrower. Nevertheless, it is absurd to suggest that some hon. Members can be elected by the first-past-the-post system
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and others on the basis of proportional representation, whatever the arguments for proportional representation. I do not believe that that is a tenable proposition.
We may also consider that there could be an argument for extending representation on the basis of what the people of Northern Ireland seem to be saying. There have been no elections recently but the Strathclyde university poll bears out the findings of the 1976 opinion poll conducted by National Opinion Polls for one of the television companies. The Strathclyde poll shows that more than 79 per cent. of Catholics and 72 per cent. of Protestants in the North support direct rule. Those figures are similar to the NOP findings in 1976. If the people of Northern Ireland are saying in that way that they want direct rule to continue. it seems to me that there is a further powerful argument for their being entitled to more representation in the forum that is carrying on the rule of the Province.
Mr. Arthur Latham: I intervene now because I do not know whether I shall catch the eye of the Chair. My hon. Friend talked of integration in terms of representation. He appears not to have considered—nor, apparently, did Mr. Speaker's Conference—integration in terms of government. Will he acknowledge that direct rule is not the same as integration? If one is to go along the road to arguing that there is a case for parity of representation, should not that develop into parity of treatment in terms of legislation and the jurisdiction of this House, rather than of Ministers, over the affairs of Northern Ireland?
Mr. Watkinson: I have not used the word "integration"at any stage in my speech. But I entirely agree with my hon. Friend's last point. Part of the test of being part of the United Kingdom is that one is prepared to accept the legislation passed by this House. I see the right hon. Member for Down, South (Mr. Powell) nodding his head, but I think that he has views about homosexuality, for example, suggesting that he would not be prepared to support the application of this country's legislation on the matter in Northern Ireland.
Mr. Powell: The point is that legislation was passed through this House in

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respect of England only, on a free vote on a Private Member's Bill. What I object to is the prospect—I do not think that it is a very close one—that it might be applied as a matter of Government policy by Order in Council to Northern Ireland. So I am not really adrift from the hon. Gentleman.
Mr. Watkinson: I am obliged to the right hon. Gentleman.
It was my good fortune to visit the Province only last week, when I was the guest of the Gloucestershire Regiment. I was very impressed by the regiment's efficiency and competence in very difficult circumstances. It does not need me to describe to hon. Members the position in which the soldiers find themselves. For me, the experience was somewhat depressing in that I saw places where it was not possible for me to go alone. Certainly it was not suggested that it would be wise for a Member of Parliament to do so.
I was in the Londonderry area and, as part of my tour, I flew over the country. That experience gave me a good insight into the problem. The commanding officer pointed down and said"There you see the scrubland and the hills. That is where the Catholics are. There is the marshland down by the lake. That, too, is where the Catholics are. That is the fertile plain. That is where the Protestants are."
I have long held the view that the basic reason behind the problem in Northern Ireland is involved in land. There is no more basic matter for men than the possession of land or territory. It goes profoundly to the essence of our very being. In Northern Ireland, there is an essential battle about the ownership of land.
The Protestant State in Northern Ireland was created in and was preserved for the Protestants deliberately. In fact, three provinces of historic Ulster were, as it were, siphoned off in order that that Protestant State could be created and maintained as a Protestant entity.
That degree of passion which is aroused in the Province, aided by the religion which gives rise to added passion, is such that we in this House and the country at large have to accept that we are dealing with two communities where the
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nationalistic sense burns so deeply that it makes Scottish nationalism look a pale, guttering candle in comparison.
The Protestants have shown quite clearly that they will fight for that country. Equally, there is an organisation which is given great support in the community. I know this from being in such places as Dungiven. The Catholics there and in other places are prepared to give support to the Irish Republican Army. So we have these two forces in conflict with each other.
What is the outcome of this likely to be? To some extent, I share the gloom of my hon. Friend the Member for Kingston upon Hull, Central who suggested that direct rule would continue, that we might eventually be able to bring the security position under control, and that we might"Ulsterise"the situation so that the RUC and the UDR could manage the country. I have my doubts about that.
One of the grim prospects held out by the right hon. Member for Down. South is that Ulster must be prepared, if it is to continue on its present path, to endure the killings which go on and on in that Province. I do not think that there are any new initiatives which will resolve this difficulty overnight.
Certain right hon. and hon. Members advocate consistently the idea of power sharing. I have tried to explain to Opposition Members before now that they do so because it goes to the essence of our politics. When confronted by a difficulty of this kind, we tend to seek the compromise. That is the British way. Certainly it is a way which I should like to see developed. But I do not hold out any great hope for it, especially after listening to the hon. Member for Antrim. North (Rev. Ian Paisley), who left this House in no doubt that there was not much hope of matters moving in that direction. If power sharing is not possible, I see no immediate way out of this House continuing on its present course for the Province. I think that we shall have to continue with direct rule.
Having said that and having pointed to some of the difficulties, I reiterate the view with which I started. In my view, the Bill is entirely justified. We cannot any longer allow the people of Northern

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Ireland to endure under representation. If certain consequences flow from that, as my hon. Friend the Member for Kingston upon Hull, Central pointed out, so be it. I think that the principle must stand.
9.6 p.m.
Mr. Michael McNair-Wilson: I agree with the hon. Member for Gloucestershire, West (Mr. Watkinson) that Northern Ireland cannot continue to be under represented in this House.
As a member of Mr. Speaker's Conference, I particularly resent some of the insinuations made by the hon. Member for Belfast, West (Mr. Fitt) that somehow the Speaker's Conference had been set up in such a way that political partiality, not equity of parliamentary representation, was its objective. I would add to that resentment my feeling about the speech by the hon. Member for Manchester, Blackley (Mr. Rose) who suggested that even the Boundary Commissioners could be got at to make the Bill a useless and gerrymandered document.
Having said that, and adding my thanks to Mr. Speaker and his staff for the excellent way in which the Conference was organised and the papers were put before us with so much detail about parliamentary representation within the United Kingdom generally, the single exchange of questions and answers which remained most clearly in my mind was between the hon. Member for Belfast, West and the Leader of the House on 30th November 1977. The questions and answers appear on page 26 of the minutes of evidence. I intend to quote the exchange that took place, because it is extremely important in understanding the Bill and the ramifications of the legislation when it finally becomes an Act of Parliament. The hon. Member for Belfast, West put to the Leader of the House:
" You said in your opening remarks Northern Ireland was under represented by the number of seats it has. If that is true in 1977 it has been true for the past 50 years, is that right?"
The Leader of the House replied,"Yes, that is so." The hon. Member for Belfast, West repeated his question:
" It has always been under represented since the creation of the state in 1920?'
The Leader of the House replied,"Yes, that is right."
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It seems from those questions and answers that, although one might say that it was no more nor less than the simple truth, the Leader of the House—after all, he is an expert on these matters—was saying that no matter whether there had been a Parliament at Stormont since 1920 or some other form of institution since 1973, throughout that time Northern Ireland had been under represented in this the Mother of Parliaments.
It has been suggested by at any rate one Labour Member that the right hon. Gentleman's change of mind was part of some political intrigue between the Government Front Bench and the United Ulster Unionist Party. In fact, that was not the kind of statement that we would expect from a person of his understanding of the constitution of this country unless he had given very careful thought to how he would answer those questions.
It seems to me therefore, that one can fairly say that the right hon. Gentleman had considered Northern Ireland with its Parliament at Stormont or without its Parliament at Stormont, that he had considered Northern Ireland with its Assembly or without its Assembly, and that he had come to the conclusion that no matter what devolved Administration there might be in a region of the United Kingdom, that could not be a makeweight for the number of seats that that area should fairly have in the Westminster Parliament.
It seems to flow from that not only that the right hon. Gentleman is clearly right in saying that Ulster has been underrepresented but that the addition of these seats in no way exonerates the present Government, or a future Government, from seeking to set up some form of local Administration in the Province.
The amendment in the name of the hon. Member for Belfast, West seems to be completely out of place, for if he had thought about that answer he would surely have reached the same conclusion as I have.
It has already been said by the hon. Member for Gloucestershire, West that the Strathclyde poll suggests that direct rule is much more popular in the Province than those on the Government Back Benches have sought to suggest during this afternoon. Whether that be the case or not, I simply reiterate my view that

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the Government have no case to put to suggest that extra seats for Northern Ireland at Westminster somehow satisfies, or should satisfy, the natural desire of the people of Northern Ireland for a proper and effective devolution of power to their Province.
In my simple view, this Bill—which I welcome—like the Speaker's Conference, sought to put right a wrong, a wrong which I believe most fair-minded Members of this House recognise. Indeed, it has been said that those who seek to argue that this Bill, somehow or other, will upset the balance of the political situation in Northern Ireland are, as has been pointed out, the very same Members who would no doubt wish to tell us that the people of Northern Ireland have been discriminated against in terms of their ability to vote as other members of the United Kingdom have voted. They cannot have it both ways. But if the Leader of the House is to be believed—and I believe him—all of us in the House tonight should recognise that in this small Bill we are putting right a wrong of 58 years' standing. It should make us blush for shame that we have allowed so much time to pass before putting matters to rights.
One might just wonder what the situation in Northern Ireland would now be if we had put that wrong right many years ago. Who knows what Members of Parliament might have come to this Chamber? Who knows what they might have been able to tell us about their Province that we have lever been able to hear? Who knows whether the present political situation, the unhappy situation of terrorism, and so on, would in fact have been created if those extra Members had been sitting in this Chamber, able to make certain that we did not forget their fellow men?
Lastly, I shall make just one comment about the number of seats. I hold a very simple view, which is that a Member of Parliament sitting here in Westminster should represent, no matter from where he comes, roughly the same number of people. I know there are geographical arguments to tell me that it is not always possible to reach a simple mathematical quota for every Member of Parliament, but I cannot help wondering how long this House of Commons will continue with a system which creates such an
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enormous imbalance between the number of votes that an English Member of Parliament has to poll to come to Westminster and those that a Scottish Member of Parliament has to poll.
I would also say to the Government—and perhaps I am saying it to both Front Benches—that if Assemblies are to be given to the regions of the United Kingdom, I believe the people of England are going to feel that they are becoming—and rapidly—the poor relations in terms of our parliamentary democracy. That is not to say that I do not want to see Northern Ireland replete with 16 or 18 seats at Westminster, and with it own regional council or that I do not wish the same for Wales and Scotland; it is simply that we cannot continue with an increasing imbalance between England and English constituents and those of other regions of the United Kingdom.
I therefore hope that when the Boundary Commissioners do their work, which I am sure they will complete with total impartiality, they will bear in mind that even if the United Kingdom quota, in terms of electors, would give Northern Ireland 16 seats, 18 seats would put Northern Ireland on a par with Wales. That may be not as good as Scotland, but it would be somewhere in the middle.
However, the flexibility which the Speaker's Conference has provided for the Boundary Commissioners to enable them to oscillate between the lower figure of 16 and the higher of 18 should give that equity in parliamentary representation in Northern Ireland which I have wanted for many years, which I now welcome, and which will, God willing, by 1984 mean that this House will have a number of additional Members from Northern Ireland.
9.17 p.m.
Mr. James Kilfedder: Throughout the debate hon. Members have described the Bill as an act of justice to Northern Ireland. However, it is certainly bruising the English language to describe as an act of justice a piece of legislation that perpetuates an injustice to Ulster and the Ulster people. I do not see why the Ulster people should be expected to fly into a frenzy of delight about the Bill when they know, as the right hon. Member for Down, South (Mr. Powell) and his six colleagues know, that

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these five extra seats fall far short of Ulster's fair entitlement on the basis of Scottish representation.
That is not just my opinion, and neither is it the opinion only of the Ulster people. The hon. Member for West Lothian (Mr. Dalyell), a prominent member of the Labour Party and a leading anti-devolutionist, declared that by rights Ulster should have 23 seats. He was speaking from a close knowledge of Scotland.
The Northern Ireland Convention majority report, which represented all shades of Unionist opinion, demanded 20 to 24 seats for the Province. To my knowledge, the Unionist voters in Northern Ireland, and the Unionist Party itself have not gone back on that declaration—that is, not until now when the Powell seven, as I call them, have settled for five extra seats.
By accepting fewer seats than the Province should have on the basis of Scottish representation, the right hon. Gentleman and his colleagues are doing an ill service to the Ulster people. Out of geographical considerations Scotland was given slightly more seats proportionately than England. Since Northern Ireland, unlike Scotland, is separated from the mainland by a stretch of water which incidentally creates expensive transport problems, I believe that the Province should be treated more favourably than Scotland.
That is not all. Scotland will soon have its own Assembly. The Scottish people want control of their own affairs, and they have rejected as inadequate the regional councils. But, arrogantly, the Government and the Powell seven deem the Ulster people unworthy of having a legislative Assembly at Stormont. Arrogantly, this Government and the Powell seven deem the regional councils, which are disliked by the Scottish people, as good enough for the Ulster people. Arrogantly, the Government and the Powell seven have refused to give the Ulster people the opportunity of deciding for themselves in a referendum whether they want a Stormon Assembly.
So much for the democratic rights of the Ulster people. But Ulster has even been denied by the Government and the Powell seven the right to a representative in the Common Market Parliament.
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It is the only region of the United Kingdom that has been penalised in this way.
Northern Ireland is a depressed area with the highest unemployment in the United Kingdom, and with a standard of living lower than that in Great Britain. However, despite the Government and the Powell seven, Northern Ireland will have the opportunity on 7th June to be represented in the Common Market Parliament. Even so, the people of Northern Ireland would have been denied by the Powell seven the opportunity of having three candidates. Originally, the Powell group tried to deny Ulster people the opportunity of having a direct vote for representatives in the European Parliament.
We have a reverse situation in discussing this Bill in which the hon. Member for Belfast, West (Mr. Fitt) has been arguing against increased representation for Northern Ireland. Certainly the people of Northern Ireland wish to have a devolved Parliament of Stormont, and in my opinion they would prefer to have that Parliament instead of increased representation. If this Bill is supposed to do justice to the people of Northern Ireland, let it do so and let there be proper representation in this House for Northern Ireland. Let us at the same time stop the move to integration which has been started by the right hon. Gentleman and his six acolytes.
9.22 p.m.
Mr. Norman St. John-Stevas: I wish to preface my remarks by paying a tribute to my hon. Friend the Member for Epping Forest (Mr. Biggs-Davison) for all he has done for the cause of peace in Northern Ireland. We regret that he is no longer on the Opposition Front Bench. However, we are delighted that he is still making a contribution to the solution of the most difficult problems of the Province. We listened carefully to his characteristic intervention and his most interesting suggestion that we could also look to representation in the other place to make the problem more amenable to solution.
I wish that I could continue in this ecumenical vein with regard to the Leader of the House. The only toast I could propose to him is that of"Absent friends ". Where is the right hon. Gentleman? We have heard the speech of the Secretary of State for Northern Ireland,

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who is now present. Furthermore, we shall hear the Minister of State, Northern Ireland Office, replying to the debate. I pay tribute to the work he has carried out in the Province. But as this is a matter that very much affects this House, I believe that the Leader of the House should be here. It is a matter for regret that he is not present.
It is a matter of personal regret that the right hon. Gentleman is absent, because the confrontation between the right hon. Gentleman and me has been billed in advance on television and elsewhere as the best show in town. However, it is a production that needs two stars. I hope that the show will not be indefinitely postponed and short-circuited, otherwise we shall put the soubriquet of the Windmill Theatre into reverse. It will be not"We never closed ", but"We never opened ".
The absence of the Leader of the House was commented on by the hon. Member for Kingston upon Hull, Central (Mr. McNamara). The Home Secretary's absence was commented upon by the hon. Member for Belfast, West (Mr. Fitt). Apparently the explanation advanced was that those right hon. Gentlemen find this Bill distasteful because of various utterances which they have made in the past. That may well be the case. For all I know, they may even disagree with the Bill, but it is a new constitutional doctrine that one can somehow dissociate oneself from a Bill which has been approved by the Cabinet of which one is a member and oppose it in the Smoking Room, but not in this House. It is seeking to cleanse oneself, as it were, by not giving tongue to one's view—by becoming a kind of oratorical Pontius Pilate. That is an entirely new doctrine. The Bill is a collective measure of the Government. It is supported by the entire Cabinet. Therefore, in supporting it they are all equally praiseworthy or all equally culpable. We cannot have a modified doctrine of Cabinet responsibility for the Bill.
The Bill is opposed by a minority in the House, but that is a small minority. It is supported by all shades of opinion in the House and all shades of opinion within the Unionist Party. Given the premise of the argument, the retention of the unity of the United Kingdom and
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our electoral system, it is difficult to understand how the Bill can possibly be rationally opposed.
The Bill has been described as an act of simple justice. That, indeed, is what it is. Northern Ireland is part of the United Kingdom. It will be so for the foreseeable future. It is wrong that it should be under-represented.
I do not wish to go again into the statistical argument that has been recited by my hon. Friend the Member for Abingdon (Mr. Neave) as well as by the Secretary of State, but the figures tell their own story.
The electoral quota to elect a Member in Scotland is 53,000. In Wales it is 57,000, in England it is 66,000 and in Northern Ireland it is 86,000. It may be that on the figures Scotland is over represented. No doubt that is arguable. However, that is another subject and another debate. If Scotland is over represented, that has no bearing on the argument that Northern Ireland is underrepresented, and that under the Bill for the first time it will be fairly represented.
Mr. Flanneryrose—
Mr. St. John-Stevas: I shall give way to the hon. Gentleman when I have finished this part of my argument.
That is why your Conference, Mr. Speaker, approved the reform by 22 votes to one.
Mr. Flannery: The hon. Gentleman seems to have so over-simplified the politics of Northern Ireland that he believes that the mechanistic counting of heads means democracy. The debate to which he has listened has revealed conclusively that Northern Ireland was a gerrymandered State from the beginning and that 51 per cent. of the votes produced 12 Members in this place, 10 on the Opposition Benches and two on the Labour Benches. That is a total misrepresentation. Through sheer expediency the Labour Government now propose to give more seats to a grossly over-represented group. That will produce more difficulty and drive more people into the hands of the IRA in Northern Ireland. That will be the impact of the pseudo-democracy that we are now having to accept.
Mr. St. John-Stevas: The hon. Gentleman's views on Northern Ireland seem to

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be as about objective as his views on education. I had not concluded my remarks. I was at the starting point. I was not at the terminus but at the point of departure. I was dealing with justice and electoral arithmetic. However, I recognise the complexity of the situation in Northern Ireland and I shall be referring to it.
It was the Conservative Party that was the first party in the House to recognise the anomaly.
Mr. Powell: No, it was not.
Mr. St. John-Stevas: It was the Conservative Party that pressed for reform. That appeared in a 1974 election manifesto. The Conservative Party may have been late, but it was not as late as the Labour Party. That is undoubtedly true. The Labour Party was last in the field.
It was with a certain amount of scepticism that I listened to the Secretary of State for Northern Ireland supporting the Bill and saying that it is a measure that meets the demands of equity, fairness and justice. That may be true but, it really does not apply to the motivation of those in the Government who have supported the Bill. There is a distinction between the measures in the Bill and the motivation that lies behind it. I do not have to add anything to the devastating exposé of the hon. Member for Belfast, West. There was much of his speech with which I disagreed—and in a speech of that length it would not be difficult to find something to disagree with. But on that point, concerning the bona fides of the Government, I thought that he made a case, as did the hon. Member for Kingston upon Hull, Central, which was unanswerable. It was all the more effective being addressed by one hon. Friend to another.
Mr. Fitt: My right hon. Friend the Member for Bermondsey (Mr. Mellish) did very well, too.
Mr. St. John-Stevas: I feel that I would be quite out of place, quite de trop, among such a band of brothers. But why was this change—and this is the point—opposed by the Government so strongly before March 1977? Suddenly there was this change of both practice and principle. It is said that Henry VIII first saw the Gospel light in the eyes of Anne Boleyn. The Secretary of State for
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Northern Ireland first saw the Gospel light in the eyes of the right hon. Member for Down, South (Mr. Powell).
This was not a conversion of principle on the part of the Government. It was a conversion of practice. Their minds were concentrated by the electoral situation here and that led to a reversal of policy. That is the simple truth. Well, that is politics and I do not necessarily condemn it entirely, but one should recognise that change for what it was. It was political and not a conversion of principle on the grounds of equity, fairness and justice. We have seen all sorts of coalitions in our time. We have seen the Fox-North coalition, and this coalition, for a temporary purpose, may well be in that tradition. But one does not have to pretend that it is anything other than that.
We have heard various points in the debates. First, there was the devolution issue. It is said that this issue justified under-representation. That certainly was the argument used at one time, that because Northern Ireland had a devolved legislature it was not entiled to full representation at Westminster. That was rejected by the Kilbrandon Commission. The idea, of course, does not stand up in logic or in practice. It does not stand up in practice because since 1972 Stormont has gone, alas. It stands up even less—
Mr. McNamara: Alas?
Mr. St. John-Stevas: Yes, alas. I think that it is a sad thing that it has happened. It is also out of accord with the situation which may well be created by the emergence of local assemblies in Scotland and Wales. But most of all, the arguments are really on different issues. They are quite distinct issues. The fact that one devolves responsibility on certain issues does not entail, in consequence, that there should be under-representation in an Assembly which is discussing different issues. The two events are not connected in logic. There is no contradiction between devolution and centralisation, nor is there any justification for under-representation in the main legislature because one has a devolved legislature at the same time.
With regard to the question of numbers, the proposal of Mr. Speaker's Conference embodied in the Bill has the merit of flexibility. The arithmetic is right and while there is a recommendation of 17

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seats there is the allowance of flexibility between 16 and 18. It is good to have a certain amount of flexibility when the Boundary Commissioners are examining the problem.
The opposition has principally come from the hon. Member for Belfast, West, who speaks for the SDLP. He is perfectly entitled to his view in this House. The fact that it is a minority view does not necessarily mean that it is wrong. One can criticise his arguments on a number of grounds. First, although the hon. Member represents the views of the SDLP, he does not represent necessarily the view of Roman Catholics in Northern Ireland.
Mr. Fitt: Neither does the hon. Gentleman.
Mr. St. John-Stevas: The hon. Gentleman has not yet heard what I am about to say on this point. He must not indulge in these prophetic gifts when, if he waits a moment, he will be able to hear what I say. The SDLP certainly represents a substantial body of Roman Catholic opinion in Northern Ireland—nobody could deny that—but there are many Catholics in Northern Ireland who support the Union, and that is clear also. It was clear at the time when the border poll took place. I wish that people were more aware of this. Perhaps I might say that they would be more aware of it if Catholics were better represented in the ranks of the other parties in Northern Ireland.
Mr. Fitt: The hon. Gentleman has said that the border poll was of some political significance in Northern Ireland. In fact, the SDLP, which I lead at the moment, advised our supporters not to vote on the border poll, because we knew already what it would mean. We knew what happened in 1920. On the other hand, I have heard from the Labour Benches—and I hope that the hon. Gentleman speaking for the Opposition, will not get involved in the same type of euphoria—that the only way to prove whether either the Catholic or the Protestant population support one or other of the political parties is by the results of the ballot box. The SDLP at the moment is the second largest political party in Northern Ireland—
Mr. Speaker: Order. The hon. Member for Belfast, West (Mr. Fitt) spoke for 79 minutes, and the winding-up speeches will be very brief.
Mr. St. John-Stevas: It was certainly the second longest intervention that we have had in the course of our debate. I am not trying to prove too much by what I am saying. I fully acknowledge the position of the hon. Gentleman's party, but we should not try to prove too much. The fact should be known that there is not an identification between the hon. Gentleman's party and the Catholic population of Northern Ireland, because there are considerable numbers of people who support the Union in different ways. That is my point, and it is not the same as saying that they support the Unionists.
The hon. Gentleman made much of the fact that this reform would benefit the Unionist parties in Northern Ireland. It may do or it may not, but once again we are in the realm of speculation. We are not even in the realm of psephology, which is an inexact science. We are in the realm of prophecy.
I have confidence in the equity, fairness and justice of the Boundary Commission in Northern Ireland. Having read the evidence which it gave to Mr. Speaker's Conference, and having read what Mr. Justice Murray and Miss Simmons had to say, I have every confidence that it will do its best to see that the measure is interpreted fairly in the context of Northern Ireland. Here the case of the hon. Gentleman is not proven. It may well be that a substantial proportion of the five seats will go to parties other than the Unionist Party.
Mr. Fitt: Or the other way round.
Mr. St. John-Stevas: Yes, but one cannot conclude that this is a benefit for the Unionist Party. It may turn out to be that, but that is not its intention, and it is not a necessary conclusion to draw from its provisions.
Mr. McNamara: In fact, the Secretary of State made the point that it would benefit the SDLP.
Mr. St. John-Stevas: I shall not judge between these rival faiths. I am agnostic on this issue. I am saying that the position is open, that it could go either way and that no firm conclusion can be drawn

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for the benefit of any party from the provisions of the Bill.
The hon. Member for Belfast, West seemed to think that this measure would advance integration. Again, this is quite a separate issue. Just like devolution, integration is a separate issue on which we may have views. But the future of integration will depend upon the measure of agreement which is reached between the communities in Northern Ireland itself, just as the future of devolution will depend upon that basic premise. It will depend on the willingness and ability of all those in Northern Ireland who are concerned with politics to achieve justice for the communities there. This Bill does not affect the issue of integration one way or another.
The point about proportional representation has been of importance to our discussion, because we have the Liberal Party amendment. I fully accept that this is not a clear cut and dried case. A lot of arguments have been put forward, and can be put forward with great justification, for PR in the particular situation of Northern Ireland. One can see those arguments in the special situation there. But I think that those arguments are outweighed by the principle that elections for this Parliament, taking place at the same time throughout the United Kingdom, should be on the same basis. That was the point which was so strongly made by my hon. Friend the Member for Abingdon and was supported in the extremely telling speech of the hon. Member for Gloucestershire, West (Mr. Watkinson). I believe that that argument must prevail over the admittedly valid arguments which the hon. Member for Isle of Ely (Mr. Freud) put forward.
Mr. Freud: Does the hon. Gentleman really feel that it does not matter what brings about an absolutely rotten inequality in which over 40 per cent. of the people of a country are represented by only two out of 12 Members of Parliament? Surely the important thing is to have the right representation.
Mr. St. John-Stevas: At this moment I do not want to enter into that argument. But I think that I have been perfectly fair to the points made by the hon. Gentleman in saying that there was substance in them but that they must be
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subordinated to the general argument of principle.
One comes back to where we began. This is a long, overdue measure of reform. We have had a number of excellent, constructive and statesmanlike speeches. I congratulate the right hon. Member for Belfast, East (Mr. Craig) on his contribution. It is true that this is a minor measure, but it is a measure of justice. The basic problems of the Province will not be affected radically one way or another by the Bill. They must be resolved in other ways. But meanwhile it is right that Northern Ireland should have a more effective and representative voice here. We wish the Bill a speedy passage on to the statute book.
9.44 p.m.
The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): We have now progressed from a short Mr. Speaker's Conference report to a short Bill. However, I think that our discussions today have reflected the fact that the substance about which we have been talking is a very important issue in Northern Ireland. I have never felt so unwanted as I feel today. It seems that anybody in the House could have wound up the debate.
The hon. Member for Chelmsford (Mr. St. John-Stevas) said he was looking forward to this great confrontation with the Leader of the House, but I have a sneaking feeling that he is winding up today only because the Opposition have only one Front Bench spokesman for Northern Ireland. My old opponent, the hon. Member for Epping Forest (Mr. Biggs-Davison) is now sitting on the Back Benches. If I were the hon. Member for Chelmsford I would contain myself a little over this big confrontation. From my experience in the House, when this confrontation comes about it will be such that if it were a snooker match my right hon. Friend would have to give the hon. Member about a five-black start.
This is a serious matter. I have lost count of the times that I have stood at the Dispatch Box during the past four years commending Northern Ireland legislation to the House. Today is different from most other occasions because today I am speaking to a Bill rather than an Order in Council. Before the right hon. Member for

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Down, South (Mr. Powell) intervenes to say that he wishes that there were more Bills and fewer orders, I shall anticipate him because I am well aware of his views. Certainly we differ on that question. We differ for a very simple reason—this Government want to see a return to devolved government in Northern Ireland.
Direct rule is only an interim arrangement. Therefore, we continue to use Orders in Council drafted to be consistent with Acts of the Northern Ireland Parliament or measures of the Northern Ireland Assembly. We see this as the principal way to legislate for Northern Ireland on transferred matters during direct rule. The fact that we have legislated in this way will greatly ease the handover to devolved government when the end of direct rule comes.
Mr. McNamara: How interim is"interim "?
Mr. Concannon: Until the people of Northern Ireland decide otherwise.
The argument about the method of legislating for Northern Ireland is very relevant to today's debate. Although the Bill has had a general welcome, I recognise that it has also caused some concern. Some right hon. and hon. Members—notably my right hon. Friend the Member for Bermondsey (Mr. Mellish), my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) and my hon. Friend the Member for Manchester, Blackley (Mr. Rose), as well as my hon. Friend the Member for Belfast, West (Mr. Fitt) who gave a very good exposé of his party's opposition to the measure—have expressed the fear that increased representation at Westminster will bind Northern Ireland more closely and even permanently, to Britain and make an acceptable form of devolved government even more difficult to attain.
The Government, through their actions, have demonstrated their determination to continue the search for an acceptable form of devolved government in Northern Ireland. It would be a tragedy if others in Northern Ireland abandoned that search because of their misinterpretation of the Bill.
The Secretary of State has already explained why the Bill is before the House. It is not seen by the Government
350
as a step down the road to complete integration. The Bill simply corrects the injustice arising from the fact that the electors of Northern Ireland have a lesser degree of representation than their fellows elsewhere in the country.
The Bill shuts no doors and forecloses no options. It does not set the long term future of Northern Ireland in any rigid mould. Self determination for the people of Northern Ireland—not representation —is the key to the future of the Province. The majority of the people of Northern Ireland at present clearly wish to remain as part of the United Kingdom. Therefore that must remain the position. But as the Secretary of State has said, no British Government will stand in the way of a change if that is the freely expressed wish of the majority. That was the view of the previous Conservative Government and it is our view. The Bill in no way alters that.
Mrs. Winifred Ewing: Do I understand the remarks of the Minister as meaning that the Government have set their hearts against any possibility of a united Ireland, which is the clear view of the hon. Member for Belfast, West (Mr. Fitt), who spoke for more than an hour?
Mr. Concannon: Had the hon. Lady listened to me just now she would have heard me say that the Government would not stand in the way of the expressed wish of the majority of people in Northern Ireland. That was the view of the last Conservative Government and it is the view of this Government.
The hon. Member for Isle of Ely (Mr. Freud) moved the amendment in the name of the leader of the Liberal Party. The Bill implements the recommendation of Mr. Speaker's Conference, the terms of reference of which referred only to the number of parliamentary constituencies in Northern Ireland. The method of election is an entirely separate matter. The Conference did not consider it; neither, therefore, does the Bill. However, it would be unusual if one method were used for electing some hon. Members and a different method used for others.
Mr. Fitt: I am delighted to see the present Home Secretary in the Chamber. I am sorry that he was not here for my speech. Has the Minister of State

351
taken account of the reservations expressed over a number of years by the Home Secretary to the effect that Northern Ireland is not Scotland, England, or Wales? It is a place apart, and we cannot apply the same restrictions to the electors of Northern Ireland that we apply to other parts of the United Kingdom.
Mr. Concannon: I do not have long and I wish to get on to other matters.
Mr. Fitt: Does the Minister agree with the Home Secretary?
Mr. Concannon: I was at the Northern Ireland Office when the present Home Secretary was making the speeches that my hon. Friend the Member for Belfast, West (Mr. Fitt) quoted. I have all the quotes in front of me.
In general, the Bill has received the welcome that I would expect for legislation giving effect to a near unanimous recommendation of an all-party Speaker's Conference. But hon. Members have raised a number of matters and I shall deal with as many as I can.
To be fair, I should start with the speech of my hon. Friend the Member for Belfast, West. He asked why we changed our mind over representation. If he had not interrupted me, I would have dealt with that aspect and, perhaps, had time to deal with one or two other matters as well.
The Government have long recognised that Northern Ireland was underrepresented in the House in comparison with other parts of the United Kingdom. For some time there was a general belief that the existence of devolved government in a certain part of the country justified a lower level of representation there. I have copies of the speeches of the current Home Secretary from which my hon. Friend the Member for Belfast, West quoted and I have copies of other quotations as well. I have been at the Northern Ireland Office for four and a half years and I am grateful that some of my speeches have not been quoted.
My right hon. Friend the present Home Secretary said, when he was Secretary of State for Northern Ireland:
"The question of Northern Ireland representation at Westminster continues to be raised. I accept that Northern Ireland is under-represented and that this becomes more apparent the longer that direct rule continues."
352
—[Official Report. 2nd July 1976; Vol. 914, c. 813.1
Mr. McNamara: It was the Government's policy that devolved government and power sharing were a prerequisite to increased representation. My right hon. Friend seems to refuse to recognise that this alteration has taken place.
Mr. Concannon: My hon. Friend should have allowed me to continue. I intend to deal with that matter. As my right hon. Friend the Secretary of State said when introducing the Bill, Parliament has approved Scottish and Welsh retention of full representation even after devolution. It was then that it became clear that each part of the country should have full representation, regardless of the existence of devolved government and it was then that the Government acted on Northern Ireland representation.
Mr. Fitt: On a point of order, Mr. Speaker. You will remember that at the beginning of the debate many reservations were expressed about the way in which the Bill was being introduced, on the grounds that it is of supreme constitutional importance because it will change the number of Northern Ireland Members in the House and that they could decide the future of government in Northern Ireland. Many people said that the Bill affected the Representation of the People Acts and that the Bill should have been introduced by my right hon. Friend the Home Secretary.
I ask you, Mr. Speaker, to rule that before the debate is concluded there should be some expression of opinion by a Home Office representative and, in particular, by the Home Secretary.
Mr. Speaker: The hon. Member will be well aware that I cannot ask for a voice from the Home Office. I must allow the Minister to reply.
Mr. Concannon: My hon. Friend the Member for Belfast, West (Mr. Fitt) spoke for one and a quarter hours. I have lost count of the number of times since March 1977, that the ridiculous allegation has been made about a deal between the Government and the Unionists. My right hon. Friend has denied the existence of any pact between the Government and the Unionists. The allegation is not true.
The voting lists are evidence of that. Immediately after the deal was alleged to

353
have taken place seven Unionists voted against the Government on a confidence motion. No Unionists voted for us. The day after that vote we had Northern Ireland Question Time. The first Question was from the hon. Member for Tyrone, who had voted against the Government on the vote of confidence and he wanted more money for his constituency.
Rev. Ian Paisley: On a point of order, Mr. Speaker. Is it in order for the Minister to refer to a constituency that does not exist in Northern Ireland?
Mr. Concannon: The hon. Member to whom I referred acknowledged that he knew about whom I was talking. If there was a pact there is little evidence of it. Any idea of a pact is absolute nonsense.
The Bill arises from the acceptance, in the light of devolution proposals for Scotland and Wales. that the people of Northern Ireland are under represented at Westminster. The Bill provides for an increase in seats in Northern Ireland to the same pro rata level as that in the United Kingdom. The Bill has nothing whatever to do with pacts or deals.
I am confident that the Boundary Commission will, as always, carry out its task of drawing the new boundaries with the utmost impartiality. Under the Commission's statutory procedure the electorate will have an opportunity to object to the Commission's proposals or to make alternative proposals.
The Boundary Commission for Northern Ireland is bound by the same rules of

Division No.4]

AYES

[10.0 p.m.

Buchanan-Smith, Alick

Meyer, Sir Anthony

Steel, Rt Hon David

Colquhoun, Ms Maureen

Morris, Michael (Northampton S)

Stewart, Rt Hon Donald

Dean, Paul (N Somerset)

Morrison, Rt Hon Charles (Devizes)

Wainwright, Richard (Coine V)

Ewing, Mrs. Winifred (Moray)

Pardoe, John

Walker, Rt Hon P. (Worcester)

Fisher, Sir Nigel

Penhaligon, David

Wilson, Gordon (Dundee E)

Freud, Clement

Rathbone, Tim

Young, Sir G. (Ealing, Acton)

Grimond, Rt Hon J.

Ross, Stephen (Isle of Wight)

Home Robertson, John

Sillars, James

TELLERS FOR THE AYES

Howells, Geraint (Cardigan)

Sinclair, Sir George

Mr. A. J. Beith and

Kershaw, Anthony

Smith, Cyril (Rochdale)

Mr. Russell Johnston.

Knox, David

NOES

Abse, Leo

Banks, Robert

Blaker, Peter

Adley, Robert

Barnett, Guy (Greenwich)

Blenkinsop, Arthur

Alison, Michael

Bates, Alf

Boardman, H.

Allaun, Frank

Bendall, Vivian

Body, Richard

Anderson, Donald

Benn, Rt Hon Anthony Wedgwood

Booth, Rt Hon Albert

Armstrong, Ernest

Bennett, Andrew (Stockport N)

Boscawen, Hon Robert

Ashton, Joe

Bennett, Dr Reginald (Fareham)

Bottomley, Rt Hon Arthur

Atkins, Rt Hon H. (Spelthorne)

Benyon, W.

Bottmley peter

Atkinson, David (B'mouth, East)

Berry, Hon Anthony

Bowden, A. (Brighton, Kemptown)

Atkinson, Norman (H' gey, Tott' ham)

Biffen, John

Bradford, Rev Robert

Awdry, Daniel

Biggs-Davison, John

Bradley, Tom

procedure as are Commissions for the other parts of the United Kingdom. It must publicise its initial proposals, allow for objections, conduct local inquiries where necessary and eventually submit its report and recommendations to the Secretary of State. That might take up to two years. That may seem a long time, but it is essential that the Boundary Commission is seen to be impartial and that its procedure is beyond reproach.
I say to my hon. Friend the Member for Manchester, Blackley (Mr. Rose) that the matter will have to be returned to the House. Any gerrymandering would be abhorrent to the Boundary Commission and certainly to the chairman, who is Mr. Speaker.
It is not possible for the Government to make predictions about which parties will be returned for the new 17 seats. The quota is about 60,806. In Belfast, North the electorate totals 66,000. The figure for Belfast, South is 70,000, for Belfast, East, 76,000, for Belfast, West 59,000, for Antrim, North 103,000, and for Antrim, South, 126,000.
I cannot believe that the argument made by my hon. Friend the Member for Blackley will apply anywhere else but to those constituencies which have over 100,000 electors. There is much that I could say, but I must conclude my speech.
Question put,That the amendment he made:—
The House divided: Ayes 27, Noes, 355.

Bray, Dr Jeremy

Golding, John

Mallalieu, J. P. W.

Brittan, Leon

Gourlay, Harry

Marks, Kenneth

Brotherton, Michael

Graham, Ted

Marshall, Dr Edmund (Goole)

Brown, Hugh D. (Provan)

Grant, George (Morpeth)

Marshall, Jim (Leicester S)

Brown, Robert C. (Newcastle W)

Grant, John (Islington C)

Marshall, Michael (Arundel)

Bryan, Sir Paul

Gray, Hamish

Marten, Neil

Buchan, Norman

Grist, Ian

Mason, Rt Hon Roy

Buchanan, Richard

Grocott, Bruce

Mather, Carol

Buck, Antony

Hall-Davis, A. G. F.

Maude, Angus

Budgen, Nick

Hamilton, Archibald (Epsom & Ewell)

Mawby, Ray

Butler, Mrs Joyce (Wood Green)

Hannam, John

Maxwell-Hyslop, Robin

Campbell, Ian

Hardy, Peter

Maynard, Miss Joan

Cant, R. B.

Harrison, Rt Hon Walter

Mellish, Fit Hon Robert

Carmichael, Neil

Hart, Rt Hon Judith

Mikardo, Ian

Carter-Jones, Lewis

Harvie Anderson, Rt Hon Miss

Millan, Rt Hon Bruce

Castle, Rt Hon Barbara

Havers, Rt Hon Sir Michael

Miller, Dr M. S. (E Kilbride)

Channon, Paul

Hayhoe, Barney

Mills, Peter

Churchill, W. S.

Hicks, Robert

Miscampbell, Norman

Clark, Alan (Plymouth, Sutton)

Holland, Philip

Mitchell, Austin (Grimsby)

Clark, William (Croydon S)

Hooley, Frank

Moate, Roger

Clarke, Kenneth (Rushcliffe)

Horam, John

Molyneaux, James

Clegg, Walter

Hordern, Peter

Monro, Hector

Clemitson, Ivor

Huckfield, Les

Montgomery, Fergus

Cockcroft, John

Hughes, Roy (Newport)

Moonman, Eric

Cocks, Rt Hon Michael (Bristol S)

Hunt, John (Ravensbourne)

Moore, John (Croydon C)

Coleman, Donald

Hunter, Adam

More, Jasper (Ludlow)

Cohen, Stanley

Hurd, Douglas

Morgan, Geraint

Concannon, Rt Hon John

Hutchison, Michael Clark

Morris, Alfred (Wythenshawe)

Conlan, Bernard

Irving, Charles (Cheltenham)

Morris, Rt Hon Charles R.

Cook, Robin F. (Edin C)

Irving, Rt Hon S. (Dartford)

Morrison, Hon Peter (Chester)

Cooke, Robert (Bristol W)

Jackson, Miss Margaret (Lincoln)

Morton, George

Cope, John

James, David

Moyle, Rt Hon Roland

Corbett, Robin

Jay, Rt Hon Douglas

Mulley, Rt Hon Frederick

Costaln, A. P.

Jeger, Mrs Lena

Murray, Rt Hon Ronald King

Cowans, Harry

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

Neave, Airey

Cox, Thomas (Tooting)

Jessel, Toby

Nelson, Anthony

Craig, Rt Hon W. (Belfast E)

John, Brynmor

Neubert, Michael

Cralgen, Jim (Maryhill)

Johnson, James (Hull West)

Newens, Stanley

Crawshaw, Richard

Johnson, Walter (Derby S)

Newton, Tony

Crowther, Stan (Rotherham)

Johnson Smith, G. (E Grinstead)

Normanton, Tom

Cryer, Bob

Jones, Alec (Rhondda)

Oakes, Gordon

Cunningham, G. (Islington S)

Jones, Barry (East Flint)

Ogden, Eric

Davies, Ifor (Gower)

Jones, Dan (Burnley)

Onslow, Cranley

Oavis, Clinton (Hackney C)

Jopling, Michael

Orbach, Maurice

Deakins, Eric

Joseph, Rt Hon Sir Keith

Orme, Rt Hon Stanley

Dean, Joseph (Leeds West)

Judd, Frank

Ovenden, John

Dempsey, James

Kaberry, Sir Donald

Page, John (Harrow West)

Dewar, Donald

Kaufman, Rt Hon Gerald

Page, Rt Hon R. Graham (Crosby)

Doig, Peter

Kerr, Russell

Paisley, Rev Ian

Dormand, J. D.

Kilfedder, James

Park, George

Douglas-Hamilton, Lord James

Klmball, Marcus

Parker, John

Douglas-Mann, Bruce

King, Evelyn (South Dorset)

Pattie, Geoffrey

Drayson, Burnaby

King, Tom (Bridgwater)

Pavitt, Laurie

Duffy, A. E. P.

Lamborn, Harry

Pendry, Tom

Dunlop, John

Lamond, James

Perclval, Ian

Durant, Tony

Lamont, Norman

Peyton, Rt Hon John

Eadie, Alex

Langford-Holt, Sir John

Phipps, Dr Colin

Eden, Rt Hon Sir John

Latham, Arthur (Paddlngton)

Pink, R. Bonner

Edwards, Nicholas (Pembroke)

Leadbitter, Ted

Powell, Rt Hon J. Enoch

Ellis, John (Brigg & Scun)

Lee, John

Price, C. (Lewlsham W)

Emery, Peter

Le Merchant, Spencer

Price, David (Eastlelgh)

Evans, loan (Aberdare)

Lester, Jim (Beeston)

Radlce, Giles

Evans, John (Newton)

Lestor, Miss Joan (Eton & Slough)

Rees, Rt Hon Merlyn (Leeds S)

Ewing, Harry (Stirling)

Lewis, Kenneth (Rutland)

Renton, Rt Hon Sir D. (Hunts)

Eyre, Reginald

Lewis, Ron (Carlisle)

hodes James, R.

Falrbairn, Nicholas

Lltterick, Tom

Rhys Williams, Sir Brandon

Fairgrieve, Russell

Loyden, Eddie

Richardson, Miss Jo

Farr, John

Luard, Evan

Rldsdale, Julian

Faulds, Andrew

Luce, Richard

Rifkind, Malcolm

Fernyhough, Rt Hon E.

Lyon, Alexander (York)

Rippon, Rt Hon Geoffrey

Finsberg, Geoffrey

Lyons, Edward (Bradford W)

Roberts, Albert (Normanton)

Fitt, Gerard (Belfast W)

McCusker, H.

Roberts, Wyn (Conway)

Flannery, Martin

McElhone, Frank

Robertson, George (Hamilton)

Fletcher, Ted (Darlington)

Macfarlane, Nell

Rodgers, George (Chorley)

Fookes, Miss Janet

MacGregor, John

Rooker, J. W.

Foot, Rt Hon Michael

McGuire, Michael (Ince)

Rose, Paul B.

Ford, Ben

McKay, Alan (Penlstone)

Ross, Rt Hon W. (Kllmarnock)

Forrester, John

MacKay, Andrew (Stechford)

Ross, William (Londonderry)

Fowler, Gerald (The Wrekln)

MacKenzie, Rt Hot. Gregor

Rost, Peter (SE Derbyshire)

Fowler, Norman (Sutton C'l'd)

Macmillan, Rt Hon M. (Farnham)

Rowlands, Ted

Fraser, Rt Hon H. (Stafford & St)

McMillan, Tom (Glasgow C)

Ryman, John

Gardiner, George (Relgate)

McNair-Wllson, M. (Newbury)

St. John-Stevas, Norman

George Bruce

McNair-Wilson, P. (New Forest)

Scott, Nicholas

Gilbert, Rt Hon Dr John

McNamara, Kevin

Sedgemore, Brian

Glyn, Dr Alan

Maguire, Frank (Fermanagh)

Sever, Jonn

356

357

Shaw, Arnold (Word South)

Stradllng Thomas, J.

Weatherill, Bernard

Shaw, Giles (Pudsey)

Strang, Gavin

Weetch, Ken

Shaw, Michael (Scarborough)

Summerskill, Hon Dr Shirley

Wellbeloved, James

Shelton, William (Streatham)

Taylor, Mrs Arm (Bolton W)

Wells, John

Shepherd, Colin

Taylor, R. (Croydon NW)

White, Frank R. (Bury)

Shore, Rt Hon Peter

Taylor, Teddy (Cathcart)

White, James (Pollok)

Short, Mrs Renee (Wolv NE)

Tebbit, Norman

Whitehead, Philip

Silkin, Rt Hon John (Deptford)

Temple-Morris, Peter

Whitelaw, Rt Hon William

Silkin. Rt Hon S. C. (Dulwlch)

Thomas, Rt Hon P. (Hendon S)

Whltlock, William

Sims, Roger

Thomas, Ron (Bristol NW)

Whitney, Raymond

Skinner, Dennis

Thorne, Stan (Preston South)

Willey, Rt Hon Frederick

Smith, Dudley (Warwick)

Torney, Tom

Williams, Rt Hon Alan (Swansea W)

Smith, Rt Hon John (N Lanarkshire)

Townsend, Cyril D.

Wilson, William (Coventry SE)

Snape, Peter

Urwln, T. W.

Wlnterton, Nicholas

Spearing, Nigel

van Straubenzae, W. R.

Woodall, Alec

Speed, Keith

Varley, Rt Hon Eric G.

Woof, Robert

Spence, John

Vlggers, Peter

Wrigglesworth, Ian

Spriggs, Leslie

Wainwright, Edwin (Dearne V)

Young, David (Bolton E)

Stallard, A. W.

Wakeham, John

Younger, Hon George

Stanbrook, Ivor

Walker, Harold (Doncaster)

Steen, Anthony (Wavertree)

Walker, Terry (Klngswood)

TELLERS hOR THE NOES:

Stoddart, David

Warren, Kenneth

Mr. James Hamilton and

Stokes, John

Watklns, David

Mr. James Tinn

Stott, Roger

Watklnson, John

Question accordingly negatived.
Main Question put forthwith pursuant to Standing Order No. 39 (Amendment on Second or Third reading):—
The House divided: Ayes 350, Noes 49.

AYES

Abse, Leo

Castle, Rt Hon Barbara

Falrbalrn, Nicholas

Adley, Robert

Channon, Paul

Fairgrleve, Russell

Alison, Michael

Churchill, W. S.

Farr, John

Anderson, Donald

Clark, Alan (Plymouth, Sutton)

Faulds, Andrew

Armstrong, Ernest

Clerk, William (Croydon S)

Fernyhough, Rt Hon E.

Ashton, Joe

Clarke, Kenneth (Rushcliffe)

Flnsberg, Geoffrey

Atkins, Rt Hon H. (Spelthorne)

Clegg, Walter

Fisher, Sir Nigel

Atkinson, David (B'mouth, East)

Cockcroft, John

Fookes, Miss Janet

Awdry, Daniel

Cocks, Rt Hon Michael (Bristol S)

Foot, Rt Hon Michael

Banks, Robert

Cohen, Stanley

Ford, Ben

Barnett, Guy (Greenwich)

Coleman, Donald

Forman, Nigel

Bates, Alt

Concannon, Rt Hon John

Forrester, John

Belth, A. J.

Conlan, Bernard

Fowler, Gerald (The Wrekln)

Bendall, Vivian

Cook, Robin F. (Edin C)

Fowler, Norman (Sutton C'l'd)

Bennett, Andrew (Stockport N)

Cooke, Robert (Bristol W)

Fraser, Rt Hon H. (Stafford a St)

Bennett, Dr Reginald (Fareham)

Cope,John

Gardiner, George (Relgate)

Benyon, W.

Costaln, A. P.

George Bruce

Berry, Hon Anthony

Cowans, Harry

Gilbert, Rt Hon Dr John

Blffen, John

Cox, Thomas (Tooting)

Gilmour, Rt Hon Sir Ian (Chesham)

Biggs-Davlson, John

Craig, Rt Hon W. (Belfast E)

Glyn, Dr Alan

Blaker, Peter

Cra'gen, Jim (Maryhltl)

Golding, John

Blenklnsop, Arthur

Crawshaw, Richard

Goodlad, Alastalr

Boerdman, H.

Crowther, Stan (Rotherham)

Gourlay, Harry

Booth, Rt Hon Albert

Cunningham, G. (Islington S)

Graham, Ted

Boscawen, Hon Robert

Davidson, Arthur

Grant, George (Morpeth)

Bottomley, Rt Hon Arthur

Davies, Ifor (Gower)

Grant, John (Islington C)

Bottomley, Peter

Davis, Clinton (Hackney C)

Gray, Hamish

Bowden, A. (Brighton, Kemptown)

Deaklns, Eric

Grist, Ian

Bradford, Rev Robert

Dean, Paul (N Somerset)

Hall-Davis, A. G. F.

Bradley, Tom

Dempsey, James

Hamilton, Archibald (Epsom & Ewell)

Bray, Dr Jeremy

Dewar, Donald

Hamilton, James (Bothwell)

Brlttan, Leon

Dodsworlh, Geoffrey

Hamilton, Michael (Salisbury)

Brotherton, Michael

Dolg, Peter

Hampson, Dr Keith

Brown, Hugh D. (Provan)

Dormand, J. D.

Hannam. John

Brown, Robert C. (Newcastle W)

Douglas-Hamilton, Lord Jamea

Hardy, Peter

Bryan, Sir Paul

Drayson, Burnaby

Harrison, Rt Hon Walter

Buchanan, Richard

Duffy, A. E. P.

Hart, Rt Hon Judith

Buchanan-Smith, Allck

Dunlop, John

Harvle Anderson, Rt Hon Miss

Buck, Antony

Durant, Tony

Havers, Rt Hon Sir Michael

Budgen, Nick

Eadie, Alex

Hayhoe, Barney

Bulmer, Esmond

Eden, Rt Hon Sir John

Heseltine, Michael

Butler, Adam (Bosworth)

Edwards, Nicholas (Pembroke)

Hicks, Robert

Butler, Mrs Joyce (Wood Green)

Emery, Peter

Hodgson, Robin

Campbell, Ian

Evans, John (Newton)

Holland, Philip

Cant, R. B.

Ewing, Harry (Stirling)

Hooley, Frank

Carlisle. Murk

Eyre, Reginald

Horam, John

358

359

Hordern, Peter

Miller, Hal (Bromsgrove)

Shaw, Michael (Scarborough)

Huckflela, Lea

Miller, Dr M. S. (E Kilbride)

Shelton, William (Streatham)

Hughes, Roy (Newport)

Miscampbell, Norman

Shepherd, Colin

Hunt, David (Wirral)

Mitchell, Austin (Grimsby)

Shore, Rt Hon Peter

Hunt, John (Ravensbourne)

Mitchell, David (Basingstoke)

Sllkln, Rt Hon John (Deptford)

Hunter, Adam

Moate, Roger

Silkln, Rt Hon S. C. (Dulwich)

Hurd, Douglas

Molyieaux, James

Sillars, James

Hutchison, Michael Clark

Monro, Hector

Sims, Roger

Irving, Charles (Cheltenham)

Montgomery, Fergus

Sinclair, Sir George

Irving, Rt Hon S. (Dartlord)

Moonman, Eric

Smith, Dudley (Warwick)

Jackson, Miss Margaret (Lincoln)

Moore, John (Croydon C)

Smith, Rt Hon John (N Lanarkshire)

James, David

More, Jasper (Ludlow)

Smith, Timothy John (Ashfleld)

Jay, Rt Hon Douglas

Morgan, Geralnt

Snape, Peter

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

Morris, Alfred rvvythenshawe)

Spearing, Nigel

Jesse 1, Toby

Morris, Rt Hon Charlea R.

Speed, Keith

John, Brynmor

Morris, Michael (Northamptbn S)

Spence, John

Johnson, James (Hull West)

Morrison, Rt Hon Charles (Devizes)

Stainton, Keith

Johnson, Walter (Derby S)

Morrison, Hon Peter (Chester)

Stanbrook, Ivor

Johnson Smith, G. (E Grlnstead)

Morton, George

Steen, Anthony (Wavertree)

Jones, Alec (Rhondda)

Moyle, Rt Hon Roland

Stewart, Rt Hon Donald

Jones, Barry (East Flint)

Mulley, Rt Hon Frederic*

Stewart, Ian (Hitchln)

Jones, Dan (Burnley)

Murray, Rt Hon Ronald King

Stewart, Rt Hon M. (Fulham)

Jopllng, Michael

Neave, Airey

Stoddart, David

Joseph, Rt Hon Sir Keith

Nelson, Anthony

Stokes, John

Judd, Frank

Neubert, Michael

Stott, Roger

Kaberry, Sir Donald

Newton, Tony

Stradllng Thomas, J.

Kaufman, Rt Hon Gerald

Normanton, Tom

Strang, Gavin

Kershaw, Anthony

Oakes, Gordon

Summersklll, Hon Dr Shirley

Ktlfedder, James

Ogden, Eric

Taylor, R> (Croydon NW)

Kimball, Marcus

Onslow, Cranley

Taylor, Teddy (Cathcart)

King, Evelyn (South Dorset)

Orme, Rt Hon Stanley

Tebbit, Norman

King, Tom (Bridgwater)

Page, John (Harrow West)

Temple-Morris, Peter

Knox, David

Page, Rt Hon R. Graham (Crosby)

Thomas, Rt Hon P. (Hendon S)

Lamborn, Harry

Paisley, Rev Ian

Tlnn, James

Lamond, James

Park, George

Torney, Tom

Lamont, Norman

Parker, John

Townsend, Cyril D.

Langford-Holt, Sir John

Pattle, Geoffrey

Urwln, T. W.

Lawrence, Ivan

Pavltt, Laurie

van Straubenzee, W. R.

Leadbltter, Ted

Pendry, Tom

Varley, Rt Hon Eric G.

Le Marchant, Spencer

Percival, Ian

Walnwrlght, Edwin (Dearne V)

Lester, Jim (Beeston)

Peyton, Rt Hon John

Wakeham, John

Lewis, Kenneth (Rutland)

Phlpps, Dr Colin

Walker, Harold (Doncaster)

Lewis, Ron (Carlisle)

Pink, R. Bonner

Walker, Rt Hon P. (Worcester)

Loveridge, John

Powell, Rt Hon J. Enoch

Walker, Terry (Kingswood)

Luard, Evan

Price, David (Eastleigh)

Warren, Kenneth

Luce, Richard

Pym, Rt Hon Francis

Watklns, David

Lyons, Edward (Bradford W)

Radice, Giles

Watklnson, John

Mabon, Rt Hon Dr J. Dickson

Ralson, Timothy

Weatherlll, Bernard

McCusker, H.

Rathbone, Tim

Weetch, Ken

McElhone, Frank

Rees, Rt Hon Merlyn (Leeds S)

Wellbeloved, James

Macfarlane, Neil

Rees, Peter (Dover & Deal)

Wells, John

MacGregor, John

Ronton, Rt Hon Sir D. (Hunts)

White, Frank R. (Bury)

McKay, Alan (Penlstone) MacKay, Andrew (Stechford)

Renton, Tim (Mid-Sussex) Rhodes James, R.

White, James (Pollok) Whitehead, Philip

MacKenzio, Rt Hon Gregor

Rhys Williams, Sir Brandon

Whltelaw, Rt Hon William

Macmlllan, Rt Hon M. (Farnham)

Rldsdale, Julian

Whitlock, William

McMillan, Tom (Glasgow C)

Rifklnd, Malcolm

Whitney, Raymond

McNair-Wllson, M. (Newbury)

Rippon, Rt Hon Geoffrey

Wllley, Rt Hon Frederick

McNalr-Wilson, P. (New Forest)

Roberts, Albert (Normanton)

Williams, Rt Hon Allan (Swansea W)

Madel, David

Roberts, Wyn (Conway)

Wilson, Gordon (Dundee E)

Mallalieu, J. P. W. Marks, Kenneth

Robertson, George (Hamilton) Rooker, J. W.

Wilson, William (Coventry SE) Winterton, Nicholas

Marshall, Dr Edmund (Goole)

Ross, Rt Hon W. (Kilmarnock)

Wood, Rt Hon Richard

Marshall, Michael (Arundel)

Ross, William (Londonderry)

Woof, Robert

Marter.. Nell

Rossi, Hugh (Hornsey)

Wrigglesworth, Ian

Mason, Rt Hon Roy

Rost, Peter (SE Derbyshire)

Young, David (Bolton E)

Mather, Carol

Rowlands, Ted

Young, Sir G. (Ealing, Acton)

Maude, Angus

Ryman, John

Younger, Hon George

Mawby, Ray

Salnsbury, Tim

Maxwell-Hyslop, Robin

St. John-Stevas, Norman

TELLERS FOR THE AYES:

Meyer, Sir Anthony

Sever, John

Mrs. Ann Taylor and

Mlllan, Rt Hon Robert

Shaw, Giles (Pudsey)

Mr. Joseph Dean.

NOES

Atkinson, Norman (H'gey, Totl'ham)

Flannery, Martin

Lee, John

Buchan, Norman

Fletcher, Ted (Darlington)

Loyden, Eddie

Canavan, Dennis

Freud, Clement

Lyon, Alexander (York)

Carmlchael Neil

Grimond, Rt Hon J.

McGuIre, Michael (Ince)

Carter-Jones, Lewis

Grocott, Bruce

McNamara, Kevin

Clemitson, Ivor

Home Robertson, John

Magulre, Frank (Fermanagh)

Colquhoun, Ms Maureen

Howells, Geraint (Cardigan)

Maynard, Miss Joan

Corbett, Robin

Johnston, Russell (Inverness)

Mellish, Rt Hon Robert

Ewing, Mrs. Winifred (Moray)

Kerr, Russell

Mikardo, Ian

Fitt, Gerard (Belfast W)

Latham, Arthur (Paddlngton)

Newens, Stanley

360

361

Orbach, Maurice

Ross, Stephen (Isle of Wight)

Thome, Stan (Preston South)

Ovenden, John

Sandelson, Neville

Wainwright, Richard (Colne V)

Pardoe, John

Short, Mrs Renee (Wolv NE)

Woodall, Alec

Penhallgon, David

Skinner, Dennis

Price, C. (Lewisham W)

Smith, Cyril (Rochdale)

TELLERS FOR THE NOES

Richardson, Miss Jo

Spriggs, Leslie

Mr. John Ellis and

Rodgers, George (Chorley)

Thomas, Ron (Bristol NW)

Vlr. Tom Litterick.

Rose, Paul B.

Question accordingly agreed to
Bill read a Second time
Bill committed to a Committee of the whole House.—[Mr. John Evans.]
Committee tomorrow.

EMPLOYMENT (GUARANTEE AND COMPENSATION PAYMENTS)
10.30 p.m.
The Minister of State, Department of Employment (Mr. Harold Walker): I beg to move,
That the draft Employment Protection (Variation of Limits) Order 1978, which was laid before this House on 8th November, be approved.
Mr. Speaker: I understand that it is for the convenience of the House to take with this order the second order:
That the draft Unfair Dismissal (Increase of Compensation Limit) Order 1978, which was laid before this House on 8th November, be approved.
Mr. Walker: I am grateful that the House has agreed to take the two orders together.
The Employment Protection (Variation of Limits) Order is laid in accordance with section 148 of the Employment Protection (Consolidation) Act 1978, which requires the Secretary of State to carry out a review in each calendar year of certain limits in the Act.
This is the second annual review. The limits reviewed are those concerned with guarantee payments to workers on short-time and weekly earnings limit laid down for the purpose of calculating redundancy payments, certain unfair dismissal awards and certain debts in relation to the insolvency provisions of the Employment Protection Act.
My right hon. Friend the Secretary of State has to take three factors into account in the review:
" the general level of earnings obtaining in Great Britain at the time of the review; the national economic situation as a whole, and such other matters as he thinks relevant ".
If in the light of his review the Secretary of State considers that any of the limits should be changed, he must prepare and lay before each House the draft of an order giving effect to his decision which is subject to the affirmative resolution procedure. If he considers that any of the limits should not be varied, he must lay before each House a report stating his reason.
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We decided that all the monetary limits covered by the review should be raised by about 10 per cent., and that decision is set out in the order now before the House. We decided not to vary two of the limits involved in guarantee pay, and that decision is explained in the report which was laid at the same time as the order.
If the order is approved in both Houses, it will come into effect on 1st February 1979. This follows the pattern established last year, when the increases in the limits came into effect on 1st February 1978.
Let me briefly explain the considerations that led to this decision. The first factor that the Secretary of State must take into account is the general level of earnings obtaining in Great Britain at the time of the review. The index of average earnings indicates that, averaged over the whole economy, the level of earnings in August was 13·9 per cent. higher than 12 months previously and in September the figure was 15 per cent. higher.
The second factor to be taken into account is the national economic situation as a whole. The Government continue to give priority to the need for continuing restraint and for keeping costs to employers as low as possible. In the light of this, we decided that although the earnings figures would suggest an increase of nearer 15 per cent., the right figure is 10 per cent. I shall now explain what this means in practice, with the various limits.
First, let me deal with guarantee pay. The increase of 10 per cent. in the guarantee pay limit means that, from 1st February 1979, the maximum guarantee pay for days on which it is payable will be £.7·25, compared with £6·60 at present. Guarantee pay is normally payable for the first five days of short-time working in each quarter. The quarters commence on 1st February, 1st May, 1st August, and 1st November. The Secretary of State is required by section 148 of the Act to review both the five-day limit and the period of a quarter within which it applies. We have decided to make no change to either limit. The report that has been laid before the House sets out the reasons for not altering these limits.
We are discussing with the TUC and CBI the proposals put forward in a consultative document on short-time working

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compensation last April. It is essential that we take into account the views of both sides of industry before bringing forward later in the Session legislation that would replace the present guarantee pay scheme.
Because we are engaged in discussions about the form that the new arrangements for compensating short-time working are to take, it seems sensible to leave the basis of the present payments unaltered.
Mr. David Madel: The hon. Gentleman may have noticed that in the debate on these matters in another place it was asked whether the weekly payments are taxable. The Minister answering said that he was not sure. Is the hon. Gentleman able to tell us whether the weekly payments of £7·25, as opposed to the lump sum, are taxable?
Mr. Walker: The guarantee payments are regarded as ordinary pay. I am sure that they are so regarded, but so that the matter is beyond doubt I shall ensure that it is investigated before we conclude the debate.
I refer to the weekly earnings limit of £100 on redundancy pay and other related payments. I take redundancy payments first, as they set the standard for the rest. The effect of the order is to raise the weekly earnings limit to £110. This means that the new maximum redundancy payment will be £3,300—that is, 30 weeks at £110, which is the amount payable to a man of 61 who has served 20 years and gets one and a half weeks' pay for each year of service.
I turn next to the basic award of compensation for unfair dismissal. As the award is intended to reflect the amount of redundancy payment which would have been received by an employee if he had been made redundant instead of being unfairly dismissed, it follows that the limit should remain in line with the redundancy payments earnings limit. Consequently, the order proposes that it, too, should be increased from £100 to £110. The new maximum payable will be exactly the same as the maximum redundancy payment, namely £3,300.
The additional award which a tribunal may award where the employer has refused to comply with an order for re-instatement or re-engagement is also
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currently subject to a £100 weekly earnings limit. There are no substantial reasons for allowing the limit to get out of line with the limit for redundancy payments. It is right to keep the link between redundancy payments and the basic award of compensation for unfair dismissal, and therefore it is sensible to keep the limits in step throughout the unfair dismissal provisions and to adopt £110 a week also as the limit on a week's earnings for the purpose of calculating the additional award.
Finally, then, are payments to employees in the case of an employer's insolvency. These, too, have been subject to a weekly earnings limit of £100, and the order raises them to £110.
The additional cost to public funds of the proposals in the order is estimated at £1,750,000. That is the estimated additional cost to the redundancy fund.
I can sum up the effect of the variation of limits order by saying that it increases by 10 per cent. the monetary limit for guarantee pay and the weekly earnings limit used for the calculation of a redundancy payment and for the purposes of certain unfair dismissal and insolvency awards. The guarantee pay limit goes up from £6·60 to £7·25, and the weekly earnings limit goes up from £100 to £110. These increases take account of the three factors that I described earlier, and I hope that they will commend themselves to the House as being a reasonable outcome of the review.
I confirm what I said to the hon. Member for Bedfordshire, South (Mr. Madel) earlier. I have received confirmation that the guarantee pay is subject to taxation in the same way as is normal pay.
Mr. Robin Corbett: Does my hon. Friend accept that 4,000 workers on The Times who are threatened with being locked out of their jobs from Thursday midnight, not understanding the way in which we go about these matters in this place, may see the variation order as some encouragement to the management to indulge in the lockout? Will my hon. Friend make clear that the higher rates proposed in the orders have nothing to do with that, and make no comment on the lockout or possible abuses of the Employment Protection Act that are being proposed by the management?
Mr. Walker: The order does not become effective until 1st February 1979 and so does not apply to that situation. I am bound to say in passing—I do not want to widen the debate—that if the unhappy situation at Times Newspapers Ltd. proceeds as threatened some difficult legal problems will arise, I believe, in connection with the question whether there are redundancies, how many redundancies, and what the effect on the payment of rebates will be. There is a range of issues. I wonder whether those involved have addressed themselves to this question. I must resist the temptation to be drawn into a wider discussion. [Interruption.] I hear someone on the Tory Benches asking"Who are those involved? ". It has been pointed out that there are nearly 5,000 jobs at risk here. This is a serious issue.
I turn to the other order for which I seek approval. This is of a rather different sort. It has been laid before the House in accordance with section 75(2) of the Employment Protection (Consolidation) Act 1978 and its effect is to raise the limit on the compensatory award for unfair dismissal from £5,200 to £5,750. I am sorry that my hon. and learned Friend the Member for Leicester, West (Mr. Janner) is not present. In our last debate on this matter he pressed me hard to do exactly what we are now doing. I would expect him to be comforted by what I have said.
The limit to which I have referred is not subject to the annual review, but it may be raised from time to time. There is a power within the Act enabling my right hon. Friend to raise it. The compensatory award is given in addition to the basic award for unfair dismissal and it is tailored to the individual employee's loss. The limit on the compensatory award has been £5,200 since September 1974. Very few people now received £5,200 but there were eight cases in 1977, and it seems right to make a modest increase in the limit to allow for the effects of inflation. Bearing in mind the need to keep down costs to employers, we have decided to raise the limit by a shade more than 10 per cent, to £5,750. This seems to me a sensible and reasonable proposal.
There is one final point that I should make on this limit. It will apply not only to unfair dismissal compensatory awards but to compensation that may be awarded
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by industrial tribunals in cases where complaints of discrimination in employment under the Sex Discrimination or Race Relations Acts have been upheld.
The increases proposed in the draft orders represent a modest increase in the limits that make some allowance for the effect of inflation without adding disproportionately to employers' costs.
10.43 p.m.
Mr. Barney Hayhoe: We believe that the Government are ill-advised and insensitive in bringing forward these orders containing 10 per cent. increases at this time—and particularly on a day when the Government are imposing arbitrary sanctions on Ford for breaking the 5 per cent. wages limit. The Government's stupidity in making such proposals is astonishing.
Last year, when the Government came forward with proposals for 10 per cent. increases, these were generally accepted in the House. They were in line with the Government's view on 10 per cent. pay increases. They were also in line with other of the criteria that the Government are enjoined by the legislation to take into account in arriving at their decision. But this year it really is astonishing that on this day the Government should propose 10 per cent. increases in these matters when they are acting as they are with 5 per cent. pay limits for others.
It is important to look at various aspects of the matter in some detail. The Minister of State, in explaining the provisions of the orders, referred to redundancy pay. We must take account of the scandalous increase in the size of the redundancy fund, which has been allowed to grow during recent years. The worst fears that I and my hon. Friends expressed at the time of the redundancy payments legislation of 1977 have been fully realised. The House will recall that at that time, on a miscalculation, the Government thought that the redundancy fund was moving into deficit. On a recalculation it was discovered that at the end of 1976 the redundancy fund was in modest surplus of £5·3 million. As a result of the actions that the Government have taken, that redundancy fund grew, by 31st December 1977, to £28·9 million, and now, in November 1978, the surplus in that fund is standing at over £60 million.

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I ask a Written Question, to which I received a reply yesterday from the Under-Secretary of State for Employment. I asked whether the Government would
" propose to Parliament that the amount of rebate be increased or employers' contributions be reduced".
It was never the intention of the 1965 redundancy payment legislation that it should be built up as a way of gaining resources for the Government of the day. The Minister replied that
" The current surplus is not unreasonable given the fluctuations which have occurred in the amount of rebate payable from the Fund over the years."
What the Ministers means by that is the fund has grown because the Government have reduced the amount of rebate payable to employers. The Minister went on to say that
" It serves also to reduce the public sector borrowing requirements."—[Official Report, 27th November 1978; Vol. 959, c. 39.]
What on earth has that to do with the redundancy payments scheme? This is a gross abuse and misuse of the provisions of legislation passed by this House. The Bill that was put forward to provide reasonable arrangements for people made redundant is now being used by the Government as a back-door way of raising money in order to reduce the Government's borrowing requirement.
It is absolutely inappropriate that the Government, with this background of having allowed the redundancy fund to grow so large, should not be coming forward now with an order increasing the size of the rebate. The Government pay no money into the fund at all. It is really industry's fund. The Government only administer it and, indeed, make a charge for the administration. The money is wholly raised from industry. it can be used only to meet redundancy payments. It is, as I say, a misuse and an abuse of these procedures that the Government are making industry lend them money, under the guise of collecting these contributions to the redundancy fund, in a way which otherwise industry would not do.
We see the Government indulging in other practices of enforced loan. Earlier today a number of hon. Members on each side of the House were listening to
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representatives of the Wine and Spirit Association, talking of the inequity of the loan that that industry makes to the Government of about £150 million a year because proper arrangements for deferring excise duty are not entered into. This is on the same parallel—the Government are misusing legislation and taking money from industry. It seems that Department Ministers are so craven and lily-livered in their approach that they are not able to insist that the rebate is raised from its present level of 41 per cent. to at least 50 per cent. without further delay.
Four months ago one of the junior Ministers said that the possibility of restoring the rebate to 50 per cent. was under consideration. After representations had been made to the Secretary of State this month, he was still saying that that possibility was under consideration. That is all Ministers do; they just consider things. It is time they took action and lived up to their Department's reputation. They should take account of the genuine spirit of the redundancy legislation which they are signally failing to follow at present.
The rebates were 75 per cent. until 1969, when a Labour Government cut them to 50 per cent. It was another Labour Government who cut them again, to 41 per cent. The fact that the rebates have been cut places a burden on industry, particularly small businesses. It causes difficulties and in its own way mitigates against job opportunities.
We shall vote against the order to increase the amount of redundancy payments in order to draw attention to the Government's gross mishandling of these matters. Ministers should give urgent priority to raising the rebates, and until they get their priorities right they will get no support from us.
Another aspect of the question deals with unfair dismissal. Again, we had the absurd assertion from the Minister at Question Time today that on the recent debate on industrial tribunals the Government won the argument. Ministers should reread the debate on 21st November last year—hardly recent, but perhaps it could be so described in Government thinking. They would find that the Government were shot out of the water in which they

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were wallowing by the arguments produced at that time—
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. Perhaps the hon. Member will remind the House whether they were discussing an increase in compensation.
Mr. Hayhoe: My arguments are absolutely relevant. The last time we discussed these orders these points were raised and the then occupant of the Chair accepted that they were relevant.
The issue with which these orders are concerned is the raising of limits. One must take account of the whole public attitude towards the question of unfair dismissal, the compensation available, and the grave disquiet about the number of cases that have occurred.
If the House is seen merely to be allowing the increase in the amount that may be awarded by tribunals in unfair dismissal cases without paying some attention to the considerable public disquiet, it would be falling below the standards demanded of it. The Government have made some improvements in these procedures, which make the changes in compensation a little more acceptable, but many more changes need to be made before it would be right for us to nod through increases in the amount that can be paid in unfair dismissal compensation. It is inopportune for the Government to bring forward proposals to increase the limits at a time of so much public disquiet.
As we saw from the debate in another place, many cases are being argued about and causing public controversy.
Mr. J. W. Rooker: They are blown up by the press.
Mr. Hayhoe: Of course the press blows up some of these matters in ways that the hon. Gentleman may not like. Sometimes cases are blown up in ways that I do not like, but even in the research carried out by the policy study institute at the Government's request and in the survey of the opinion research centre on the effect of employment protection legislation on businesses concern is expressed about the way in which unfair dismissal cases are handled.
As a result of the orders, the maximum claims will be increased from
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£13,400 to £14,770. I do not believe that this should be done at a time when there is so much public disquiet. The House should be reflecting this concern.
The case of the Vauxhall worker has filled many column inches in the press, and was referred to in another place. That gentleman was awarded compensation of £7,319. I make no criticism of the members of the industrial tribunal concerned. As far as I am aware, they came to a unanimous decision. I was not present at the hearing, and I am in no position to judge the balance of the argument one way or the other. However, I have read the press reports and other documents associated with the case, and on that evidence it seems to be a somewhat curious decision. It is suggested that other workers found in similar circumstances had been treated differently by the company. I understand that they used the internal disputes proceedures.
Mr. Deputy Speaker: Order. I have the greatest difficulty in relating the hon. Gentleman's remarks to the terms of the order, which deals solely with the question whether the maximum amount of compensation should be increased.
Mr. Hayhoe: Part of the public disquiet is centred around the amount of compensation. The order will increase the compensation limits. If there were no public concern, I should not be arguing as I am. It is because there is public disquiet, as a result of the press reports of this and other cases, that my colleagues and I believe that it is inappropriate for the Government to bring forward these proposals at this time, instead of dealing with matters of greater substance relating to the whole way in which unfair dismissal cases are treated.
Mr. Bob Cryer: Will the hon. Gentleman give way?
Mr. James Prior: No.
Mr. Cryer: I am grateful to the hon. Member for Brentford and Isleworth (Mr. Hayhoe) for ignoring the shouted, bellicose instructions of the right hon. Member for Lowestoft (Mr. Prior), but will the hon. Gentleman confirm that the median figure for compensation awards is far removed from the single example that he has quoted and is, in fact, in the low hundreds? If the hon. Gentleman is

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worried about public concern, why does he not concentrate on the average awards and stop using dramatic exaggerations in order to try to mount the bandwagon that he and his Tory friends are trying to get rolling?
Mr. Hayhoe: I have not exaggerated. Is the hon. Member for Keighley (Mr. Cryer) suggesting that the award of £7,319 is exaggeration?
Mr. Cryer: The hon. Member is using that award as a dramatic exaggeration. It is not typical, and the hon. Member knows it. He should use the average figure, which is between £300 and £400. Why does he not quote that figure?
Mr. Hayhoe: I am not exaggerating. I am explaining what happens in a particular case. If the hon. Member had paid the attention that I have paid to these matters and had attended the last debate on the subject he would know that I have made it clear that the median level of awards is much below that figure. By his interventions, the hon. Member for Keighley shows his appalling ignorance of earlier discussions. I have no doubt that he was involved in matters related to other Departments and was not trying to refurbish his political image so that he can hawk himself round other constituencies when his own constituency rejects him at the next election.
Mr. Rooker: On a point of order, Mr. Deputy Speaker. You have drawn the attention of the hon. Member for Brent-ford and Isleworth (Mr. Hayhoe) to the fact that he was becoming out of order. I agree with you, Mr. Deputy Speaker, although I want a wide debate. Surely the hon. Member is out of order now. He is taking up the valuable time of those hon. Members who want to challenge his spurious and dishonest argument.
Mr. Hayhoe: I have been courteous and given way to the hon. Member for Keighley who twice has displayed his appalling ignorance of these matters. Perhaps an attempt should be made to defend him by the hon. Member for Birmingham, Perry Barr (Mr. Rooker).
Mr. Kenneth Lewis: My hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe) said that he did not intend to be critical
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of the tribunals. But he was pushed from that intention by Labour Members below the Gangway. I have no such inhibition My hon. Friend is justified in using this example because it was blazoned across the headlines of every newspaper in the country. Can my hon. Friend confirm that the award—which was equal to winning a minor prize on the football pools—for going to sleep on the job must have had an effect upon every worker in the country? That worker must have believed that it is better to go to sleep than to work.
Mr. Hayhoe: Awards such as this must cause considerable public disquiet. It is interesting that the tribunal judged that there was a 50 per cent. liability by the worker. In arriving at the liability the tribunal did not use the overall limits established by legislation. Those limits applied not to the 100 per cent. but came into operation when the 50 per cent. figure was used. The Minister should carefully examine the relationship between the limits set down and the percentage claims that are made. The Employment Protection Act, or at least the way in which I understand it is being implemented, leads to considerable unfairness.
Mr. Donald Dewar: I am interested in the hon. Gentleman's argument about the so-called Vauxhall case. Does he accept that it is atypical, because it was inflated by the fact that a reinstatement order was made which was not honoured by the employers and that therefore £1,900 was added to the sum awarded? Even removing that £1,900, given that the rest was calculated with a 50 per cent. disregard because of the condition of the application, does this not show that the present limits are out of line with inflation? Does the hon. Member agree that the figures in that case show that the limits are inadequate?
Mr. Hayhoe: I do not accept that for a moment. The lesson of this case and of any fair-minded assessment of the cases dealt with generally by the tribunals is that it is inappropriate to be raising the limits at this time. Of course this case appears particularly absurd—
Mr. Corbett: Tell us another one.
Mr. Hayhoe: I can quote a number of cases from my files, but it would be wrong

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to detain the House. A number of cases have gone to the tribunals but have been turned down because of the excessively legalistic approach adopted. We gave several examples in the debate on 21st November 1977. Questions have been asked about cases, and about the costs incurred by employers in fighting cases which are often based on little substance. It was said at Question Time today that between 65 per cent. and 68 per cent. of cases are lost.
Mr. Deputy Speaker: Order. We are not discussing the working or the unsatisfactory working of industrial tribunals, we are discussing the limits of compensation.
Mr. Hayhoe: I should not be sidetracked by the interventions of Labour Members below the Gangway, but surely it is relevant to describe how the tribunals work and the limits under which they operate. If the limits were minuscule, there would be little public disquiet. If they were high, there would be a different level of public disquiet. I am talking about what seem to be curious decisions of tribunals.
The converse is equally true. The reverse should apply to someone who has been unfairly dismissed and is entitled to compensation. However we look at the tribunals, there is concern about the limits. These procedures have been unfair to those involved—sometimes to the employees, more often to the employers. We require to look at the whole range of ways in which unfair dismissal cases are being dealt with.
Mr. Deputy Speaker: Not under this order.
Mr. Hayhoe: I believe that we should do that before we agree to the increase in the compensation limits.
Too many claims are made without reasonable justification, and small businesses are adversely affected by this legislation. I agree, of course, that this is not the time to debate these matters at length, but we believe that it would be wholly wrong to make provision for increases in the limits of compensation without a quick comment on some of the important matters involved. The parent legislation, the Employment Protection Act, has damaged employment prospects.
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It has cost jobs. It has done damage to job opportunities—
Mr. Deputy Speaker: Be that as it may, it is not what we are discussing.
Mr. Hayhoe: We are discussing orders arising from that legislation. If the legislation did not exist, we should not be discussing them.
I listened to what the Minister said about the orders. I do not dismiss all his arguments out of hand. I believe that balance and judgment are needed in arriving at the appropriate decision. We think that the Government have the balance entirely wrong. We do not accept the Minister's judgment on these questions, and that is why we shall be voting against the orders.
11.12 p.m.
Mr. Donald Dewar: Perhaps I should start with a modest declaration of interest, in that I am at least nominally still a solicitor in private practice, and until recently—until the House began to take up all my time after my return at a by-election—I appeared fairly frequently before industrial tribunals in Scotland. If it is not finally destroying my credibility, I should admit that I was often instructed by trade unions.
I must confess that I find all the rage and fury about industrial tribunals and the workings of the Employment Protection Act rather synthetic. I say that because I find it only in the Chamber of the House. Moving around my part of the United Kingdom and talking to people on both sides of industry, I find that there are anxieties about this or that aspect, as there always will be about any major legislation. There will always be teething troubles. But I do not find the widespread feeling, almost of paranoia—I think that that is a fair word to use—that seems to breed on the Opposition Benches.
We are discussing a fairly modest but welcome provision. Apart from the fact that the rules of order make it difficult to pursue the argument that one dislikes some aspects of the Act and the industrial tribunal machinery, or indeed that one dislikes it entirely and would like to get rid of it lock, stock and barrel, I do not see why that should stop one from saying that while the legislation exists it should

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give the tribunals a reasonable limit of discretion in order to operate properly.
Given what has been happening to wage rates and conditions of employment, it is clear that in a small but important minority of cases the present limits are probably too low. No one expects that there will be a rash of judgments in unfair dismissal cases where the award will suddenly rise to the maximum of £5,750. I am sure that such awards will still be rare. But anyone who has tried to calculate what compensatory awards tribunals are likely to make, or has had to cost fringe benefits or a good employee pension scheme, will know that it is easy to reach the maximum figures quickly. They will still be a maximum after this modest order has been implemented.
The controversial Vauxhall case to which the hon. Member for Brentford and Isleworth (Mr. Hayhoe) referred seems to me to illustrate the need for the order and for the kind of increase in the unfair dismissal limits that is embodied in it.
I did not hear the evidence in the Vauxhall case, and I would not dream of discussing the merits of it, because I have had the misfortune to hear other people commenting on the merits of cases in which I have been involved when they have not heard the evidence and I have. The ability of any human being to get hold of the wrong end of the stick on the basis of press reports is almost limitless. I am not interested in the merits of that case, but we know that an award of about £7,000 was made. We know that £1,900 of that came because there had been a reinstatement order made by the tribunal which the firm, for reasons which appeared good to it, refused to implement. So, knocking that off, we are left with a cash award very near the maximum that a tribunal under the present regulations could make.
What is interesting, as I tried to point out in an intervention, is that the figure was calculated although the tribunal found that the applicant was 50 per cent. to blame for his own dismissal. In other words, if we take a hypothetical case in which a worker was wrongfully dismissed, with no excuse for the action of the employer and no contributory negligence on the part of the employee, when it
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came to the bones of compensation and to the clinical business of trying to compensate honestly and properly, clearly we would have ended up with a figure far, far in excess of the 5,200 which was the limit at the time that the tribunal was sitting.
I do not care what people think about courts or industrial tribunals. That is a much wider question. But I am clear that if a court or tribunal exists and operates under the law of the land and the end of the exercise is to produce proper and fair compensation on the basis of that law, it is ridiculous that there should be a limit imposed on what the court can award. We are, in effect, saying to a man"We have put into operation a law which will give you fair compensation for your loss and we have decided what that loss is, but, unfortunately, because of an artificial and arbitrary ceiling written in by Parliament, we can give you only half of the sum to which you are entitled."
If that principle applied in terms of personal injuries or any general principle of civil law in damages actions for, say, breach of contract, there would be considerable anxiety and disquiet about it. If a man has suffered injury and damage and an industrial tribunal has calculated that damage, it is a fair principle that that sum should be awarded to him. Indeed, if I have any reservations, it is that I should like to see the limit raised even higher, so that the tribunal's discretion to make a fair award could be even further unfettered.
My one surprise about the judgment in the Vauxhall case was that a reinstatement order was ever made. With a 50 per cent. contributory factor from the employee, it is surprising that there was a reinstatement order. Leaving that on one side, the lesson that I draw from it is that there is a need to raise these limits and to allow proper discretion and freedom of manoeuvre to the tribunal.
I do not want to labour this, but the same general principles apply to the redundancy payments. If the redundancy payments scheme were introduced on the basis of weekly pay, and if we have had a position since 1974 in which weekly pay has escalated, it is important that a modest effort should be made to keep pace with inflation.

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I welcome these orders, recognising that they are modest. My limited, workaday experience in unspectacular cases that are not splashed across the headlines is that the system, on the whole, is welcomed and is working well. Certainly in Scotland it is not bogged down in legalisms, and I do not think that it is inflexible. I discovered from a Written Answer recently that in Scotland the average length of time for a case before a tribunal is less than three hours, and only 8 per cent.—as opposed to the very much higher figure of 20 per cent. in England—are adjourned to another day. That is perhaps some measure of the complexities that can arise.
I find that both employers and trade unions see tribunals as a useful way of settling individual grievances. I should like to see them used more. If individual grievances are settled in the course of a morning in a reasonably informal, commonsense atmosphere, it may persuade people that they do not need to walk off the job. Indeed, it may lead to industrial order, not anarchy.
If we manage to get more rationality, responsibility and order into everyday affairs on our industrial scene, because we have provided a proper, sensible and humane way of settling disputes, the balance in favour of the Employment Protection Act and of the industrial tribunal system will be substantial. As these orders provide extra leeway in the exceptional case to make an award to which someone is fairly entitled, I warmly welcome them. I am genuinely sorry that what seems to be spleen, general prejudice and a lot of hot air is leading Opposition Members to vote against these measures.
11.21 p.m.
Mr. David Madel: The hon. Member for Glasgow, Garscadden (Mr. Dewar) raised the interesting general question of the working of industrial tribunals. It would be fascinating to follow him into that area, but I shall not do so. We and, I think, the whole country hope that industrial tribunals are working within the spirit of the Employment Protection Act 1975 which, in section 2 for instance, encourages the extension of collective bargaining and gives ACAS power to advise on how industrial relations might be
380
improved within particular organisations. Indeed, there is a whole range of points in the Act which we hope industrial tribunals consider before reaching decisions. I shall return to that later.
When the Minister of State began his speech, I thought that he was going to do a re-run of what he said on 30th November last year in Committee. On that occasion, being conscious of the need to avoid any excessive costs which employers might have to endure, he said:
"The Government continue to give priority to the attack on inflation and unemployment. Additional costs to employers which might have to be passed on in higher prices must, therefore, be kept as low as possible. Moreover, the more an employer has to pay out in guarantee pay the greater the risk that he might be tempted to consider redundancies as an alternative."
Later, he admitted that what the Government were proposing in 1977 called
" for additional costs to employers…to be kept to a minimum."—[Official Report, Fourth Standing Committee on Statutory Instruments. & c., 30th November 1977; c. 5-7.]
I wish that the hon. Gentleman had repeated that today, because the risks and the difficulties for employers 12 months on are just as great, if not greater. Indeed, the Manpower Services Commission report on the need to create a large number of additional net jobs if we are to bring unemployment down to the level of the early 1910s ought to have been restated vigorously by the Government tonight. The Government keep talking about a 5 per cent. pay limit for those who are at work, but they are here proposing a 10 per cent. increase for those who, unfortunately, might not be at work.
In the debate in the other place a week ago a number of speakers asked the Government about the short-time working scheme outlined in the Queen's Speech. No answer was given. The Government had three months during the Summer Recess in which to devise the Queen's Speech. Therefore, I think that we must again ask: what is the position about that proposed legislation? Are we to have early action from the Government?
I should like to raise another matter which was mentioned a week ago, namely, the additional costs to employers of any application to the Price Commission and the Secretary of State for Prices and

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Consumer Protection. Lord Boyd Carpenter said in the other place:
" It will be quite unfair to put this additional load on employers without at least accepting that when applications are made for price increases the Price Commission and the Secretary of State for Prices and Consumer Affairs would take it into account."—[Official Report, House of Lords, 21st November 1978; Vol. 396, c. 917.]
There was no answer from the Minister who replied to that debate. I hope that we shall get an answer tonight, because it is another anxiety and worry for employers at a very difficult time.
I turn briefly to the question of unfair dismissal and the conditions which can trigger off an increased award. I refer first to what was said at the Employment Appeal Tribunal, as reported in The Times on 22nd February of this year. The report said:
" Employees must be aware of dismissal rules."
This was a case involving Meyer Dumore International, an engineering company, of Willesden, London. The president of the employment appeal tribunal, Mr. Justice Phillips, said:
" Employers who intend to dismiss workers involved in shop-floor fights must make sure that everyone knows what will happen if one occurs."
He said that a disciplinary code must be publicised within the company, that any internal inquiry must be fairly conducted and that an industrial tribunal might be expected to hold a dismissal following that to be fair. Mr. Justice Phillips went on to say:
"The company's disciplinary rules lacked clarity. It failed to consider any penalty short of dismissal."
That is sound advice. That is the sort of thing that we were saying three years ago during the passage of the Employment Protection Bill. We spoke of the need for employers to get across new procedures, disciplinary codes, grievance procedures, and so on, that would stem from the measure. But without going into the details of the Vauxhall case—it was inevitable that it would be raised in an oblique form; it was raised a week ago and it has been raised again today —there are certain things to which I should like the Government to turn their attention on the question of what can
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trigger an industrial tribunal and an award.
For instance, are the Government satisfied that before an industrial tribunal wades in with an award agreed grievances and disputes procedures have been satisfactorily carried out within the company? One hopes that they have been, but this is something about which the Government and the ACAS ought to say something more, because if agreed grievance procedures and disputes procedures have been bypassed that should be taken into account by the industrial tribunal.
Secondly, if a company and the trade unions have a 100 per cent. union shop agreement, if there is an internal procedure for dealing with grievances, if there is official union recognition, if there is a closed shop and if there is a 100 per cent. union agreement, what is the position where the union declines to contest the case yet an individual goes to an industrial tribunal?
Mr. Rooker: As the hon. Member has come back to the Vauxhall case, will he say whether the criterion of people falling asleep on the job applies to his hon. Friend the Member for the City of London and Westminster, South (Mr. Brooke) who for the last 10 minutes has not been able to keep awake? Is it because the hon. Gentleman is a member of this club and white that no one will mention it?
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. At least it is not the responsibility of the Chair to ensure that all hon. Members are awake.
Mr. Brian Sedgemore: A sum of £7,000 would not pay for the Moss Brothers hirings of the hon. Member for City of London and Westminster, South (Mr. Brooke).
Mr. Madel: The hon. Member for Luton, West (Mr. Sedgemore) is making a noise. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) must have been watching me. I was studying my documents carefully. I cannot possibly comment on that.
If there is a 100 per cent. union agreement, and if the official trade union line is not to contest a dismissal, what do the Government think when there is a grievance procedure and a disputes procedure

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and the official trade union attitude is not to proceed with it and the whole matter is bypassed and taken to an industrial tribunal by an individual?
These are very important questions. When one mentions industrial tribunals, at the slightest whiff of criticism the Minister of State gets upset. He must, surely, realise that controversial cases will be raised in an oblique form in the House. Three years after—
Mr. Harold Walker: Will the hon. Gentleman tell me why the House does not see fit to debate every controversial magistrates' court decision and why it is that it is just the industrial tribunals within the whole judicial system that are selected for nitpicking and raking over in the House in this fashion?
Mr. Madel: With respect, the Minister of State is wrong. It is not nitpicking. Very often the awards made and the arguments put forward at industrial tribunals stem from what happened three years ago in the Employment Protection Act. If we support the law that provides that there should be an improvement in industrial relations and an extension of collective bargaining and it can be shown in a particular case that that has not happened, inevitably the matter will come up in the House. The Minister has been here long enough to know that any form of industrial dispute, once it bursts upon the newspapers for any length of time, is pushed around the House because in nearly all cases it is considered a relevant subject for debate.
The Government ought to look carefully at the Employment Protection Act and all its workings. There is still time to do it.
Mr. Deputy Speaker: Order. That may well be so, but not under this order.
Mr. Madel: Thank you, Mr. Deputy Speaker. Before the Government go any further in putting forward these increases they should see how their pay policy is going. Last year they linked the increase to pay policy. If they are to be logical, the increase this year should be 5 per cent.
11.32 p.m.
Mr. Cyril Smith: I ought to put on record the position of myself and my colleagues about these orders.
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There is some concern about such things as industrial tribunals and the Employment Protection Act. But I have never heard the official Opposition say that they believe that the Act should be repealed. If it is not to be repealed, I am not sure which parts they will alter, which parts they will leave in, and so on.
Perhaps at some time there will be an opportunity for us to discover what is wrong with the Act and where it needs to be put right. I certainly do not subscribe to the view, as I have said over the past three weeks, that the Act is having the damaging effect on employment that the official Opposition claim. There are worries about it and perhaps in the future we could look at those.
I and my colleagues are concerned to ensure that if employees are made redundant they are entitled to proper payment. That situation has arisen in my constituency in the last three days where another textile mill is closing with 280 people being declared redundant. it is no good my saying to those people that the payment they will receive this year is the same as they would have received two years ago. Benefits have increased in that period, and therefore these benefits must increase, too.
I shall support the Government on these orders tonight. I hope that those of my hon. Friends who are present will do the same. I am prepared to bet that a greater percentage of my party than the official Opposition will vote tonight. While we feel less concern about the Act, about industrial tribunals, and so on, we believe that it is right to increase the amount as provided by the orders. We do not believe that the concern that is felt generally about the Act is sufficient reason to deprive employees of proper payment.
11.33 p.m.
Mr. J. W. Rooker: May I seek clarification from you. Mr. Deputy Speaker? We are discussing two orders. We may be discussing them together, but are we entitled to one and a half hours for each order, or to one and a half hours for the full debate?
Mr. Deputy Speaker: It was announced by Mr. Speaker at the outset that both orders are being taken together.
Mr. Prior: The hon. Member for Birmingham, Perry Barr (Mr. Rooker) was asleep as usual.
Mr. Rooker: I have not finished dealing with the right hon. Member for Lowestoft (Mr. Prior).
I heard what Mr. Speaker said, Mr. Deputy Speaker. I know that we are debating the orders together, but they appear separately on the Order Paper.
Mr. Deputy Speaker: The result of Mr. Speaker's announcement is that there is only one and a half hours to debate both orders.
Mr. Rooker: Well, that is 30 seconds up the spout, but at least I have the point clear.
Mr. Deputy Speaker: Order. Mr. Speaker put that matter to the House and it was agreed.
Mr. Rooker: I am not arguing about it. I was seeking clarification because time is getting on and there is a lot to say.
I support the orders, which may come as a surprise. It is imperative that compensation for redundancy should move roughly in line with wages, prices or the cost of living. The Opposition do not agree with that, and tonight they will vote against increased redundancy pay. One would think from listening to the Tories that the Labour Government had been responsible for introducing the unfair dismissal legislation. It is clear that the Tories deeply regret what they did in the Industrial Relations Act 1971, when they put in a sweetener, by way of the unfair dismissal provisions, to catch the trade unions on the rest of the Act. That is the one part of their Act that survived. That sticks in their gullets, as has been shown again tonight.
We heard a very dishonest speech from the spokesman for the Tory Party—the hon. Member for Brantford and Isleworth (Mr. Hayhoe}—when he concentrated on one example. He did not tell us about the other cases in his file. He could have told us, for instance, that in 1977 only 13 cases out of 3,000 were settled for over £5,000. He did not tell us that in 30 per cent. of cases the award is less than £200. These are the nuts and bolts of unfair dismissal compensation. The May issue of the Department of Employment Gazette, giving the analysis of figures for 1977, specifically states that
" in 1977 more than half the awards made by industrial tribunals were for less than £400
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and just under two-thirds of awards were for less than £500. Less than 2 per cent of awards were over £3,000.
That is the scale of the problem, yet the Tories pick on one case, without knowing the facts, to thrash the whole system.
It is well known that there were others at the Vauxhall plant who had been faced with similar circumstances. It is well known that in many factories, given the different payment systems operating, people cannot leave after they have finished their work quota. There have been arguments about that at British Leyland, Birmingham. The men say"We have finished our work quota. Why should we stay in the factory? ". Nevertheless, the person in question had finished his work quota and it seemed that because he was black he was not taken back.
If a reinstatement order is made and a person is not taken back, that can increase the award. We should aim at increasing the number who are reinstated. A bundle of money—whatever the amount—is not the same as a job. The money will not last. The money is a stigma to some people: they have no self-respect, because they cannot go to work—[Interruption] Some Tory Members have just come in from the bars. The hon. Member for Petersfield (Mr. Mates) knows nothing about a real job of work. He has never put his hand to a real day's work in his life. He laughs and sniggers when I talk about people who have been dismissed and who do not want compensation but who want their job back. This can sometimes increase the compensation.
In 1977, only 102 out of 3,900 successful cases won reinstatement following a tribunal hearing. That was 0·3 per cent. of all unfair dismissal applications. The number who won re-engagement amounted to only 0·2 per cent. We should aim for reinstatement and re-engagement, and not necessarily for compensation, which is not always practical. I know from my experience on both sides of industry that if some of those who have been dismissed were taken back that would result in the firm losing all its other employees. However, there are occasions on which it would be practicable to take people back, but it happens to an insufficient degree. We must, therefore, compensate to a greater extent those who, but for the firm's refusal to accept them, could have had their jobs back. Perhaps this arises

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from personality clashes. There are many reasons why people can be refused reemployment, having been successful before a tribunal.
That raises another question. It is first necessary to succeed in getting before a tribunal. Only 36 per cent. of applicants succeed and 64 per cent. do not. A total of 36 per cent. of the cases heard by tribunals were successful. A great deal must be got over before one even begins to talk of compensation. As the firm often brings along slick lawyers, while the trade union officials have other jobs to do, there are many problems that workers have to overcome even to win a case of unfair dismissal. Because of all the barriers, we should not complain when the Government come forward with proposals to put this matter on a regular basis by operating the limits.
From 1971 to 1974—I stand to be corrected because I am speaking from memory—the Conservative Government never operated the limits for redundancy pay or unfair dismissal. They never brought an order to the House to raise those limits. They were first raised in the middle of 1974, just after Labour took office. Therefore, in those Tory years compensation for unfair dismissal was allowed to fall. It was cut in half in real terms. The hon. Member for Rochdale (Mr. Smith) has already emphasised this point. How can the hon. Gentleman go to his constituents now and say"You may now have what you would have been paid two years ago "? This is a ludicrous situation, and his constituents would be most annoyed if he were to say that.
The Tory Party's record on this matter is not good, nor indeed is it very good on employment protection in general. The fact that the Tories intend to vote against increasing redundancy payments and compensation for unfair dismissal for people at the bottom end of the scale—thousands of people who will receive payments of only £200, £300 or £400—shows their attitude. I do not know how they have the effrontery to force a vote on this order. The Tories came to this House wanting, by implication, to increase unemployment. That is what happens in the operation of market forces. Firms will be allowed to collapse and others will grow in the ashes of the old firms. That is the view of the right hon. Lady the Leader of the Oppo-
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sition, and we know that it is rubbish, as the former Prime Minister, the right hon. Member for Sidcup (Mr. Heath) admits.
If the Tories want to allow that to happen, what do they intend to do for those who will be put out of work because of the operation of their policies? We now know. They will never again increase the compensation limits for unfair dismissal or redundancy payments, and there is every indication that if the Tories ever gain power again they will tinker with the Employment Protection Act and probably abolish some of the unfair dismissal provisions. It is well known that no worker can make a claim for unfair dismissal until he has worked for a firm for six months. The period was two years when the scheme was introduced. What we did—
Mr. Deputy Speaker: Order. None of that occurred under this order.
Mr. Rooker: With respect, Mr. Deputy Speaker, I think that it does arise here because a worker cannot have the benefit of these new limits unless he can put forward a claim for unfair dismissal, and he cannot do so unless he has worked for a firm for six months. I was merely drawing attention to the fact that the period used to be two years and is now six months. That has meant more claims.
Mr. Deputy Speaker: Order. None of that arises from the matter that is before the House tonight.
Mr. Rooker: If more people make claims and win awards, that will increase the total amount of money paid out to them. As we are to raise the basic limits of compensation, that will add to the figure even more. The number of people who will share these increased benefits is relevant in respect of the redundancy payments fund. I accept that my point went a little wide, but it is fair to look at the pool of money that one is using to pay compensation, because under this order the pool will be increased by about 10 per cent.
As a result of the reduction from two years to six months the case load increased. However, the case load between 1976 and 1977 hardly increased. It increased from 33,700 to—
Mr. Deputy Speaker: Order. That cannot arise under the order.
Mr. Rooker: No, it cannot. However, it is highly likely that between 1978 and 1979 the number of claims for unfair dismissal procedures will be no higher than in 1977. That is because there has been a smoothing out of the system. The campaign that Conservatives have run outside the House against unfair dismissal compensation will not apply any more. The system has levelled out and it should work smoothly. I support the orders.
11.46 p.m.
Mr. Leon Brittan: The Government seek the approval of the House for an increase in the limits by approximately 10 per cent. We shall not support them because they have failed to make out a case for that 10 per cent. increase.
The arguments put forward by the Minister of State were not clearly related to the criterion specified in the Act. The hon. Gentleman talked of the general level of earnings increases obtaining in Great Britain at the time of the review and said that that was about 14 per cent. He seemed to say that 14 per cent. was rather high and that we should settle for 10 per cent. That is no argument.
The Government, as they know well, are not bound by the general level of earnings. There are two other important criteria that are set out in the Act. The first criterion is the national economic situation and the second is such other matters as are thought relevant. In other words, the Government are entitled to take, and are bound to take, a broad view of what is appropriate to be done in a situation of the sort that we now face. By increasing the limits the Government are increasing costs that are not absolutely the same as wage costs for employers but must, at the very least, be related and analogous to wage costs.
It is reasonable to ask the Government how they relate 10 per cent. to the incomes policy that they are operating. As far as we know, in spite of all the buffetings that that policy has experienced—I am not trying to make fun of it—it still stands at 5 per cent. Some of us may have doubts about the viability of that policy, and others may have doubts about its desirability, but it remains the Government's commitment. At the most, and allowing for a little give
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and take, the Government are aspiring to a 7½ per cent. earnings increase. If anybody goes above that he runs the risk of being clobbered, as Ford has been today.
If that is the sort of increase in wage costs that the Government are hoping to achieve, whatever our reservations about the feasibility or desirability of that may be, it is reasonable to ask the Minister how he relates that aspiration to an increase in these wage-related costs of 10 per cent. It is because the Government have totally failed to offer even a sliver of an argument on that score that I shall continue to advise my right hon. and hon. Friends to oppose the increase.
Other matters have been raised. Hon. Members have talked about the total amount of compensation available for unfair dismissal. We were told that it was unfair to refer the Vauxhall example because that is untypical. We were told that in the majority of instances a few hundred pounds are in question rather than a few thousand as in the more dramatic examples. That is true.
Unfortunately for the Government, that argument cuts both ways. In 1977 there were 35,389 cases, of which only eight secured the maximum award of £5,200. I have not worked out the percentage, but it seems that eight out of 35,389 is a minute proportion. If that is the number which actually secured the maximum award after a tribunal hearing, it does not seem to make much of a case for saying that that maximum is inadequate to provide the compensation that ought to be given in cases of this kind.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) raised an objection to there being limits at all. I can understand that. But if there are to be limits, in considering whether they should be increased one has to ask whether there is a significant number of cases in which the limits currently operating prevent fair compensation being given to those who come before the tribunals. It is clear from the figures I have given that no case can be made today for the substantial inadequacy of that maximum figure and for that figure rendering any sort of injustice to any significant number of people.
The hon. Member for Garscadden also asked a more general question. He found it doubtful whether there was anyone

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except those on the Floor of the House of Commons who was concerned about the operation of the Employment Protection Act. I do not believe that if the hon. Gentleman, with his customary standards of fairness, were to draw an even reasonable trawl through employers, especially small employers, he would be able to speak to more than a handful of gatherings before he found deep dissatisfaction over the way in which the Act is operating.
It does not follow from that that we are in favour of the repeal of the Act. We have made it clear that we are not. If we have reservations about the way in which the Act is operating, it is entirely logical and reasonable for us to make the point that until those fears are allayed, until those anxieties are quietened, until the changes are made that seem desirable, it would be wrong to operate the increases which the Government are asking for, particularly as they have lamentably and totally failed to relate those increases in any way to their incomes policy, based as it is upon the figure of 5 per cent.—or at most 7 per cent. They have come, instead, to the House to present a totally unconvincing argument for a 10 per cent. across the board increase. For those reasons I advise my right hon. and hon. Friends to oppose these orders.
11.53 p.m.
Mr. Harold Walker: I am touched by the concern of the hon. and learned Member for Cleveland and Whitby (Mr. Brittan) for the Government's 5 per cent. pay policy, particularly since the hon. and learned Member and his hon. Friends have spent a substantial part of the afternoon denouncing the Government for trying to enforce their 5 per cent. policy and have encouraged a wholly inflationary settlement at Ford.
The hon. Member for Brentford and Isleworth (Mr. Hayhoe) argued, among other things, that the increase in the limits for unfair dismissal compensation would provoke the Opposition to vote against the orders because the increase represented an unfair and heavy burden on employers. It was left to the hon. and learned Member for Cleveland and Whitby to stand that argument on its head at the end of the debate by saying that because tribunals rarely, if ever, award the maximum there is no point in raising the limits. That was an extra-
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ordinary and convoluted argument for voting against the orders.
The hon. and learned Gentleman seemed to make a great point about there being three broad sets of considerations to be taken into account by my right hon. Friend, along with two other considerations and the general level of earnings obtaining in Great Britain at the time of the review. He obviously did not listen to my opening speech. He echoed and went over precisely the same ground. I do not know whether he was with us when we debated the last orders almost exactly 12 months ago.
The hon. Member for Bedfordshire, South (Mr. Madel) referred to the record of our Committee proceedings at that time and quoted from it. He might have helped himself and the House had he looked at what I said. I stated:
" In reviewing these limits, the first of the three factors which must be taken into account is the general level of earnings "
and so on. Then I said:
" It is the year-on-year increases in the general level of earnings which is, of course, most relevant in the context of an annual review of the guarantee pay limits."—[Official Report, Fourth Standing Committee on Statutory Instruments, & c., 30th November 1977, c. 4.]
I made it abundantly clear that the 10 per cent. chosen last year had nothing to do with the Government's pay limits, that it was a pure coincidence. The policy that I showed then to be the basis of our determination has to be consistent to be the same this year. It is a question of looking back over the period at what has happened to pay, on a year-to-year consideration. It is a waste of time for me to have to explain yet again to Opposition Members what I have already explained.
I turn now to a point raised by the hon. Member for Brentford and Isleworth and the hon. and learned Member for Cleveland and Whitby about the size of the redundancy fund. I have some sympathy with them. It is a fact that the amount in the fund is too high. We are looking carefully at the level of rebates, and we are looking also at the new scheme of short-time working that will be introduced by a Bill and the way in which we shall be financing that. I think that because we now have an allocation out of national insurance contributions towards employment protection legislation we shall

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want to look carefully at how the funding arrangements will fit in with that employment protection allocation and how it is distributed between what will then be three funds—the maternity fund, the redundancy fund and the funding for the short-time working scheme. We shall be looking very carefully at the level of the redundancy fund and at the level of contributions in the context of the total employment protection allocation. I hope that the Conservative Members will find that a not unsympathetic response to what 1 think was a fair point.
I turn finally to one other matter. Intemperate and irresponsible attacks were made by Opposition Members on the industrial tribunals. If Labour Members from time to time criticise the judiciary and our judicial system that provokes howls of wrath from Opposition Mem-

Division No.6]

AYES

[11.59 p.m.

Allaun, Frank

Flannery, Martin

Millan, Rt Hon Bruce

Anderson, Donald

Fletcher, Ted (Darlington)

Miller, Dr M. S. (E Kilbride)

Armstrong, Ernest

Foot, Rt Hon Michael

Mitchell, Austin (Grimsby)

Atkinson, Norman (H'gey, Tott'ham)

Ford, Ben

Morton, George

Barnett, Guy (Greenwich)

Forrester, John

Moyle, Rt Hon Roland

Bates, Alt

Fowler, Gerald (The Wrekin)

Mulley, Rt Hon Frederick

Beith, A. J.

Freeson, Rt Hon Reginald

Noble, Mike

Benn, Rt Kon Anthony Wedgwood

George Bruce

Oakes, Gordon

Blenkinsop, Arthur

Gilbert, Rt Hon Dr John

Orbach, Maurice

Boardman, H.

Golding, John

Orme, Rt Hon Stanley

Booth, Rt Kon Albert

Gourlay, Harry

Park, George

Boothroyd, Miss Betty

Grant, George (Morpeth)

Pavitt, Laurie

Bradley, Tom

Grant, John (Islington C)

Penhaligon, David

Braine, Sir Bernard

Grocott, Bruce

Radice, Giles

Bray, Dr Jeremy

Hamilton, James (Bothwell)

Rees, Rt Hon Merlyn (Leeds S)

Brown, Robert C. (Newcastle W)

Hardy, Peter

Richardson, Miss Jo

Buchanan, Richard

Harrison, Rt Hon Walter

Roberts, Albert (Normanton)

Callaghan, Jim (Middleton & P)

Home Robertson, John

Robertson, George (Hamilton)

Campbell, Ian

Hooley, Frank

Rodgers, George (Chorley)

Canavan, Dennis

Horam, John

Rooker, J. W.

Carmichael, Neil

Howells, Geraint (Cardigan)

Ross, Stephen (Isle of Wight)

Clemitson, Ivor

Huckfield, Les

Ross, Rt Hon W. (Kllmarnock)

Cocks, Rt Kon Michael (Bristol S)

Hunter, Adam

Rowlands, Ted

Cohen stanly

Irving, Rt Hon S. (Dartford)

Sandelson, Neville

Coleman, Donald

Jackson, Miss Margaret (Lincoln)

Sedgemore, Brian

Concannon, Rt Hon John

John, Brynmor

Sever, John

Conlan, Bernard

Johnson James (Hull West)

Shaw, Arnold (llford South)

Cook, Robin F.(Edin.C)

Johnson, walter(Derby S)

Silkin, Rt Hon John (Deptford)

Corbett, Rabin

jonnson,Alec(Rhondda)

Silkin, Rt Hon S. C. (Dulwich)

Cowans, Harry

Jones Barry(East filnt)

Silverman, Julius

Cox, Thomas (Tooting)

Kaufman, Rt Hon Gerald

Skinner, Dennis

Craigen, Jim(Maryhill)

Lamborn, harry

Smith, Cyril (Rochdale)

Crawshaw, Richard

Lamond james

Snape, Peter

Crowther, stan (Rotherham)

Leadbitter,Ted

Spearing, Nigel

Cryer, Bob

Lestor, miss john(Elon & Slough)

Sprigs, Leslie

Cunningham,G. (Islingtom S)

Lewis Ron(carlisle)

Stallard, A. W.

Steel, Rt Hon David

Davidson, Arthur

Litterick, Tom

Stewart, Rt Hon M. (Fulham)

Davis, Clinton (Hackney C)

Loyden, Eddie

Stott, Roger

Deakins, Eric

Lyons, Edward (Bradford W)

Strang, Gavin

Dean, Joseph (Leeds West)

Mabon, Rt Hon Dr J. Dickson

Strauss, Rt Hon G. R.

Dempsey, James

McElhone, Frank

Summerskill, Hon Dr Shirley

Dewar, Donald

McGuire, Michael (Ince)

Taylor, Mrs Ann (Bolton W)

Doig, Peter

McKay, Alan (Penlstone)

Thomas, Ron (Bristol NW)

Dormand, J. D.

MacKenzie, Rt Hon Gregor

Urwln, T. W.

Douglas-Mann, Bruce

McMillan, Tom (Glasgow C)

Varley, Rt Hon Eric G.

Duffy, A. E. P.

McNamara, Kevin

Wainwright, Edwin (Dearne V)

Eadie, Alex

Mallalieu, J. P. W.

Walker, Harold (Doncaster)

Ellis, John (Brigg & Scun)

Marks, Kenneth

Walker, Terry (Kingswood)

Evans, loan (Aberdare)

Marshall, Dr Edmund (Goole)

Watkins, David

Evans, John (Newton)

Marshall, Jim (Leicester S)

Watklnson, John

Ewing, Harry (Stirling)

Maynard, Miss Joan

Weetch, Ken

Fernyhough, Rt Hon E.

Mikardo, Ian

White, Frank R. (Bury)

bers, yet they do not hesitate, without consideration and without thinking of the effect on the industrial tribunals, to make irresponsible attacks against them on the basis of newspaper reports which are written for the sake of sensationalism rather than with a cold assessment of the facts. I urge Opposition Members to have concern for the effect that they are having on our industrial tribunal system and to behave in a rather more responsible fashion when they seek to pull apart, as they do, some of the decisions of industrial tribunals.
It being one and a half hours after the commencement of proceedings on the Motion,Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business):—
The House Divided: Ayes 166, Noes 159.

White, James (Pollok)

Woodall, Alec

Whitehead, Philip

Woof, Robert

TELLERS FOR THE AYES

Whitlock, William

Wrlgglesworfh, Ian

Mr. Ted Graham and

Williams, Rt Hon Allan (Swansea W)

Young, David (Bolton E)

Mr. James Tinn

Wilson, William (Coventry SE)

NOES

Adley, Robert

Hannam, John

Neubert, Michael

Aitken, Jonathan

Havers, Rt Hon Sir Michael

Newton, Tony

Atkins, Rt Hon H. (Spelthorne)

Hayhoe, Barney

Normanton, Tom

Atkinson, David (B'mouth, East)

Heseltine, Michael

Page, Rt Hon R. Graham (Crosby)

Awdry, Daniel

Hicks, Robert

Page, Richard (Workington)

Baker, Kenneth

Hlgglns, Terence L.

Pattie, Geoffrey

Banks, Robert

Hodgson, Robin

Percival, Ian

Bendall, Vivian

Holland, Philip

Pink, R. Bonner

Bennett, Dr Reginald (Fareham)

Horam, John

Prentice, Rt Hon Reg

Benyon, W.

Hunt, John (Ravensbourne)

Price, David (Eastlelgh)

Biffen, John

Hurd, Douglas

Prior, Rt Hon James

Blaker, Peter

James, David

Ralson, Timothy

Body, Richard

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

Rathbone, Tim

Boscawen, Hon Robert

Jessel, Toby

Rees, Peter (Dover & Deal)

Bottomley, Peter

Johnson Smith, G. (E Grinstead)

Renton, Tim (Mid-Sussex)

Brlttan, Leon

Jopling, Michael

Rhodes James, R.

Brooke, Hon Peter

Kaberry, Sir Donald

Rhys Williams, Sir Brandon

Buchanan-Smith, Alick

Kershaw, Anthony

Ridley, Hon Nicholas

Buck, Antony

Kimball, Marcus

Rossi, Hugh (Hornsey)

Budgen, Nick

King, Evelyn (South Dorset)

Rost, Peter (SE Derbyshire)

Bulmer, Esmond

King, Tom (Bridgwater)

Sainsbury, Tim

Carlisle, Mark

Knox, David

Scott, Nicholas

Channon, Paul

Lamont, Norman

Shaw, Giles (Pudsey)

Churchill, W. S.

Langford-Holt, Sir John

Shaw, Michael (Scarborough)

Clark, Alan (Plymouth, Sutton)

Lawrence, Ivan

Shepherd, Colin

Clark, William (Croydon S)

Le Marchant, Spencer

Sims, Roger

Clarke, Kenneth (Rushcliffe)

Lester, Jim (Beeston)

Sinclair, Sir George

Clegg, Walter

Lewis, Kenneth (Rutland)

Smith, Dudley (Warwick)

Cooke, Robert (Bristol W)

Loveridge, John

Smith, Timothy John (Ashfleld)

Cope, John

Luce, Richard

Speed, Keith

Dean, Paul (N Somerset)

Macfarlane, Neil

Spence, John

Dodsworlh, Geoffrey

MacGregor, John

Sproat, lain

Douglas-Hamilton, Lord James

MacKay, Andrew (Stechford)

Stainton, Keith

Drayson, Burnaby

McNair-Wilson, M. (Newbury)

Stanbrook, Ivor

Durant, Tony

Madel, David

Stewart, Ian (Hitchin)

Eden, Rt Hon Sir John

Marshall, Michael (Arundel)

Stradllng Thomas, J.

Edwards, Nicholas (Pembroke)

Marten, Nell

Taylor, R. (Croydon NW)

Emery, Peter

Mates, Michael

Taylor, Teddy (Cathcart)

Eyre, Reginald

Mather, Carol

Tebblt, Norman

Falrbairn, Nicholas

Maxwell-Kyslop, Robin

Temple-Morris, Peter

Falrgrieve, Russell

Meyer, Sir Anthony

Thomas, Rt Hon P. (Hendon S)

Farr, John

Miller, Hal (Bromsgrove)

Townsend, Cyril D.

Finsberg, Geoffrey

Miscampbell, Norman

Vlggers, Peter

Fisher, Sir Nigel

Mitchell, David (Basingstoka)

Wakeham, John

Fookes, Miss Janet

Moalo, Roger

Warren, Kenneth

Forman, Nigel

Monro, Hector

Weatherill, Bernard

Fowler, Norman (Sutton C'l'd)

Montgomery, Fergus

Whitelaw, Rt Hon William

Gardiner, George (Relgate)

Moore, John (Croydon C)

Whitney, Raymond

Glyn, Dr Alan

Morgan, Geraint

Winterton, Nicholas

Gorst, John

Morris, Michael (Northampton S)

Younger, Hon George

Grist, Ian

Morrison, Rt Hon Charles (Devizes)

Hall-Davis, A. G. F.

Morrison, Hon Peter (Chester)

TELLERS FOR THE NOES:

Hamilton, Archibald (Epsom & Ewell)

Neave, Airey

Mr. Anthony Berry and

Hamilton, Michael (Salisbury)

Nelson, Anthony

Sir George Young.

Hampson, Dr Keith

Question accordingly agreed to
Resolved,
That the draft Employment Protection (Variation of Limits) Order 1978, which was laid before this House on 8th November, be approved.
Resolved,
That the draft Unfair Dismissal (Increase of Compensation Limit) Order 1978, which was laid before this House on 8th November, be approved.—[Mr. Harold Walker]

PETITION

  Lytchett Minster School
  12.13 a.m.
  Mr. Evelyn King: With your permission Mr. Deputy Speaker, I present a humble petition from the residents in Upton, Dorset, and others who live in that area. It is supported by 1,290 persons. Many of them are parents who are anxious about the educational future of that area.

  397
  The petition sheweth:
  That a request by the Dorset county council in its capacity as a local education authority to the Secretary of State for Education and Science to form the provision of an age range of 1 I to 18 years in Lytchett Minster upper comprehensive school has been refused by the said Minister.
  That the Minister of Education seeks to remove the sixth form from Lytchett Minster upper comprehensive school.
  That if the said sixth form were maintained it would be no smaller than the average size of sixth forms in the United Kingdom of Great Britain and Northern Ireland, nor would it be more costly.
  That the school is in the centre of a strong rural community and the Minister has failed to take into account relevant factors social as well as educational.
  That the Minister's proposals if carried out would not ensure parity—equal status—with other local rural comprehensive schools.
  Wherefore your petitioners pray that your Honourable House will support your petitioners in their desire that the Secretary of State for Education and Science review her decision that Lytchett Minster upper comprehensive school have no sixth form.
  And your petitioners, as in duty bound, will ever pray, etc.
  The petitioners, who include Mr. Charles Hanex, the chairman of the governors, and Councillor Perkins, feel strongly about this issue and look to Parliament to redress this anomaly.
  I beg leave to present the petition.
  To lie upon the Table

SHEFFIELD SPECIAL STEEL INDUSTRY
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates]
12.15 a.m.
Mr. Frank Hooley: Sheffield has been traditionally famous for centuries for the production of cutlery and, of course, steel. Today it is an important centre for the production of items of equipment for the nuclear power industry, aero engines, the offshore oil and gas industry, steel-making plants, shafts and rotors for electric power plant, crankshafts for cars, hand tools, machine tools, magnets, the fabrication of titanium, forgings, castings, die stampings, and the use of steel involving alloys of tungsten, chrome, nickel, vanadium and other alloys. It is one of the greatest industrial
398
engineering cities of Europe and the home of famous names like Vickers, Firth Brown, Hadfield, Osborn, Edgar Allen, Thomas Ward and Stanley and Ridgway Tools.
But most of this manufacturing capacity depends on high quality alloy steel which is made in Sheffield—or until recently was mostly made in Sheffield. But in the early days of 1977 a serious problem arose with the import from other countries of tool steels, high-speed steels and stainless steel bar. Some of the most important forms of alloy steel are used in the city's industries. I am afraid that I must weary the House with one or two figures showing the extent of this important penetration and where the damage was being done at that time.
The import from Japan of these three forms of steel was 148 tons in 1972. By 1976 it had risen to 2,900 tons, and it was alleged that the Japanese were selling at 50 per cent. below their home prices. The import of stainless steel bar from Spain was virtually nil in 1970, but was 1,500 tons by 1976. Stainless steel bar imports from Austria also were virtually nil in 1970 but had become 2,000 tons by 1976. From Sweden, imports of tool and high-speed steel were 2,000 tons in 1972 and had risen to 5,500 tons by 1976, and it was alleged that the Swedes were selling at 48 per cent. below their home price. Imports from West Germany of tool steel and stainless steel bar were negligible in 1972 but had risen to 3,500 tons by 1976.
By January 1977 the alarming fact emerged that the import of these special steels had risen to a 71 per cent. penetration of the United Kingdom market. In 1976 it was 35 per cent., and five years earlier it was 8 per cent. It was estimated that that had involved a loss of 1.500 jobs in Sheffield in 15 months. The impact was primarily on the private sector and did not greatly affect the British Steel Corporation.
In the light of those figures the British Independent Steel Producers Association made strong representations for antidumping action by the Government. In a letter dated 29th March 1977, addressed to me, and sent, I believe, to other hon. Members, Mr. Stanley Speight, of Neepsend Ltd., wrote:
" I am not exaggerating when I say that 1 can see a positive danger, unless there is some

399
action by Government, of this industry disappearing from Sheffield in the same way that we have lost for instance our motor cycle industry…
I think I can emphasise the seriousness of the position if I say, quite sincerely, that in an integrated group like Neepsend making a lot of finished products, it would be economic sense for us to stop steel making and buy our steel in the cheapest market. We would probably achieve better results from a profit point of view but of course this is not in the long-term interests of our company and all its employees, neither is it in the interests of Sheffield and the nation. I think, however, it does emphasise the seriousness of the problem."
That statement sums up very well the problem that faced Sheffield then and still faces it.
The Government were hamstrung by our membership of the EEC in taking any action, because we are not allowed under the treaty to negotiate on trade matters with other countries. But the Government did press the Commission to negotiate with the external suppliers of the steels, particularly Japan, Sweden and Austria, with a view to limiting imports.
The matter became so serious that a deputation from Sheffield went to the Department of Industry on 18th May. I was accompanied by my hon. Friends the Members for Sheffield, Brightside (Miss Maynard) and Sheffield, Hillsborough (Mr. Flannery) as well as trade union members from the Iron and Steel Trades Confederation and the Amalgamated Union of Engineering Workers and a member of BISPA. Following those representations the Government introduced a system of surveillance licensing over imports of steels. Some voluntary limitation on imports was agreed with Japan and antidumping duties were imposed on steels from Spain, South Africa and Japan. So, following that approach by Sheffield, there was some action by the Government to try to limit the damage that the imports were doing to the Sheffield steel industry.
Unfortunately, however, the action was not sufficiently extensive or effective enough to prevent the situation in 1978 from becoming more serious through the import of those three sensitive products—high-speed steels, tool steels and stainless steel bar. I must again give some figures. Whereas the aggregate import quantities of those sensitive products in 1972 had been 9,200 tons, by 1978 the figure had shot up to 24,300 tons.
400
The point about the situation this year, a point that I must emphasise, is that the major damage is now being done by three of our EEC partners—West Germany, France and Italy. The import figures for West Germany in the course of 1978, supplied by BISPA and calculated on an annual basis, was 6,900 tons. The figures for France and Italy were 3,600 tons and 4,500 tons respectively. In 1973 Italy had supplied no steel of this kind to the United Kingdom market. Those countries sent us a total of 15,000, whereas in 1972 the import figures from those sources had been 1,500 tons. We have had a tenfold increase from our EEC partners over six years. What is more depressing is that Germany appears to be providing a back door for Austrian steel to enter this country, although theoretically we could take action as Austria is outside the EEC.
In July this year Mr. Stanley Speight, former master cutler of Sheffield, and director of the Neepsend firm, made a massive public attack on the matter. He said:
" I have always believed that Britain should be a part of Europe, but I never thought we would become a doormat for Europe. That is just what we have become. In terms of special steels our problems now are from EEC partners. High-speed and tool steels are products not covered by the Davignon agreement and not even by the Treaty of Paris."
To show that there is independent evidence and that this is not just special pleading by Sheffield, must quote the findings of the iron and steel sector working party report of NEDC, a report which for some reason was leaked to the press. although efforts by me as a Member of Parliament to obtain it have been unsuccessful. The report pointed out that in 1971 the import percentage of high-speed steel in the British market was 1 per cent. and by 1977 it was 30 per cent.; that of tool steel was 8 per cent. in 1971 and by 1977 it had become 49 per cent.; that of stainless steel bar was 5 per cent. in 1971 and had shot up to a disastrous 69 per cent. by 1977. The main origins of this penetration were West Germany and Italy, followed by Sweden and Austria.
No doubt partly as a result of this very damaging report by the working party my right hon. Friend the Secretary of State for Industry wrote to Commissioner Davignon on 15th September drawing

401
attention to the serious consequences for the Sheffield industry of this degree of penetration and pointing out that in terms of special steels Sheffield was now working down as low as 40 per cent. of capacity, and saying that employment in the Sheffield area, which had been of the order of 17,000, had slumped to 12,000 in 1976 and was down to an estimated 8,000 in 1978. It is also possible that the pricing level of the German steel especially was breaching the Coal and Steel Community pricing rules under article 60 on discriminatory pricing. I hope that my hon. Friend the Under-Secretary of State will refer to this when he replies to the debate.
On 6th November of this year a deputation again went to the Department of Industry. This time it consisted of six hon. Members from Sheffield, Rotherham and other areas close to Sheffield and a powerful trade union delegation from the Iron and Steel Trades Federation, the Transport and General Workers Union, the Amalgamated Union of Engineering Workers and the boilermakers, as well as representatives of the Sheffield trades council and the city council. It made a strong protest about the state of affairs which has been developing and which could threaten the very existence of the special steel industry. I understand that Ministers have also received strong representations in more or less the same terms from BISPA and the Sheffield chamber of commerce.
Redundancies are spreading in the city. Neepsend Ltd. recently has had to declare 100 redundancies, Keyser Sanderson 60, Swift Levick 200, and there may be more to come. We do not find this in any way tolerable for an important key industry which is the basis of Sheffield engineering and which contributes important components to a wide range of high technology industries such as the nuclear industry, aero engines and offshore engineering.
It is fair to say that there is a case for reorganisation and modernisation within the Sheffield special steel industry, and a good many takeovers and amalgamations have occurred already. The Aurora company has taken over Samuel Osborn, the Weir group has taken over O.H. Steelfounders, Dunford Elliott took over Hadfield, Johnson and Nephew and
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Firth Brown was amalgamated a little while ago into the Johnson Firth Brown combine, Edgar Allen and Balfour Darwin have become Edgar Allen Balfour, we had the whizz-kid financier Mr. Jessel in and out, and we have had the very unwelcome interference of Lonrho in the recent past.
There has been new investment in important machinery, notably the GFM forging machine in Firth Brown, but I believe that there is a case for new investment and further reorganisation of the industry with involvement by the National Enterprise Board.
This industry is the basis of a wide range of industries vital to this country's future as an industrial Power. I want to make it clear to the Minister that we are not going to allow it to be destroyed, that it must be preserved and that, whatever action has to be taken within the EEC and, if necessary, outside the limits of the Treaty of Rome and the Treaty of Paris, we are going to protect this industry and make sure that it is not destroyed.
12.31 a.m.
The Under-Secretary of State for Industry (Mr. Les Huckfield): I pay tribute to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) and, indeed, to my right hon and hon. Friends the Members for Penistone (Mr. McKay), Sheffield, Hillsborough (Mr. Flannery), Sheffield, Brightside (Miss Maynard), Sheffield, Attercliffe (Mr. Duffy), Sheffield. Park (Mr. Mulley) and Rotherham (Mr. Crowther) for the way in which over a period, they have pressed their case. I pay particular tribute to my hon. Friend the Member for Heeley for the way in which he put his case tonight and to my hon. Friends the Members for Hillsborough and Brightside who have stayed tonight, because I know that there is a great deal of concern in Sheffield about this matter.
I am particularly glad tonight because I can bring my hon. Friends up to date with events which have been taking place today, in connection with special steels. We recognise the long-standing special steels tradition in Sheffield, such as the high alloy steels with their high technology applications in aerospace, gas turbines and chemical plants. There has also been the recently commissioned British

403
Steel Corporation major development costing £130 million aimed at re-establishing Sheffield's pre-eminence in stainless steel. Developments in low alloy engineering steels have taken place recently in Rotherham with some record performances in steel melting.
Of course, my hon. Friend's main concern has been in tool steel, high-speed steel and stainless steel bar. I recognise that this is also Sheffield's main concern at the moment. This is only one section of the special steel industry, but it is very important.
My hon. Friend was right to draw attention to import penetration levels. Because of their concern about import penetration in the early part of 1977, the Government encouraged the sector working party to carry out its own special study of the reasons for this growth of imports to which my hon. Friend referred. Because that study took evidence from stockholding merchants and was widened to include interviews with representative users, and because a consultant then had discussions with producers, a great deal of the information is confidential. That is why it is difficult to have full publication of it. Nevertheless, my hon. Friend referred to some of the trends which that study confirmed.
The study confirmed a number of factors which had contributed to the current situation of high import penetration. The report mentioned marketing deficiencies, the loss of previous advantage vis-à-vis our competitors in product quality and finish and the fact that inflation here was at a higher rate than that of many of our international competitors, and of course there has been a certain lack of investment, to which my hon. Friend referred.
The most important difference to which the study drew attention was that some European special steel makers, both within and outside the Community, seem determined to preserve and increase their market share and thus maintain production levels by offering steel at prices which can probably cover only their variable costs of production. In contrast, United Kingdom companies maintained their profitability, but at the expense of market share. That is the main difference to which my hon. Friends have drawn attention so far. They also referred to the fact that we now have figures of well over
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50 per cent. import penetration of certain special steels. My hon Friend the Member for Heeley mentioned some further figures which I gave him in a parliamentary answer this week.
It was because of that evidence that the Government wanted to act as vigorously as possible to protect the industry against unfair competition from other countries and, indeed, to support the industry's own efforts to reach understandings with major foreign competitors. Some of our efforts in this direction have been publicly acknowledged by the British Independent Steel Producers Association—BISPA.
My hon. Friend referred to certain imports. He will know about the antidumping duty which was imposed in October 1976 against Spanish stainless steel bar, which is still in force. He will also know about the investigations which have been undertaken into alleged dumping of various special steels from Austria and Sweden. These were terminated in the light of inter-industry understandings which were reached and later market developments. My hon. Friend will also know about the satisfactory understandings which were reached about the expected level of Japanese exports to the United Kingdom.
My hon. Friend mentioned the fact that a package of measures was announced by the European Commission in December 1977. These, of course, generally cover ECSC special steels as well as bulk steels and provide for consultations if problems arise on Treaty of Rome steel products. Nevertheless, I recognise, as my hon. Friend said, that the coverage so far is certainly not as universal as he and his Friends would wish.
In this particular scheme from the EEC, it is the Community's base price scheme for steel imports which provides for rapid anti-dumping action where injury is caused by steel products imported at below the base price from third countries with which no satisfactory agreement is currently in operation.
Again, referring to the third country figures, I am sure my hon. Friend will recognise that because of these kinds of actions the share of the United Kingdom market of stainless steel bar from Spain has fallen from 8.3 per cent. in 1977 to 5.5 per cent. in the first nine months of this year. Sweden's share of our market

405
for alloy tool, die and magnet steel has fallen from 13·6 per cent. in 1976 to just 4·1 per cent, in the first nine months of this year. Austria's share of our market in the same sector has declined from 4·6 per cent. in 1977 to only 1·3 per cent. so far this year. All of this represents useful if, perhaps, so far limited progress.
Of course, taking the broad areas, I am sure my hon. Friend will recognise that so far, as a result of some of these activities alloy tool, die and magnet steel import penetration has fallen from 73·.01 per cent. in 1977 to 71·.34 per cent. so far this year. Stainless steel bar penetration has fallen from 44·78 per cent. to 41·25 per cent. I am not saying that those are figures for complacency, but I give them to my hon. Friends to show that some effect of these measures is now being seen.
However, my hon. Friend was right tonight to point out that all of this might have done a great deal to mitigate the problems of low-cost imports from third countries. But instead of our own products filling the gap, it has been imports from other Common Market producers which have tended to increase as the measures against third country imports were taking effect. This, as my hon. Friend rightly said, is a much more difficult development.
My hon. Friend referred to the increasing share of countries such as Germany, which has doubled its level of imports into the United Kingdom of tool and stainless bar steel since 1976. Italy, which exported none before 1977, is now the largest supplier of stainless steel bar to the United Kingdom, and France has now, for the first time, become a substantial supplier of both stainless and high special bar.
It is in this kind of market that the Davignon measures do not have effect, although, as I have said, they have an effect in bulk steels. It is in this kind of market that Sheffield producers have been alleging that breaches in ECSC pricing rules have taken place. It is in this kind of market that the consultants' report to the iron and steel sector working party itself pointed to the prime need to take action to improve the European trading position and to control uneconomic selling.
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It was because of this concern that the chairman of the iron and steel sector working party originally wrote to my right hon. Friend the Secretary of State on 15th August about the problems of imports of stainless, tool and high-speed steel bars. In his original complaint he drew particular attention to the high level of imports from other member States—Germany, Italy and France, as my hon. Friend has said—and referred particularly to cases of the low prices quoted, mainly by German producers whose domestic prices were alleged to be higher. In his submission he suggested that quotas should be imposed on all imports while longer-term solutions were being worked out.
However, I say to my hon. Friends—because I think that they accept the position in which we find ourselves as a Government—that we have no power to impose quotas against other Community countries. Quantitative import restrictions on trade between member States are specifically prohibited by article 4(a) of the ECSC Treaty and article 30 of the EEC Treaty. Apart from that, these provisions arc direcetly enforceable in the United Kingdom and any trader could quickly take legal action in United Kingdom courts against the Government if we attempted to prevent his importing from the Common Market.
Because of this situation my hon. Friend the Minister of State, Foreign and Commonwealth Office originally raised this matter in the Council of Ministers on 25th July. Since then as my hon. Friend knows, my right hon. Friend the Secretary of State has written to Commissioner Davignon. My right hon. Friend the Minister of State raised the question with Commissioner Davignon on 16th October. He raised the matter with him again on 21st November in the Council. Because of these representations Commissioner Davignon has assured my right hon. Friend the Secretary of State that he shares our concern about the social and regional consequences for Sheffield of any further deterioration in the situation of the special steels industry. Furthermore, he confirms that the information that we have supplied to him about prices is being used by Commission officials in an investigation into the pricing practices for special steels on the basis of article 60 of the ECSC Treaty, which prohibits

407
discriminatory pricing. We have therefore today put the Commissioner's reply to the iron and steel sector working party which met this afternoon. We have asked for a quick response with its views on how we might respond most effectively.
We have also indicated to it today our willingness to help as much as possible with son-re of the investment which my hon. Friend said was so essential. We want this sector of industry to be made stronger with more investment in modern plant and equipment, with more research and development, and, where needed, some restructuring.
We have already made several grants to firms such as Johnson Firth Brown which received about £1.45 million under section 7 of the Industry Act towards its GFM project which had a total value of more than £9 million. There was assistance to Edgar Allen Balfour which has been offered assistance of £250,000 towards its project which involves investment of £2.4 million. I could give further examples.
We have today said to the NEDO sector working party that we would like it to consider whether a scheme under section 8 of the Industry Act would help. At its working party meeting this afternoon it took great interest in that possibility and, with BISPA, undertook to discuss the possibilities of the scheme with its members. We stand ready to consider other practical ideas and proposals by the working party by which the Government might help to
408
improve the efficiency and competitiveness of the industry.
My hon. Friends therefore see that action is being taken on a number of matters which encompasses some of the issues which they have stressed. The sector working party will be letting us have their views on Commissioner Davignon's response in the next 10 days or so. My right hon. Friend the Secretary of State will then be in a better position to consider how best to reply to Commissioner Davignon's latest letter.
In addition, BISPA is going to Dussel-dorf next Thursday to continue its dialogue with other Community producers. It will then consider carefully the contribution that a section 8 scheme could make to the industry. In addition, at the Council of Ministers in late December we hope that we shall be presented with a further opportunity of pursuing this difficult matter further with the Commission.
I hope that what I have said tonight indicates that we share the concern which has been expressed many times by my hon. Friends. But I believe that if our attempts to solve this problem are to come to fruition it is a matter of the Government, the Commission and the industry all playing their part. I believe that if we work together we can secure a successful future for this section of the special steels industry.
Question put and agreed to.
Adjourned accordingly at sixteen minutes to One o'clock.

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

EEC/COMECON: CO-OPERATION AGREEMENT
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 what response has been made to the proposal by the Council for Mutual Economic Assistance (COMECON) to the European Economic Community (EEC) for an agreement for economic co-operation.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the CMEA's proposal was received in February 1976. In November 1976 the EEC responded by proposing an alternative draft agreement defining the forms and procedures for relations between the Community and the CMEA. Negotiations between the two sides are continuing. The Government hope that they will soon be brought to a successful conclusion.
Lord BROCKWAY: My Lords, I thank the Minister for his Answer. Is it not rather disappointing that there should be this long delay in carrying out the core of the Helsinki Agreement, which was economic co-operation? Cannot something now be done, either in these negotiations or through the European Commission, to speed up economic co-operation, which must be the basis for all other spheres?
Lord GORONWY-ROBERTS: My Lords, it is of course the Government's policy to ensure, so far as they can, that all signatories to the Helsinki Agreement observe, both in the letter and in the spirit of that document, its objectives. In pursuance of that policy, in November
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1974 the Community sent to each CMEA member State an identical outline of the kind of subjects which might be covered in trade agreements between the Community and the individual CMEA member States. It is true that discussions have taken quite a long time, but this is an extremely important matter and it is right to get it absolutely correct before we agree to a solution. It might be said that before everybody affixed their signatures to the Helsinki Agreement they should have understood very clearly that, in so doing, they were expected to implement its provisions to the full. We propose to approach this particular agreement in that spirit.
Lord CHELWOOD: My Lords, is it not a fact that a number of formerly independent countries in Europe which are now members of COMECON insist on having bilateral trade agreements with the EEC itself and co-operation agreements with individual members of the EEC, and that in any case COMECON does not have either the mandate or the organisation to enter into direct commercial relations with the EEC?
Lord GORONWY-ROBERTS: My Lords, that is broadly our understanding of the situation. For that reason, the Community has conveyed to the CMEA that it is prepared as a Community to deal with member States of the CMEA. Under that umbrella, business deals between member States of the Community can, of course, proceed with member States in Eastern Europe. This is our view. We are now discussing the matter with the CMEA.
Lord BROCKWAY: My Lords, is it not the case that the proposal included individual nations negotiating with the EEC? But, more important, may I ask the Minister whether it is true that economic co-operation has actually declined? Is it true, as stated in The Times of 23rd November, that imports from Eastern Europe declined from 34 per cent. in 1976 to only 4 per cent. in the first six months of this year and that exports to Eastern Europe declined from 7 per cent. in 1976 to only 1 per cent. in the first six months of this year? Does not this illustrate the urgency of the issue?
Lord GORONWY-ROBERTS: My Lords, without advice I could not confirm or contradict my noble friend on the figures which he has given. However, we have a very large and, so far as I can see, flourishing trade with Eastern Europe. We want to continue and expand it on the proper basis which was indicated in outline a moment ago by the noble Lord, Lord Chelwood. I see no reason why the kind of agreement which the Community has already concluded successfully with the ACP countries under the Lome Convention, with EFTA and with a number of Mediterranean States, and which it has recently concluded in the form of its co-operation agreement with China, should not equally be applicable to the CMEA organisation of countries.
The Earl of ONSLOW: My Lords, is it not true that the Russians, who, after all, control the Eastern European economies, are finding it very difficult and are almost refusing to negotiate with the EEC as a whole? Consequently, does not this possibly indicate why some of the figures quoted by the noble Lord, Lord Brockway, have fallen to the level that they have?
Lord GORONWY-ROBERTS: My Lords, I think it is a point that the figures need to be looked at very carefully, and the noble Earl has made that point. He also implicitly made the valuable point that the Community is prepared to have an umbrella agreement with the CMEA within which two things are possible. Member States of the Community will be enabled to have business dealings with member States in the CMEA, thus maintaining and expanding the trade that my noble friend Lord Brockway quite rightly advocated; secondly, the Community itself wishes to negotiate a trade agreement as distinct from business dealings with, so far as possible, individual member States in Eastern Europe. It is for those member States to indicate whether they wish CMEA to act for them. We are not satisfied that that is the position at present.
Lord GLADWYN: My Lords, is not the position that COMECON and the EEC are in no way comparable entities?
Lord GORONWY-ROBERTS: My Lords, that is the short and the best
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answer of all; they are not comparable, but we continue to negotiate to see whether comparability can somehow be achieved.
Lord DRUMALBYN: My Lords, is it not a fact that it is not so much agreement between the member States of the Euro pean Economic Community and the member States of COMECON that are in question, but it is two points: First, the industries within the member States of the Community and the States of COMECON and, secondly, a growing effort on the part of this country to ensure that the agreements between—
A noble Lord: Question!
Lord DRUMALBYN: My Lords, may I ask whether it is not a fact that there is a growing tendency in this country to ensure that the companies in this country do negotiate with organisations within the COMECON countries and that that is something which we should like to see encouraged?
Lord GORONWY-ROBERTS: Certainly, my Lords, on the first point, I repeat that business dealings by companies and organisations, whether private or public, in individual Western States with State organisations in the Eastern States continue to be perfectly possible. What is at issue is whether CMEA, as the noble Lord, Lord Gladwyn, has put it, is entitled to equate itself with the EEC as an organisation for a generalised purpose. There are certain areas of competence for the EEC which are well understood and there is the possibility of what I call "umbrella agreements" under which, State by State, company by organisation, exchanges can move forward.
We have just had a protracted discussion with the CMEA on these questions, which went on until very late at night. I should like to inform the House that nothing like a breakdown occurred. There was not absolute agreement, but both sides agreed that they would take home their own version of the decision reached and would return at a future date to discuss the matter. There is the possibility that there will be a meeting of experts in the future to try to iron out these difficulties.
Lord BROCKWAY: My Lords, can the Minister give us an assurance—
Lord STRABOLGI: My Lords, we have had nearly 10 minutes on this Question, and I think it would be the wish of the House that we should move on.

PAY GUIDELINES: GOVERNMENT BLACKLIST
2.47 p.m.
Lord BOYD-CARPENTER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many companies are now on their blacklist by reason of granting pay increases to their workers which were alleged to be in conflict with the guidelines laid down at the material time; whether the number on the list has increased or decreased in the last six months, and by how much; and how long they now intend to maintain and operate this list.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, 70 companies are currently subject to discretionary action for breaches of the Government's pay guidelines. Thirty-two companies were subject to such action six months ago. As I made clear in your Lordships' House on 15th November of this year, the Government consider that their pay policy is a vital element in the control of inflation and will continue to take discretionary action, where necessary, to support it.
Lord BOYD-CARPENTER: My Lords, if the Government intend to use powers given to them by Parliament for other purposes in order to impose penalties on companies who do nothing unlawful but whose actions displease the Government, would it not be more appropriate for the Government to come to Parliament and seek Parliamentary authority for this creation of a new kind of criminal offence?
Baroness BIRK: My Lords, it is not a new kind of criminal offence. It is something for which the Government have authority. Governments have the right to purchase or not to purchase goods from any company they desire, in the same way as has the noble Lord. So far as the other discretionary powers are concerned, they are in fact discretionary and they would only be used in circumstances in which the original Act of Parliament gives discretionary powers. So I am afraid that the noble Lord is quite wrong in his implication that the use of any of these sanctions would be illegal.
Lord BYERS: My Lords, would the noble Baroness say where there is the authority for the discretionary powers which are being used?
Baroness BIRK: My Lords, if the noble Lord is speaking about the legal authority, it depends upon whether he is talking about export credit, industrial assistance, grants, and so on; these are all in the legislation which enables the Government to give these grants. It is within the discretion of the Government. It is all part of Government policy and it has all been stated in the White Paper and in other Government papers.
Lord BOYD-CARPENTER: My Lords, reverting to the answer given by the noble Baroness to my supplementary question, is it not the fact that the Government are committed to using their powers of contracting and placing purchasing orders in accordance with rules agreed with the Public Accounts Committee in another place, including accepting the lowest tender where the goods to be supplied are satisfactory? Is it not, therefore, a departure from that longstanding and salutary practice when the Government introduce a totally different consideration, that the company concerned is acting lawfully but contrary to Government policy?
Baroness BIRK: No, my Lords. The Government even when using sanctions can still decide, and must still decide, whether in any special circumstances they will make a particular decision. It is up to the Government to decide. I think I should say to noble Lords that this is not something the Government contemplate

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with relish. It is a very unhappy, unfortunate situation. It is not something that any Government want to do, but it is absolutely essential that in order to keep inflation down the Government stand by their pay policy stated many times and laid down in the White Paper. If this breaks down, then the end result for the country, and not just for the individual companies, will be a much higher rate of inflation and all the terrible things which go with that.
Lord MACKIE of BENSHIE: My Lords, is it not a fact that the Government are applying a statutory wage policy by the back door, and is it not time that they admitted that we need a statutory wages policy?
Baroness BIRK: No, my Lords, that is not true at all. It is a voluntary incomes policy with fairly specific guidelines. Tied to that there are the self-financing productivity deals. So it is very much more flexible than the noble Lord suggests; it is not a statutory wages policy.
The Earl of GOWRIE: My Lords, returning to the question of legality, since when has a White Paper been a legislative authority? And, since I acknowledge, as the noble Baroness says, that the Government do have discretionary powers, if this policy is as important as the Government are making out, why do they not bring the discretionary powers before Parliament and make them statutory?
Baroness BIRK: My Lords, there is no point in that. Why should one make discretionary powers statutory? The noble Earl and his colleagues are always arguing for greater free enterprise and flexibility, but they want to make this situation more rigid. The powers are there and one uses them, reluctantly, if one has to. I cannot add anything to what I have said two or three times: that the question of whether you buy from a certain person or company is a matter of choice for a Government just as it is for any individual.
Baroness WOOTTON of ABINGER: My Lords, is it not a fact that for many years past the Government, in the opposite situation so to speak, have refrained from placing contracts with companies which do not observe the fair wages clause? Is not that a precedent the other way round for what is happening now?
Baroness BIRK: My Lords, my noble friend has there an extremely good point.
Lord COTTESLOE: My Lords, does the Minister think it is right—I am not asking whether she thinks it is lawful or whether she thinks it is expedient, but does she think it right—that the Ford Motor Company, who have suffered losses of £450 million of revenue in attempting to keep within the guidelines of the Government's pay policy—and have been hindered in doing so by some millions of pounds paid out by the unions in supporting and prolonging the strike—should now be penalised for doing so?
Baroness BIRK: My Lords, there is a Private Notice Question following the Starred Questions, I think put down by the noble Lord, Lord Carr of Hadley. I hope the noble Lord, Lord Cottesloe, will wait for that to be dealt with because that specifically concerns Fords.
Lord WIGODER: My Lords, will the Government ensure that any sanctions that are imposed bite not only on the management but also on the unions concerned?
Baroness BIRK: My Lords, they must do, must they not?
Noble Lords: No—why?
Baroness BIRK: They do, my Lords, because any sanctions imposed which place particular demands and restrictions on a company, on the management, affect the whole company. As the workers are part of the company it eventually must affect the workers, unless of course productivity increases and then the sanctions are withdrawn, in which case everybody benefits, management and workers.
Lord LEATHERLAND: My Lords, while we are on this question of pay increases, may I ask my noble friend whether a pay increase has recently been granted to Members of the House of Commons, and can she assure us that that was within the guidelines?
Baroness BIRK: My Lords, I do not know whether it is or is not, but so far as I am concerned, that is a different question.

DETENTION ACCOMMODATION AND "ARK ROYAL"
2.56 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 whether, when HMS "Ark Royal" is taken out of commission, consideration will be given to its use for young offenders, until such time as other, very necessary accommodation can be provided.
The MINISTER or STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, the possibility of using decommissioned ships has been considered before but there are many difficulties about using a ship as a prison, borstal or detention centre. An additional consideration in respect of "Ark Royal" is that the material condition of this very large and complex vessel will deteriorate rapidly after her paying off date and maintenance costs will become prohibitive. As resources become available we shall be providing accommodation for young offenders ashore which has been designed for the purpose.
Baroness VICKERS: My Lords, will the noble Lord ask Her Majesty's Government to convey our thanks to all those who served on this magnificent ship for their excellent service and also to the many people in the Devonport dockyard who have kept her afloat all these years? When will the noble Lord be able to say whether this ship is going to be destroyed as the "Eagle" was, or is going to be used for any other purpose other than the one I suggest?
Lord HARRIS of GREENWICH: My Lords, I would certainly agree with the noble Baroness on the first two points she put to me. On the last point, all I can do today is to reply to the precise Question she put to me; namely, whether "Ark Royal" should be turned into a penal establishment. Our view on that is that it should not be.
Baroness EMMET of AMBERLEY: My Lords, may I ask the Minister to give
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sympathetic consideration to this question because I remember when I was an active magistrate how difficult it was to deal with the young offender for want of accommodation? It need not be called a penal establishment; it need not be called a borstal. It could be called "Victory", and that might do the young people some good.
Lord HARRIS of GREENWICH: My Lords, our view so far as this particular proposal is concerned in respect of "Ark Royal" is that the cost of making it into any form of establishment of the kind proposed by the noble Baroness and her noble friend Lady Vickers would be prohibitive, and for that reason we do not support the view.
Baroness FAITHFULL: My Lords, if the Minister considers "Ark Royal" as being too big and too expensive, may I ask whether he would agree that the little ships could be used for the purpose proposed? I cite in particular the trawler "Harriet" beached on the coast at Millom which is supposed to take children in need and in trouble.
Lord HARRIS of GREENWICH: My Lords, that is a very different question. Obviously I have no knowledge of the vessel to which the noble Baroness refers. All I can say today is that the Prison Department staff who worked on HMS "Maidstone" found that experience not at all satisfactory, and therefore we are not predisposed to favour this particular proposal.
Lord HANKEY: My Lords, is it not odd that the British are abolishing their aircraft carriers at a time when the Russians and the Americans are both building them?
Lord HARRIS of GREENWICH: That, my Lords, does appear to be a slightly different question.
Lord ORR-EWING: My Lords, I wonder whether in future the noble Lord would speak a little more clearly. We appreciate his answers but it is very difficult to follow them if one swallows the words. Somehow the microphone system does not cope with it. We would like to hear what he replies in future.
Lord HARRIS of GREENWICH: My Lords, I apologise to the noble Lord if he did not hear my replies. I will, if necessary, bring a megaphone on future occasions.

BRITISH SHIPBUILDERS: FINANCIAL RESULTS
2.59 p.m.
Lord CAMPBELL of CROY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what relationship the recently announced financial results of British Shipbuilders bear to the target of limiting losses, in the year ending 31st March 1979, to £45 millions set by the Secretary of State for Industry and announced by him on 4th July in accordance with Section 10 of the Aircraft and Shipbuilding Industries Act 1977, which requires the determination of financial duties.
Lord LEONARD: My Lords, the financial target for this year is based on British Shipbuilders' forecast of the loss this year. The 1977–78 accounts relate to losses to March 1978. A substantial part of these losses, I should add, were on contracts taken before nationalisation.
Lord CAMPBELL of CROY: My Lords, in thanking the noble Lord, Lord Leonard, I do also warmly congratulate him. Not only is this his first appearance at the Dispatch Box but it is also his maiden speech. It is daunting to have to do both at the same time, and upon a subject so fraught with serious problems. He has carried out his first assignment admirably and I am sure that we look forward to hearing him again frequently. As regards the substance of the reply which I have received, has there been any reason since July for a further assessment of losses and a change of target for the current year, in view of the recent announcement of the loss by British Shipbuilders of no less than £105 million in the first nine months of its existence?
Lord LEONARD: My Lords, I answer the noble Lord's question by saying, as I have said before, that a tremendous amount of the previous loss was due to prevesting assumptions and computations. So far as the present situation is concerned, we have it on the advice of the Finance Director that British Shipbuilders is on target for this year. That sounds to me something that we can be happy about. On the other hand, I think that the whole House and the noble Lord. Lord Campbell of Croy, will agree that the unprecedented contraction of the shipbuilding industry worldwide is something that we must take into consideration. We must hope that we shall be able to weather the storm. As your Lordships know, the shipbuilding industry, as a whole, is going through a time when it is not beyond the bounds of possibility that we may have to reduce the tonnage in shipbuilding as a whole. I do not know whether that answers the noble Lord's question but it is the best that I can do at present.
Lord SHINWELL: My Lords, what is meant by the term "on target"? Does it mean that British Shipbuilders is going to accrue further losses?
Lord LEONARD: My Lords, my noble friend is, believe it or not, quite right. The Minister has stated that it should seek to keep within the limit of £45 million. Your Lordships must realise that such losses occur worldwide; they do not occur for us alone, and that is the reason for the Intervention Fund. It is up to us. We have to compete with our Far Eastern friends and we have to do the best we can to ensure that the losses are at a minimum. From the point of view of the loss, the target set was £45 million and the Finance Director says that he is on target for that. However, I agree with my noble friend that it is a loss.
Baroness ROBSON of KIDDINGTON: My Lords, will the noble Lord enlighten me? He referred to the losses incurred before vesting day. Could he tell us what has happened to the money belonging to certain shipping companies such as, for example, Brooke Marine, which was very much in credit at the time of vesting day?
Lord LEONARD: My Lords, I think that I should be given notice of a Question of that sort, because I do not have the information for which the noble Baroness asks.
Lord ORR-EWING: My Lords, will the noble Lord say whether the figure given includes the very heavy subsidy on the building of Polish ships, or is that additional to the losses now announced?
Lord LEONARD: My Lords, all subsidy is reached by a proper accountancy approach to the matter. It does not take in Polish shipping or any other shipping; it is based on the broad tonnage which is to be built by British Shipbuilders over the year.
Lord CAMPBELL of CROY: My Lords, while the shipbuilding industry throughout the world is, as the noble Lord has said, in a great recession, an up-turn is expected in the mid-1980s. Is it not disquieting that virtually all the other shipbuilding countries have made arrangements, and announced them, to adapt and adjust to this situation, but Britain is apparently still undecided?
Lord LEONARD: My Lords, I do not think that I would quite agree with what the noble Lord has said, because I must say that British Shipbuilders is at present bringing about a Corporate Plan. That Corporate Plan takes into account all the points made by the noble Lord and it is hoped that capacity may be cut, and could be cut, to 430,000 tons. That in itself will involve redundancies and until the Corporate Plan is produced and put forward we cannot arrive at any figures. However, the most that I can say is that we shall keep the shipbuilding industry at the maximum possible in keeping with showing a profit in conjunction with the Intervention Fund, which, I mentioned before, is the important factor as regards keeping abreast of our competitors worldwide.
Lord GISBOROUGH: My Lords, is the noble Lord aware—
Baroness LLEWELYN-DAVIES of ASTOE: My Lords, as the whole House I am sure recognises, my noble friend Lord Leonard needs no rescue from me, but I see that we have already taken
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29 minutes on Questions and there is to be a Private Notice Question and a Statement. I hope that I have the support of the House when I say that I think we should move on.

FORD PAY SETTLEMENT
Lord CARR of HADLEY: My Lords, I apologise to your Lordships if there has been a delay, but I received a message which I did not quite understand. I should like to ask a Question of which I have given Private Notice. The Question is as follows:
"To ask Her Majesty's Government whether they will make a Statement about the Government's intentions following the Ford pay settlement".
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will answer that Question in the form of a Statement.

ARBITRATION BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to introduce a Bill to amend the law relating to arbitrations and for purposes connected therewith. My Lords, I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

NATIONAL LAND FUND BILL [H.L.]
3.8 p.m.
Lord REIGATE: My Lords, I beg to move that this Bill be now read a second time. I must apologise to your Lordships for the fact that this is a repeat performance because on 23rd June 1977 I introduced a Bill with the same title, the same contents and the same purposes. As not all of your Lordships will recall either the occasion or my speech, I am sorry to say that I must, very briefly, repeat my explanation.

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The National Land Fund was instituted by Dr. Dalton in his Budget speech in 1946. He allocated the sum of £50 million, which had been received from the sale of surplus war stores, to a National Land Fund as, in his own words, "a thank-offering for victory". Its purpose was the preservation of the national heritage.
I do not propose, and nor is it necessary, to cover the whole history of the Fund in the years since 1946, but it should suffice to say that the Fund now stands at £18 million; that its original purpose has been widened to include both works of art and historical houses; and that the Treasury has decided that expenditure from the National Land Fund must be regarded as public expenditure. Her Majesty's Government have also retained full control over all expenditure from the National Land Fund—not only what it should be spent on, but when it should be spent.
My Bill has one main purpose, which is to remove the control of the National Land Fund from Her Majesty's Government and place it, with suitable safeguards, under independent trustees. There is a two-fold aim to this. The first is to eliminate delays in reaching decisions which are often inevitable with Government Departments. Your Lordships will understand that when a work of art or a house comes on to the market through adverse circumstances, it is sometimes essential that a decision should be taken quickly, and it is, frankly, very often impossible to do this when as many as three, four or even five Government Departments may be involved.
The other aim is to remove any expenditure from the Fund being considered within the purview of the public sector borrowing requirement. I shall not burden your Lordships with any detailed explanation of the clauses; at this stage it is quite unnecessary. In 1977 I withdrew my Bill in the face of the obvious opposition of Her Majesty's Government. Your Lordships will appreciate that no progress can be made in the other place with this Bill unless it has Government support. Why, then, do I seek to reintroduce it now?
Much has transpired since June of last year. A sub-committee of the Expenditure Committee in the House of Commons has examined the National Land Fund, It
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completed its task within one month and the report was published in March, 1978. It is an outstanding and thorough report, and I would recommend its reading to any of your Lordships who are concerned with the future of the national heritage. I was not invited to give evidence to that committee. Therefore, to me it is the more remarkable that by a process of telepathy, coincidence or common sense the committee came to the same main conclusion as I had embodied in my Bill in 1977; namely, that the Fund should be transferred to independent trustees, as set out in Clause 1 of my Bill.
The committee made certain other recommendations, not all of them necessarily for legislation. There are certain recommendations which, if your Lordships give the Bill a Second Reading, I should hope to leave to a later stage. However, there are two which I should like to mention. First, the committee recommended that the name of the National Land Fund should be changed to the "National Heritage Fund" and, secondly, that the sum of the Fund should be raised to £50 million.
On the first, I am in entire agreement with the committee and would seek to change the name at later stages. On the second—namely, the raising of the Fund to £50 million—it is obviously inappropriate to seek to do that in your Lordships' House. But to me the most interesting part of the whole report was the fact that the committee totally repudiated the Treasury view of the Fund—namely, that payments from the National Land Fund are to be regarded as part of the public expenditure and, therefore, subject to the varying and various controls which are applied to other Government expenditure at different times. However, that is Treasury doctrine or, as I would call it, Treasury dogma.
A wise and, dare I say it, witty writer once said:
"Any stigma is good enough to beat a dogma with".
The committee has supplied the stigma and repudiates the dogma in this robust and trenchant statement which I shall quote:
"Your Committee believe that payments from the Fund, as presently constituted, are not public expenditure. Public expenditure took place in … 1946, and not in the succeeding years in which the capital was applied".

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It goes further and give excellent reasons for justifying that statement. The committee then recommends:
"… that payments from the … National Land Fund should not be regarded as public expenditure, and that HM Treasury ceases this accounting practice forthwith".
If the Fund was transferred to independent trustees, it would then become possible for it to revert to its original intended role of a contingency fund. Here again I should like to quote the report when it says:
"This principle of contingency fund, although implicit in existing legislation, is denied fulfilment because of administrative convention".
On why a contingency fund is needed, I should like to quote the late Lord Crawford and Balcarres, who was chairman of the National Trust and of the National Art Collections Fund when, in 1967, he referred to:
"… the need for the Government to set up an independent national fund which should be administered neither by Parliament nor by the Treasury. In other words, there should be the possibility of making a major purchase at a time when politics are not too rosy and politicians are out of humour, when the balance of trade is bad, or when any of the thousand and one excuses for not giving a grant crops up. Until such a fund is set up there can be no security".
Those were very wise words indeed, and the situation, alas! has not changed in 11years.
The Select Committee reported last March. We have had no sign of the Government's views, and I do not think that we shall be any wiser today. But in my view the delay is not justified. There is a principle involved and it is a question of saying "Yea" or "Nay" to that principle. The Press comment on the report was unanimously favourable. I am also glad to say that the Conservative Party seems to have given it general support. Judging from a quotation published in the Daily Telegraph on 6th November, these proposals have the blessing of Sir Geoffrey Howe and the benediction of Mr. St. John-Stevas, who are respectively the Opposition spokesmen for Treasury Affairs and the Arts. The Select Committee's own report was all-Party and unanimous. It is the Government alone who are out of step or, more correctly, who are marking time.
So what happens next? On this occasion I shall not withdraw my Bill. There are, then, two courses open to me: first, if your Lordships approve, it could
1140
be sent to a Select Committee; or, secondly, I could let it go through all stages in the normal way. It is true that a Select Committee involves delay. Most of the work has already been done for such a Select Committee by the Select Committee from another place. Therefore, I have decided not to ask your Lordships to set up a Select Committee but to let the Bill proceed normally, in the hope that by the time your Lordships' House reassembles and we reach the Committee stage, the Government will have made up their mind on the principle.
This Bill will not in any way solve the problem of preserving our national heritage. I have never claimed that for this Bill. Many precious possessions will continue to leave the country; there will continue to be destruction of the countryside; many lovely homes will be torn down. The times are out of joint. This Bill will not alter all of that. But I believe that it could make a small contribution towards a change that we desire. On occasions this Fund could act, to borrow a phrase that was used in the last debate by the noble Viscount, Lord Norwich, as a fire brigade by cutting out the delays which are inherent in any State administration. There are other occasions—and perhaps this is even more important—when it could take a decision which is impolitic or unpopular for the Government. It is a small step forward, and I hope that your Lordships will agree to give the Bill a Second Reading. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Reigate.)
3.21 p.m.
Baroness ROBSON of KIDDINGTON: My Lords, I rise to support and thank the noble Lord, Lord Reigate, for reintroducing the Bill before us today. We on these Benches welcome the Bill in principle. In particular, we welcome the proposal to recreate the Fund as an independent organisation administered by trustees and free of Treasury controls. Like most Members of your Lordships' House, I have been disturbed over the years at the use, or the non-use, of the Fund since it was set up; all of us, as laymen, believed that it was set up as a capital fund of £50 million in the 1946 Finance Act as a permanent war memorial, as has already been said.

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This was a wonderful vision at a time when this country had very limited resources available. I believe that the use of the Fund since then has not lived up to the great ideals envisaged for it. Indeed, I think it was only at the time of the Mentmore dispute that it became obvious to many people in this country that the National Land Fund was not what we thought it was. That was the first time that I became deeply aware of the fact that a Government Department such as the DOE accepting money from the Land Fund would have to accept equivalent cuts in its own Vote. No wonder the Land Fund was under-used.
This reinforces the comment of the noble Lord, Lord Reigate, that the Fund was used and treated as current public expenditure subject to all the normal constraints on such expenditure. Had the £50 million created in 1946 been invested as a capital fund for the use of the preservation of our heritage, however conservative you are in your estimates of what it would have been worth today, we should have had an income of at least £15 million a year purely from the investment of the original sum. That would have gone a long way to help us in the problems that face us.
I am very happy that as a result of the introduction of this Bill, which I am sure your Lordships' House is going to accept, we shall once and for all properly safeguard the money in the Land Fund, and the Bill is deeply welcomed. The only reservation I have about the Bill is the purposes for which it appears to intend the Fund to be used. I refer to Clause 4(2), which deals with the appointment of trustees by the Secretary of State. It says:
"those who appear to him to have knowledge of architecture and the fine arts, finance or administration".
When Dr. Dalton introduced the Fund in 1946, he said:
"I should like to think that through this Fund we shall dedicate some of the loveliest parts of this land to the memory of those who died that we should have freedom".
I believe therefore that the Fund was originally conceived mainly for the purchase of land; yet 75 per cent. of all spending has been on works of art and to acquire houses in lieu of death duties.
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Of course we want to safeguard houses and works of art. These are treasures that we want to keep. But we do not want to do that with this particular Fund to the exclusion of beautiful parts of our country threatened by modern so-called civilisation. After all, if we look at the kind of assistance that exists for the preservation of our heritage, we have other organisations such as the Historic Buildings Council—which I admit gets a not at all adequate grant from the Arts Council. In actual fact, the grant to the Historic Buildings Council from the Arts Council, which has to cover the whole of the United Kingdom, is less than the grant given to Covent Garden. I do not mean that I begrudge Covent Garden its grant, but we have to have a sense of proportion. What I am concerned to ensure is that the National Land Fund, which, by its very name, was meant to preserve the most beautiful parts of our countryside, should not be used purely for the preservation of ancient buildings and for the purchase of important works of art. That is my only reservation, and I hope that at Committee stage we shall be able to resolve those problems. Apart from that, I wholeheartedly welcome the Bill.
3.27 p.m.
Lord COTTESLOE: My Lords, we must be grateful to my noble friend Lord Reigate for bringing forward this Bill. I much hope that the House will approve it and that the Government will give time to carry it through both Houses of Parliament into law. The history of the National Land Fund is a sorry story, as my noble friend has said. The spendid concept of Dr. Hugh Dalton when, as Chancellor of the Exchequer in 1946, he had available some £165 million from the sale of surplus war stores, in setting aside £50 million to establish this Fund for the preservation of our national heritage as a memorial to those who fell in the war has been effectively stultified by the conventions that the Treasury at once established to control its use.
By an ingenious use of semantics—a use that some people might think hardly quite honest—they persuaded successive finance Ministers of both Parties that the Fund did not really exist, or that if it did exist it was no more than a book entry. I rather think I heard the Minister on a

1143
previous occasion using precisely those words. This the Treasury still maintain, even though each year they publish the accounts of the Fund, including a list of the investments held as the Fund's assets.
They established a convention, as my noble friend said, that any expenditure from the Fund on the national heritage must be treated as public expenditure, and that, if any part of the national heritage (land, historic houses, and, after a few years, contents of such houses also, or whatever it might be) was accepted by the Treasury in lieu of death duty, the Fund must reimburse the Treasury for it, I cannot see that such reimbursement can properly be regarded as public expenditure: it is a reimbursement.
The Fund is invested in Government securities. The application of its income, as envisaged by Dr. Dalton, is no more public expenditure than if I, holding on my own account some Government stock and applying the income from it for my own private purposes, were to be told that that was public expenditure. Furthermore, the Treasury, who really act as trustees for the fund, so advised successive Ministers that the interest from the Fund was grossly underspent, so that it rapidly accumulated. Then, when the Fund had grown after a few years to £60 million, they persuaded the Minister—I think it was Mr. Enoch Powell who was then Financial Secretary and who should have known better—to take back the original £50 million and throw it into current revenue. Ever since, they have underspent even the interest on that interest, except in one year, so that it now stands, or stood last year, at £18·3 million.
I ask noble Lords to consider what would be the position if, as trustees of a charitable trust, having so underspent the income that it had rapidly accumulated, they then returned the original capital to the donor and then continued to underspend even the interest on that accumulated income. They would of course expect to be taken to court and held up to public execration. But that is what was done by successive Ministers of both complexions on the advice of the Treasury, and they have got away with it for 30 years. It was, as the noble Baroness, Lady Robson of Kiddington, pointed out, not until the Government
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refused to apply the Fund to the purchase of Mentmore, with all its splendid contents, at a bargain price—less than one-third of what they realised when they were dispersed at auction—that the gaff was blown and Parliament and the public began to realise how they had been duped.
It has been a sorry story. Public concern was so great that the Environment Sub-Committee of the Expenditure Committee of the House of Commons were asked to examine the National Land Fund and its workings. That all-Party Select Committee took evidence from Government Departments, Members of Parliament, private individuals and various organisations concerned with the national heritage—the National Trust, the Standing Commission on Museums and Galleries, the Museums Associations, Heritage in Danger, the Historic Buildings Council and many others—and it is all embodied in the 341 pages of this monumental report, together with 37 pages of the Committee's summary of evidence and 18 unanimous recommendations. I stress that the 18 recommendations are the unanimous recommendations of an all-Party Select Committee.
This Bill embodies one of those 18 recommendations, namely, that the National Land Fund be placed under the control of independent trustees. The Bill says that they are to be appointed by the Secretary of State, but I prefer the Committee's recommendation that they be appointed by the Prime Minister, but no doubt that could be amended at a later stage of the Bill's progress. It must be clear from what I have said that, if the Fund is to fulfill its purpose, it must be taken out of Treasury control and put into the hands of independent trustees, and that is clearly a matter requiring legislation.
Other recommendations of the Select Committee propose that payments out of the Fund be not regarded as public expenditure; that its present rather misleading name be changed and it be renamed the National Heritage Fund; and that the original £50 million be made good. I might say in passing that, as that original sum of £50 million must now be worth over £200 million, even if the £50 million were now made good, the Treasury would still have got away with three-quarters of the sum. These recommendations and much else are all there in the report.

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I hope the Minister will tell us not only that the Government will look favourably on my noble friend's Bill and help to pass it into law, but that they will also accept the other 17 recommendations of the Select Committee, most of which evidently do not require legislation. Perhaps she will tell us which of the 17, if any, would require legislation. I strongly support the Bill and wish it every success.

FORD PAY SETTLEMENT
3.36 p.m.
The LORD PRIVY SEAL (Lord Peart): My Lords, with the leave of the House I will now repeat a Statement being made in another place in answer to a Private Notice Question on the Ford Pay Settlement. It is as follows:
"The Government have considered the pay settlement reached by the Ford Motor Company with its manual workers and have discussed the settlement in detail with representatives of the company management. In the Government's view the settlement cannot be reconciled with the pay guidelines contained in the White Paper Winning the Battle Against Inflation (Cmnd. 7293). The Government have informed the company of this and have expressed their regret.
"The Government had previously made it clear that, in the event of the company reaching a settlement outside the guidelines, they would need to consider discretionary action against the company. After considering the settlement in the light of all the relevant circumstances, the Government have reluctantly reached the conclusion that such action should be taken. The company has been informed accordingly".
My Lords, that concludes the Statement.
Lord CARR of HADLEY: My Lords, I address myself to this subject as someone who has repeatedly gone on the record as believing that a policy to restrain the size of pay increases is an absolutely essential part of any overall policy to control inflation without causing even higher unemployment. I preface my remarks in that way because, feeling as I
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do, I regard this action as perhaps even more deplorable than if I took a contrary view, because if we are going to have incomes policies in this country they must not be unconstitutional, unfair, stupid and tyrannical, as this action is.
Against that background, I have four questions for the Leader of the House. First, what is the nature of the discretionary action which the Government are proposing? It seems incredible that, after all this time, all the Government can tell us is that they are going to take discretionary action. What is the nature of that discretionary action? Parliament is entitled to know.
Secondly, how much do the Government estimate this discretionary action will cost the Ford Motor Company? How much do they estimate that the nine weeks strike has cost Fords? Thirdly, do the Government really consider this kind of action to be fair? Let us consider how this came about. The Ford Company offered a pay increase in an attempt, contrary to their own view of their company's, their customers' and their employees' interest, to keep within the Government's pay guidelines. The immediate response of the unions was to call a strike in flagrant breach of an agreement solemnly entered into by the unions less than a year ago. The company then suffered a nine week strike at enormous cost, yet the only people to have sanctions applied against them are the company, not the unions. Is that fair, and can one hope to govern the country on the basis of such gross unfairness?
Fourthly, is it sensible, even in the context of the Government's own policy? If a company, in trying to keep to the Government's guidelines, takes a nine week strike and then, on top of that, very expensive sanctions are applied to it, why not settle straight away and not run the risk of a strike as well? Will not this action encourage employers in future not to keep to the guidelines but to give way to them and at least avoid the damage of a strike?
Lord BYERS: My Lords, I think it is well known that we on these Benches believe in a tough pay policy in order to check inflation; but we are extremely worried about the Statement which we have just heard, because we also believe that, if a tough policy is to be fair, it

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must surely have statutory backing and not be operated at the whim of the Government's discretion. Surely everybody must be able to know both where they stand within the law and what is to happen to them if they breach the law, rather than if they breach a White Paper or a dictate of the Governent. This gives us on these Benches very deep cause for concern. I ask the Government whether they cannot see that their policy is really the worst of all worlds. It attacks the company when it should be tackling the whole question of the unions who put the company in this position. If the policy succeeds in reducing Ford's turnover, it will undermine any chance of increasing the productivity side of the deal in excess of 5 per cent. It cannot be right; it does not make sense. I should have thought that the only alternative to arbitrary sanctions is a statutory policy approved by Parliament, but I believe that in the meantime the Government ought to take back this matter. We are on a very slippery road indeed.
3.41 p.m.
Lord PEART: My Lords, I should like to reply to the noble Lord, Lord Carr of Hadley, who put four questions. He asked about the nature of the actions which the Government could take. This matter has been considered, and action can be taken. First, purchases under some existing Government contracts may be stopped. I am outlining the possible lines of action. I am not saying that it will be done in this way, but these are the possibilities. Secondly, the Government will take account of the breach of pay policy by Fords in considering the placing of future contracts and the granting of discretionary financial assistance, such as that under Sections 7 and 8 of the Industry Act, relating to loans and grants, temporary employment subsidy, and Section 2—export credits. This could mean that the company does not get future contracts and future discretionary assistance. I cannot say specifically today what the Government will do. This is a matter for consideration, and that is why I cannot say how much the action would cost, which is the point which was raised in the second question.
There is the argument as to whether this is fair. It has been said by the company
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that the offer is within the pay guidelines, but the Government believe that we must adhere to the 5 per cent. It is essential to have a firm policy, and I believe that on this the country and the nation will support the Prime Minister and the Government. Noble Lords opposite and their Party have not come to a decision on any alternative. It is all very well criticising the Government's proposals, but I believe that the Opposition are themselves in disarray on the question of pay policy. I think that we are right to have a firm policy, and if we do not succeed in our policy it will be disastrous for the nation. The noble Lord, Lord Byers, is worried about the tough policy. He said that the policy must have statutory backing. The Government are acting legally in this matter. We believe that we must succeed in our policy; otherwise we shall have raging inflation and other serious consequences.
Lord LEE of NEWTON: My Lords, I do not for one second support the action which the Ford workers took even before they knew what was the offer of the employers. Nevertheless, is my noble friend aware that one recalls that when last year the Government did not take action against Ford for breaching the ceiling, the noble Lord, Lord Carr of Hadley, was very worried that action had not been taken? Now, apparently, he is very worried because action has been taken. Is my noble friend also aware that when the CBI—and one half, I think it is, of the Tory Party—adhere to the idea of a 5 per cent. limit and then refuse point blank to accept the only way in which the Government can enforce the 5 per cent. limit, they are guilty of sheer hypocrisy of the worst kind?
Lord PEART: My Lords, I am grateful to my noble friend for what he has said. He has had long experience of industry. My noble friend reminded the noble Lord opposite of what was his previous posture. I want to make it clear that, if we are to have a policy which is to succeed, it must be a firm policy. We cannot make exceptions.
Lord BOYD-CARPENTER: My Lords, does the noble Lord's reference to Government assistance being reconsidered mean that the Government are reconsidering the massive financial support promised

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by them to Fords in respect of the engine factory in South Wales? Secondly, does the noble Lord appreciate that much of the tone of his answer to my noble friend suggests that he takes the view that a good end justifies a throughly bad means?
Lord PEART: My Lords, on the first question put by the noble Lord, which was the most important one, the answer is, No.
Lord WIGG: My Lords, is the Minister aware that the whole House and the country will support the Government in taking firm action, but that firm action must mean that the individual institutions know both whether they are infringing the law and what the penalties are to be—and that this must not depend upon the Government's belief or upon the authority of a White Paper? Is the noble Lord aware that when it comes to an incomes policy or a prices policy I will support them with my vote and in any other way open to me, but I will not support them on this issue because this is the start of a very slippery slope indeed? If individuals can be put in peril at the whim of Ministers, without knowing what is the charge or what are the penalties, then that is not the way of a democratic society. If Ministers want a firm policy, they should come to the House of Commons and to this House and spell it out, ask for the authority, and they will get it—but not this way.
Lord PEART: My Lords, I am sorry that my noble friend cannot support me. That is not unusual sometimes, though that is another matter. I respect my noble friend, but I am sorry that he takes that view. He is really questioning the legality of the matter. All I can say—and I repeat—is that the Government remain determined to contain and reduce inflation. I believe that a pay policy is essential and must be backed up by appropriate monetary and fiscal measures. I do not want to go into lengthy subsidiary matters. I thought that the position was obvious to my noble friend, and I am rather disappointed with his attitude.
Lord SHINWELL: My Lords, can my noble friend say whether similar action is to be taken against other firms which are alleged to have violated the Government's
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decision on the 5 per cent.? That is my first question and I should like to ask another one. The sanctions, or the discretionary action, obviously mean reducing the production of Ford cars, or making financial difficulties for the firm. I should like to know whether this is intended as a deterrent, or whether it is likely to curb the advent of further inflation? Has that been considered by the Government?
Lord PEART: Yes, my Lords; I say to my noble friend that it has been considered, and there have been other cases which also have to be considered. I cannot give the names, but there are other possibilities. I am sure that my noble friend will agree that the Government's policy is to be firm about this matter. If we do not succeed in containing and reducing inflation, this country will go under, and I hope that the Opposition will be much more constructive.
The Earl of ONSLOW: My Lords, can the noble Lord please answer two questions? First, nine weeks on strike, 52 weeks in the year, and 17 per cent. still mean that the persons who have been on strike will receive less than 5 per cent. increase in annual salary over a year. That is the first point. Would he not agree with me on it? Secondly, arising from what the noble Lord, Lord Boyd-Carpenter, said, is the fact that the Government grant for the Bridgend engine works has not been withdrawn totally unconnected with the fact that it is not a million miles away from the Prime Minister's constituency; or am I being unkind?
Lord PEART: My Lords, the contract was made before the introduction of the new counter-inflation clauses in offers of industrial assistance. I am sorry that the noble Lord has given me some statistics. All I can say is that they sound interesting, but I do not think that they are very valid.
Lord HANKEY: My Lords, may I invite the Government to be a little more sophisticated? Has not the Ford Company found a most ingenious way to increase productivity, and is that not a very desirable thing to see happen throughout British industry? Are the Government complaining because the total result of about 17 per cent. is too much, or are they against that sort of agreement anyhow?
Lord PEART: No, my Lords, it is not aimed at productivity. May I say that the question is whether or not we accept the 15.7 per cent. We are committed to a guideline of 5 per cent. It is as straightforward and simple as that. If the noble Lords wish to break that, I think it would be disastrous.
The Earl of GOWRIE: My Lords, if the Government are committed to a guideline of 5 per cent., as they insistently repeat they are, why did they make a settlement within the National Health Service, as against the Ford Motor Company, of much nearer 15 per cent.?
Lord PEART: My Lords, I think that is a different point altogether.
Lord PLANT: My Lords, would not my noble friend the Leader of the House agree that the whole of the country supports the action of the Government? According to the opinion polls, the country has agreed that the Government's fight against inflation is correct and has its full support. I am sure my noble friend would agree that, had the Government done anything else, they would have completely lost their credibility in the eyes of the public; and I am sure that when the next General Election comes it will be found that the public are supporting the Government.
Lord PEART: My Lords, I am grateful for that support from my noble friend. I would only say again that if the Opposition, as they suggest in their questioning, really wish the Government to break these guidelines, they are seeking to break pay policy; and, despite the fact that I know noble Lords will not accept from me what I said previously, I believe that inevitably this would be disastrous, and they know it. I hope that noble Lords opposite will carefully consider what they would put in its place, because up to now they have been very unrealistic about this issue.
Lord BYERS: My Lords, perhaps I may ask the noble Lord one question, because I think he may have made a misstatement. He says that the guideline is only 5 per cent. Surely he is not ruling out the element of a self-financing productivity deal. That, surely, is vital for the community.
Lord PEART: I accept that, my Lords, but the basic guideline is the 5 per cent. Here we are talking about 15·7 per cent. All I am saying is this—and let us be frank. If the Opposition continue like this—and I am not now including the Liberals in this; they are generally more positive and constructive in their thinking—I think they are endangering the battle against inflation. I can say no more than that. My Lords, I am prepared to answer further questions but we have a major debate to finish. However, I am not going to protect myself since it is a major issue.
Lord BYERS: My Lords, perhaps I may ask the noble Lord a further question because, again, it is not clear, and this is very important for future deals. If a company can show that there is something in addition to the 5 per cent. as the result of a genuine productivity deal, it surely cannot be ruled out?
Lord PEART: Yes, my Lords, I accept that. There is no question about that.
Lord ORR-EWING: My Lords, perhaps the noble Lord would think about this matter and restate it. It is claimed by Fords that they will not put up the price of their products as a result of this settlement. Therefore, this settlement must come from increased productivity. Why is it so wrong that they should do this when in fact the miners took 27 per cent. last year as a result of increased production? What is good for the miners is surely good for the Ford workers.
Lord PEART: My Lords, I have made my position clear over the Ford situation, and I cannot go beyond that. I still assert that this is Government policy and I believe it has to work.
Lord CARR of HADLEY: My Lords, may I remind the noble Lord that he did not answer my fourth question, and it has a great bearing on the charge that he has made against the Opposition. I asked whether the position was sensible. I asked him whether, if a company knew that it had to take a nine-week strike to try to maintain Government policy and would then get "clobbered" by sanctions as well, it would not rather give way

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straight away and run only the risk of being "clobbered" by sanctions and not have to bear the cost of a strike also.
Lord PEART: No, my Lords, I do not think so. I think it would be wrong to think in terms of this situation spreading over the board. This is a specific thing peculiar to Fords and their action, and I think that what we have done is right.
Lord PARGITER: My Lords, may I ask my noble friend how many companies could in fact afford to give 17 per cent. without going bankrupt?
Lord PEART: I do not think they will.
Viscount ECCLES: My Lords, could the Government give us an assurance now that they are going to stick to the 5 per cent. in the public sector and that if they get into any trouble they will have sanctions against themselves?
Lord PEART: My Lords, that is another matter. As the noble Viscount knows, as Minister with responsibility for the Civil Service I have certain responsibilities in this direction. I am well aware of some of the problems, and will no doubt come to them one day.
Lord WIGG: My Lords, does the Minister rule out completely the possibility of coming to Parliament and seeking legal backing for the action that the Government now propose?
Lord PEART: My Lords, there is no question of seeking legal backing.
Several noble Lords: Why not?
Lord PEART: My Lords, there is here no breaking of any legality. I mentioned that in reply to an earlier question.
Lord LEE of NEWTON: My Lords, is my noble friend aware that, while one does not want to oppose the idea of productivity deals, the fact is that those who benefit most from these are the most crassly inefficient companies which have the most ground to make up?
Lord PEART: My Lords, I am grateful for that. I think noble Lords have given
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me a pretty good questioning, and I hope we can now move on.

NATIONAL LAND FUND BILL [H.L.]
Second Reading debate continued.
3.56 p.m.
Lord GIBSON: My Lords, I think we are very much indebted to the noble Lord, Lord Reigate. I support the Bill which he is reintroducing. I admire his perseverance; and I trust that this Bill will prove less controversial than the subject we have just been discussing. Perhaps I might be allowed to add that the noble Earl, Lord Perth, who is prevented from attending your Lordships' House this afternoon because he has just come out of hospital, telephoned me last night and asked me to associate him in the strongest terms with Lord Reigate's Bill. It is a month since the committee in the other place reported—and, incidentally, if your Lordships want to know precisely what Lord Perth thinks, his evidence is there, and very well given and very comprehensive it was—and if this afternoon's debate on this Bill elicits from the Government some indication of support for the principle behind this Bill, then we will be reassured.
My Lords, the Government are on record as saying that they want to preserve what we have all now come to call, for the want of any other phrase, the national heritage, and that they want to increase its accessibility to the public. As chairman of the National Trust, I should like to say how much I share that objective, and I hope to keep them up to the mark. If the principle of this Bill is adopted, that will be a pretty good step forward in the direction they have, they say, at heart.
The Government have, I think, three weapons in the pursuit of this objective, and one of those is the Land Fund; but to put the Land Fund in context I should like, if I may, for a moment, to refer to the other two. The first is the fiscal weapon—concessions to private owners of historically interesting property to encourage them to maintain that property for public enjoyment; and, of course, inducements to sell works of art and

1155
objects of historic interest to the State, where the State wants them, rather than to another buyer. The Government have already begun a policy of that kind, of giving inducements and making concessions. For myself, I think that that weapon needs further refinement and improvement before the owners of historic houses, at any rate, are likely to take much advantage of it; but the Government have begun that policy—that should be acknowledged—and the process may continue. That is a question for another day.
The second weapon they have is the system of grants to the owners of historic properties, whether they are private owners or public—trustee owners, like the National Trust. The National Trust has been a major beneficiary of the system of grants from, of course, the Historic Buildings Council and the Countryside Commission. It is wrong to associate the National Trust exclusively with buildings. It tends to be so in the minds of some noble Lords. The emphasis is also strongly on the countryside and we have had a great deal of help from the Countryside Commission. I might for the record correct the noble Baroness, Lady Robson, about the Historic Buildings Council. It is not a point germane to her argument but, for the record, the Historic Buildings Council does not get its money from the Arts Council; so that it does not compete, at that level, with Covent Garden. It gets it from a different Department. But that is a minor point. The National Trust has been a major beneficiary of grants from Government bodies. It is eligible only like any private owner of historic property, but I am sure that we must be much the largest beneficiary. There are the first two weapons.
The third, my Lords, is the Land Fund. Here, again, the National Trust has been a great beneficiary of the Land Fund and we are grateful. Many famous houses and large stretches of countryside have come to us through the Land Fund. In proposing that the status of the Land Fund can be changed—and, as I think, improved—I do not want it to be thought that the Land Fund has not done any good. It has done a great deal of good; but it could have done more; and times are changing. It is worth mentioning that
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we have had Hardwicke, Ickworth, Saltram and, lately, Cragside, and many others which I will not mention. Therefore, I am not being purely critical of the Land Fund. It has operated not wholly without benefit. Perhaps I could also take the opportunity of saying that the noble Baroness, Lady Birk, has shown herself to be—how shall I put it? I want it to sound like homage—a great friend to the conservation movement and her heart is in the right place. She cannot always do what she would like. We must continue to press her; but her heart is in the right place on this matter.
But the situation is changing. The National Land Fund perhaps was not so necessary in the 1950s and 1960s and, although I share the objection of the noble Lord, Lord Cottesloe, to what happened when it was stripped of its funds, one must admit that there was a different climate of opinion at that time because it was an entirely different situation. The threat is now upon us to a much more serious degree than before because of the twin pressures of inflation and taxation. Those two together are posing a threat to country houses large and small and to our heritage in all its aspects. And just at the moment when the threat is greatest comes the revelation—as I think it is to most people—that this national fund is not a contingency fund at all. I will not weary your Lordships with this point. It is one that has been made before but it is the principal point. Here we do not have a reserve which can be used when there are other pressures on public expenditure. It competes with other forms of public expenditure. It can only be a reserve and a genuine contingency fund if it can be easily used when it is most needed; and that is not the situation at the moment. In the memorandum to the committee of the House of Commons the Historic Buildings Council put it well when it said that the resources of the Fund are simply not available in a form appropriate for the expenses of unforeseen rescues. Since that is one of the purposes for which it was set up, the argument for changing its status and handing it over to independent trustees is, to me. unassailable.
The recommendations of the committee are admirable and I spent part of last week-end reading the evidence. There

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is a lot of evidence and one cannot help but be impressed by the scope of it, the detailed and expert nature of it and the representative character of it. To me, it was always an added sterile and barren argument whether it constituted an addition to public expenditure or not. Of course, it almost certainly did so, because of the way it was arranged by the Treasury. But it should not have done so; and from now on, we ought to see that it does not. The committee relegated that added argument to its proper place and brought out the point in its principal recommendation that the Fund must be a genuine reserve. What is in it should be able to be spent without competing with other forms of public expenditure. That is the case for the independent trustees.
My Lords, there are two specific recommendations which I may mention in that report to which I hope the Government will give sympathy, encouragement and support and have embodied in any change that they may make. These are very important to the National Trust. One recommendation is that the Government should implement that section of the 1953 Historic Buildings and Ancient Monuments Act which relates to the power to give endowments. We have taken from the Government properties with deficit grants and this does not work well. I do not want to lead your Lordships to think that we do not work well with Government Departments. We do so extremely well; but we do not always have the same priorities; and I am resolved (and so is the council of the Trust) that we will not take properties without endowments in future. Once we have taken them with endowments, we will stand by the endowments and we will find any deficit, if it then arises, by public appeal or from our general funds. But, I am afraid that we shall be rather demanding in the endowments that we ask for because our past experience is that we have not asked for enough. I do not think that we ought to rely any more on annual deficits.
The second recommendation which is important to us is that the Government should allow works of art taken in lieu of taxation to remain on the walls or on the tables of the houses or places with which they are historically associated unless there is some special reason for removing them. We shall be told that all this solves
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nothing since the Fund will run out and will have to be topped up. That is true. Of course, it does not solve the basic problem at all; but it does provide the means of solving it. In the end, only the Government can judge what proportion of our national resources to devote to the preservation and conservation of our heritage and, in my view, it is neither more nor less likely that they will take a sensible view of the relative value to a civilised, and, incidentally, very tourist-dependent country. The more our productivity declines in relation to that of other countries, the more important it is that we have good things that people can come to see so that we can earn some money in that way. But it is neither more nor less likely that they will take the view that I should like them to take of the relative importance of our heritage—whether you have an independent fund or not. The independent fund simply gives a better means of implementing the basic decision which one hopes they will take about the amount of resources that they are prepared to devote to this matter.
I can only hope in making their final judgment over the years about the resources that they will take note that this is no longer an elitist interest, if ever it was. There were 20 million visitors last year to open houses, 5 million of them to National Trust houses. This is some indication of the proportion which went to private houses and of the importance of sustaining those houses. The National Trust cannot manage all those houses. The National Trust has 750,000 members and I cannot believe that for each one who got around to joining there are not at least another nine or 10 who have the same general approach to life and who will join—when we catch them. So that we shall have 7 or 8 million in a few years' time. It is not an elitist thing at all. It is a great national pleasure and an international pleasure.
My Lords, these are hard times but this morning I went to the Historic Buildings Council's 25th Anniversary exhibition, a little party before lunch in the banqueting hall. There I saw a picture of the Staunton Harold church. I have not been there for many years. Above the door outside the church there is an inscription to the builder, Sir Richard (or Sir Robin) Shirley. It says:

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"A singular praise it was to have done ye best things in ye worst times and hoped them in the most calamitous".
I commend that to the Government as a motto.
4.10 p.m.
Lord SANDFORD: My Lords, I rise to support my noble friend in the main purpose that he has set himself in introducing this Bill for a second time, and to welcome his second initiative. I should also like to join with him in acclaiming and applauding the report of the Public Expenditure Committee of another place, which we now have available and did not have available when the Bill was first introduced to us. I speak as one who was the Minister responsible for a number of these aspects for three or four years and I confirm from my first-hand experience both the need for and the value of this measure.
I should like briefly to deal with four points. The first is the purpose of this Bill. When Dr. Dalton introduced the National Land Fund, he described his purpose as being that of increasing the national estate. I think I am right in saying that he would not carry the members of my own Party with him in that objective. There is no strong evidence that the mere nationalisation of our heritage does very much to improve it. I hope, on the other hand, that we are agreed among all Parties to rephrase our objective now as being that of safeguarding the national heritage without worrying too much about the ownership. If we can address our minds to that and consider the national heritage as being made up of things belonging to the Crown and to the trusts—the National Trust in particular—and things in the care of local authorities and in private ownership, we shall get on very much better. Without necessarily renouncing Dr. Dalton—that would be too much to ask—I hope that the Minister will be able to confirm that she joins with us in the objective of safeguarding the national heritage. I hope that would be the purpose about which we would agree, whatever Dr. Dalton may have said 32 years ago.
Secondly, I should like to refer to the name of the scheme we are setting up, I do not think it is consistent with Clause 2 of the Bill itself to continue to call this the National Land Fund Bill. I want to
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say a word or two in support of the noble Baroness, Lady Robson of Kiddington, in a moment. The fact of the matter is that we are dealing with the entire national heritage; it is more than land, and the Public Expenditure Committee has recommended a change of title to National Heritage Bill. On the whole, I think that is better. On the other hand, I agree with the noble Baroness, Lady Robson of Kiddington, that we certainly want to see land continuing to be one of the main items which this fund is used to acquire. Although, as the noble Lord, Lord Gibson, has said, there is immense public support for saving works of art and other chattels, I suggest that it is land such as the cliffs of Pembrokeshire and the Chilterns, and some of the prize parts of the National Parks, which is on the whole enjoyed by a larger part of the population than any of the other things that we are talking about.
The third point is not one I need spend very long on: it is the main point made by other speakers; namely, we must do whatever is necessary to make sure that expenditure from the Land Fund—or the National Heritage Fund, as I hope it will be called—is not in future to be regarded as public expenditure. When this Fund is used, it must be used completely independently of contemporary economic considerations, quite distinctly from the economic climate which must govern other things in our national life at any one particular moment. There must be a flexibility for opportunity purchases, and, if that is to be so, I am in no doubt at all that independent trustees are much more appropriate than civil servants and Ministers in charge of the Treasury.
I must spend a little bit longer on the fourth point. It is small but has not so far been mentioned. I ask the Minister to comment on this in reply or, if not, to write to me afterwards. Would it be possible to design the Fund so that it could be used not merely to acquire land, chattels or other bits of the heritage, but also to secure and support appropriate patterns of management? That would indeed dedicate the heritage as Dr. Dalton decreed. It would safeguard the heritage and make it available for the public to enjoy; but it would leave it in the ownership in which it happens to be at the time—that is to say, we would use the National Heritage Fund to support management

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agreements in the public interest. I hope that the Minister and my noble friend will look sympathetically at an Amendment of that sort. Better still, I hope the Minister, when she replies to the debate, will indicate that she would be willing to introduce something of that nature. I know that her Department is much concerned to make it quite clear that management agreements can have the full force of the law.
4.17 p.m.
Lord O'NEILL of the MAINE: My Lords, I apologise for intervening—with the full approval of certainly my Front Bench—and I should like to assure the noble Baroness, Lady Birk, that I do not have her in mind in saying what I am going to. This Land Fund business has been a very long saga right from its inception, and nobody has delineated it better than the noble Lord, Lord Cottesloe. Therefore, I will not go into it. When we had the Mentmore debate I made rather a startling remark: I said that if Mentmore had been in Northern Ireland it would not have collapsed. A lot of people did not believe that to be true. We all know what has happened to it recently.
When Dr. Dalton set up the Land Fund consisting of £50 million that tiny little place called Northern Ireland received £1 million. In Northern Ireland we started immediately to use that Land Fund almost entirely—and this was long before I was a member of the Government of Northern Ireland—for the Northern Ireland Committee of the National Trust. We were thereby able to save many beautiful places and, what is more, to endow those places so that they could continue. At a later stage we were able to top up their endowments. I think particularly of the beautiful garden at Rowallane which did not have a large enough endowment. It was later topped up so that it could continue to be kept at its previous level.
That shows what could have been done if Dr. Dalton's idea had been carried out in Britain. Instead of raiding the nonexistent Land Fund of £50 million—which was regretfully done at the time when a noble Lord of this House, Lord Thorneycroft, was Chancellor of the Exchequer—-we found that £1 million was insufficient and we topped it up. I inter-
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vene—especially when we have such terrible news every day from Northern Ireland—to explain to your Lordships how the Land Fund in Britain could have been used if a different attitude had been taken by the Treasury.
I fully support the noble Lord, Lord Gibson, in believing that we must not think the whole time of country houses. The Giant's Causeway (which I am sure some of your Lordships must have heard of) was saved by the Land Fund and put under the charge of the National Trust. A very long section of the coastline was also dealt with in the same way. Admittedly—I say this in deference to the noble Lord, Lord Gibson—we had considerable help from Operation Neptune at the time. Be that as it may, I do congratulate the noble Lord, Lord Reigate, on his tenacity in continuing with this measure. I wish him all success and I make this plea to the Government: if a tiny little place like Northern Ireland could have made such good use of their land fund down the years, is it not time that the British Government faced up to their responsibilities today and accepted the all-Party advice of people who take an interest in these affairs?
4.21 p.m.
The Earl of GOWRIE: My Lords, I am very pleased to follow my noble friend Lord O'Neill of the Maine in believing that tenacity and persistence are among the most valuable political virtues. I should like to congratulate my noble friend Lord Reigate on his persistence in bringing this Bill back before us for the second time. This time he may have a very long and erudite report by an all-Party Select Committee at his back. Nevertheless, it was he himself who, before that Committee reported, brought a Bill before us over a year ago; and of course he is quite right to bring it back now with all that extra ammunition to back him up.
That said, of course, we should not really need a national land fund, and we would not need one if taxation were allowed to fulfil its proper role of raising revenue rather than engaging in social engineering. I am passionate for liberty and I honour fraternity, but I have always been somewhat sceptical of equality because it seems to me that egalitarian

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philosophies take the responsibilities for the future—and what else is a heritage?—away from individuals and devolve them upon other bodies. They also tend to confuse the interests of a community, which are of course paramount over the interests of an individual, with the interests of a State. A State, however virtuous, is subject in a democracy to short-term and constantly shifting political pressures and I would argue, with my noble friend and others on this side, that indeed these matters of heritage are too important to be subject to the day-to-day pressures on democratic states.
Egalitarian measures such as capital transfer tax will surely do more damage to the national heritage in the future than anything dreamed of by Christie's, Sotherby's or some of my own professional colleagues in Bond Street. As my noble friend acknowledged when he reintroduced it, I do not think, therefore, that this Bill will by itself solve all the problems of conservation and of keeping important works of art and the like in this country. However, it will certainly help.
In addition to admiring tenacity and persistence as political virtues, one must also admire courage; but I am not sure whether I am courageous enough this afternoon, having heard the speeches coming from behind me, to make too passionate a defence of the Treasury in regard to its record over the National Land Fund. I would, however, make, even to my noble friend Lord Cottesloe, this partial mitigation of the Treasury: that it seems to me that the Treasury position, in so far as I understand it, is that Ministers are perfectly entitled to come to Parliament and ask for any amount of money to be spent on the arts, on conservation, on the Giant's Causeway or whatever they like, but that it is more questionable and perhaps a dangerous precedent for them to take tax monies and invest them against some forward and future use which they are not coming before Parliament to ask for. But, while I think the Treasury are not wholly wrong in such sound Conservative principles—as the behaviour of my noble friend Lord Thorneycroft and my then right honourable friend Mr. Enoch Powell showed in 1957—we all know that it is
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important not to be too stubborn, and to know when to yield and when to make exceptions.
It is, for instance, true that when Mr. Dalton set up the National Land Fund there was a special feeling of responsibility for the heritage engendered by the experience of the last War. I certainly derived a certain wry pleasure from listening this afternoon to all the praise being heaped on the late right honourable gentleman from the Benches behind me. His name, and that of the noble Lord, Lord Shinwell, were almost the first words that I heard in my political consciousness—usually as the lights went out in 1946 or 1947—and I cannot remember my own rather Conservative household being as complimentary as my noble friends this afternoon.
It is also a difficult political problem, in that great houses, great works of art and magnificent holdings of land have been long associated in the popular mind with great wealth. Indeed, it is true that they represent great wealth, but only when they come to be sold. While they are being conserved they are not in fact wealth; they are very often a drain on the expenditure of those who own them. The essence of our policy is to try to combat this problem of the national heritage on a number of levels and to relate taxation to revenue requirements. We want to reduce rates of income tax, particularly at the high and marginal levels, and we want to re-think capital transfer tax. We believe, for instance, that donations to galleries and museums, and indeed to the National Land Fund, should be legitimate offsets against taxable income. The owners of works of art and of great houses in the main spend a lot of time and money trying to keep up our national heritage in this country and, in my view, have in the overwhelming majority of cases shown great public-spiritedness. We plan to recognise this by helping them in return. We wish to encourage them to keep their property, and our heritage, in good order; and so we would like to see special listed building allowances built into the tax system for expenditure on approved works.
The noble Lord, Lord Gibson, made the point also that one cannot live by a national land fund alone. If stately

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homes are not to become mere museums they must not be cut off from their supporting estates, and safeguards for owners are surely needed against the capital taxes which have been imposed on them in recent years. We want to make the idea of a maintenance fund—which is a sort of national land fund in minature—attractive to owners, so that transfers to such a fund out of an owner's own resources should be recoverable after a period of time.
We also want losses on the professional opening of houses to be allowed to be offset against the owner's other income. I think that would do a great deal to help those who are performing this valuable service. We want to see that objects and pictures surrendered in lieu of taxes should be allowed to stay in the historic houses with which they are associated, because we have the lesson of France before us, where the architecture is as magnificent as ever and as magnificently kept as ever, but where many of the great houses are sadly bare of their contents.
I recognise, with my noble friend Lord Sandford, that land is as important here as objects of art or buildings; and, of course, when one thinks of land in England, one thinks of the great gardens and we should like to see gardens enjoying the same status for conservation as works of art and architecture.
In the modern world, as I know very well through my own commercial work, works of art and the prices they fetch at sales attract a very great deal of publicity. But, in fact, against other forms of expenditure, against the activity of private markets in general and Government expenditure in particular, the amounts of money involved are really minute. Your Lordships will be aware that the largest new entrant into the art market in recent years has been the British Rail pension fund—a sad comment on our inflationary times. Nevertheless, in spite of the enormous amounts of money being spent in art market terms by the British Rail pension fund, the sum adds up to well under 3 per cent. of their annual expenditure. And so, as my right honourable friend the Leader of the Opposition has said, we believe that candle-end economies on the arts are valueless in terms of general savings
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achieved, but can cause quite disproportionate damage to the arts themselves. It is, therefore, Conservative policy to follow the lead of my noble friend. We are concerned about the flow of works of art out of this country. We believe that improvements to the income and capital tax systems will help to stem the flow.
However, we also acknowledge that a Government safety-net, or fire brigade, as I think another noble Lord called it, may be necessary for the foreseeable future. We therefore accept the main recommendations of the Select Committee on the National Land Fund, that the Fund should be revitalised as a national heritage fund under the control of independent trustees. It could act as a contingency fund to assist with grants or loans to non-profit-making organisations seeking to preserve exceptional examples of the national heritage, whether they be buildings, landscapes, gardens or works of art. It gives me great pleasure to be able to make this commitment, and I am most grateful to my noble friend Lord Reigate for giving me the opportunity to do so.
Lord DAVIES of LEEK: My Lords, I was interested in the speech of the noble Earl and I am glad that I have had the opportunity of listening to it, but surely a problem arises. I knew an old collier who was one of Britain's best orchid growers. People would travel miles to see his little greenhouse in a garden that was not a quarter of an acre. I, too, should like to have subsidies when I render my entire house to make it last a little longer, but I am not in that echelon of wealth. I do not want to be nasty about this, and I want to support the idea that these beautiful homes should exist. But once we enter into that sphere, where do we stop? My little collier is now, I hope, growing orchids in the Kingdom of Heaven, but would people like him get help with their extraordinary flowers and gardens? Do people with beautiful country cottages in the Pennines and in Wales, which people come from miles around to see, come into this category? That is the point that I want to pose.
The Earl of GOWRIE: Why not, my Lords?
Lord DAVIES of LEEK: That is fine, my Lords. I thank the noble Earl.
4.34 p.m.
Baroness BIRK: My Lords, as the noble Lord, Lord Reigate, pointed out, we debated this Bill more than a year ago. I cannot say that I looked forward with any great delight to the prospect of its coming up again. The only thing that it did for me this afternoon was to save me from making the Statement on Fords, so maybe every cloud has a silver lining. But I can assure the noble Lord who introduced his Bill in a very felicitous and extremely brief way, that the Government have been far from inactive in the meantime. Nothing could have given me greater pleasure, greater relief, greater joy and a sense of being first in the field, than to have been able to announce a Government decision on the future of the National Land Fund which would have made everyone happy. I should have loved to do that today. I should have liked to be the bearer of such tidings but, alas!, it was not to be. However, this is an important and complex matter with heavy wide-ranging issues. It is not just a matter of principle. It is a matter of dealing with very practical problems at the same time.
The Government have accepted that there is a need to have a very good hard look at our current arrangements for preserving the national heritage and, in particular—this has been pointed out by nearly all noble Lords—at how the National Land Fund fits into this context. I think it would be fair to say that over the past decades neither Party in Government has had a particularly good record in this field. In many ways, both artistically and in regard to our heritage, we have been almost illiterate in our approach, and it is a happy situation that, generally, the position has changed and is still changing today.
So after the Mentmore trauma an interdepartmental working group of officials was established in July last year. Then, in November last year, the Environmental Sub-Committee of the Expenditure Committee began their own inquiry into the National Land Fund. Clearly, as I think the noble Lord, Lord Reigate, accepted, the Government did not want to take any
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decisions on the future of the National Land Fund before the report of the Environmental Sub-Committee had been received. Their report was published in June this year, not March. It is just a small point, but it was three months later than the noble Lord said. The report was important and fascinating reading, and extremely thorough. As we all know, it made 18 separate recommendations which covered a range much wider than those covered by the Bill of the noble Lord, Lord Reigate, as he pointed out. Several noble Lords have mentioned specific recommendations. The noble Lord, Lord Cottesloe, said that he would like to see the whole 18 implemented, but I shall mention just some of the areas covered to show their extent.
There was the question of the provision of endowments for historic houses owned by the National Trust and other bodies. My noble friend Lord Gibson, whom I should like to thank for his very kind remarks and for his very pleasant comment, was quite emphatic that endowments needed in future by the National Trust for their houses will have to be very much larger. Then there were the questions of the size of the Fund; whether or not the £50 million removed in 1957 should be restored; whether or not the public expenditure principles employed by the Treasury were rightly applied; the arrangements for the acceptance of property in lieu of tax; the public access conditions attached to the exemption of heritage property from tax, and the very large question of the reconstitution of the Standing Commission on Museums and Galleries. As well as being the concern of the Treasury, a number of those items are the concern of my noble friend the Minister for the Arts, Lord Donaldson.
Many of these points found both in this Bill and in the Environmental Sub-Committee's Report need very careful consideration by a number of Government Departments. For instance, how would the new body, whether on the lines suggested in the Bill or as recommended by the Environmental Sub-Committee, relate to existing bodies such as the national museums and galleries and the Historic Buildings Council? As my noble friend Lord Gibson pointed out to the noble Baroness, Lady Robson, as I was going to do, the grant here is from my

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Department, the Department of the Environment, and not from the Arts Council. These already have functions with which this new body might overlap. This is just an indication of the complexity of the issues.
Then there is the very vexed and difficult question of resources, in particular the restoration of the £50 million which was removed in 1957. As the noble Lord, Lord Reigate, explained—he explained the valid constitutional reason—this Bill does not provide for such a restoration. Nevertheless, it was one of the recommendations made by the Environment Sub-Committee. I think it is worth pointing out that the money was removed, as several noble Lords have mentioned, as the result of a recommendation from the Public Accounts Committee in the 1953–54 Session. It was not a Treasury recommendation. It was the Public Accounts Committee which recommended that the Government should consider legislating to return to the Exchequer some part of the large and growing balance of the Fund. (I was delighted, incidentally, that the noble Earl, Lord Gowrie, had a pleasant word to say about the Treasury, which takes a lot of knocks from many people, including myself.) This was on the principle that it was undesirable that substantial amounts of public money should be outside the direct control of Parliament. Nevertheless, the Fund has continued to grow in size, and in April of this year stood at about £17 million.
I do not want to try to deal with the past—in fact, I do not think I could stand it again—and go through the maze of the National Land Fund and the way that it works in terms of public expenditure. I should have to start right from the beginning, otherwise I should lose track of it, it would take a long time, and it would be very boring for noble Lords who know better than I about the way it works.
If that £50 million were to be restored to the Fund, or if any resources were to be provided for the new Fund, as they would have to be, they would still constitute public expenditure. I do not intend to go into the difficult question of whether public expenditure occurs when resources are paid into the Fund or when they are paid out. Nevertheless, restoration of the £50 million would constitute
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public expenditure. The Environment Sub-Committee itself specifically recognised—and I should like to point this out to the noble Lord, Lord Cottesloe—in paragraph 41 of their report that restoration would involve public expenditure. The recent Conservative Party publication on the arts recommended the restoration of the £50 million—which, incidentally, they themselves removed—but only as resources permit. It is generally recognised that resources are needed. Nevertheless, the other demands upon our resources have to be taken into account. This is common ground in the case of both political Parties, and indeed all political Parties.
We come next to the point mentioned by my noble friend Lord Gibson: the question of priorities. I firmly believe that one of the problems with which we are faced—it is also one of the points of optimism with which we are faced today—is that whereas in the past (the history of the National Land Fund shows this) interest in our heritage and in the arts was high among a certain number of people, it was not so widespread and did not go through all strata of our society in the way that it does now. We are now in a situation, therefore, where there is a greater demand for the heritage side as well as for the visual arts and the performing arts—for all the arts. I include our heritage under this umbrella.
This interest in and demand to enjoy the arts, which is glorious to behold and which is why it is so fascinating to be working in this field, has grown at a time when economically we have been in very grave straits and when we have had to face great financial difficulties. We are in a situation where, whatever the method that is used, our resources are not infinite. Therefore, it is a question of priorities. Also, we have to face the practical problem of how best to deal with those priorities. I would only say to noble Lords who, including myself, feel impatient about this—because we all want to reach a conclusion—that I, as a member of the Government, want with my colleagues to reach a conclusion. I believe that there is a certain amount of optimism and hope to be derived from the fact that discussions are taking place. I can promise noble Lords that this is not a subject which has been put into a

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pigeon-hole, not to be brought out for some years.
The Earl of GOWRIE: My Lords, I am most grateful to the noble Baroness for giving way. She mentioned the sentence in the Conservative Party document which contains the phrase "but only as resources permit". My understanding is that the next Conservative Government will restore the £50 million.
Baroness BIRK: My Lords, that is a very nice point for the noble Earl to make. I can only go by the written word. Without being unkind, it is one thing to make this point while in Opposition but quite another to make it when, as a Government, one is faced with the problem. I accept the intention, but this is one of the facts of governmental life which I know that the noble Earl appreciates.
The noble Earl referred to the CTT problem and the whole question of taxation. Those of us who are concerned with our heritage and the arts are in constant communication with our colleagues in the Treasury in order to try to see whether this question can be worked out equitably all around so as to give more mileage to the arts and our heritage. Nevertheless, I must point out that, certainly so far as our heritage is concerned, those people who own large houses which are expensive to maintain—for instance, the members of the Historic Houses Association—are among the first to say that although, quite naturally, they would like more tax concessions, this Government have done more to help them through tax exemptions than any previous Government. I could bring witnesses to prove that; they would be quite prepared to say so. They are extremely realistic about this matter.
The noble Earl, Lord Gowrie, also suggested—and I believe other noble Lords did so, too, including the noble Lord, Lord O'Neill of the Maine—deducting for income tax purposes expenditure on maintaining heritage property. Government assistance is already given through grants. Although there is always a case and an argument for trying to do better in that field, it would be unfair for anybody to go away with the feeling that exemption from taxation—and a considerable amount of taxation—is not used for this purpose.
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However, the important point is that the Government accept that there is a need for change. Some of us know what we want, but it is a question that still has to be discussed and worked out. I is not true that the National Land Fund has done nothing for the last 30 years I was delighted when my noble friend Lord Gibson mentioned a number o things which the National Land Fund has done. I believe that it was the noble Lord, Lord Sandford, who mentioned that Hugh Dalton increased the national estate. May I put it to him that it was extraordinary of him to equate that with nationalisation. When he was speaking of increasing the national estate in that context (I am not speaking about other areas of Government) what he was really talking about was exactly what we have al been talking about today—the beauties of this country. As the noble Baroness Lady Robson of Kiddington, stressed sc well, he was talking largely about the countryside itself and also our urban heritage, but to a great extent about our rural heritage, too. It would be quite wrong for anybody to go away with the idea that increasing the national estate in that sense is equated with nationalisation.
In my speech last year I drew attention to the vast range of properties which have been acquired for the nation through the Fund. I will not go over that again but just to bring it up to date, only last week my right honourable friend the Secretary of State for Scotland announced the acquisition of Hamilton High Parks, which includes a number of outstanding historic buildings. Earlier this year he also announced the acquisition of Haddo House and its contents, near Aberdeen, My right honourable friend the Secretary of State for Wales also announced this year the acquisition of Chirk Castle. It is lucky that we have got something from Wales and Scotland, and we in England recently acquired Cragside Hall, its contents and some adjoining land. There have been major acquisitions of works of art as well as buildings and land; paintings by Turner, Rubens and Breughel and I know that a number of other significant acquisitions are in the mind of my noble friend Lord Donaldson.
I was delighted that the noble Lord, Lord Reigate, said that he does not intend to commit this Bill to a Select Committee.

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I am sure that he is absolutely right since the evidence heard by the Committee in another place was so very deep and thorough. Very considerable work has been done at official and ministerial level by Government Departments in their response to this report. It is also true that several Departments are involved in this. I have listened carefully to the speech made by the noble Lord, Lord Reigate, and to those of all the noble Lords who have spoken in this short but interesting debate. I shall with great pleasure pass on to my ministerial colleagues all the ideas and the points that have been raised. I know that a number of the points that were made have already been taken into account in the various discussions but there is nothing like adding reminders, which I think was the purpose of the noble Lord, Lord Reigate, in initiating this debate on the National Land Fund and its future.
Finally, I would assure noble Lords that I certainly take this matter very seriously and without any complacency and certainly with a great feeling of urgency. I am sure that my concern is shared by my colleagues both in this House and in another place. At this very moment complex exchanges are in process, and we shall respond as quickly as is possible and as quickly as the importance of the subject permits. I hope that noble Lords may be able to expect a response in the very near future. I am afraid that all I can add at this stage is: Watch this space.
4.54 p.m.
Lord REIGATE: My Lords, I am most grateful to all the noble Lords who have given such warm support to my Bill. The debate has gone rather wider than I had expected and in some respects it has gone outside the contents of the Bill. I should like to comment on one or two of the points that have been raised, in that they may be raised again at later stages of the Bill. First, I should like to thank my noble friend Lord Cottlesloe for his support. I entirely agree with him that it would be my intention to table an Amendment to the Bill so that the trustees were appointed by the Prime Minister and not by the Secretary of State, but I was rather anxious to have my Bill in the same form as last time.
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The noble Baroness, Lady Robson, gave the Bill her support and also raised the matter of the appointment of trustees and the qualifications which I suggested for them. One could go on debating this for ever, and certainly the fund could and should be used for the purchase of land on certain occasions. That was its original purpose, but we must recognise that a great many things have changed since 1946. We have had National Parks legislation and town planning legislation which has made the situation slightly easier and less dangerous than it was. On the other hand, we have to recognise our priorities in this matter. I would say that it is the works of art and the historic buildings of our heritage which are in the greatest danger at the present moment. We could go on arguing about that indefinitely; but, if I may put it in very simple terms, we cannot shift the Giant's Causeway to America and we are not likely to want to pull it down, whereas historic houses can be pulled down and our works of art can be sold abroad. That is why I have stressed those two things in the appointment of trustees; it was for that reason alone. I hope we may debate this; I am open-minded about it, but I hope the House will continue to support it.
I am grateful also to the noble Lord, Lord Gibson and to my noble friend Lord Sandford and my noble friend Lord O'Neill of the Maine. It is valuable support from those who are far more expert in these matters than myself. My noble friend Lord Gowrie quite rightly gave perhaps more generous praise to Lord Dalton than he thought I felt. I will say one thing about Lord Dalton: I think it was unfortunate that he did not take my advice and incorporate the independent trustees in his original proposals. We would not have had this trouble then and it would have been a very different scene today. I am afraid that the trustees would not give very high priority to the quarter acre of orchids mentioned by the noble Lord, Lord Davies of Leek. I could suggest to his friend that he opens his quarter acre to the public and charges them handsomely for entry.
Lastly, I should like to say how much I appreciate what the noble Baroness, Lady Birk, has said. The difficulty in dealing with the noble Baroness is that we all know that her heart is in the right place,

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even though she is sitting on the wrong side of the House. Unfortunately, it is not her heart but her head with whom we have to argue, and I am not surprised that she could not make any announcement today. I do not know whether any of your Lordships read that in another place on 23rd November in a Written Answer Mr. Joel Barnett replied:
"The recommendations … are being given the most careful consideration by myself and my ministerial colleagues in all the interested Departments. This is a complex matter to which we attach great importance. It needs careful evaluation of the options open and we have not yet reached a decision".—[Official Report, Commons; col. 710).
In short, every avenue is being explored, no stone is being left unturned—and I have no doubt that dozens and dozens of departmental logs are being rolled for all they are worth. But still I think we have made some progress. May I say also that the report was ordered to be printed on 2nd March and I was quoting from the cover of the report.
As to the overlap question mentioned by the noble Baroness, Lady Birk, I see no reason why this should prove any more difficult in practice than the overlap between the Government bodies concerned. Different people will be negotiating, but negotiations will have to take place. Not only for constitutional reasons but for reasons of practicality I did not include any reference to the sum of £50 million referred to. Of course, in the Bill we could say that it would not come into operation until an appointed day, by which time it would have gone through another place and the £50 million could or could not be added. The important thing is to get the principle of the contingency fund and of the independent trustees established. I hope that by the time the later stages come we shall have at least some support from the Government.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

WELFARE OF LIVESTOCK (INTENSIVE UNITS) REGULATIONS 1978
5 p.m.
Lord STRABOLGI: My Lords. I beg to move that the draft Welfare of Live-
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stock (Intensive Units) Regulations Order 1978, a copy of which was laid before the House on 1st November, be approved.
The matter before your Lordships today is that of farm animal welfare, a subject over which this House has always shown deep concern. We are, my Lords, already a signatory of the Council of Europe Convention on the Protection of Animals kept for Farming Purposes which was opened for signature by member States of the Council in March 1976. The Convention, which was drawn up by the Council's Committee of Experts on the Protection of Animals, sets out in general terms principles for the welfare of animals kept for farming purposes with particular regard for animals in modern intensive stock-farming systems. The protection of animals kept for other purposes falls outside its scope. Its principles have been framed in such a way as to be precise enough to prevent completely free interpretation, but wide enough to allow for different needs.
In addition to the United Kingdom, nine other member States of the Council have signed the Convention and four have taken the further step of ratification. The Convention came into operation on 9th September last, when the pre-condition of ratification by four member States of the Council had been fulfilled. To be able to ratify the Convention, member States of the Council have to establish that their national law on farm animal welfare is in conformity with its provisions.
I am pleased to be able to tell your Lordships that our legislation in Great Britain, as contained in Part I of the Agriculture (Miscellaneous Provisions) Act 1968, conforms with the Convention in all but one respect. The exception is that our law does not specifically require, as does Article 7 of the Convention, the daily inspection of livestock and equipment in intensive units. The regulations we are now considering will fill this gap. The legislation of Northern Ireland also has a gap and similar regulations will be made to fill it.
Only those countries which have ratified the Convention will be able to become full voting members of a Standing Committee which, under Article 8 of the Convention, the Council is required to establish once four members have ratified the Convention and brought it into force. The Standing

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Committee will have the important task of producing detailed provisions for the implementation of the principles set out in the Convention and will be expected to make recommendations to the contracting parties to the Convention. It will be required to facilitate settlements of disputes between contracting parties concerning the implementation of the Convention and to give advice when contracting parties seek it. The Standing Committee has no executive power—the contracting parties do not have to accept its recommendations—but these recommendations and its advice will nevertheless carry great weight in a wide international forum. I am sure that your Lordships will agree that the United Kingdom should put itself in a position, through making these regulations, of being able to ratify the Convention so that, as a contracting party, we may play a full and rigorous part in the work of the Standing Committee.
The draft regulations before your Lordships rely, of course, on powers in Part I of the Agriculture (Miscellaneous Provisions) Act 1968 under which it is an offence to cause or knowingly allow farm livestock on agricultural land to suffer unnecessary pain or unnecessary distress. Your Lordships will know the Act requires that we consult the interests affected by these proposals. This we have done and some modifications to the proposals originally circulated have resulted from the consultative process. Our Farm Animal Welfare Advisory Committee has also been consulted. I am pleased to tell your Lordships that these consultations have revealed that daily inspection of livestock and equipment in intensive units is already a normal practice in this country.
I will now turn to some of the details of the draft regulations. Modern intensive methods of stock-keeping have come to rely more and more on equipment much of which is operated automatically and on which the animals kept in this way may depend for their lives. Therefore, the welfare, and indeed the survival, of livestock in these intensive units depends on the effective running of this equipment It also depends, to a considerable extent, on high standards of stockmanship being observed. These factors are recognised in Article 7 of the Council of Europe's Convention, which stipulates that stock and equipment in intensive livestock units
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should be inspected at least once daily and that any defects in the equipment should be remedied with a minimum of delay. If there is a defect which cannot be put right at once, all measures necessary to safeguard the welfare of the animals are required to be taken immediately. The definition of "intensive unit" in the draft regulations now before your Lordships recognises the dependence on automatic equipment of animals kept intensively, and defines "intensive unit" in terms of the extent to which the welfare of livestock kept in this way depends on such equipment.
Regulation 2 sets out the requirements that stock and equipment in intensive units, as defined, should be inspected at least once daily, and that if the stock show signs of being other than in a state of well-being, or if defects are found in the equipment, all necessary measures to remedy the situation are immediately taken.
I feel sure that your Lordships will acknowledge the very real concern shown by the British farmer and his stockman, in the great majority of cases, for the welfare of the livestock in their care. Our consultations with interests on these regulations, as I have already said, have confirmed this concern by revealing that daily—and sometimes more frequent—inspections of stock and equipment in intensive units is general practice in this country: these inspections are an important part of good husbandry practice and the need for them is reinforced by the natural concern of the farmer for the source of his livelihood.
I hope I have been able to explain why the Government propose to make regulations which require those keeping livestock in intensive units to act in a way which is already normal practice. We need these regulations, which were passed by another place last Friday, to enable us, through ratification of the Convention, to become full and active participants in the Standing Committee of which I have spoken earlier. In this way we shall be able to play a full and constructive part in the development of European policy on farm animal welfare. My Lords, I am confident that the House will approve these draft regulations. I beg to move.
Moved, That the draft Welfare of Livestock (Intensive Units) Regulations
Order 1978, laid before the House on 1st November, be approved—(Lord Strabolgi.)
5.10 p.m.
Lord SANDYS: My Lords, the House will be grateful to the noble Lord, Lord Strabolgi, for explaining in such detail the draft regulations. Indeed, it will be especially grateful because on examining the Hansard of another place for Friday last, I was unable to discover that any discussion took place. Therefore, the opportunity for a fuller discussion in your Lordships' House is particularly welcome.
I should like to stress from this side of the House that we support the regulations which fill the gap which the noble Lord set out. There are four questions which I should like to ask the Government and of which I have already given prior notice. The first problem which occurred to me when reading the regulations was the definition and meaning of the phrase "intensive unit". We read in the regulations that:
" 'intensive unit' means a building in which livestock is kept under a husbandry system".
I should like to ask the noble Lord whether the definition given in the regulations excludes intensive grazing units or, indeed, intensive agisting units as regards grazing in a situation outside the holding concerned?
The second problem arises in regard to the question of the right of entry. The Agriculture (Miscellaneous Provisions) Act, to which the noble Lord drew attention and which of course is the source from which these regulations draw their authority, contains a section which deals with the penalties for refusing admission. Let us imagine circumstances in which an official of the Ministry of Agriculture is refused admission to a holding by a member of the staff of that holding. Under Section 7(2) of the Act the penalty on summary conviction for doing that is a fine not exceeding £20. I hope that the Government will examine this situation because it is one which gives rise to public concern. There may be reasons for a member of staff refusing entry to an official making an inspection. Indeed, we all know only too well that a few years ago inspectors may have carried
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foot and mouth disease from one place to another. Of course, they always take the greatest possible trouble, but can they be 100 per cent. certain? That is the second point that I should like to raise.
Thirdly, can the Government identify the operative date of the regulations? Our understanding is that it will be in the very near future. And fourthly, can the noble Lord say what consultation has taken place with interested parties to these regulations?
5.14 p.m.
Lord MACKIE of BENSHIE: My Lords, certainly we should like to welcome these regulations, although I very much doubt their value except as a standby in the case of people who are either very rich or very foolish. One can invest a great deal of money in an intensive system, and I assume that one of the main objects of the regulations is to deal with the intensive system whereby hens are kept in cages and the food travels round to the hens instead of being in front of them all the time. Personally, I think that it is appalling to see the poor brutes jumping up and down waiting for the food to arrive and then, presumably after it has come, settling down to lay an egg before it comes round for a second time. Tremendous distress could be caused if such apparatus were to break down and I think it right to have regulations to deal with people who are foolish enough to neglect it. However, the investment is such that they must inspect these systems, in my view, two or three times a day. Certainly as regards the ordinary system of keeping cattle, my cattle are never inspected less than three times a day. Therefore, I hope that the regulations will enable foolish and cruel people to be caught, but in general I should have thought that the cruelty regulations would have covered the situation. However, if it is necessary to have these regulations to subscribe to the convention, then obviously that is what we must do.
5.16 p.m.
Lord HOUGHTON of SOWERBY: My Lords, there are two important debates to follow this one and I fully understand that I must not trespass unduly on the time of the House as regards these regulations. Nevertheless, Parliamentary experience teaches me that one

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must grasp opportunities as they come, to deal with matters about which one feels deep concern. Therefore, I shall try to confine my remarks as closely as possible to the regulations before the House.
The noble Lord, Lord Sandys, raised the question of what is an intensive unit. That seems to be set out fairly fully in the regulations. I thought that the noble Lord was going to read on from where he stopped because it says:
"a husbandry system that, for the purpose of providing for the care of the livestock, relies on automatic equipment to such an extent that failure of that equipment will cause the livestock to suffer unnecessary pain or unnecessary distress unless the failure is rectified or other provision is made for the care of the livestock".
That is the significance of the matter with which we are dealing. We are concerned with animals which rely upon automated care. The figures given by the Ministry in another place indicate that about 90 per cent. of eggs and broiler chickens are housed in intensive units. A very high proportion of farrowing sows, young and growing pigs and many calves—although probably not the majority—are also housed nowadays in these intensive units. That makes the condition of this very large proportion of our livestock a matter of considerable concern to all those who are studying the welfare of animals.
The draft regulations have been explained by my noble friend with his customary clarity. We have gathered that they are narrow in scope and probably of little practical consequence. We are gratified that the conditions under which animals are to be kept in intensive units in this country conform, under our existing legislation, with the Convention of the European Council with the single exception that up until now we have not had regulations which require a stipulated frequency of inspection. These regulations propose that there should be an inspection at least once a day.
Frankly, I should have thought that any farmer or stockman who does not inspect stock at least once a day under these conditions is not fit to be in business. Indeed, my noble friend has confirmed information that I have received from other quarters that generally speaking stockmen in this country are not content for only one inspection a day—indeed, the British Poultry Federation, whose
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Director-General I consulted on this, said in a letter to me:
"In practice we would regard these regulations as an absolute minimum. We would expect our membership to inspect far more frequently than once a day".
He went on to say:
"I would be very surprised if our members insisted on less than three visits a day to stock under any circumstances".
That is very welcome information. Therefore, this regulation, so to speak, underwrites the more favourable practice which is prevalent in our intensive farming industry.
I believe that under the Agricultural (Miscellaneous Provisions) Act 1968 which is reproduced in this order, there is a weakness with regard to enforcement. Regulation 3 says:
"A person who fails to comply with the provisions of the preceding regulation shall be guilty of an offence under section 2 of the Agriculture (Miscellaneous Provisions) Act 1968".
But, as I understand it, the principal Act itself does not contain anything very frightening with regard to penalties. One would assume from the provision in the regulation which I have just quoted that severe treatment would be meted out to anyone who fails to comply with the regulation. But that is not so, because if we turn to the 1968 Act we find that:
"Failure on the part of any person to observe a provision of a code for the time being issued under this section shall not of itself render that person liable to proceedings of any kind".
What it does do is to expose such a person to a presumption of guilt if he is charged with causing unnecessary suffering to livestock and it is found that he failed to comply with the code. If I am wrong in that respect, no doubt my noble friend will correct me. But sometimes we suggest that dire penalties will be imposed for non-compliance when in fact that is not the case.
I do not want to be disparaging about this matter, but could any regulation provide for less than this? It really is the smallest improvement in existing conditions; in fact, it is not an improvement in existing conditions, it is merely a reinforcement of the very minimum that reasonable stockmen and farmers observe in their daily practice. I should not like to say that it is not worth the paper it is written on, but in practice it will not make very much difference to the conditions

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of the battery hen, the imprisoned calf or the battened-down sow. I shall not dwell on the conditions of these animals, which are brought up under intensive conditions. All I shall say is that I have yet to meet a human being who envies a battery hen. None of us can be absolutely sure what pain and suffering living things endure under the conditions which we impose upon them.
Of course, the Minister could have gone further than this. There is nothing under the proceedings in the European Convention which would have prevented him from making some improvement or at least embarking on steps which might lead to some improvement. Many years ago we were pioneering in this field, but we are no longer doing so. Therefore, these regulations are really a formality. It is a formality to complete the ratification of the regulations by the British Parliament and so to qualify for membership of the Standing Committee which is provided for in Article 9 of the Convention. As my noble friend pointed out, the committee shall be responsible for the elaboration and adoption of recommendations to the contracting parties. That is a good thing to be in. We shall be taking part in the evolution of improved regulations and conditions for livestock kept in these conditions.
What happens next? My noble friend did not carry the discussion any further than the simple explanation of the contents and implications of the regulations. I do not complain about that. In his official position he cannot make a bid for reform quite so freely as I can. However, if we are to take part in this Standing Committee, I think that we should be considering how we shall use the opportunity to bring about more improvements.
There is one article in the convention which I think is suggestive of the line of consideration for the future. Article 3 of the convention says:
"Animals shall be housed and provided with food, water and care in a manner which—having regard to their species and to their degree of development, adaptation and domestication—is appropriate to their physiological and ethological needs in accordance with established experience and scientific knowledge".
That is an aspect of animal care to which I do not think we have given very much attention.
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I shall conclude with a more general reference to the problem of the controversies which always surround regulations and consideration of animals kept under these conditions. I think that on occasions like this it is a pity that producers and consumers always appear to be thrown into opposite camps. On one side of the controversy there is the "industry"—and there are publications such as the Poultry World and other trade papers—implying worthy, conscientious, kindly people working for the public good and in all respects entitled to consideration and appreciation. On the other hand, we have this new section of the community called the "welfarists'', implying a breed of emotional do-gooders whose hearts rule their heads and who are a bit of a nuisance. It is a pity that the discussion is developing in this sort of way.
I commend to my noble friend and, indeed to your Lordships, a very constructive lecture given by Dr. David Sainsbury recently to the Universities Federation for Animal Welfare and which is summarised very fully indeed in the issue of the Poultry World of 18th November this year. If I may, I shall conclude by saying that he has put forward, quite briefly, some proposals which he sees as the only way in which to try to replace the often extreme stances taken by those on both sides of the frequently acrimonious argument. I think that that is something we all want to see, but it requires much more investigation into this very important matter of so-called factory farming than appears to be on foot at the moment.
I therefore leave the thought with my noble friend that there ought to be some place, apart from the statutory and nonstatutory advisory committees of experts to which he referred, in which the industry and other experts, and the so-called "welfarists", may come together to study what are the welfare as well as the economic and other aspects of the industry. That, I think, would offer some hope for the future. If we go on as we are, and every time these orders come up there is a denigration in some quarters of the "welfarist" and an acrimonious attitude towards the industry by those who are very keen indeed on getting greater welfare in the care of the animals concerned, that I think is a constructive idea that I can leave with my noble friend.
5.30 p.m.
Lord GISBOROUGH: My Lords, I should like to support the order, and apologise to the noble Lord that I was not here at the beginning of his speech. Many people who eat their boiled eggs in the morning are not aware that there is a 95 per cent. chance that they will have been laid in a battery where the hens will almost certainly be bare of feathers as they peck each other four to a pen, and, when they eat their bacon, that the pigs may not have been able to turn round for long periods at a time.
I should like to ask two questions. First, does the noble Lord not feel that the regulation of acceptable cruelty in the management of battery or factory animals is reduced each time a new machine is produced which is proved to be the most efficient way of keeping those animals? Secondly, approximately how many inspectors, in relation to the number of units in the country, are there at the moment, and how many will there be in the future? Is there any likelihood that the number of inspectors at the Ministry can in any way cope with the number of factory units in the country?
5.32 p.m.
Lord STRABOLGI: My Lords, as on previous occasions when matters concerning animal welfare have been before your Lordships we have had a serious and useful debate, and I should like to thank all noble Lords who have taken part, and particularly, for his constructive and helpful approach, my noble friend Lord Houghton of Sowerby who, I know, feels strongly on these matters. I can understand the views of noble Lords who feel that perhaps we ought to be doing more for animal welfare than provided for in these draft regulations. But, as I explained, they are of a technical nature and designed to enable us to ratify the European Convention on the Protection of Animals Kept for Farming Purposes.
I can assure noble Lords that the Government intend to continue a policy of making sound provisions in this sensitive area when there is a clear need firmly based on scientific knowledge. In this we shall be aided by full participation in the work of the Council of Europe which ratification of the convention, and
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membership of the Standing Committee, will bring, since this will enable us to benefit both from a closer knowledge of the work of the other European countries concerned and to offer them our own valuable experience. In framing our approach to subsequent work in this field we shall continue to draw on the invaluable advice provided by our Farm Animal Welfare Advisory Committee. In answer to the noble Lord, Lord Mackie of Benshie, I think that that is really the justification for this order, to enable us to play our full part.
Noble Lords have asked a number of detailed questions, which I shall do my best to answer. The noble Lord, Lord Sandys, referred to the other place and said he could not find anywhere any reference or account of the debate in Hansard. The regulations went to a Standing Committee last Wednesday and only came formally before the full Chamber of the other place on Friday, but they were fully considered in the Standing Committee, and I would suggest that he gets the Hansard covering the deliberations of that committee. The noble Lord also asked about an intensive unit, which, of course, in the regulations means a building. I can confirm that only a building is intended. It was not the intention to include such systems as zero grazing, referred to by the noble Lord, and hopper systems, as these are not sufficiently automated to come within the scope of the definition of an intensive unit.
The noble Lord also referred to the Agriculture (Miscellaneous Provisions) Act 1968, and the question of the fine for an offence of refusing to admit an inspector which, as the noble Lord said, and rightly, is only £20. The noble Lord asked, as he was fully entitled to do, whether this should be reviewed. The offence involved, of course, is one of obstruction. This offence occurs widely in legislation, so alterations to the level of the fine would have to be considered centrally as a single issue. I shall, however, draw what the noble Lord has said to the attention of my right honourable friend. The noble Lord, Lord Sandys, asked when the operations would come into effect. This will be on the 1st January next year. With regard to the number of organisations we have consulted, I am glad to tell him that this is about a hundred. I have a list of them

1187
and I shall arrange for this to be put in the Library of your Lordships' House.
My noble friend Lord Houghton raised a number of points. He asked first about enforcement. The Ministry's professional veterinary staff are authorised to enter land for the purpose of checking on observance of Part I of the Agriculture (Miscellaneous Provisions) Act 1968 and any regulations made under it. The Veterinary Service visit livestock units to check that the Act and regulations are being complied with.
The noble Lord, Lord Gisborough, asked about manpower. The State Veterinary Service is already responsible for checking compliance with the livestock provisions in Part I of the 1968 Act, and will also be able to carry out the inspections required by these regulations, so no extra staff is likely to be involved. I am afraid that I cannot tell him the exact number of inspectors. I can write to him if he wishes to know, but it is thought that the number is sufficient.
My noble friend Lord Houghton asked about penalties for neglect of stock. The draft regulations provide that a person who fails to comply shall be guilty of an offence under Section 2 of the 1968 Act. Section 7(1) of this Act, as amended by the Criminal Law Act 1977—I am glad that my noble friend asked so that I can spell this out—provides that a person guilty of an offence under Section 2 of the 1968 Act shall be liable on summary conviction to imprisonment for a term not exceeding three months or a fine not exceeding £500, or both.
The noble Lord also raised the general question of whether there should be more consultation between the different interests, and I am glad that he did. I may say here that the Government are considering setting up a Royal Standing Commission, or a similar body, on animal welfare. This is a far-reaching suggestion, the implications of which are extensive, and time will be needed before a decision can be reached, but we take note of what my noble friend has said.
My noble friend also referred to Dr. Sainsbury's article. The agriculture Departments and the Farm Animal Welfare Advisory Committee recognise that knowledge of farm animal welfare
1188
must be increased. The agriculture Departments have introduced arrangements under which suitably qualified experts monitor work at research stations, universities and experimental centres. Livestock husbandry projects with a welfare component will be identified. This information will be supplied to the advisory committee so that it can frame its advice to Ministers accordingly. The idea of concentrating all animal welfare research at one centre, which has recently been ventilated, would in our view be disadvantageous. Work is already undertaken by a number of specialist teams in the various institutes and agricultural colleges and on Ministry experimental farms. The co-ordination and direction of these wide-ranging activities must, we believe, continue to be exercised by the agriculture departments.
My noble friend also referred in general to the whole question, including the ethical question, of intensive units. The House will recall that the Brambell Committee, which reported in 1965, stated that intensive systems as such should not be regarded as objectionable and might often benefit the animals. We still have not found an alternative way which is economically viable to produce sufficient supplies of these relatively cheap proteins—eggs, poultry and pig meat—and thus the battery cage may well have to be with us for some time yet.
In the controlled environment provided for in intensive systems, optimum levels of feeding, temperature, ventilation and lighting can be maintained which, coupled with high standards of management, should ensure that the animals thrive. By contrast, under the free range system animals could be subject, and indeed often are, to the vagaries of the weather, attacks by predators and the risk of suffering disease unobserved, and I note what the noble Lord, Lord Gisborough, said in this connection.
Clearly, what animals lose under intensive systems is the degree of freedom they would experience under the more traditional extensive farming methods. However, there is as yet no means of understanding whether animals feel deprivation if kept in intensive systems. We know, however, that under good stocksmanship they thrive if kept intensively. In the view of the Government

1189
the way forward is to continue to develop scientific knowledge on animal welfare guided by the advice given to Ministers by the valuable Farm Animals Advisory Committee and, at the same time, to ensure through inspection and advice by the State Veterinary Service that animals kept intensively do not experience unnecessary pain or distress. That will be our continuing aim.
On Question, Motion agreed to.

ECC 38th REPORT: MISLEADING ADVERTISING
5.43 p.m.
Viscount TRENCHARD Viscount TRENCHARD rose to move, That this House takes note of the Thirty-eighth Report of last session of the European Communities Committee on Misleading Advertising (R/511/78) (H.L. 230, 1977–78). The noble Viscount said: My Lords, in moving that the House take note of this report I must refer to the many things that have happened since July when that report was put to bed. There has been a conference in Brussels on consumer policy called by Commissioner Burke, statements by officers of the Commission which bear on this subject at that conference and elsewhere; draft committee reports for the European Parliament; a very important report from the Director of Fair Trading on a review carried out by the Fair Trading Office on the self-regulatory element of British advertising control; and an important debate in the other place on 16th November.
There have also been a number of public Ministerial pronouncements in this country and a number of statements by Commissioner Burke quite recently. I think noble Lords from Sub-Committees B, D and E of the Select Committee who contributed to our report would still want me, in spite of all those statements, to say that our report stands. I hope members of those sub-committees will feel that the remarks I make on some of the up-to-date statements are in accordance with the feelings they have on the subject.
The original timing of this proposal was that the Directive should be operative by the end of this year. The technical position is that it awaits the report of the Social
1190
and Economic Committee and of the European Parliament. I say "technical position" because in fact Commissioner Burke—I certainly welcome the statement—has declared his readiness for the Commission to look at this proposal again. Perhaps it should be on the record at this stage in the debate in very brief terms what the Britsh position is on the control of misleading advertising. In our report we have suggested that the other subject, of advertising unfair as between one trader and another, should not be the subject of a consumer policy directive.
The British control system on everything except television and radio comes under the Advertising Standards Authority, of which the noble Lord, Lord Thomson of Monifieth, who will be speaking in this debate, is chairman, and two-thirds of its members are independent of the profession. The body which does a great deal of the work under the Advertising Standards Authority and which is staffed by the industry in the main is the Code of Advertising Practice Committee working on or with the British Code of Advertising Practice which has been built up over a number of years. The industry finances all of this, and the publicity to go with it, to the tune of some £600,000 a year. Outside that, the control of television and radio is under the Independent Broadcasting Authority, but they work on a very similar code which has drawn heavily from the experience of the self-regulatory system and they utilise the organisations in that area to do much of the work for them.
Behind both of those two systems lie the Misrepresentation Act, the Trade Description Act, the Fair Trading Act and many other Acts of Parliament which bear on these questions. I will leave till later a few comments on how it works, but let me quickly say that in the view of the Select Committee it does work as well or better than the control systems of other countries, and this opinion has recently been borne out by the report I mentioned from the Fair Trading Office on the survey they carried out in which, in one summary, the Director said:
"I hope this survey will help to put matters in perspective. Our research has produced no evidence to suggest that the public are being mislead or confused by advertising on a wide scale. Indeed, it suggests strongly that with a

1191
general tightening up and the limited statutory backing proposed, the self-regulatory system should provide adequate protection for consumers".
Also in the survey is the statement:
"The results indicate that the vast majority (93 per cent. of advertisements) in newspapers and magazines conform to the Code".
The Select Committee feel that this draft Directive needs a major rethink, and they do not think the delay that might be caused by that is very important. That is because there was no evidence advanced to us that the differing standards of control of misleading advertising in any way affects the functioning of the Common Market. At the time the Department of Prices and Consumer Protection gave evidence to us, they had no evidence either.
Perhaps this is a moment for me to declare not a present but a past interest in advertising. Until the beginning of last year I was an executive director of Unilever and its Dutch sister who, between them, advertise on a very much bigger scale in the countries of the Nine than probably anyone else. I took the opportunity of my connections to ask whether they had any evidence that the differing standards in this area were holding up the functioning of the Common Market and trade across boundaries and that kind of thing. Not only did they say, No, for the reasons which others gave to us when we took evidence—namely, that the differences of language and ethnic differences arc very much greater than differences of advertising control—but also because, in so far as there could be a marginally more sympathetic situation in, say, Northern France than Southern Belgium, whether one is a Belgian advertiser or a French advertiser, one is at equal liberty to use the magazines in Northern France.
It therefore surprised the Scrutiny Committee that this Directive was put forward under Article 100 of the Treaty of Rome, because this article in envisaging Directives under it, says,
"as directly affect the establishment or functioning of the common market".
At the conference in Brussels, which I have mentioned, a suggestion was made by the Commission that it could equally well have been put forward under Article 235. This is the miscellaneous article
1192
which allows the Commission to put forward anything that it feels is in the interest of the Common Market which is not covered by the other articles in the Treaty of Rome. It is rather like the old Army charge "prejudicial to good order and military discipline" which is used when one cannot think of anything else. It was not put forward to the Council of Ministers, nor to member countries, on that basis; and if it had been put forward on that basis, perhaps the reactions would have been quite different. The real authority for—
Lord DRUMALBYN: My Lords, I hope that my noble friend will forgive me for intervening. I wonder whether he really is right in saying that had it been put forward under Article 235 the reactions might have been quite different. Article 235 is quite specific, in that any action taken must be
"in the course of the operation of the common market, one of the objectives of the Community and this Treaty has not provided the necessary powers …".
The point is that this must be in the course of the operation of the Common Market.
Viscount TRENCHARD: I think, my Lords, that I should have said that the reaction would certainly not have been more favourable. That was really what I meant. The real authority for the draft Directive comes from the Council meeting of April 1975, and Commissioner Burke has recently suggested that the Commission has worked only at the invitation of the Council expressed at that meeting in 1975. I wonder whether "the invitation of the Council" is a fair phrase. I would suggest that perhaps the Council agreed in general to a recommendation which was put before them. I have here the document of April, and what in fact the Council of Ministers agreed is quoted in the following terms:
"approves the principle of a consumer protection and information policy, and the principles, objectives and general description of action to be taken at Community level as set out in the preliminary programme annexed hereto".
The programme covers many aspects of consumer policy in what is described as a preliminary form, and only one small section of it deals with advertising.
I cannot really feel that the Council of Ministers, in agreeing in general terms

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the principles of consumer policy, were consciously agreeing to the harmonisation of the methods of the control of misleading advertising. In this connection one must welcome the recent statement by the President of the Commission that the Commission are not seeking harmonisation for harmonisation's sake.
At this stage I should refer to the debate in the other place on 16th November, as recorded at column 758 of Hansard, which ended, after support from all sides, with the following agreement:
'that in its present form it"
—"it "is the Directive—
"is not acceptable to the United Kingdom, as it seriously undermines the existing system of self-regulation".
Many other reasons were mentioned in the debate. I should have liked to have had the time to have commented on many articles in the Directive, but there is not the time. However, I believe the Committee felt that Articles 2 and 3, which are not long—the whole Directive is short—are couched in such wide and general terms that one would never get the same standards of control of misleading advertising after interpretation of this short Directive in the courts, the very different courts, of the Nine. So, even if the object were harmonisation in its own right, I think it is extremely doubtful whether one would in fact get harmonisation—certainly not of method.
I must comment on Article 5 because it deals with the methods by which each country shall control misleading advertising. Before returning to a few of the points that it makes, I would draw your Lordships' attention to the fact that in our report, we quoted from Article 189 of the Treaty of Rome, as follows:
"A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods".
I believe that any reading of Article 5 is not in conformity with Article 189 of the Treaty. Article 5 requires that laws shall be used to do specific things. Corrective statements as penalties, injunctions without proof of fault, and money sanctions are all mentioned. If there is to be action at an EEC level, let us be judged on how well we prevent misleading advertising. The Commission will be aware of the debate taking place in the United Kingdom
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on whether our system can be improved—and of course it can. I expect that they will have noted various ministerial Statements of puzzlement expressed publicly and in discussion documents.
I wish to try to summarise very quickly what I believe the Committee felt. They felt that the British system does, in the main, work. They felt that there was a strong self-interest by all interested in the advertising world to keep standards up. They noted that sanctions were applied, that advertisements were stopped, and that publicity was given to offenders. They noted that the code of practice and self-regulatory system had the following advantages over a legal system. First, it was final; there was no court of appeal from the ASA. Secondly, it was easy to alter, and build on, a code of practice, and to change it more easily than it would be to alter the law.
Thirdly, the code of practice and the self-regulatory system could go much wider than the law on matters of taste and on whether, in that sense, advertisements were good or bad. Fourthly—and I say this notwithstanding the report of the Office of Fair Trading—the speed was likely to be faster than any legal system that the Committee could contemplate. Clearly the Director of Fair Trading has suggested that in some cases the self-regulatory system could perhaps be quickened.
May I ask your Lordships, in a moment of light relief, to contemplate whether the law or a code of practice and a self-regulatory system would deal with the problems created by some of the following statements. A certain beer refreshes the parts that other beers cannot reach. I do not think it does unless you spill it. Another beer is advertised for strength, and houses can be carried in the palm of your hand. A petrol not only puts a tiger in your tank but means happy motoring. You are invited to "Fly the Tube". That is the underground to Heathrow. You are invited to take a non-stop trip to paradise. I have to give the name of the company advertising that, otherwise it does not mean anything. It is Air Jamaica. Things happen after a certain bath salts bath. I shall not go on: there is sunshine in every packet; one pill works faster than anything, and so on. I suggest that things of this kind

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are most easily dealt with by the self-regulatory system backed up by the experts in the profession itself.
I think we have to be very careful of the suggestion that we should keep the self-regulatory system and bring in some statutory back-up. If that statutory backup were in any way an appeal court, it would delay the speed of the present control system. Even the carefully thought-out suggestions of the Director of Fair Trading on how to back up the self-regulatory system, using his own office so to do, could produce an appeal court situation, because there are at the moment disagreements—genuine disagreements—between advertisers and the ASA and its bodies, and it might encourage people to pay less attention to the ASA on the grounds that they knew that the Director of Fair Trading had a power to come in, and only on a narrower and legal basis, not on a wide basis of taste. My Lords, there are loopholes in any system in this area. Our belief, I think, was that the profession was more likely to catch the fly-by-night or once-only law-breaker than the law.
Returning finally to the EEC Directive, bearing in mind what the President has said about not wishing harmonisation for harmonisation's sake, if we need it at all at EEC level it cannot be put forward under Article 100. I think also that the Commission must realise that they will not get an absolutely standard procedure and standard enforcement through the legal systems of the countries of the Nine based on a short document couched in wide, general and at times not very specific terms. I beg to move.
Moved, That this House takes note of the Thirty-eighth Report of last session of the European Communities Committee on Misleading Advertising (R/511/78) (H.L. 230, 1977–78).—(Viscount Trenchard.)
6.4 p.m.
Lord HAMPTON: My Lords, I am sure we are all grateful to the noble Viscount, Lord Trenchard, for opening this debate with such distinction and clarity. For the most part, with all his knowledge, I must wholeheartedly go along with him, and I hope other speakers will support the idea that self-regulation has proved itself a satisfactory method
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of controlling advertising in this country. Perhaps I may also refer to the words of the Minister of State, Mr. John Fraser, in opening the debate in another place on misleading advertising in the European Community. He said this:
"Self-regulation, a code which is agreed by the industry, an obligation to follow the spirit as well as the letter of the matter, seems to me much more satisfactory".—[Official Report (Commons), 16/11/78; col. 708.]
Much more satisfactory, he was saying, than the idea behind the Commission Directive that stronger statutory control is desirable.
The point of view that I shall be arguing is that the standard of advertising is as high in this country as it is anywhere in the European Community, if not in the world, but that it is not entirely free from what I shall call tactical weaknesses and that I believe it may need a very real and searching consideration of its strategy. The Opposition in this House, whichever of the two largest political Parties that may be, is apt to say that too much legislation is being enacted. I hope we can all agree that no major statutory measure would be beneficial in the present case. It has been said that you cannot make people better just by passing a law, and also that:
"there will certainly be no better Britain until there are better Britons".
What a remarkable change of atmosphere would come about if, say, at the next Budget the general public felt encouraged to follow the spirit as well as the letter of the matter, instead of running off to arrange tax-avoidance with their accountants, particularly if the taxes were seen to be reasonable and fair. But, anyway, the advertising industry in this country does, I feel, largely follow the spirit rather than the letter of the law, and I suspect that an attempt at statutory enforcement might, psychologically, produce the opposite of the desired effect. What is needed is a continued mood of co-operation with an alert and intelligent public.
Generally speaking, I have little doubt that advertising in this country is "legal, decent, honest and truthful". Travelling by underground, as I do quite frequently, I find the advertisements entertaining and cheerful, and parts of stations which have no posters are dull and gloomy by comparison. Press advertisements are

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often both humourous and informative, and television adverts often show an intriguing skill if one is not too irritated at the interruption of a gripping programme. I believe that the industry is capable of sorting out most problems of "unfair" advertising between one advertiser and another, but the general public must accept its duty to attack what is definitely misleading—and I mention here what I consider to be tactical errors of this sort. First, in the other place my honourable friend Mr. Richard Wainwright has drawn attention to the Electricity Council's claims with regard to their new off-peak electricity tariff known as Economy 7. There is, for example, a television advertisement in which a couple tell how they run their all-electric home on £3 a week. This is technically correct, but the advertisers carefully avoid mentioning that the couple concerned had previously paid out some £650 in insulating their home, and had not as yet recouped their costs. I might add that I am also sceptical, from personal experience, of the value of heating rooms during the night, even at reduced cost, when they are not in use.
Secondly, I would mention advertisements such as the recent poster for premium bonds. The suggestion here was (I do not know whether it still is: I have not seen it recently) that, while there is a very good chance of winning handsome prize money in one of the monthly draws, anyway one cannot lose as, pound for pound, one's money is always there for withdrawal on demand. I do not think the fact that anyone of reasonable intelligence could see that this is largely nonsense is any justification for its use. For, in the first place, the whole operation is a tremendous gamble in which most will win nothing so that a few, including the Government, can win high prizes. That is fair enough, but they should say so. In the second place, one's deposited money will, in times of inflation, be losing value all the time, and fairly fast.
Thirdly, I would mention a series of advertisements by Shell, a little time back, using magnificent photographs of beautiful towns and villages with few, if any, cars pictured, the message being that one should use one's car (fuelled, of course, by Shell) to visit such places. What is not pointed out here is that in such circum-
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stances every car is a nuisance except, of course, one's own.
Lastly, I would mention my conviction that the word "only" in relation to prices is seriously abused. The public should much more often be left to make up its own mind as to whether a price really is a bargain. I repeat that from what I have read or personally experienced, I join those who believe in making the self-regulatory system work to the best advantage for all rather than extending statutory control. I have just listed examples of what I have called tactical errors which the public should jump on as hard as they can. I should like now, briefly, to raise points on which I believe the industry may have to think again on strategic grounds for the common good in respect of a different form of misleading advertisements.
I quote first from my right honourable friend the Leader of the Liberal Party writing in The Times last June. He says:
"The knowledge that we live in a world of finite resources has percolated well beyond the confines of a few environmental enthusiasts. There is a constraint on unlimited growth and, what is important, there is known to be a constraint".
This clearly sounds the warning that people cannot expect year by year to have more and more; and advertising campaigns that tempt people so to want are doing a grave disservice to the community. I also quote from the Conservation News of last July which says:
"Inflation is often the product of a scramble for shares of the cake aggravated by scarcity. A major factor is artificial want creation, especially advertising".
Unfortunately, I believe this also to be true and that television advertising in particular induces a tremendous urge to buy more and more. Incidentally, I distrust broadcasts aimed at children behind, as it were, their parents' backs. If they are honest, neither this Labour Government nor the Conservative one before have come anywhere near achieving the stability we so urgently need. We are once again moving into a situation where virtually every section of the community is at least considering fighting for a larger pay packet. And, quite frankly, I do not think that too much persuasive advertising, as opposed to the more strictly informative, helps.
I should like to end by quoting from that deeply sincere book Enough is Enough by the right reverend Prelate the

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Bishop of Winchester. It points the need for a most serious consideration of man's future in this world of ours. It runs:
"It is not surprising that an enormous number of people of all ages and in many different countries have come to the conclusion that unless we can discover a radically new style of living, and can get it put into practice, the balance of life on this planet will be irretrievably deranged and we shall be plunged into chaos".
These are strong words which I do not believe that we can just brush aside. I am certainly no puritan. I enjoy worldly goods and like to see other people enjoying them, too. But I accept that many of our resources are finite and nonrenewable and that we owe it to future generations not to squander them without concern. What I believe we need to concentrate on is finding, for all, a life higher in human satisfaction but which may possibly mean accepting a lower so-called standard of living in purely cash terms. I was brought up with a family bread board that had carved on it the words, "Waste not, want not!" I believe it is a lesson that many people are having to learn again and, not least, the many honest and honourable people of the advertising profession to which I was happy to belong a number of years ago.
6.13 p.m.
Lord NEWALL: My Lords, I, too, should like to thank my noble friend Lord Trenchard for explaining the situation so clearly and for introducing this debate. The prime objective of this proposed Directive is indisputable; it is to ensure that consumers are protected against misleading advertising. It would be as hard to oppose that objective as to stand here and declare myself against motherhood or in favour of sin. But beneath the acceptability of the objective lies a host of unacceptable means by which the EEC proposes to achieve those ends. First, it requires the adoption of new laws and details some of the procedures whereby they are to be put into effect. I am not a lawyer, nor do I need to be to oppose such fundamental changes to our British system of justice in the name of harmonisation. I believe that it is far better to press for member States to develop means appropriate to their own existing legal traditions and their own control system.
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Secondly, it is vital in this context to ensure that there is real consumer benefit in adopting additional consumer protection measures. I find no evidence to the Scrutiny Committee of any significant benefit to consumers from the proposed Directive. The National Consumers' Council said that any benefit would be "relatively little". The National Council of Women, which, in addition to its direct members, has representatives of about 100 affiliated societies, said that it
"believes that there are a number of aspects of the proposal which could seriously affect [the control system's] effective operation and could rebound on the consumer".
The Department of Prices and Consumer Protection is reported as stating categorically that it would be of no benefit to consumers and many other organisations have suggested that it could diminish the protection that consumers presently enjoy.
The existing controls over misleading advertising are, as we have heard, a balance between statutory requirements and vigorous self-regulation. I stress "self-regulation" as we have heard this described as "voluntary control"; but self-regulation of advertising is not voluntary. Members of the advertising industry cannot choose to opt out of the system, which is one important reason why the present balance between the law and self-regulation works so well. And we have evidence that it works. We are fortunate enough to have the benefit of the Office of Fair Trading's thorough and painstaking review of the United Kingdom self-regulatory system of advertising control, published on November 15th. They establish that 93 per cent. of the 2,993 advertisements that they investigated complied fully with the Code of Advertising Practice.
The assessors used by the Office of Fair Trading were not experts in either the intentions or the interpretation of the code and they believe that about 7 per cent. of the advertisements they examined breach it in some way. In some cases, perhaps, their interpretation of the rules was mistaken. In many cases, as the Office of Fair Trading has recorded, the breaches were "technical" or of an extremely trivial nature. There were very few gross deceptions likely to cause consumers significant harm.

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At the Press conference given by the Office of Fair Trading to launch the report, the example given of such a breach concerned an advertisement for a garden shed. The illustration of the shed was marked, "No planning permission required"—which was not true of the whole range of home extensions which were offered by the advertisement. I am not belittling this example. What I home to underline is the smallness of the nut which the EEC proposes to crack not so much with a sledgehammer as a bulldozer. The nature and scale of the problem simply do not warrant the dramatic changes proposed and the consequent upheaval of the present equilibrium between law and self-regulation.
I do not claim that the present system is perfect; I believe that the advertising industry itself would welcome back-up powers vested in the Director-General of Fair Trading to deal with the tiny "pirate fringe" outside the reach of the code and the current legal constraints. But J doubt very much whether any other member of the European Community has evidence that 93 per cent. of its advertisements meet every detail of its national law, let alone that they would meet the infinitely greater demands of the British Code of Advertising Practice. Nor do I imagine that all the aspects of all British statutes and Statutory Instruments enforced by our trading standards officers would prove to be observed scrupulously in 93 per cent. of cases.
Our current control system and, particularly, the self-regulation within it is of very real benefit to consumers. The proposed Directive requires the new statutory measures to be cheap and quick for consumers to use. That is a contradiction of terms. Any statutory measure would inevitably cost more than the price of a postage stamp—which is all it costs a consumer to complain to the Advertising Standards Authority and set an investigation in motion. I am told that the simplest kind of civil procedure for getting an interim injunction would cost some £500 compared with 7p for a second-class stamp: so that is an increase of 714,286 per cent. Is that in the consumer interest? The Advertising Standards Authority does not reveal complainants' names without their express permission. Such a procedure must encourage far more consumers
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than court action, which cannot be anonymous.
The present code of advertising practice is far wider in scope than the law, and administered in the spirit as well as the letter, as the noble Lord, Lord Hampton, has already said. The proposed legal system would give consumers less protection at more cost, and actively discourage them from complaining against advertisements which they considered misleading. It could not be anywhere near as quick or as cheap. Were such a system, dependent on close co-operation in the consumer interest, to be replaced by the proposed adversary procedure, no one could expect advertisers, agencies and media to continue to spend their own time and money on ensuring vigorous enforcement. Such enforcement would be considerably diminished, if it did not disappear altogether, at the expense of the very consumers the proposed Directive is supposed to protect.
This now seems to be sinking in to the EEC's communal consciousness. The Minister for Prices and Consumer Protection told the House of Commons on 16th November that the proposed Directive failed to appreciate the strengths of the system of advertising controls that we already have. The very next day, on Friday, 17th November, Commissioner Burke addressed an Advertising Association luncheon. He said that the European Commission never had it in mind to undermine or supplant the self-regulatory system and that Article 7 gives it express—if to some people rather grudging—recognition. He said:
"I am perfectly prepared to consider whether at this stage greater prominence should be given to the EEC proposal to the self-regulatory system".
But "greater" is very unlikely to be adequate.
It has been said—and I have found no evidence to disprove the statement—that we have in Britain the most effective and most vigorously enforced system of advertising control in Europe. If the Directive proposed that member States harmonised with the balanced system we operate in the United Kingdom, there would be a good probability of real and universal consumer benefit. Such a course is not, however, practical. Other

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member States do not have the benefit of an Advertising Association which embraces in one body the interests of advertisers, advertising agencies and the media. Nor have they spent over 50 years developing enviably high standards. Nor do they have the mechanism provided through the Advertising Standards Authority to react quickly to changing trade practices, social needs, new product fields, to introduce new controls or amend existing ones quickly, and with the guaranteed co-operation of all sides of the advertising industry.
The Office of Fair Trading's review is extremely timely in dispelling some of the myths and guesswork and giving us some hard facts about the effectiveness of advertising control in the United Kingdom. It seems clear that the proposed Directive is designed to deal with the myth, not the reality—the reality being the results of a continuous raising of standards over a period of half a century. So, this 50 year old baby, still developing well, will undeniable be thrown out with the bath water if the proposed EEC Directive on unfair and misleading advertising is adopted, and those who will suffer are the very consumers it is designed to protect.
6.23 p.m.
Lord KENNET: My Lords, the noble Viscount, Lord Trenchard, is to be thanked very much for introducing this debate in such an extremely lucid and informative manner. He is an expert on the subject and a highly valid spokesman of the committee to which we both belong. Later in the debate we shall be hearing my noble friend Lord Thomson of Monifieth, who is doubly an expert in the subject, first having been a European Commissioner and now chairman of the Advertising Standards Authority.
I am a complete amateur in the subject. Until the other day, I was the original ignoramus in advertising in that I did my level best never to look at any. Of course, that did not quite succeed: I did sometimes see some. I used to feel that what persuaded me was anything that was clever, funny or charming. It never occurred to me to wonder whether it was true or not. I took for granted it was not; why should it be? We have been given an instance of the beer which reaches the parts which other beers
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cannot reach. That is not true but it is clever, funny and charming. Another example is a singer who has latched on to that and bills herself as a singer who reaches the parts the others cannot reach. This is even cleverer, funnier and more charming. And so on down the line.
Advertisements for a certain vermouth which we see in the cinemas are extraordinarily charming, beautiful and cunning. I think to myself: "Maybe if there is someone at that firm who knows a good advertisement when he sees it—namely, one which is clever, funny and charming—perhaps he can make a good vermouth; so let us buy it". That is what makes me buy; not the claim of any factual nature that it is better than anything else or better for you, but simply evidence of intelligence in that commercial enterprise.
The other day, by chance, I was pitchforked into one of the hot seats on this matter. This House was kind enough to send me as one of its members to the European Parliament. In the European Parliament there is a rapporteur system which is extremely complicated. There is a system called pondération—which is the French for "weighting". Like so many other French words, it is now coming into English and we call it "the ponderation". Whenever a proposal from the Commission comes before the Parliament and a rapporteur has to be found to go into it and make a proposal to the Parliament for what the Parliament should think on it, pondération swings into effect. First of all they ponderate: Is it an important proposal? Is it really important? Will it affect people? Then they ponderate: Is it politically glamorous? Even if it is unimportant but still politically glamorous a lot of people will want it. Then they ponderate: Which political group last had a report and of how much importance and glamour?
When all this has been stirred up and put into the computer at the end of the day a report goes to a certain political group. There follows a mini-political pondération about which of our individual members, and from which country, last had a report which had been adjudged to be of such political importance and such glamour, and the Party machine comes into effect. One thing that this marvellous system does not take account

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of is whether the victim at the end of the day happens to be someone who knows anything about the subject, cares anything about the subject or has even heard of the subject.
So much for telling the House how I have become rapporteur on this draft Directive to the European Parliament. I should report to this House this is simply a matter of climate and opinion. It is very obvious to us in the British Parliament in the British legal system and Whitehall that Articles 100 and 235 of the Treaty of Rome mean what they say. They say that if something is impeding the smooth creation of the Common Market and if it is distorting competition, then the Commission may introduce a Directive to stop that happening and, subject to the approval of the Council of Ministers, may require member countries to adopt harmonised measures or standardised measures.
It is obvious to us that if there is no evidence of a distortion of competition across frontiers, they should not be introducing Directives under Article 100. But I have to report as a returned traveller that this is not obvious to the other member States of the European Community, the European Commission or the European Parliament. There if we point that out, we are simply told: "You are being British again; you are obstructing things". They produce very full and valid precedents for tens or even hundreds of occasions when measures have gone through without any real evidence on the distortion of competition, which they were designed to avoid, ever having existed. It is taken for granted among the other countries that if a measure looks like a good idea one does it under Article 100 with or without proof of the distortion of competition. I am still reporting a situation which is objectively the case. It annoys the other countries very much when we get up and claim that this ought not to happen. They say they were doing it for 15 years before we joined and they do not propose to stop doing it now.
This is a factual report to this House. I do not have any opinion on the matter: I am precluded by my position as rapporteur from having an opinion on this matter. I would simply tell the House, and anybody outside the House who can hear, that it is a very strong opinion held
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by the others and they are very fed up with us for taking the opposite opinion. In time maybe we shall come to a general resting-place, but for the moment this Directive is a quite striking and dramatic case of that normal difference of opinion between the rest and us.
The noble Lord, Lord Newall, has given us a number of striking figures in defence of the thesis that everything is for the best in the best of all possible Britains. He says that only 7 per cent. of our advertisements appear to be against the code: I believe that was quoted from the latest publication of the Director-General of Fair Trading. I hope that the noble Lord, Lord Thomson, when he comes to speak will be able to put a fuller gloss on what I am about to say.
There are 25 million advertisements a year in this country, and 7 per cent. of that figure is somewhere between 1½ million and 2 million. We can hardly stand up to opinion in the rest of the Community and say that we refuse to change our system because it is so perfect that we only have 1½ million advertisements which contravene our own rules every year. That would hardly be a realistic position and I think that statistic should be seen in proportion from both sides.
Let me touch for just a moment on an issue which has not been raised in this debate so far, though it was raised at great length during the debate in another place a week or two ago: that is the question of fear. It would be against the draft Directive to base advertising on "sentiments of fear"—to make an appeal to fear. The objection has been raised in this country: "But what about Government advertising against smoking, for instance?" That is based on fear, and rightly so; and there is a good deal of advertising to the effect: "Don't do something or other because if you do it will have bad effects". It would obviously be wrong to seek to circumscribe such warnings, since they are true, and it is right that people should be told they are true.
The draft Directive as it now stands would not catch that kind of advertising because, in its terms, that kind of advertising is not advertising. In its terms, advertising is simply a statement made in the course of a trade or business, promoting

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the sale of goods or services. A Government insert in a newspaper saying "Don't smoke" is not advertising within the terms of this Directive, and therefore it seems probably all right to accept that there should be a Community Directive at the end of the day which makes reliance on fear improper.
What we are talking about in this dispute between us and the rest is this—and perhaps I could fill this in a little: it is not a dispute between Britain and the rest tout court. There are others who do not like it and one country where it is not much liked, although the objections are not nearly as strong as they are in this country. That country is Denmark, where their existing ombudsman system is in conflict with what is proposed in the draft Directive as it now stands. The conflict is not so sharp and will not be so difficult to resolve as is the case in our country between the ASA system and the proposed legal system of court jurisdiction. It is only a question of the relationship between a jurisdictional system and a voluntary system. The draft Directive as it stands makes it perfectly OK for the splendid Authority of the noble Lord, Lord Thomson, to continue exactly as now, but what it wants to do is to make it also a criminal offence to engage in this kind of advertising. Let us get this straight, because it has not yet been made clear—the fear among those who object to the draft Directive is that the Advertising Standards Authority would wither away if a legally enforceable regime were set up over its head, simply because the parties to disputes would not be prepared to lay before the noble Lord, Lord Thomson, all the arguments which they would later have to display in court. I think that is the essence of the defence of the present system and the essence of the objection to the new proposed system.
Nevertheless, we have the fact that my right honourable friend Mr. Hattersley, who is the Secretary of State responsible for this, has recently called for a statutory back-up system. He has rejected the draft Directive in its present form and has endorsed the opinion of those who maintain that the ASA must continue, but has called for a statutory back-up system for the Authority. I hope it may be accepted in due course that something can be made out of all this which will in effect be a
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statutory back-up system for the ASA but which will not carry any risk of causing that Authority to wither away, and indeed will have the effect of strengthening it. I do not want to poach on the territory of the noble Lord, Lord Thomson, because he will tell us a lot more about this much better than I can, but there are people who are getting away scot-free at present by simply cocking a snook at the ASA. They are expelled from the association; they are pariahs and so on; but they are not criminals and if they think it is worth their while they can go on cocking a snook and defying all the standards.
If we can devise something which would allow such cases as that at the end of the day to be brought into court, that would be a reconciliation between all the interests. It is not too difficult to do so. It might be done in one of two ways: either the ASA could be empowered to take them to court or the Director-General of Fair Trading could be empowered to do so, which would make him very much like the Danish ombudsman. But—and I think there is no point in ignoring this fact—there is a very strong feeling—
Lord MACKIE of BENSHIE: My Lords, would the noble Lord give way for a moment? Could he tell us in what way they are cocking a snook at the ASA? I understood they had the power to stop them advertising: in other words, the newspapers would stop taking their advertisements.
Lord KENNET: My Lords, I think I ought to leave the authoritative answer to the noble Lord, Lord Thomson. I believe it is the case that if an advertiser inserted an advertisement which was against his standards and was then expelled from the association—assuming that he was ever a member—and that if the association then told the newspaper which had carried the advertisement that he was expelled from the association because he was a villain, the newspaper could also cock a snook and continue to carry it. I believe that is the case, but the noble Lord, Lord Thomson, will correct me if I am wrong. We do have this figure of 1½ million a year of advertisers who break the standards. It is not negligible.

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To come to the question of how this might be handled, I think the sticking point between the objecting countries, Britain and perhaps Denmark, and the others—and therefore the Commission, because the Commission does reflect the opinion in the other Continental countries with the exception of Denmark—at the end of the day is likely to be: should the citizen or the consumer group, as an individual or as a class, have the right to go to court and complain about an advertisement? If the ASA has not done so, should he have the power? If the Director-General of Fair Trading has not done so, should he have the power? The Commission of the European Communities is very likely to maintain its proposal that he should. It would then be a question of saying in Britain: "No, we cannot accept that: the private citizen may not have access to the courts on this matter. "If we say that to the Council then the Directive could be killed, because that is the way things go. However, I think we should all be thinking about whether we want to fetch up in a position where we alone, possibly with one other country, appear to be denying access to our courts to single citizens and classes of citizens who in all other Community countries have access to the courts.
Having said that, I think the chances of coming to some kind of draft which will meet with the agreement of the majority of the European Parliament and of all the Ministers, when it comes to the Council of Ministers, are not very high. Equally, they are not very low: in my view it is about 50:50. Speaking personally again, if I may, I would say that if we do not succeed it is not the end of the world for the prosperity, happiness and morality of the European Community peoples.
6.40 p.m.
Lord DIPLOCK: My Lords, like the noble Lord, Lord Kennet, and perhaps more plausibly, I disclaim any knowledge of advertising. But I hope that I may be permitted to say a little about two of the Articles in this Directive which deal with the legal procedure which, if the Directive goes through, will be compulsory, because this raises an important question of principle affecting the ad-minstration of civil and criminal justice in the United Kingdom, and the extent
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to which our having joined the Common Market will compel us to alter a system which has lasted so long and, I venture to think, worked comparatively well.
There is a basic difference between the system of administration of justice in the common law countries and in those with the Romano-Germanic systems which are those of the original six member States. I do not say that our system is necessarily better, but what I do say is that it is very different both as regards the roles which judges and advocates play in the administration of justice, and as regards the underlying concepts as to methods by which truth can best be ascertained and justice done.
As I say, our method would not necessarily be better, but it is the only method that we are used to. It is suited to this country by its history, by our national temperament and by our particular sense of fairness. One thing that I have learned from a considerable experience of comparing systems of legal procedure in different countries is that you cannot successfully graft, for a particular purpose, some organ from a different system into a wholly different body of procedural law. Under Article 5 of the Treaty, we have a general duty. It reads:
"Member States shall take all appropriate measures … to ensure fulfilment of all the obligations resulting from action taken by the institutions of the Community",
and this applies to the obligation to give effect to Directives.
The noble Viscount, Lord Trenchard, has quoted Article 189 of the Treaty, which states what the objectives are. They are to,
"be binding as to the result to be achieved: but shall leave to the national authorities choice of form and methods".
In this Directive, Article 1 defines the results to be achieved in very simple terms,
"To protect consumers, persons carrying on a trade, business or profession, and the interests of the public in general against unfair and misleading advertising".
I wish to say nothing about the definitions of "misleading advertising "or" unfair advertising"; they have already been dealt with. But what I do want to say something about is Article 5.

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It provides in its first paragraph:
"Member States shall adopt adequate and effective laws against misleading and unfair advertising".
That, in the light of Article 5 of the Treaty, is unnecessary, but it is perfectly harmless. It presents no difficulty, because our existing laws, which include the common law and not merely statutory law, provide a very adequate machinery for achieving the objects which I have just read out. But Article 5 then gets down to the form which these laws are to take, and the methods by which they are to be enforced. The details are apparently based largely upon French law, which is familiar with the mixed criminal/civil action; an action partly criminal and partly civil, which does not form part of our jurisprudence.
The first paragraph provides that there must be provision for civil action by persons suffering loss or damage. Again, that presents no difficulty. The common law itself already provides for it here. It then goes on to say that these remedies shall also be open to associations. That would either involve, if you imported it into English law, the admission of the part action, which is unknown to English law and which, where it has been adopted in the United States, has led to great difficulties which, if it had to be dealt with in the English system of procedure, would fill me with horror as a member of the Judiciary of this country; or, alternatively, would provide for a new form of locus standi hitherto unknown to English or to Scots law.
Then, the next paragraph goes on to provide for injunctions and it appears to contemplate two kinds of injunction, one of them at the behest of a public authority. That I do not mind. There is already provision of that kind in the Fair Trading Act. It provides the statutory back-up, of which the noble Lord, Lord Kennet, spoke, and that is something which is simply developing our own system. It is perfectly possible to put it into English law without the dislocation that the Directive would require.
The same paragraph goes on to deal with injunctions to be granted in civil actions without proof of fault or actual prejudice. That conflicts with the general law relating to the grant of injunctions in civil proceedings; and do not forget, my
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Lords, that injunctions involve perhaps the most serious kind of what are, in effect, criminal sanctions, because disobedience of injunctions is contempt of court, for which imprisonment, or whatever punishment the law thinks fit, can be imposed. To bring this new concept of cases where it is appropriate to grant injunctions into English law would—I ask your Lordships to forgive the expression, because it is a tiresome one—stick up like a sore thumb in English procedure.
Then there are provisions for the court ordering the publication of corrective statements, or of a court's own decision. This is unknown in English law. The courts are ill adapted to it and there is no means whatever of insisting upon the appropriate medium for publishing the statement. Here again is something which is unnecessary, something which interferes with our ordinary system of administration of justice.
Finally, let me come to the last paragraph about deterrents and penalties. In English and Scots law, that would be characterised or classified as criminal law. It is true that in the old days we used to have what were known as common informer actions whereby a private individual could bring an action for penalties as a way of enforcing the law. That was finally abolished as an anachronism some 10 years ago. I hope that we are not going to find that anachronism reintroduced into English jurisprudence. So what would be involved is a criminal prosecution. I do not mind criminal prosecutions. There are already some for statutory offences in relation to advertising.
I turn to Article 6, which deals with the burden of proof in both civil and criminal proceedings, for which we are required to provide in Article 5. That places the burden of proof of the truth of everything said in his advertisement upon the advertiser. That conflicts with what is perhaps the most fundamental principle in English and Scots criminal law: that the onus of proof of all the ingredients in the offence lies upon the prosecution. That is the protection which we have built up over centuries for those accused of offences before our courts. It is a protection which I should be very loth to see abolished in this particular case, for no good reason that I can see.

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The effect of these detailed provisions in Articles 5 and 6 means that we should be compelled to engraft onto English and Scots law a hotchpotch of civil and criminal proceedings lifted out of a Romano-Germanic system of procedure conflicting with our own and unsuitable in form for inclusion in our system for the administration of justice. If that is permitted in this the first Directive where there has been an attempt to do it, it will set a precedent which, frankly, fills me with horror. If it is followed, it will destroy the coherence of the system of administration of justice in this country. Whatever may be said about the rest of the Directive, I do urge upon this House and upon Her Majesty's Government that Articles 5 and 6, at any rate, should be resisted.
Lord KENNET: My Lords, perhaps I may be allowed to clarify one point about class actions. The noble and learned Lord said that this would introduce a new form of locus standi unknown to English or Scottish law. Of course that is so in the case of the courts, but may I ask the noble and learned Lord what the position is with regard to that form of locus standi at statutory inquiries which are held under planning law?
Lord DIPLOCK: My Lords, under planning law, anybody whom the inspector allows can say what he likes; but, if the noble Lord will forgive my saying so, planning law—at least, inquiries—is not part of the administration of justice.
6.55 p.m.
Lord DRUMALBYN: My Lords, already we have had some distinguished speeches, so I feel very reluctant to impose further upon your Lordships' time. I suppose that my justification for doing so is, first, that I was asked to speak, to which one can always say, "No, thank you"; secondly, that for some years I was chairman of the Advertising Standards Authority. However, as the noble Lord, Lord Thomson of Monifieth, who succeeded me is here, that in itself is not a very good reason, either, but for the fact that I may have been in Brussels since last he was there, unless he came back this morning. I came back last night.
Lord THOMSON of MONIFIETH: My Lords, I set off for Brussels tomorrow morning, so the noble Lord has an advantage over me. However, he has the best of all reasons for speaking, because not only was he my predecessor as chairman of the Advertising Standards Authority but also he was the founding father of the system of self-regulation, both as a Minister and then as chairman of the Advertising Standards Authority.
Lord DRUMALBYN: My Lords, I am very grateful to the noble Lord, although I always call him my noble friend. In that case, he places upon me a very heavy responsibility. I am sorry to see the noble Lord, Lord Kennet, departing at this stage; perhaps it is only to have consultations and, as rapporteur, to start writing his report. However, I should like to comment on one or two things in his speech. First, I think that we can rely upon his report being quite as witty as the wittiest of advertisements, and I think that he may be considerably aided by what is being said today in the House. Also, I think that I am a sufficiently good European to be able to make the point that if there was evidence of abuse of such gravity and magnitude that it was absolutely essential for us to change our system, whether the abuse was in this country or in other countries of Europe, then I should be bound to say, "Well, it's too bad. We have a choice of evils here. We must bring our system into line."
But what I think the noble Lord has to consider, and what I am sure the Government will be considering, is whether that applies in the case of misleading and unfair advertising. Is it really worth while to ask Great Britain to change her system so radically as the Directive will require in order to harmonise? This is a very important point. I understood "harmonise" to mean bringing the existing laws into line. However, if one is adding to the existing laws, as appears to be done in the case of the instant injunction, then that is going rather further than the pure harmo-nisation, the pure approximation of laws. If to add to it were part of harmonisation or approximation, then, to carry the matter to an extreme conclusion, one could harmonise by completely changing the laws of all the countries. I do not believe that to be right or feasible.

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The noble Lord called in aid the review of the Office of Fair Trading, which is an excellent document, in which it found that some 7 per cent. of advertisements were in contravention of the code. I am choosing my words carefully here because of course that does not mean that by being in contravention of the code the advertisements were necessarily misleading. There are other ways of being in contravention of the code. However, I should like to point out in passing that that figure is exactly half the figure that was found at the last count which was done by the Bureau of the European Union of Consumers. I think that is the right title, translated from the French. That found that there were 14 per cent. of contraventions at that time. But, just in case one may wonder whether there is any justification for the suggestion that our system does somewhat better than systems abroad, a similar inquiry was conducted in Germany which found four times as many contraventions. I think perhaps it is worth bearing that in mind when we are considering the necessity for har-monisation and how it is to be done.
I should like to congratulate very much indeed my noble friend Lord Trenchard on the splendid start which he gave to this debate. I should like to add one point to what he said; it has not really been stressed quite as much as it might have been. We have in this country a dual system of criminal prosecutions for false and misleading advertisements under the Trade Descriptions Act and the other Acts concerned. Of course, under those Acts it is possible for anybody (except in Scotland) to bring prosecutions. In fact very few individual consumers do. I believe there is a record of one having done so, and I am not certain that it was not the brother of the noble and learned Lord, Lord Diplock.
Then of course it is possible for the fair trading authorities also to bring prosecutions. That is not a class; they are an administrative organ of government although they belong to the local authorities. It follows that we would already be in compliance with a very large part of the Directive as it stands. I do not think I am going too far in saying that a great deal of that Directive derives from the Trade Descriptions Act and also from the British Code of Advertising Practice.
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It is the things which are added to that which are open to question.
It has been said, quite correctly, that the present Advertising Standards Authority and the self-regulatory system as a whole is not perfect. I may say that there has been a steady improvement, both in its record and in the effectiveness of the code. But it is not perfect, and the report of the Office of Fair Trading has made some suggestions for its improvement. Personally, I am not sure that all of them would improve it, but that is a matter for further consideration. Also, of course, there are proposals for the strengthening of the Trade Descriptions Act. What is the opinion of the Government on this? Are they of the opinion that if these measures are taken we would be complying with anything that could resonably be demanded of us? Are they of opinion that the new procedures that are being suggested in the Directive are not only unnecessary but might have bad effects, not only on the self-regulatory system but also on the consumer? Are they of opinion that there is any scope for further discussion within the Commission and between the Commission and the various countries concerned?
Reading the minutes attached to the report of the European Committee it seems to me that the Department are of the opinion that the Directive goes much too far in tampering with the form and method of the system that we have at the present time. I think it is worth while at this stage in the debate to repeat what Article 189 says. It deals with the effect of a Directive which the Council has approved, and it says:
"A Directive shall be binding as to the result to be achieved upon each member State to which it is addressed but shall leave to the national authorities the choice of form and methods".
Whatever can be said of this Directive, it certainly does not do that. I do not know what happens at the next stage. We do know that any such Directive, even though it is carried by a majority—it may be only a qualified majority—in the Commission must be approved unanimously by the Council. The Council can either approve or, I believe, refer it back.
What is going to be the objective of the Government in this? Are they going to ask for further time to consider it?

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I think I am right in saying that at the end of the title the Directive has "final". There is not much finality in things of this kind which have already gone on for a long time, and I suppose it means final before it goes to the Commission; but I am not even sure of that because it might be altered in the light of representations made in the Economic and Social Committee or by the European Assembly itself.
We want to be quite certain here, first, as to what can happen in the light of this debate and, secondly, as to what attitude the Government intend to take. They are perfectly entitled to say—and I rather think they will say—that they will take into consideration what has been said in the course of this debate; but I hope that they will be able to go a good deal further than that in this case and indicate full support for what was said by their representative to the committee itself.
The Department of Prices and Consumer Protection gave this evidence to the Sub-Committee:
"We have no evidence whatsoever that there is any impediment at all to intra-community trade as a result of differing practices as now conducted".
It went on to say:
"There is no evidence to suppose that advertising as such hampered the free movement of goods and services between countries".
The Commission appear to have no evidence either, because another witness said that he had himself asked the Commission whether they could instance any such an effect, and the answer given was that there was a tendency for German customers to cross the border into Holland to buy certain household goods because of the less strict laws on price cutting and premiums offered with the goods. These are matters which are right outside the Directive before us. If one or other of the countries feel that their citizens may have been placed at a disadvantage vis-à-vis the other, surely the two countries can settle the question between them without the need for all the hoo-hah, if I may put it that way, that we are having over this matter.
What we must make clear—and I detected in what the noble Lord, Lord Kennet, was saying a doubt about this—is that we all accept that it is desirable that all States should have some form of
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laws against misleading, and possibly also unfair advertising. The fact of the matter is that they all do have that; and I think it is a shade arrogant of the Commission, or the Directorate General at any rate, to start off by saying that the object is to protect the interests of consumers, and so on, as if they were not protected already. However, it is fair to add that even if all the laws were identical there is no way of ensuring that the same view would invariably be taken in the case of each particular advertisement in each of the member States as to whether it was or was not an infringement of any of those laws.
If that is so, and I am sure it is so, should we not go as far as desirable and no further, which is just to make certain of what is intended, the protection that it is intended to provide and for whom it is intended to be provided, without going into great detail as to how it should be provided? At the present time when an advertisement contains a plain lie no doubt it is nailed in all States to some extent; and there, of course, the question is to what extent you can nail a lie and what proportion of lies are nailed. I would respectfully submit that the proportion is likely to be very much less than the proportion that is found under the self-regulatory system. Of course, lies are only a small part of the field of misleading and unfair advertisement, and one that should be dealt with and is dealt with by criminal law.
The second question that arises is whether the Directive leaves national authorities the choice of form and method. The evidence of the Department indicated quite clearly that it does not. What was said was:
"Where we part company with the underlying implication of the Directive is that there is a need to harmonise the means by which the objectives are to be achieved".
Nor were they very enthusiastic about combining misleading advertising and unfair advertisement in the same Directive, the more so as one is mainly in the criminal field and the other mainly in the civil field. But I must say that given the different origins and developments and attitudes, for example, the difference between the British and German attitudes to advertising, I am inclined to think that any harmonisation would have to cover both, but it would not follow that the method

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should be the same. That is entirely a personal opinion.
My Lords, I hope that the Government will maintain the line of the Department of Prices and Consumer Protection on the second question. Surely it is not too much to invite the Commission to adopt a constructive rather than a destructive attitude towards the means of protecting the consumer. I do not want to be unfair to them. I know that the introduction, for example, of the injunction process was intended to be both innovative and constructive; but if it is going to result in the destruction of the self-regulatory system and in grave prejudice to the legal system, then I doubt very much whether it would be right to follow it. The real question here is that it is obvious that in a situation like this, as Lord Kennet has indicated, we are going to run into a certain amount of unpopularity; we have probably done so already. But that degree of popularity or unpopularity has to be measured against the real advantages and benefits to the Community and the country as a whole. I would have liked to finish by quoting Kipling, but I think I had better not.
7.14 p.m.
Lord SAINSBURY: My Lords, may I congratulate the noble Viscount, Lord Trenchard, my colleague on Sub-Committee D, on his excellent presentation of the 38th Report of the Select Committee of the European Communities. The object of the draft Directive, which has already been quoted by the noble and learned Lord, Lord Diplock, is unexceptionable. I doubt whether anybody would quarrel with this objective. We would all agree, I am sure, that the consumer needs, and is entitled to, honest, truthful and unexaggerated information and that taste and decency should be observed. The draft Directive, however, prescribes in detail the method and forms of carrying out the objectives, and this, in the opinion of the Committee, is wrong and misconceived.
The British system of self-regulation must be seen in the context of extensive statutory provisions. There are in all some 60 statutes, the principal ones, as already mentioned by the noble Viscount, Lord Trenchard, being the Misrepresentation Act 1967, the Trade Descriptions
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Act 1968 and the Fair Trading Act 1973, which between them provide powerful consumer protection covering not only advertising but all forms of trade description. The detailed control of advertising which follows on these statutory obligations is predominantly self-regulatory and based on a code of practice agreed by the advertising industry and operated by a number of formal institutions, including the Advertising Standards Authority. This system is so much more preferable, in my opinion, to the recourse to legal remedies through the courts. As has already been said, it has the advantage of speed; it leads to much quicker action against the offender than the legal process. Another advantage of a code of practice is that it can be easily adapted to changing circumstances and thereby kept up to date.
I agree with the Committee that the operation of detailed legal control as proposed in the draft Directive would undermine so much of the voluntary cooperation which has been developed in this country and would eventually lead to the discontinuation of our present efficient mixture of voluntary and statutory control. The draft Directive is also considered unsatisfactory because several definitions are imprecise, deficient, or capable only of subjective interpretation, and are deemed inadequate as a basis for legislation. For example, it is surprising that the word "advertiser" is not defined in the draft Directive. In fact, the Committee challenges the claim of the Commission that the different degrees of legal protection against misleading and unfair advertising in member States hinder trade within the Community. For it is unusual, as has already been said, for advertising campaigns to be planned with the prime object of transcending frontiers because of language, ethnic differences, differences in taste, et cetera.
It cannot be disputed that strong controls over advertising are desirable for consumer protection throughout the Community. Nor would we disagree that statutory requirements could not be made more effective in practice in the United Kingdom. But the legal mechanism described in the draft Directive seem to be much too heavy-handed and inflexible. I support the suggestion that the work of

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the Office of Fair Trading should be expanded to resolve any possible defects in the existing United Kingdom system. I have already detained your Lordships too long. I should like to conclude by echoing the wise words of Mr. Roy Jenkins, that the Commission should concentrate on areas of real need and should not seek to include unnecessary details, but rather lay down the primary objectives to be achieved and leave the detailed implementation to member States.
7.22 p.m.
Lord MOTTISTONE: My Lords, I should like to begin by thanking my noble friend Lord Trenchard for so ably introducing the debate. As a fellow member of Sub-Committee D, I certainly agree with him and, notwithstanding the reports, statements and various meetings that have taken place since we made our report last summer, I would subscribe exactly to what we said then as being wholly applicable now. I shall not bore your Lordships with any detail as regards this matter because many other noble Lords have most capably covered the ground. There are only two matters that I should like to dwell on very briefly. First, it seemed to me that in his speech the noble Lord, Lord Kennet, in advertising the attitudes of our fellow countrymen in the Community, was trying to frighten us. Whether it was a frightening advertisement I cannot be sure, but he was trying to say to us: "Look, your recent report says that 7 per cent. of the advertisements do not conform to the ASA code. That can be translated into l¼ million advertisements and is not that a huge number?".
Lord KENNET: My Lords, it was 1½ million.
Lord MOTTISTONE: My Lords, this surely needs to be taken in perspective. My first point is how badly did those advertisement fail the test; how much did they fail purely on the matter of technicality; and how important is it? For example, I would be prepared to bet that any day—and today as much as any other—more than 7 per cent. of the cars parked in London are illegally parked in the wrong place. However, we, as a country, do not feel extremely guilty about that: we do not feel that we much change
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all of our laws. We might consider that we should improve them, but I do not think that we need feel a great sense of guilt that there are probably nearly 1 million motor cars illegally parked in London on any one day. That would not seem to me—although it sounds a huge number—to be a frightening situation.
Much the same sort of attitude needs to be applied to the statistics relating to advertisements. As my noble friend Lord Drumalbyn said, the situation is improving and that is perhaps because the system we have is not too bad.
Lord KENNET: My Lords, would the noble Lord give way?
Lord MOTTISTONE: My Lords, I thought that the noble Lord, Lord Kennet, could not resist it!
Lord KENNET: My Lords, Yes, I cannot resist it. Will he give us his opinion of the following possible advertisement to be seen in tube stations. "Are you legal, decent, honest and truthful? Ninety-three per cent. of advertisers have to be."
Lord MOTTISTONE: Is it not slightly like, "Have you ceased beating your wife?" because it does not really pick up the point about how much the splendid qualities, about which the noble Lord has been talking, have been transgressed. However, let us leave it there.
Lord MACKIE of BENSHIE: My Lords, perhaps it would be worth mentioning that 6 million advertisements in Germany apparently transgress the code.
Lord MOTTISTONE: My Lords, that is splendid. I should like to pursue another point which is rather more important and which the noble Lord, Lord Kennet, touched upon. Can the Government clarify their attitude about the general business. The fact of the matter is that as the noble Lord, Lord Kennet, said the Secretary of State for Prices and Consumer Protection has, during the past month, been making statements to the effect that there needs to be a statutory back-up to the present self-regulatory system and that he is looking into that and asking questions about it. That to

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my mind does not fit in with the wholly admirable speech made by his Minister of State in another place on 16th November at column 707, when he said:
"This predominantly self-regulatory process is backed up by about 60 statutes each covering aspects of advertising, though the statute law is not foremost. The law is used to provide the necessary back-up if the administrative control should fail to be completely effective".
At column 709 he said:
"I share the view of the Select Committee and the Scrutiny Committee in another place"—
I am delighted to hear that he agrees with us—
"that two systems of regulation—one the voluntary system and the other recourse to the courts—could not in practice co-exist and that in their present form the Commission's proposals would seriously undermine the administrative control systems and would certainly not work as well".
It would seem to me that the Secretary of State, in seeking to produce additional statutory back-up to cover the self-regulatory system, is in danger of creating the very condition which his Minister of State has told us is likely to make matters worse. That is made clear by the second quotation. It would be most helpful to hear from the Government exactly what is the policy that is emanating from the Department of Prices and Consumer Protection. It would seem to me that the views expressed by the Minister of State are wholly admirable and need the fullest support from the Government, including the Secretary of State. I shall not keep your Lordships any longer as I am sure we are all most anxious to hear what the noble Lord, Lord Thomson of Monifieth, has to say.
7.29 p.m.
Lord THOMSON of MONIFIETH: My Lords, I must begin by declaring an interest. As has been indicated during the debate, one of the posts which I hold is Chairman of the Advertising Standards Authority which, as your Lordships know, gave both written and oral evidence to your Lordships' Committee. I should like to join with everyone else in congratulating the noble Viscount, Lord Trenchard, and his colleagues on the Committee, on the report that they have produced. I hope that, as it shows every sign of doing, the House will agree with the conclusions of the report, and I very much hope that Her Majesty's Government will,
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in fact, be guided by these conclusions in further discussions of this Directive in the Council of Ministers and elsewhere.
However, apart from its implications for British law and practice in the field of advertising standards, the report has very large implications for the development of Community policy, going far beyond the immedate subject matter of advertising control. Before I return strictly to advertising, I should like to say a few words about that aspect. As a former European Commissioner, it is a chastening and no doubt a salutory experience to find oneself at the receiving end of a Commission Directive. This particular Directive, as other noble Lords have said, seems to me to be unexceptionable in its aims: indeed, I think it is admirable in its aims. It is important to protect consumers from misleading advertising and, indeed, to ensure that advertising—so pervasive in our society—maintains socially responsible standards.
I was interested in what the noble Lord, Lord Hampton, had to say on that aspect. I would only say in parenthesis to his remarks about the danger of creating unneeded wants—the danger of forgetting about our finite resources—that I do not think we can expect the advertising business to take on itself the burdens related to much wider fields of political policy which are the responsibility of all of us. Indeed, I might say—and it is outside my responsibilities as chairman of the Advertising Standards Authority—that one of the conclusions I have reached as regards this country's economic problems is that we need more marketing rather than less if we are to regenerate our economy and dispose of the products of that regeneration. But, of course, the marketing must be responsible marketing according to good standards.
However, although as the report emphasises, this Directive is unexceptionable in its aims, it is misconceived in its methods. I would only add to what the report says that, apart from the methods being proposed being inappropriate and harmful inside the United Kingdom, I believe they are also quite unwise from the Community point of view. My noble friend Lord Kennet says that the only advertisements he likes are ones which are witty and amusing, and he certainly

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provided us with a witty and amusing speech. I think it is becoming known in the advertising industry that if one wants to get an advertisement past the present chairman of the Advertising Standards Authority, one good method is to make him laugh. My noble friend made me laugh with his speech, but I am bound to say that I did not think his speech conformed to what I would regard as being in conformity with the code of good Community practice.
I was rather shocked to hear him say that he finds that his colleagues in the European Parliament, where I am so glad he is now a Member, seem, as he put it, to have a total disregard for whether any proposals that come from the Commission are legal or illegal, or whether or not they are in conformity with the provisions of the Treaty. I hope that the Parliament is not becoming too careless about these matters because this is an important point in regard to this particular Directive. As other noble Lords have pointed out, no serious evidence has been produced to support the justification given in the Commission document that this rests on preventing distortion of trade within the Community. I think that the real justification for the Directive lies not in the Article 100 provision about "directly affecting the functioning of the Common Market", but in the Community programme for consumer protection and information adopted by the Council of Ministers in April 1975. As the noble Viscount, Lord Trenchard, emphasised, that programme was a very general programme which broadly laid down certain principles. I think that the judgment one has to make in the Community perspective is whether or not these principles are in fact being fulfilled in a sensible way.
The consumer protection side of the Commission's work is relatively new and, despite some misconceptions in this country, it is very much under-staffed. It is a very small and new department of the Commission. I believe that it is potentially an important part of the Community, if the Community itself is to have a human face and to do things which are relevant to the ordinary experience of the individual citizen. But, if it is to serve the consumer, it ought to beware of getting the reputation of intervening with too
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much grandmotherly fussiness in some of the details of our daily lives which are best left to national governments or, dare I say it from these Benches, sometimes best left alone altogether.
There are now a number of warning signs—this Directive is one and there was a recent Directive on doorstep selling—that the Commission ought to take a look at its consumer strategy and get its priorities right. The top priority for the consumer activity within the European Commission ought beyond doubt to be to ensure that consumer considerations are given much greater weight in the determination of the Common Agricultural Policy. Inside the Commission, those concerned with the consumer side should be taking on Directorate-General for Agriculture rather than getting in our hair here in the way they are doing. This is by far the most important and most relevant consumer responsibility for the Commission to assume. But, when the Commission moves more directly into the field of consumer protection, I think it should do so with considerable prudence and with a clear concept of what it seeks to do. I suggest the following points.
First, where public safety or health is concerned, there is a strong case for combining national regulations in a single Community regulation, though it it is still very necessary to do that in a common-sense way. Secondly, where there are distortions to trade and where there is the opportunity for an expansion of inter-Community trade, there is a great public advantage in exporters facing a single Community standard instead of having to cope with six, seven, eight or nine separate national standards. But here harmonisation should be optional for those who wish to export, leaving the Scots with their haggis, or the Bavarians with their beer to go on making them in their own peculiar way if they do not wish to send them across the internal frontiers of the Community.
Finally, where the Community has a really positive and important role to play in consumer protection is in providing comparative information about arrangements in each others' countries and encouraging member States to adapt the best practice in the Community as a whole to its own legal and administrative

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traditions. The present President of the Commission, Roy Jenkins, has just been quoted by my noble friend. I offer another quotation from the President. He said recently:
"It is no part of our philosophy or practice to enforce uniformity. What would be the purpose of trying to make the British act like the French or the Italians act like the Danes?"
But he added:
"That is not to say that all of us may not after have something to learn from others".
I very much hope the Commission will increasingly concentrate on that side of things, because I think one is bound to say that, despite these assertions, which were made in the days when my noble friend Lord Soames and I both sat in the Commission, one needs constant vigilance and constant effort to try to maintain the right sort of balance in these matters.
Clearly, in this case, the balance has gone wrong. I think that the present Commission has gone wrong basically because it seeks to apply the essential characteristics of one national system—with the greatest possible diffidence and respect to the noble and learned Lord, Lord Diplock, it is probably more the German system in the advertising field than the French system—to the Community as a whole. That is as unwise as seeking to apply our pragmatic British system to other countries of the Community. I have no doubt that the German practice, with its reliance on litigation, is consistent with German traditions. But other countries have their own ways of doing things. I certainly agree entirely with the noble and learned Lord, Lord Diplock, about the very great difficulty of grafting one legal system—one legal habit—on to another. But to hang the reversal of the burden of proof on so improbable a peg as advertising control is an extraordinary thing to do. I might just add that one of the strengths of the self-regulatory system is that under it the burden of proof lies with the advertisers. It can lie with the advertiser in a self-regulatory system; but once you get into the courts it is quite another matter to reverse that very fundamental tradition.
In Britain's case the system we have built up, as has been described by other noble Lords—and I shall not cover the same ground—is a peculiarly British
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mixture of statutory control and self-regulation, very consistent with the mixed economy that it serves. The Advertising Standards Authority side of it has recently been the subject of this report by the Office of Fair Trading, which has been described. I was happy to hear the quotations that other noble Lords have made from that report, because I think it shows that it is working reasonably well.
My noble friend Lord Kennet dealt with the question of the percentage figure it produced, the 93 per cent. figure, which he quite understandably turned the other way and then did his arithmetic. The noble Lord, Lord Mottistone, asked for a judgment about what the real figure was in terms of serious breaches of the code of practice. Our judgment in the Advertising Standards Authority would probably be that the real figure is around 2 per cent. or 3 per cent., and that is consistent with what is mentioned in the report where it says that a number of the breaches were technical breaches and not breaches of substance.
I would therefore put it to my noble friend Lord Kennet in this way: I do not think that misleading advertising makes people lose sleep a great deal at night. It would hardly be described as one of our great national problems. But if you were to say in the matter of divorce that you had 97 per cent. success in marriage, if you were to say in the matter of industrial relations that you had a 97 per cent. success in avoiding unnecessary strikes, I think that on these really important matters people would judge that the institution of marriage was not in bad shape and that industrial relations in this country were rather healthy. I think that that is a fair perspective into which to try to put these statistics.
There is general agreement that, although our British system is probably one of the most developed in the world—and I think it has been looked at independently and found to be working well—it is by no means perfect and there is room for improvement. I could perhaps tell the House that the Advertising Standards Authority will be having discussions with the Director-General of the Office of Fair Trading about the various detailed recommendations he makes; to discuss co-operatively and constructively with him

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as to how our internal procedures might be made even more efficient.
I think also that there is a general agreement that spreads from the consumer organisations, on the one side, through the Government Departments and agencies, and to the advertising business, that there would be advantage in some further statutory back-up to deal with what is commonly called the "pirate fringe" which operates outside the self-regulatory system, and to which my noble friend Lord Kennet referred. There is less agreement on how this can best be achieved, but there is a broad consensus that it is something that is best left to be worked out at the national level.
This Directive, as drafted, would not help with the real improvements needed; and this Directive, as drafted, would do very great positive harm. I was much encouraged to hear from the noble Viscount and others Mr. Burke's reaction to seeking to bring about changes and improvements in this Directive. Mr. Burke has a very important responsibility in the Commission. It is fair to say that he inherited this Directive. This Directive, rather to my surprise when I returned to London, had been gestating in the backrooms of the Berlaymont when the noble Lord, Lord Soames, and I were there. I hope that it will be possible for the Commission to amend it in the light of the general debate that has been provoked not only in the British Parliament but within the wider Community institutions. I also agree with my noble friend that, if at the end of the day it were not possible to do so, I think on this matter if Her Majesty's Government were to say, No, it would be entirely consistent with a policy towards the Community based on a firm conviction about the advantages of Community membership for Britain. There is no obligation as part of the Community to say, Yes, to everything, although I am sure in this case that it ought to be possible to find a compromise so that the admirable aims of the Directive can be achieved by each country following its own legal and administrative traditions.
If I may trespass for just 30 seconds on the debate to follow shortly about the European Monetary System, I would only say that although I think we are entirely justified in taking the view that has been formed in the British Parliament about this
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Directive, and although I believe that a negative view about this Directive is entirely consistent with a positive and enthusiastic view about Britain's real future lying in the European Community, it helps a great deal for the United Kingdom to carry conviction on these lesser matters in the Community if once in a while we would be really positive about the great issues.
7.47 p.m.
Lord REDESDALE: My Lords, I should like first to join with everybody else in thanking the noble Viscount, Lord Trenchard, for giving us the opportunity of debating the draft Directive this evening. I should also like to heartily congratulate all those members of Sub-Committee D who have spoken tonight, as well as those who took part in producing such an excellent report.
At this late stage in a debate I feel it is rather like a shy at a fair where most of the coconuts have already been knocked off and there are very few prizes to be won. However, I must at this stage declare an interest in that I currently advertise in most of the European countries; I have spent 25 years in the advertising industry, and I feel that these things are a qualification rather than something that precludes one from speaking in such a debate.
There is one thing I found in those 25 years in advertising; that is, that nearly everybody considers themselves to be experts on one side, and also of course that nearly everybody you ever talk to says that personally they have never been influenced by advertising. These are the two sides of the argument. On the other hand, some consumerists attribute quite fantastic pulling power to advertisements which not even an old-time huckster could hope for in his wildest dreams. Somewhere in between there is the true effectiveness of advertising.
Obviously the vast majority of those people concerned, such as the advertisers, the trade bodies, the agencies, and the media, subscribe wholeheartedly to the underlying concept of protecting the consumer from misleading advertising. However, this draft Directive is certainly not the way of achieving this. I cannot resist going through just one or two of the Articles, and raising one or two points. I shall try not to delay the House too

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long, especially those who are following on the "snake". I am sure that the noble Lord, Lord Soames, may be getting hungry, but he would never make a meal of a "snake"!
On Article 2 we come to the definitions. I think that this was amply covered in the report. It is obviously far too wide. Take the word "misleading", for instance. The Trade Descriptions Act in law covered this much better, because instead of using this general term "misleading" it actually says "false to a material degree". There are other bits that come up, and they were discussed at some length in another place, such as what exactly "unfair" meant. "Unfair" could, rather like the Rent Act in some ways, turn round and bite the people it is designed to protect, so "unfair" could be extremely damaging not only to consumers but advertisers, and for all the wrong reasons.
"Fear" came up and that, too, was debated. Apparently it is okay for a Government to use fear, but not an advertiser. I suggest that certain principles must be adhered to; either something is good or bad. Then there was the question of "arouses expectation" and I thought that, on this point, the noble Lord, Lord Hampton, ran away from the Directive a little, in that he was saying that false hopes could be aroused and that the whole basis of advertising, which is promise, was wrong. The noble Lord was in the industry and he must be aware that it has done a considerable amount of good, in that it increases the volume of trade so that prices can be kept at economic levels, and I need not develop all the arguments on this theme, which we know so well.
The noble Viscount, Lord Trenchard, discussed Article 3 and the section which describes omitting material information, that really touched on the point of the contravention of the codes was raised. The noble Lord, Lord Kennet, in his amusing speech (though I regret he is not in his place now) said there were about 1·5 million—though if he was referring to 25 per cent. it would be 1·75 million—misleading advertisements. As the noble Lord, Lord Mottistone, pointed out, it is a question of degree; some of those were minor infringements and therefore the figure must come right down.
The noble Lord, Lord Kennet, made other interesting points and, in his second
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intervention, admitted that he could not resist; perhaps we should call him the unresisting rapporteur! Could a self-regulatory system run alongside a legal system? He thought that perhaps it could. I do not believe it could work, although I subscribe to the view that perhaps the ASA could be given additional back-up powers through the OFT; that, I think, would be a sensible system, but I do not think the two could be run side by side as was indicated in the Directive.
Regarding Article 5, the legal aspect, I would not dream of throwing a ball at any remaining coconuts because the noble and learned Lord, Lord Diplock, ably and learnedly covered the point. However, I wish to touch on the point where the Directive seemed to be wonderfully optimistic in saying that a cheap, effective and quick method of legal safeguards could be introduced. In my humble experience, I have found the law never to be cheap—indeed, always to be expensive—and it seems to move with the speed of rock erosion. Lord Diplock covered the question of the burden of proof on advertisers and spoke of—I reiterate it only because I believe it to be so important—what is perhaps the most fundamental basis of English and Scottish law; namely, that you should be innocent until you are proved guilty. Regarding Article 8, the purpose apparently is harmonisation, although there seems to be some doubt about the total purpose. The Directive said it allowed for some countries to have stricter legislation, and that does not seem to be a move towards harmonisation.
I do not want to detain the House because the matter has been ably covered by previous speakers. I want to leave your Lordships with one thought in particular because it is vital: the self-regulatory system works because it demands observance of the spirit as well as the letter of the code, whereas—those of us who have been in business know this only too well—an ingenious copywriter could weasel-word his way around the law. I look forward to hearing from the Minister as to how the Government will proceed further with this matter.
7.55 p.m.
Lord WALLACE of COSLANY: My Lords, I wish on behalf of my colleagues

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on these Benches and on behalf of the Government to thank the noble Viscount, Lord Trenchard, for initiating the debate and for his contribution. I am sure he will agree with me that we owe a debt of gratitude to the sub-committee which dealt with this issue in so much detail. My task tonight is made somewhat easier by knowing that, apart from one issue, there is very little between us, either between the committee or the Government, or indeed between many of the speakers. I am also conscious of the fact that we have an important debate to follow, so I will not detain your Lordships for long.
I will not follow some of the light relief examples given by Lord Trenchard and some of the other examples which were adduced by noble Lords, but I am sure that the authorities responsible will take due note of all that has been said. The noble Lord, Lord Newall, and others referred to the report of the Director-General of the Office of Fair Trading. I do not intend to quote from that report because it is with my right honourable Friend and under considerable and careful study at the present time. The matter is, therefore, receiving attention. I share the interest of the noble Lord, Lord Hampton, in advertisements on the Tube, although sometimes the additions to them are perhaps a little embarrassing. I thought the noble Lord raised a moral approach to advertising, and I am sure that his views were acceptable to and fully understood by Members of your Lordships' House.
My noble friend Lord Kennet has been appointed to a difficult job by a system of pondération, something at which the imagination boggles. I have served on the Council of Europe, but it seems that the EEC and the European Parliament is a far more complicated body and I am rather pleased I have not got there. He made an important point when he spoke about appeals to fear; clunk-click is one and the tobacco warning is another. To be fair, I do not think the Commission is necessarily trying to stop those. Article 2 of the Directive defines advertising as the making of any pronouncement in the course of a trade, business or profession for the purpose of promoting the supply of goods or services, and Governments are not normally engaged in trades, bus-nesses or professions, although they
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encourage people to buy seat belts and to promote the supply of goods.
Viscount TRENCHARD: My Lords, is the Minister aware that the problem of fear does not depend just on Government advertising? I would remind him of articles like burglar alarms, fire extinguishers, safes and insurance policies. One could go on giving examples. They are all legitimately advertised from the point of view of fear.
Lord WALLACE of COSLANY: Yes, my Lords; I would agree with the noble Viscount on that point. I was referring mainly to Government-sponsored advertising. However, more generally, any definition of fear presents serious problems, but within the control procedures proposed it could also lead to long legal arguments. I believe—and I hope the noble Viscount will agree—that subjective matters of this kind are better covered, as indeed they are now in this country, in codes of practice. It all comes back to that; and I believe that is the best way to deal with the matter.
The noble and learned Lord, Lord Diplock, made a considerable contribution to the debate, and for that we are extremely grateful. He referred in particular to Articles 5 and 6. I do not propose to go into detail now because of the time factor, bearing in mind that there is a debate to follow, but I can assure the noble and learned Lord that we fully appreciate, and agree with, the points that he expressed, particularly on Article 6 which I regard as an extremely serious matter, and which involves a principle of British law that must be protected.
The noble Lords, Lord Drumalbyn and Lord Mottistone, both wanted an indication of Government policy. The Government are now considering how best the existing controls on advertising might be strengthened and improved. They do not believe that self-regulation of itself is enough, as they have made clear. They think that the codes of practice which underlie the self-regulatory system need strengthening with modern, effective, statutory, back-up framework. They are conscious that this needs to be done in ways which will not destroy the good will of the industry on which effective regulation depends. This is why

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they will give the most careful study to the recent report from the Office of Fair Trading and will listen carefully to the views of the industry before deciding on appropriate action to be taken; but they are firmly of the view that the existing system of self-regulation—and not action through the courts—is a strength to be built upon.
I believe that the contribution of my noble friend Lord Thomson of Monifieth carried weight for two reasons: first, his experience as Commissioner, and now his position as Chairman of the Advertising Standards Authority. I am sure that the words he uttered will be very carefully considered in Brussels and in other places where the Common Market and the Commission operate. I thank my noble friend for his criticism of the Commission, which will be welcomed not only by Members of this House, but by many members of the British public outside.
I thank the two Opposition speakers, the noble Lords, Lord Redesdale and Lord Newall, for their careful and considered expressions of opinion, and indeed for the restraint which they exercised in a situation where there could have been some violent criticism. I will not go into detail now regarding the contribution of Lord Redesdale, but I should say that we share his criticism of the articles which he quoted, and I think that that will meet his point, at least so far as the debate is concerned.
The Directive has attracted a good deal of criticism in this country, not least from your Lordships' own Select Committee. It is all the more important to distinguish between the content of the Directive, which certainly leaves considerable scope for improvement, and the general policy objective which underlies it. I hope that this is common ground. Your Lordships' Committee's report acknowledges (in paragraph 27) some sympathy with the aims of the draft Directive, and it is right to do so. The object of seeking improved protection for the consumer against false or misleading advertising is unexceptionable. It is a view which seems to have been shared generally in the debate in another place. With all the benefit of hindsight, perhaps it is unfortunate that the Commission should have translated this sensible object into a Directive in
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quite the present form. Because there is no doubt that certain features of the present draft have proved unduly restrictive, they have cut across our present approach to advertising control—based on a mixture of voluntary and publicly enforced measures, rather than civil law—to a quite unnecessary degree, and to an extent which makes the Directive in its present form unacceptable to the United Kingdom.
The Select Committee has rightly drawn the attention of this House to the fact that, in its present form, the Directive not only would require the adoption of effective laws against misleading and unfair advertising, and for these laws to be enforced through the courts, but also outlines in some detail the procedures by which the laws are to be put into effect. The committee has pointed to the implications of the proposed legal procedures for existing United Kingdom law and practice. It is concerned about the requirement that associations, as well as individuals, should be allowed to institute proceedings. It questions the provision for the granting of injunctions without proof of fault. It questions the responsibility which is laid on the courts to settle the terms of a corrective statement for publication. It is also concerned that the burden of proof in relation to the correctness of a factual claim is reversed in this Directive, and that the Directive might require the creation of new criminal offences.
The committee is right to question these features in the present draft Directive. They are all important matters. They have important wider legal implications for United Kingdom law and practice which, whatever their general merit, ought not to be imported on the back of a Directive narrowly concerned with advertising. However, the Government go even further. In the debate in another place on 16th November my honourable friend the Minister of State for Prices and Consumer Protection questioned whether a rigid legal procedure enforced by the courts is the most effective way of controlling advertising. The Government's view is that given the control arrangements that have already developed in this country, new provision for civil action in the courts under novel rules is not the most effective way of improving the control of advertising, and indeed would cut across the controls we already have.

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The House will recall that in giving evidence to the Select Committee the Department's representatives said that they thought that the process of law by itself perhaps was too blunt an instrument for dealing effectively with false and misleading advertising. I understand that the CBI and the Advertising Association also share this view; and, in representing their views on this Directive, both bodies have said that advertising control should be based on an efficient mixture of statutory and voluntary control. The Government agree with them. They think that those who framed the draft Directive may have failed to appreciate the strength of the system of advertising control we already have in this country.
This system was explained in some detail to the Select Committee. In this country advertising has long been regulated dominantly by a process of self-regulation, either by the Advertising Standards Authority through its codes of practice, or through the codes approved by the statutory Independent Broadcasting Authority. It has been explained that this predominantly self-regulatory process is backed up by something like 60 Statutes, each covering particular aspects of advertising. Of all these, perhaps the most important is the Trade Descriptions Act 1968, which, among other things, prohibits false or misleading statements about goods, prices and services in all areas of marketing. But the pattern of development of control in this country has been that the "front-line" controls over advertising are basically self-regulatory. Although self-regulation is operated within a statutory framework, the main effect as the pattern has developed is that the detailed statutory controls have now tended to become almost back-up powers should the self-regulatory system go wrong.
The Government cannot accept a Directive which could have the effect of undermining the authority of the self-regulatory element of the system, and not work as well. The really important feature of the self-regulatory system lies in the codes of practice which it operates. The Government are in no doubt that codes of practice are better than Statute law as the primary regulators of advertising, for a number of reasons. They can be applied in the spirit as well as in the letter: objective inter-
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pretation of the law requires it to be obeyed according to the letter, giving considerable scope for avoidance. Codes can embrace subjective questions of taste and morals, even questions of social responsibility in advertising, which are not easily definable in Statutes but which are as important for consumer protection as misleadingness or unfairness. Most importantly, codes of practice can be updated more frequently than the law to take account of continuous changes in marketing practices and the social acceptability of advertisements.
For all these reasons the Government believe that the better control for advertising than the strict legal remedy pursued through the courts would be to continue to develop codes of practice and, where necessary, to strengthen this form of administrative control within an appropriate statutorily-based regulatory framework. The Government do not disagree with the Commission that self-regulation of itself is an insufficient control and needs to be supported by statutory control, but the Government firmly believe that any development of the appropriate form of statutory control is best left to member States to develop in accordance with their existing legal traditions and institutional arrangements.
My Lords, the Government intend to press strongly for this principle as the Directive continues its passage through the various EEC institutions. There will be ample opportunity to do so. The draft Directive—for that is what it is—in its present form has not yet got very far. As your Lordships may know, it has been presented to the Council of Ministers, which has submitted it for consideration to the European Parliament and to the Economic and Social Committee. The Directive is still at this stage, and awaits the resolution of the European Parliament and the opinion of the Economic and Social Committee. The European Parliament has asked no fewer than three committees of that Parliament to report on the present draft, although the primary responsibility, as has already been indicated, is that of the Committee on Public Health, Environment and Consumer Protection, for which my noble friend Lord Kennet, as we know, is the rapporteur and who tonight must obviously be better equipped to go forward with his duties, having also studied, I understand, the

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report of their debate in Hansard of the House of Commons.
No doubt both the European Parliament and the Economic and Social Committee will suggest a number of amendments which should be made to the Directive, not only in the light of the work done by them but also in the light of many discussions which the Commission has had on this Directive with interested parties. I have no doubt that the Commission will also take into account discussion in other places, like that in another place on the 16th November and in your Lordships' House this afternoon.
There seems no doubt that the present form of the Directive will be changed. The Government think it right to remove from the Directive all the features I have mentioned and, in particular, to alter the present text of the Directive to permit advertising to be regulated by appropriate authorities—like the Advertising Standards Authority or the Director General of Fair Trading—in addition to the courts. They want the useful work of these authorities in the advertising field to continue; and they share the view of the Select Committee and of the Scrutiny Committee in another place that two systems of regulation, administrative and legal, cannot co-exist.
My Lords, I turn now to the other main claim which the Commission has made for this Directive. It has said that misleading advertising and unfair advertising are improper ways of influencing the market process. The Commission has claimed that the differing degree of legal protection against misleading and unfair advertising in member States hinders their objective of promoting harmonious development of economic activities throughout the EEC. The Minister of State has made clear in another place that the Government question the need in the context of an advertising Directive to harmonise laws in order to secure the free flow of goods and services across frontiers. For this reason, the Government understand the wish of the Select Committee to challenge the legal basis of the Directive.
It is hard to understand why legal differences in member States about advertising should directly affect the working of the Common Market. But I wonder
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what tactical advantage can be gained from pressing a narrow view of the vires of the proposed Directive on the lines which have been suggested by the Select Committee in their 38th Report. It seems to me that whether or not the Directive is validly brought under Article 100, there is nothing to prevent the Commission, upon challenge, pressing its proposals under Article 235 or some other wide-ranging article of the Treaty of Rome. I wonder whether it would not be better to concentrate on amending the content of the Directive on the lines I have been discussing.
There are a number of grounds on which the Directive in its present form can be criticised. One which I have not yet mentioned is the concept of "unfair" advertising which has been introduced into the Directive and which may have more to do with protecting advertisers from each other than with protecting the consumer. But there is good reason to believe that the Commission recognises many of the difficulties. The comments of Mr. Roy Jenkins on 1st October have already been quoted in this debate. He added—and this is very important in the context of the advertising Directive, as the Minister of State has said in another place—that the Commission,
"should not seek to include unnecessary detail",
but should,
"rather … lay down the primary objectives to be obtained and leave the detailed implementation to member States".
Moreover, he went on to say that the Commission would be very willing to consider taking action to amend or withdraw proposals taking into account these guidelines.
My Lords, I again repeat the words of the Minister of State in another place, that,
"the proper application of these welcome principles will meet all my objections to the present draft Directive. I shall continue to press for their application in all future considerations of this Directive …"—[Official Report, Commons, 16/11/78, col. 711].
Since he spoke those words we have had the words of Commissioner Burke. I have his speech with me, but in view of the time I will not quote it in any great detail.
Several noble Lords: Hear, hear!
Lord WALLACE of COSLANY: As noble Lords will fully understand; and I expect that those who said "Hear, hear!" loudest obviously enjoyed the lunch as well. However, he did say in a very helpful spirit that,
"the whole merit of the Commission's procedure is the considerable degree of public discussion which is engaged in in regard to its proposals, and, where they seem to be unacceptable, the Commission can take appropriate action".
I think that your Lordships' House is in no doubt that in their present form the proposals are quite unacceptable, and no doubt Commissioner Burke will take careful note of this important debate today, as indeed will, I hope, our own noble rapporteur. I am sure the House will join me in again thanking the noble Viscount, Lord Trenchard, and of course his committee, for the valuable and instructive work that they have carried out, for which the Government, and I am sure your Lordships' House, are grateful.
8.19 p.m.
Viscount TRENCHARD: My Lords, I thank the noble Lord for that reply, which we shall all read with great care. May I just say to him that I trust that he and the Department will bring to the Commission's attention the possibility of using Office of Fair Trading-style tests as to whether or not controls are working. I am quite clear that the result of any comparative test would be favourable to this country as compared with others. Finally, I think you have to be very careful at expecting to have your cake and eat it, with the statutory back-up that everybody is suggesting is needed. I am not saying that it is impossible, but it will be very difficult if it is not to defeat its objective.
My Lords, I thank everybody who has taken part in this debate; and, as a final example of misleading advertising, perhaps, your Lordships can consider whether or not the British Railways advertisement that it is quicker by rail is misleading.
On Question, Motion agreed to.

EUROPEAN MONETARY SYSTEM TALKS
8.20 p.m.
Lord SOAMES Lord SOAMES rose to ask Her Majesty's Government what progress has
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been made in bi-lateral and multi-lateral talks within the European Economic Community towards the setting up of a European Monetary System. The noble Lord said: My Lords, I shall try in the course of my few remarks to put some of them, at least, in an interrogatory fashion. Discussion of the European Monetary System tended to concentrate on a rather narrow front and to be largely about economic technicalities until we got the Green Paper the other day. I suppose that this is partly because it is a complicated subject but partly because our poor comparative economic performance in this country, coupled with the major differences within the Labour Government on all things European, has forced Britain—probably alone among all the Community countries—into a defensive position. But I should like to pay tribute to the fact that the Prime Minister has tried to give the whole subject an international flavour, and rightly so. It is at this end of the spectum that I should like to start; looking first at the free world's need for monetary reform and monetary management, then at what contribution Europe can make to this and, lastly, at the part that Britain should play in the European scenario.
First, the international monetary scene. It has become chaotic. The weakness of the dollar, for instance, reflects in reality the basic weakness of what is left of our present international monetary system, the child of the Smithsonian Agreement. That system—or perhaps it should be better called that non-system, as it has become—is suffering from two fundamental problems: these are, first, the instability of the exchange rate relationships and currency flows which have, in the event, proved much worse under floating rates than under fixed; and secondly, the lack of a pivotal international currency of trusted value, which the dollar was but no longer is. Indeed, the United States cannot solve the whole question of the dollar by itself. But, if it is not solved or if, on the other hand, the United States, in trying to solve it, ends up in a deep recession, then the difficulties that we live with today will seem as nothing compared with what will then ensue. In sum, international monetary instability is sapping the strength of the Western world. Over-violent swings in parity changes—first one way

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and then the other—have done a grave disservice to world trade in general.
This instability is, for instance, an important element in the doubt which has to be cast on the successful outcome of the vital international trade negotiations under the auspices of GATT which are now coming to a crunch. Why so? Because what point is there in talking about, say, a 20 per cent. reduction in a tariff between the United States on the one hand and the Community on the other when we have recently seen a 20 per cent. reduction in the parity value of the dollar with the Deutschemark over a period of 12 weeks. This therefore tends to call into question the whole purpose of the tariff element of what is known as the Tokyo Round. Yet I am sure that your Lordships are aware of the terrible risks that we should all run if these negotiations were to fail, the risks that we should all run in terms of a free-for-all in competitive protectionism.
What is more, these over-violent awings, especially over-violent devaluations, have not only proved to be the result and reflection of inflation but now they have also become, to a great extent, its cause—with all the damage that that does to the very structure of Western society. So I do not believe that it is possible to exaggerate the need for a greater degree of international co-operation in the management of exchange rate movements if trade is to grow rather than to diminish, with all that that means in terms of employment and prosperity within the free world and even of its ability to sustain its defensive guard against those who would wish to see the collapse of the Western way of life.
Now, it so happens that, through a combination of circumstances, we are, I believe, presented with a Heaven-sent opportunity to restore greater order, in that the strong desire among the countries of the European Community to bring about a higher degree of monetary stability between themselves is coinciding with the announced determination of the United States Administration to maintain within certain margins—unspecified but, nevertheless, potentially valid—the exchange rate value of the dollar. It also coincides with a strong desire on the part of the
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Japanese to bring some order into the system for fear of the real dangers to world trade of the present situation.
So, if ever the time was ripe for a major initiative to restore some order to international money markets, it is now. And what better timing or origin could there be for such an initiative than the meeting of the European Council next month? I should like to see it there agreed among Heads of State and Governments that there should be an approach by the European Community to the United States and Japanese Governments along the following lines: "We, the Community"—Ishould be so bold as to like them to say—"are determined to work through the European Monetary System to create greater monetary stability among ourselves. We want you to know that we look upon this not merely as something which is necessary as a means of encouraging investment, trade and growth within the Community but also as a contribution to what we see as the much-needed improvement in monetary stability within the Western world. We should like, therefore"—I hope that they will go on to say—"to open formal discussions at appropriate level between spokesmen for the Community itself on the one hand and your Governments on the other, with a view to agreeing, first, on the need for co-operation in bringing more order into the world monetary system and, secondly, on the methods necessary to bring this about. A suitable forum would be the economic summit where the Community is represented as such. Officials could start discussions there in January to have a paper ready for the June meeting of Heads of Government, where discussion would be taken further and when decisions could be taken and commitments made." That would be the end of my message.
I do not mean by all this that we should be urging a return to a would system of fixed parities, but rather that the Community, the United States and the Japanese authorities should come to agree upon the necessary decisions and disciplines required to restore greater order in the Western international monetary scene to the benefit of all. I see such an agreement being of primordial importance to the much-needed increase in world trade in these difficult times.
My Lords, let us not lose sight of the fact that international monetary arrangements and systems are not an end in themselves; they are but a means to an end. And that end is the encouragement and expansion of trade across national frontiers. But I also believe that in purely Community terms, the chances of the European Monetary System proving a lasting success will be much enhanced if it is related to an agreement or at least an understanding with, as it were, the dollar and the yen to co-operate together to sustain a greater degree of world monetary stability. Such an agreement would do more than anything else to remove possibly dangerous pressures on the European Monetary System, to ensure its long-term survival and its contribution to a wider European union.
My Lords, this brings me to my second point: What contribution can the European Community make to greater monetary stability? First of all, it has to cobble together a monetary system which serves the European interest in the widest sense. To this end there are evidently a number of decisions of an internal Community character which have not yet been decided and which will need to be taken at the December meeting of the European Council. These are necessary whether one looks at the European Monetary System purely in terms of European self-interest or, as I prefer to do, also as a contribution which the Community can make to the world monetary and trading scene.
Of these decisions, I will mention just two—there are many more—which seem of major importance. First, the quantity of ECUs which should be created, and what they should be used for. At present, all that is proposed is that 20 per cent. of the member States' national gold and dollar reserves would be deposited with the European Monetary Fund which would issue in return ECUs to the value of 25 billion units of account. If the ECU is going to play the part in world monetary affairs that I believe is called for from so large, important and wealthy a base as is the European Community, it should be seen as becoming one of a number of international pivotal currency options along with the dollar, the yen and perhaps SDRs. To do this, will require more ECUs. It will require both a more imaginative approach to their creation in
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return not only for gold and dollar reserves, but also for national currencies; and also in their use, which is at present envisaged—particularly by the Germans if I understand it aright—as being essentially restricted to exchanges between Community central banks.
If that is the sole purpose of the ECU, it seems hardly worthwhile creating it. Central banks deposit a proportion of their gold and dollar reserves with the European Monetary Fund. They get ECUs back in return, and then can only use the ECUs to exchange among each other as the need arises. That is not much more than a charade, to be honest. I hope that the European Council will agree that the whole question of the ECU should be made much less restrictive, both in the manner of its creation and in its use and purpose.
The other matter of great importance which is still open for decision by the European Council is the whole question of consultation among member States to bring about a genuine co-ordination of monetary and fiscal policies. This must be made a reality. It is essential if the system is to work. It seems that the Community is moving inexorably towards the parity grid system whereby the relationship between each currency has to be maintained with each and every other. But it should be agreed that when the first signs appear of one currency seeming to be about to get out of line, when the bell tolls or the light flashes—however your Lordships wish to put it—there must be immediate consultation with other member States on the action to be taken. It is, as I see it, vital that this should be just a part of regular consultation and not a mere ad hoc arrangement to deal with a specific problem at a specific time. There should be frequent and regular meetings in good times and in bad of, for instance, the deputy governors of central banks and a senior Treasury official from each country who should anyhow keep in constant touch with each other in order to make a reality of co-ordination and convergence.
My Lords, what then of Britain's part in all this? It seems as if the Prime Minister's main concern has been to steer between the Scylla of infuriating our Community partners even further by refusing to have anything to do with the monetary system, and the Charybdis of

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the anger of the extreme Left which riddles his Cabinet, Government and Parliamentary Party. What a sorry state of affairs! I must comment on what seems to be the principal argument used by those who are against our joining the exchange rate mechanism. It is that sterling might get drawn, as it were, in the slipstream of the Deutschemark, to an uncomfortably high parity in relation to the rest of the world. I believe this to be the main fear.
Nobody can of course be certain how sterling's parity is likely to move, whether we are in or out of the European system. Two things I believe to be certain. One, provided we pursue monetary and fiscal policies which are sound in themselves we will not have difficulty in getting the agreement of our partners if, in spite of all, devaluation becomes patently necessary. Secondly, what is also at least probable is that those currencies that are within the exchange rate mechanism will suffer less from the more violent swings of parity movements which have been such a regrettable feature of recent years.
But, my Lords, is there any point in our putting today such points as this to Ministers? It looks as if—though I still hope I will be proved wrong—the United Kingdom will prove to be the one Community country whose Government lacks the combination of political will and economic strength and purpose to join the whole system from the beginning. Yet I do not think I should be accused of chauvinism if I were to say that the experience we have in the Treasury, in the Bank of England and in the City on world monetary matters is greater than that which any other member State can contribute to the Community's fund of knowledge in this area.
Given the prospect of the European Community taking—as I hope it will—a major initiative to strengthen the world international monetary system, then what a tragedy it is that Britain will not apparently be able to play her part as a full member of the European system with all its risks, yet with all its opportunities. What a sad commentary, my Lords, on the affairs of our country and its lack of influence in Europe that the Government should apparently feel the need to adopt such a motheaten and weak-kneed attitude on so vital a matter.
8.40 p.m.
Lord BANKS: My Lords, I am sure that the whole House will be grateful to the noble Lord, Lord Soames, for asking this important Question this evening. Briefly, I should like to join him in seeking an answer to it. We know from the Green Paper to which he has referred and which was published last Friday what are the Government's aims. They have expressed themselves as ready to join a European Monetary System on the right terms. They have given some indication in the Green Paper of what those terms would be. What we are anxious to know is what response they have had when putting these terms to the Governments of the other Member States: whether there has been any give and take, and whether any compromise solutions have emerged.
We on these Benches have made clear on a number of occasions that we are in favour of a full European monetary union. We believe in the concept of one economy for the Community. We believe that it is by pooling our resources in that way and by standing together as one that the Western democracies can ensure their survival and prosperity and also make a positive contribution to the welfare of the world. We may be right or wrong in thinking that, and this is not the moment to embark on a discussion of that question; but anyone who holds that view sees the question of EMS in a different light. EMS is primarily an exercise in currency stabilisation, providing fixed but adjustable parities within the Community. We do not see the main issue as being whether fixed exchange rates are better than floating ones and whether a degree of stability in Europe would help world currency stability. I do not say that that is not a very important issue: I simply say that we do not see it as the main issue. Our aim is not nine currencies held together within limits: our aim is one currency for the Nine.
Nevertheless, we welcome EMS as a step on that road and so we welcome the initiative of the German Chancellor and the French President and also, before them, of Roy Jenkins. But, although we want to go much further than EMS, we are not blind to the difficulties which the introduction of EMS must involve. Indeed, the difficulties arise precisely

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because EMS falls so very far short of economic and monetary union. To impose a discipline on nine independently-managed currencies in countries with differing economic parities is a formidable task. The pressure to break apart will be enormous, and failure could set the whole concept of economic and monetary union back for years. The Government, in my view, are right to say in the Green Paper:
"No currency intervention, however large the resources used for it, and no country, however powerful, can in the long run hold an exchange rate if the fundamentals are wrong".
I am sure that the Government were right to press for the eight characteristics listed on page 3 of the Green Paper. The Green Paper explains very clearly why the basket of currencies system is preferable from our point of view to the parity grid system. I think the Green Paper is right to point to the importance of the convergence of economic policies if EMS is to last. I have expressed doubts in this House before, and I express them again, about the possibility of ever bringing the economies into a complete state of convergence. I think that so long as you have independently-managed currencies that is not possible. On the other hand, an economic and monetary system of the kind envisaged could not last for long unless there were a tendency to converge.
The Government face a difficulty, to which the noble Lord, Lord Soames, referred, in putting across these views—views which I feel are justified. They have gained a reputation for being lukewarm in their attitude to the EEC. A section of the Cabinet remains opposed to British membership, and the Labour Party on the whole is hostile to it. It would be a pity if this reputation were to prejudice the Community and to prejudice within the Community a careful consideration of the case over EMS which the Government have been seeking to make. I doubt, however, whether the Government's eight points go far enough. As The Times said on 13th October:
"If you are going to merge currencies you have to merge monetary policies and if you merge monetary policies you have to merge economic policies; you have to merge institutions; you have to have one institution in charge of money supply and there has to be a transfer of resources".
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I agree with that. The Government go part of the way with that, but not all the way. In my view, if EMS were established on the basis that was advocated by The Times in that leading article, it would not last even then unless it were designed in the not-too-distant future to lead to economic and monetary union. To linger too long on the way is to court a break-up. The time must not be too long delayed after the creation of EMS before the Member States agree to leap to monetary union, to what would in effect be a single currency. Francs, marks, lire and pounds would be local names for a single money. Of course, it would have to be a very well-prepared leap, with all the policies which are going to follow afterwards most carefully planned and thought out.
It is clear that EMS as agreed by the Community in 1978 will fall short of that kind of EMS. It would certainly fall short of economic and monetary union and of the EMS that I have suggested as a necessary prelude to economic and monetary union. It seems likely even to fall short of the kind of EMS which the Government have said they want and the question is: what should the Government do in that event? We read that they will opt for half-membership. We are told they will not join in the exchange rate system officially, although they may seek to maintain the rate of exchange from outside; but I wonder whether that would give us a full say in the running of the system. Past experience would suggest that it is only full membership which enables participation in the drawing-up of the rules. If it is right that our future is bound up with Europe, then it is better to be in, however large the risks and the dangers; and on that point I agree with the noble Lord, Lord Soames. It is better to press the eight points, and other points, from within than from without. From inside, Britain can press for the kind of EMS that the Government believe to be desirable and I would hope we would come to work for the kind of EMS which would pave the way for a genuine and comprehensive economic and monetary union.
8.48 p.m.
Lord KALDOR: My Lords, I should like to preface my remarks by saying that I find myself in agreement with many

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of the points made by the noble Lord, Lord Banks, even though, for reasons that I explained in an earlier speech, I would be strongly opposed to a European Monetary Union in advance of a political union, but I agree with him that what is now proposed is not a step towards it. I am also in agreement with the noble Lord, Lord Soames, that what the world needs is greater economic co-operation and greater monetary stability to deal with the problem of worldwide inflation and to ensure that prosperity is maintained or rather restored throughout the Western World. I want to say these things because I am going to talk more particularly about the arrangements that are now proposed and whether those arrangements serve any of the objectives put forward by the noble Lord, Lord Soames, and whether they are in the Community's interests, quite apart from whether they are in the wider interests of the Western World.
I feel that when the dust has settled on these events and the verdict of history comes to be written, the present German Chancellor, Herr Schmidt, will emerge not as a Bismarck but as a Talleyrand of the late 20th century, whereas M. Giscard d'Estaing, for all his brilliance, will go down in history as the man who was outsmarted by the Germans at the critical moment. Our own Prime Minister, I think, will emerge as the man who in the circumstances made the best of a bad job.
Why do I say all this? In the light of the Green Paper—and here I very much agree with the noble Lord, Lord Banks; the authors thoroughly deserve our congratulations for the clarity of their presentation and for the cogency of their arguments—there can be no doubt that the EMS, as it is likely to emerge from the summit meeting, is a very one-sided set of arrangements. It operates greatly to Germany's advantage and greatly to the disadvantage of most other members of the European Community—and that includes France and Italy as well as Britain, though in the case of Britain it remains to be seen to what extent our formal membership of the system will effectively restrict our freedom of action. It is possible—we do not know—that the Prime Minister may secure for us the best of both worlds. In the natural course of events, it is the potentially weaker members of the Community who
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should have come together and laid down the conditions necessary to make the system a success, in terms not only of greater stability of relative exchange rates but of concerted, well-conceived and well-directed action to achieve greater comparability in the performance of the members of the Community, and to counteract the tendency towards greater divergence in economic performance and in living standards which has been evident over the last five or six years.
However, the main effect of the proposed arrangements is not that; it is to hold down the German mark in relation to other European currencies and thus to preserve Germany's privileged position as the one large industrial country in the EEC with a large surplus in her balance of payments, especially in her trade in manufactures, which is thus able, in conditions of international recession, to maintain her domestic employment levels at the direct expense of the employment levels of other member countries.
Nothing illustrates this better than the steady and dramatic deterioration in our balance of trade in manufactures with Germany. In 1970 we had a deficit in this account of £100 million. In 1973 the deficit was £600 million. In 1976 it was £1,000 million. In the first half of the current year 1978 it was running at an annual rate of £1,800 million.
Lord SOAMES: My Lords, will the noble Lord forgive me for interrupting? Would he like to tell the House whose fault he thinks that is?
Lord KALDOR: My Lords, I should certainly not say that it was not our fault—at least not entirely. We are not the only ones in this position. France maintains an adverse balance of trade in manufactures with Germany which is quite as large as ours. It is Germany which failed in the obligations which she assumed at previous summit meetings to reach certain targets in the balance of payments. This was agreed upon when President Carter and other leaders of Western countries agreed on how to deal with the recession. Germany did nothing to reduce her surplus in the balance of payments. Your Lordships may ask: Whose fault is it? Perhaps it is not the Germans fault. But "fault" is not the proper expression to use. I am talking

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merely about the consequences. France suffers from a chronic rate of inflation which apart from a few years in the middle seventies has been worse than ours and is now greater than ours and has suffered from it for much of the post-war period. I agree that in comparison with us France can look back on a remarkable record of prosperity and progress since the war. But that progress would have been inconceivable had France not made frequent use of the weapon of devaluation, with a downward adjustment in the rate of the franc particularly in relation to the mark. As I said on an earlier occasion, if you add all these adjustments together the value of the franc now is less than 40 per cent. of what it was just before the Community was formed.
M. Giscard d' Estaing no doubt thinks that the discipline imposed by the new system will itself serve to moderate France's chronic and persistent inflation. I do not believe that this is true. But even if it were true it could happen only in circumstances in which the level of production and employment in the French economy were seriously jeopardised and in which France's standing, both political and economic, was considerably weakened in relation to Germany's.
I do not of course suggest that German policies are unwise from the point of view of Germany's national interests. Given Germany's high standard of living and relatively low unemployment, its preference for slow growth and stability combined with guaranteed free access to the markets of Europe is thoroughly sensible. But for countries like Britain—and this includes France—it may involve a dual loss: a loss due to Germany's surplus in trade and her increasing market share in the manufacturers' market of the Community; and a loss due to the general slowing down in growth rates imposed on the Community and ultimately on the rest of the world. The slow growth rate may make sense in the case of Germany, but it will not make sense when translated into the situations of other countries.
It is true that exchange rates will still remain adjustable, but only by a cumbrous and unsatisfactory procedure, as the haggling and bargaining which preceded the most recent adjustment in the exchange rates of the snake a few weeks ago has shown, and which is indeed inevitable in
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any system in which adjustment of exchange rates can be arrived at only by mutual consent. In fact, the whole notion of "fixed but adjustable" exchange rates, which was originally conceived at Bretton Woods, has proved to be unworkable on account of the large speculative movements which any expectation of impending adjustments necessarily engenders. One need only recall what happened before and after our 1967 devaluation, when we made use of our right to make an adjustment in the system of fixed exchange rates, and the enormous difficulties that we had with speculative losses both before we devalued and in maintaining the new rate afterwards; and compare that with what happened in 1972 when we gave up the fixed rate and thereby brought to an end the speculators' one-way option—that is, "tails I win and heads I do not lose"—which is inherent in the so-called "fixed but adjustable" system.
Hence the concession that we should continue with a floating rate regime, which appears to have been gained by the Prime Minister in his talks in Paris, is a very important one, even if our aim is to maintain a stable rate for the pound de facto. There is all the difference between keeping the pound floating in a formally floating system and entering on a fixed system.
I trust, moreover, that we shall still be free, as we have been hitherto, to stabilise the pound in terms of the Smithsonian average rather than in relation to the German mark or in relation to the group of currencies in the new snake, because from the point of view of our exports, our competitiveness and our balance of payments, this will make an enormous difference. In the last 20 months, the pound was completely stable in terms of the Smithsonian average. It is the same today as it was nearly two years ago, but over that period the pound appreciated by some 15 per cent. in relation to the dollar and depreciated by some 12 per cent. in relation to the German mark. Had this not occurred, had we been compelled to appreciate the pound by 30 per cent. in relation to the dollar, our non-European trade—which is the one part of our trade where we are in surplus, whereas in the EEC we are in considerable deficit—would have suffered very severely.

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I am in agreement also with the analysis of the Green Paper on the need for greater stability of exchange rates. Indeed, in a paper which I wrote on the effects of devaluations in the last 10 years, which by sheer coincidence happens to be published in a volume of essays which comes out on Thursday, I come to very much the same conclusion as the Green Paper. Those like myself who advocated devaluations and floating rates in the 1960s greatly exaggerated, as subsequent events have shown, the effectiveness of the price mechanism as a remedy to dis-equilibria. Exchange rate depreciation, as the Green Paper says, would not solve "the economic problems still facing the United Kingdom". But that does not mean that the problems do not cry out for the use of more effective instrumentalities. We need new measures to ensure the orderly growth of mutually beneficial trade, in the absence of which, in the words of M. Barre, the French Prime Minister:
"Free trade is nothing but a pretext for the strongest and the least scrupulous and nothing but a snare for the weakest."
We need, above all, instruments for the selective promotion of trade, for redressing the imbalances which hamper general international economic expansion, similar to those by which, on American instigation and support, trade was progressively liberalised between the countries in receipt of Marshall Aid, while maintaining the strictest economies on dollar imports through selective import controls.
But, apart from this, economic monetary stability, like peace, is indivisible. So far, the countries of the European Community, just like Japan, have followed a purely selfish policy from the point of view of the maintenance of world prosperity. Since the onset of the oil crisis, the Community remained in surplus on its current balance of payments in every year bar one, just as Japan remained in surplus in every year bar one. The burden of carrying the balance-of-payments deficits, which were the necessary and inevitable counterpart of the surplus of the oil producers, had fallen entirely on the United States and on the developing countries, despite repeated commitments—and this is what I think needs to be emphasised—by all the leading Western countries to a rational distribution of this burden, to a rational
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distribution of the balance-of-payments deficits.
The danger now is that the EMS, by creating a new currency bloc, will serve to isolate the dollar—the very opposite of what the noble Lord, Lord Soames, thought that it would do—and will enhance speculation against the dollar [and also the pressure on the United States Government to follow deflationary policies. It will make speculation against the dollar easier and more attractive—for reasons that I cannot go into here, as they are too technical—and encourage the risk that the world will be carried into a major depression like that of 1931, as the two blocs force contractionary policies on each other. The possible political repercussions on the unity of the West and on the stability of the social system are of a kind that, I submit, could scarcely commend themselves to Members on either side of this House.
9.6 p.m.
Lord ROBERTHALL: My Lords, we must all welcome the initiative taken by the noble Lord, Lord Soames, in giving us an opportunity to speak about this very important subject at this crucial although, as I would say, very awkward time. Both the noble Lord, Lord Soames, and the noble Lord, Lord Banks, spoke in rather visionary terms. Lord Soames wanted a new approach to a better world system and Lord Banks wanted a full monetary union, neither of which, I am afraid, is on the near horizon. I should like to refer a little later to Lord Kaldor's speech.
I begin by saying a little about the machinery of Sub-Committee A which watches economic affairs in connection with Community proposals. Your Lordships discussed in July the proposals that were then being made for economic monetary union, and I had to say then on behalf of the committee that although we considered these proposals, they were so vague and uncertain that we could not go through the ordinary procedure of summoning witnesses and asking them about the probable effect of specific proposals upon United Kingdom interests.
The proposals that we are discussing tonight for an economic monetary system were first heard of in July, and the discussions went on during the Recess, mostly

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at a very high level. Although some members of that committee were watching developments on behalf of the committee, we felt very much the same difficulty, that there were no concrete proposals about which we could cross-examine witnesses in the way that is our usual practice, which was illustrated in the earlier debate tonight in your Lordships' House.
The first thing that even approaches something concrete is the Green Paper which came out a few days ago, although even that is still extremely vague. So I think that tonight we are speaking of something about which we know very little, except in broad outline. But the sub-committee of the main committee have today had an opportunity of considering briefly the Government Green Paper and the reports of recent intergovernmental meetings. Although, as I have already said, nothing is yet sufficiently definite to justify us in making a report, it was generally agreed by those members of the committee who were present that if acceptable arrangements could be made there would be an advantage both to the United Kingdom and to the EEC in some association with the EMS from the outset.
Having said that, and speaking now entirely for myself, I should like to deal with the proposals. It is quite clear that the European Monetary System is not anything like an economic monetary union, although it might be a step towards it. It appears to be something much more like the Snake, which was founded in 1972, which we and Italy and the French had to leave and which now goes on as a comparatively small number of countries grouped about the Deutschemark. But I think the essential feature of the EMS is to be an agreement on the rates of exchange that they will maintain with one another. There will also be settled machinery and a quite substantial support fund which I think is designed to give temporary help to debtor countries who are having difficulty in maintaining the rates.
My impression of the Green Paper—and we are all talking about impressions tonight—is that the Government are very sympathetic to the idea of a much more stable monetary system within Europe and that they would very much like to maintain full relationships with the new system, if it comes into being. I agree
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with one point made by the noble Lord, Lord Soames, about the expertise that is in existence in this country, and I think it will be a great pity if we cannot make a contribution. But I also read the Green Paper as suggesting that although we express interest and co-operation and sympathy we do not feel that we shall be able to be full members from the beginning; we are not strong enough to join at present.
If I am right about this I think the Government position as set out in the Green Paper is a sensible one and is a great advance on some of the things that we have said and done in this field recently. After all, we were a founder member of the International Monetary Fund, which was designed to give currency stability to as large an area as possible of the Free World. That Fund worked extremely well for 25 years or so and few would deny that things are in a much more chaotic state now than they were during the period before the Smithsonian Agreement, when the IMF was still functioning reasonably well. I think, therefore, we should be very ill-judged if we were not prepared to take as constructive a view as possible about the steps going on. If the scheme is successful it will give stability to a very important area, an area of which we are a member, and it would be some step towards the goal of economic monetary union to which we are all committed.
I therefore think that we ought to welcome the Green Paper; we ought to welcome the endeavours of the Government to go as far as they can and their wish to play a continuing part and have an association, to use the word that Sub-Committee A used in the statement that I read. But, my Lords, looking at the difficulties of the present situation, I think there can be no doubt that they have arisen because of the emergence of inflation all through the world and inflation which goes on at very different rates in different countries. I am not myself a believer in the view that we should join something which will help us to do something that we are unable to do by ourselves, that we should dive in and submit ourselves to discipline. I do not think it would work. I do not think it would help the EMS at all if we joined it as an act of faith and were forced to leave it soon afterwards because we could not carry out the steps necessary to enable us to remain within it.

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The Green Paper pointed out, and several of your Lordships have referred already to the point, that we have succeeded in keeping the pound stable against the Smithsonian parity for the last year. I hope very much we will be able to continue to do that, and that will enable us perhaps not exactly to be a de facto member of the new system but to play at any rate some part in the direction of stability. But even if the details when they are worked out turn out to be satisfactory—and here I think the noble Lord, Lord Kaldor, put his finger on one of the great difficulties—we will all have to get used to the word "symmetry". I am almost tempted to quote an Australian poem, or at least one written about Australia, on the use of the word "bloody" in Australia. It was about a man riding his horse and one verse began:
"He said this bloody horse must swim
The same for me as bloody him".
That is what symmetry means. I do not think the new system will get off to much success unless it was the same for bloody Germany as for bloody us. There again it is speculative, and we do not know the details.
The other thing we have to do is to get our own internal troubles right. What we are suffering from now is low productivity and high inflation. What we must work towards is high productivity and low inflation. It must be faced that although the Government have done better recently they still have not done very well. We have got very painfully to about a 9 per cent. rate of inflation, against the German rate which is about 3 per cent. or below, and in the light of the Ford settlement and what is going on, I think it would be a very optimistic man who thought we were going to stay as low as 9 per cent. Until we can show that we can control these things I think to make a de jure commitment to holding a fixed rate could not be the right thing for us. All our experience since the world got into these troubles, with this very large amount of speculative money floating around, is that if you are committed to a fixed rate and you are not behaving in a way which will enable you to maintain it, you will get a flood of speculation against you; you are on a hiding to nothing, and you will end up
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leaving the rate, having lost a lot of reserves and incurred a lot of debts at the same time.
I conclude, therefore, in thinking that the Green Paper is at least a step in the right direction. I think we can welcome it, and if the attitude of the Government is what I suspect it is going to be, but we do not know, that is to say, to co-operate as much as possible but not to take the step of maintaining the rate, then I think that is the right step. I think that our attitude ought to be to wish success to the new arrangements, to hope that they will progress, and particularly to wish success to France which is acting in rather a quixotic way in offering itself as an experiment. We shall learn quite a lot, even if we are not a full member, from watching its developments. However, I am sure that it could not be right for us to commit outselves now to something we have shown we cannot do.
9.21 p.m.
Lord COCKFIELD: My Lords, this is a matter of great importance for both this country and indeed the European Community as a whole. We are members of the European Community and as long as we remain members our aim ought to be to make a success of it. We ought to remind ourselves of the opening words of the Treaty of Rome which represent the obligation which we, and the other members of the Community, undertook. It says:
"It shall be the task of the Community, by establishing a Common Market and progressively approximating the economic policies of Member States, to promote throughout the Community a harmonious development of economic activities."
It is a cardinal principle of the Community that there should be free movement of goods, persons, services and capital. Those objectives cannot, in the long run, be achieved without, as the noble Lord, Lord Banks, says, a common currency. But it will, I suggest, be a very long time before we reach a common currency and that is much more likely to be reached by convergence of economic policies first, with the emergence of the common currency afterwards, rather than the other way round. It is also a matter as regards which we need to make progress slowly, carefully and step by step.
The Werner proposals of 1971 were subsequently abandoned as too ambitious.

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The Snake proved successful for the strong economies: it was a failure for the weak economies. However, I think that in fairness it ought to be emphasised that the failure was on the part of the weak economies rather than on the part of the Snake.
The EMS is the third attempt to make progress in this area. There are some countries which seem to be willing or, indeed, anxious to join the EMS because they have weak economies and they believe that EMS will prove to be a prop for them. I do not think that we ourselves ought to approach the matter in that spirit. To a country with a strong economy, and therefore a strong currency, a system such as EMS poses no threat. Therefore, the question that we really need to ask ourselves is whether our basic policy should be one of building up a strong economy or whether we are content to see ourselves condemned to economic weakness and progressive decline.
The present state of this country is not a happy one. The noble Lord, Lord Roberthall, has referred to our lack of productivity and to our continuing high rate of inflation. Our output also is showing a not-too-happy trend. On the latest Treasury forecasts, next year's growth will fall to 2 per cent., which is only half the figure for the current year, and that compares with an average forecast for the OECD as a whole for next year of 3·3 per cent. Indeed, our own projected growth rate next year is the lowest of all the OECD countries.
It is perfectly true that membership of EMS will entail severe financial disciplines, but those are just the sort of disciplines that we need here at home if we are to beat inflation and if we are to lay the foundations of a stronger and more prosperous economy. Some people claim that by joining EMS we would have these disciplines forced on us from the outside. Maybe that would be no bad thing. However regrettable it may be, experience tends to show that it is only when these disciplines are enforced from the outside that we observe them; and this, after all, is the lesson that we ought to have learned from the IMF. If we suffer from the kind of weakness of will which has been evident in recent years, there may, in fact, be no alternative but some measure of external discipline. If this discipline
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coincides with the kind of policy we ought to be following anyway, it is an advantage and not a disadvantage.
I think it is regrettable that the Green Paper has only just been published when the European summit on these matters will meet next week. As the noble Lord, Lord Roberthall, said, it is true that we still lack sufficient information to enable a proper judgment to be reached, particularly on technical issues and on the technical merits of many of the points involved. Nevertheless, having said that, there are certain aspects of the Green Paper to which one must give an unreserved welcome—if I may say so, a welcome coupled with a certain degree of relief. This is so, first, because the Government accept in the most positive terms—and here I quote from paragraph 8 on page 2:
"the concept of a zone of monetary stability in Europe to be achieved by establishing a European monetary system".
Secondly, one must also welcome the fact that the Government express their determination to maintain exchange rate stability as an essential part of the policy of fighting inflation. They reinforce this when they say—and here I quote from paragraph 2 on page 9:
"To accept a formal commitment to exchange rate stability would not represent a major break with existing policy".
However, having welcomed these declarations of good intent, there are certain points which must be made. In the Green Paper the Government endeavour to draw a distinction between the European Monetary System as such and the exchange rate regime to which this term is popularly applied. Thus the Green Paper says at paragraph 30 on page 8:
"It is important to make clear that in the Government's view the choice to be made in the coming weeks relates not to a European monetary system, but to the narrower issue of a particular exchange rate mechanism".
That is rather like telling one's architect that one is very pleased indeed with the house that he has designed, but will he kindly omit the foundations because it is well known that from time to time foundations cause trouble. The exchange rate proposals are not only an integral part of EMS, but they are the very foundation on which the whole system is built. The simple truth is that one cannot in any

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meaningful sense of the term join EMS and stay out of the currency arrangements. If the attempt to separate the two is simply a device to gain time for negotiation, well and good. But if it is a serious expression of intellectual conviction, I suggest that it is both fallacious and misleading.
I also want to comment on the description of the proposed European Monetary System as one of:
"fixed but adjustable exchange rates".
Those words appear in paragraph 8 on page 2 of the document and I recognise, of course, that they, in turn, are quoted from the annex to the Bremen communique. I know that in this rather exotic field of exchange rate theory, as Humpty Dumpty said:
"When I use a word it means just what I choose it to mean, neither more nor less".
Nevertheless, these particular words are apt to bring to mind the fixed but adjustable rates which formed the basis of the Bretton Woods system, thus creating a form of guilt by association.
In fact, I suggest that the EMS proposals represent a considerable technical advance both on the discarded Bretton Woods system and on the now largely discredited free floating rate system. The EMS system provides a considerable degree of flexibility where this is desired. It can legitimately be argued that the general margin of 2½ per cent., which apparently is contemplated, is a narrow one. But in the case of Italy, for example, a margin of 6 per cent. in each direction appears to have been negotiated. This is in fact a very considerable margin of fluctuation indeed.
If one applied these figures to the dollar/sterling exchange rate—and I quote these figures simply because they are familiar to us; I realise that, strictly, it does not come into the EMS at all—merely as a standard to illustrate how big a margin 6 per cent. is, and if one took today's rate of 1·94 dollars as a striking rate, a 6 per cent. margin would permit a fluctuation between 1·82 dollars and 2·06 dollars. This is a big margin of fluctuation, particularly in the light of the figures which are quoted in the Green Paper, and have been quoted again in this debate, to show the considerable stability of the pound over
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the last two years. With this degree of flexibility, which might be available through negotiation, the system could prove to be an acceptable and effective combination of the virtues of both the fixed but adjustable exchange rates of Bretton Woods and the free but dirty floating of the last few years.
On the evidence of the Green Paper, one could reasonably say that the Government are pointed in the right direction. What has characterised Government policy in the financial field in the last two years—that is, since the rescue by the IMF—has been not so much an error of direction as a failure to carry the policy through. I suggest that we must not fail in this way in the case of the EMS.
If we look back over the last 25 years at our relations with Europe, the whole of our relations have been bedevilled by reluctance, delay, and half-heartedness. We did not join the Iron and Steel Community when it was set up in 1949; we did not join the European Economic Community when it was set up in 1955. Our membership of the EEC has not brought the advantages for which we had hoped and, on the contrary, we find ourselves faced with serious disadvantages which were not foreseen. But much of this could have been avoided had we come in at the beginning and had we been prepared and able to take a full part in the shaping of the Community when our industry and agriculture could have taken advantage of the opportunities offered as the Community developed from the very outset. We must not make this same mistake in the case of the EMS.
If our attitude is to be one of standing on the sidelines faintly cheering, which is really what the Government are doing, we shall lose the opportunity of making a serious impact when it comes to negotiating the actual details of the scheme and the way that it will work. These matters may be of great importance. For example, it is possible that the Government are right in preferring the basket to the parity grid, but the decision seems to be set in favour of the grid. The Government's present stance cannot have helped very much in the negotiations on matters of this kind.
For a very long time this country has regrettably been in a state of decline. We are slowly but inexorably becoming

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the impoverished gentleman of Europe. It is not a trend which is easy to reverse: it is too deeply embedded and reflects long-established attitudes which are mistaken and harmful, but reversed it must be if we are to have any hope for the future. We must not neglect any opportunity which will help us along the right road, and EMS may well present one such opportunity.
9.36 p.m.
Lord ARDWICK: My Lords, I have a good deal of sympathy with what the noble Lord, Lord Cocklield, said, though I would not be so sanguine about Treasury forecasts. Experience shows that looking into the entrails of a chicken is about as useful as many of the forecasts that come out of the Treasury. I am in a good deal of agreement with what the noble Lord, Lord Soames, said, but not in his strictures on the Government for their cautiousness. I would ask him: where are the heroes? Take, say, the economists and technicians. Nobody could have been more cautious in his wisdom than the noble Lord, Lord Roberthall, was tonight. And what about the caution of my noble friend Lord Kaldor; he did not make first base for boldness.
What about the Opposition? I welcomed Lord Soames's statement because it was the first definite and positive statement I have heard from the Opposition that they support EMS. I raised the subject in the debate on the Address and then the noble Lord, Lord Thorneycroft, skated all round the subject, though it was possible to deduce from what he said that the Conservative Party had some sympathy with it. During the course of my speech I asked him to confirm it, but I did not get a positive assertion; I got a nodding of the head from Lord Thorneycroft and from the noble Earl who was by his side on that occasion. They assented, but this is the first time I have observed the Opposition saying in terms that they are in favour of EMS. I hope that when the vital debate takes place in another place tomorrow the Opposition speakers will be as forthright and outspoken as Lord Soames has been tonight.
Lord SOAMES: My Lords, I am grateful to the noble Lord both for giving way and for what he said. There is simply no doubt in our minds that if the
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Conservative Party had been in power, following the monetary and fiscal and economic policies we would have followed, this country would be able to go along with EMS. What has happened is that with the policies of the present Government, they are frightened to take the country into EMS. That is the difference. But let us be clear that EMS will not solve our problems; the fact that we join EMS will not, as my noble friend Lord Cockfield pointed out, of itself resolve our problems. That we must do for ourselves. But we need disciplined policies and if we have those policies then certainly we can join EMS as a whole.
Lord ARDWICK: My Lords, since I last spoke in this House on the subject I have, as rapporteur, taken before the European Parliament a resolution on this subject which I think would receive the approbation of the Government, judging by their views in the Green Paper. The resolution sharply distinguished between EMU, about which the noble Lord spoke, and EMS. It spoke of the loss of national responsibility that would occur in EMU but not in the EMS. It mentioned particularly the necessity for converging economic policies, higher growth rates, less unemployment, and immediate national and Community policies towards further convergence, with a reduction of regional and social disparities, and with a transfer of resources. This resolution, passed by the European Parliament—all Parties, all nations—had all the ingredients of the case which the Government have been making in these negotiations.
I want to congratulate the Government upon the clarity and the comprehensiveness of their Green Paper. It sets out the economic policies needed in the European Community if the monetary system is to prove durable; but of course it still leaves us unable to make a final judgment on whether or not Britain should go into the system. When I say that it leaves "us", I mean those of us who want to go into the system if it has acceptable conditions. I say this because some people would not go into a European system even if it gave more than Mr. Callaghan and Mr. Healey are asking for. These people want no part in any system, or policy, which binds the Community more closely together; and some of them are totally opposed to the economic policy which the Government

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are now pursuing. Despite all the lessons, they still think it possible for Britain to spend itself out of the slump into full employment, helped by import controls—and all without the support of an incomes policy. Others think in terms of import controls, but allied to a rigorous economic policy. All these are alternatives, but they are all national alternatives, and to anyone who has lived through an era of nationalism, as some of us have, they are rather frightening.
This controversy has been bedevilled by two conflicting suppositions. The first is that if we join the EMS, we should be on the road to a European union with a single currency. This idea has been fostered by ardent Europeanists, many of whom have not—unlike the noble Lord, Lord Banks—looked into its implications. They just love the word "union" as a form of cosy togetherness. The idea that EMS inevitably takes us down that road has also been peddled by the anti-Europeanists who regard European union as a threat to our wellbeing and our national virility. The truth is that the European Monetary System is a practical answer to the Community's need to get monetary stability and economic cohesion into its customs union, into the trading zone where most of the member nations do 50 per cent. of their external trade with one another.
It is certainly true that anyone such as myself, who hopes to see full economic and monetary union in the long term, can take a little heart from EMS. It is a step on the way to that eventual goal; but it is not a long step. Between EMS and European Monetary Union there is an enormous gulf. To have a union with a single currency, such as Mr. Jenkins visualised, the member nations must give up their national sovereignty over monetary and macro-economic policies, and set up federal Community institutions to control them. It would be only a skeletal federal system, but it would be a federal system nevertheless.
This could not be created by Governments acting secretly under the cover of night. It would require every participating country to make constitutional changes to hand over these powers. In almost all the countries of the Community it would have to have a sanction of two-thirds of the Parliaments of the nine or the twelve
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nations; and that would mean the sanction of every political Party. That is a tall order—a very tall order. Nobody can hope, and nobody need fear, that we are within years of such a debate; and indeed it may never come.
Economic and monetary union is not, for most of its supporters, a considered political aim. It is an incantation, it is part of the ideological rhetoric of the founding fathers, whom I honour, handed down to a generation that has not thought seriously about its implications.
I asked some German enthusiasts the other day—when they were defining themselves as believers in EMU—when they thought the Germans would be ready to have a mere minority voice in their own economy—the greatest and most prosperous economy in Europe. They had no answer.
The Earl of GOWRIE: My Lords, may I intervene before the noble Lord leaves that point? Three years ago the Government of which he is a distinguished supporter instituted a referendum. As a result of that referendum there was exactly the kind of majority consensus in this country for which he is seeking. Would that not have been the time to make the firm commitment that he himself would like to see?
Lord ARDWICK: My Lords, the firm commitment was made before our entry in 1972, when the Heads of State or Government of the new Member Powers promised irreversibly to achieve economic and monetary union. The promise of economic and monetary union is part of the acquis of the Community which we accepted on entry and which, of course, was confirmed by the referendum; but there is no date on the promise. Anyway, as I was saying, I asked these German enthusiasts when they thought the Germans would be ready to have a mere minority voice in their own economy. They had no answer. They regarded this as a brutally realistic intrusion into a beautiful dream. What is essential for us is to look today and next week on EMS as a thing in itself. Is it desirable? Is it feasible? Is it durable?
The other supposition which has bedevilled the discussion is that this is just

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another monetary scheme among geographically contiguous States; just an enlargement of the snake, designed simply to help Germany spread the burdens caused by the delinquent dollar. We had this from my noble friend Lord Kaldor tonight. Why are the French so keen on it? The cynics say, exactly as he said, it is simply to get some outside support for a tough counter-inflationary policy. These are facile explanations. The idea that President Giscard is being taken for a ride—something new to him—seems to me to be absolute nonsense. For the last eight years at least he has been an absolutely firm devotee of a fixed currency system. But what Messrs. Schmidt and Giscard did was to pick up a set of ideas which had been developing in the Community over the years; when the Werner plan for the EMU faded away in the turbulence of six years ago, the idea of economic and monetary union was not abandoned. Bankers and academics started thinking along the lines of a parallel currency which might one day become a common currency, and then Margolin and Tindemans revived the idea of a monetary union.
Meanwhile, the Commission was trying to get the member nations to co-ordinate their economies, to align their budgetary policies, to counter inflation and to get greater stability in external balances and exchange rates. Poor Vice-President Ortoli did not get much further as the inflation rates diverged wildly and the imbalances grew. He used to say he was like a missionary vainly trying to bring the Gospel to nine recalcitrant tribes. But convergence began and has continued, and at last it made sense for M. Ortoli to present a five-year programme. Of course, it had to be presented in terms of the Community rhetoric; that is, as an advance towards EMU. He and President Jenkins were encouraged to act because as early as March 1977—March last year—Messrs Schmidt and Giscard asked for a progress report on the subject by the end of the year; and M. Ortoli then presented his programme, which disappeared into the Council of Finance Ministers. But some months later Messrs Schmidt and Giscard came up with a set of ideas which were consistent with all that he had been planning. What I am trying to show is that EMS is not just the answer to a German exporter's prayer: it is a most
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important step towards the economic cohesion of the Community, and so an important step towards its political solidarity.
My Lords, in terms of economics I am a child compared with my noble friend Lord Kaldor, who has gone, and the noble Lord, Lord Roberthall. They could chase me round the currency grid and bury me in the basket. I am a mere WEA student. But politically I have no feelings of inferiority at all. The idea that the noble Lord, Lord Kaldor, was advancing—and he has come back into the Chamber now—that Germany would like to see a weak and impoverished Europe seems to be a really remarkable one. There is nothing that Germany needs more or wants more than a prosperous Europe keeping inflation at bay, a cohesive Europe—because what Germany needs is a politically cohesive Europe in the delicate situation in which she finds herself as a kind of front-line State.
Lord KALDOR: My Lords, I am sorry to interrupt the noble Lord so soon after entering the Chamber, but I must correct an impression that I did not mean to give. Nothing I said was intended to imply that Germany in any way desires the rest of the EEC to be impoverished. That is very far from what Germany desires. Certainly none of the German leaders is conscious that their policies may lead to that consequence. I was saying that Germany, as is well known, puts a very high priority on stability and on the absence of inflation and she, for herself, is not anxious to grow faster.
Lord ARDWICK: My Lords, noble Lords heard Lord Kaldor as well as I did and they will agree or disagree with the inferences that I drew. Anyway, EMS deserves to be supported by all those good Europeanists who want a more cohesive Europe yet do not want to sacrifice national sovereignty. Again, this word "sovereignty" has been much abused by both the Europeanists and their opponents. It is the fashion to describe long-term international commitments such as we entered into when we joined NATO or the IMF or even the United Nations as an acceptable abdication of sovereignty. It is no such thing. Nor is it a loss of sovereignty when we pool competences in

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the Community. A loss of sovereignty is when you give something away for ever; and if you want to get it back often you have to have an army to help you. A pooling of competences is just a loan, which you can retract at need, if you think it essential to do so.
Nobody is going to be locked in the EMS for ever. Nobody is going to say that the value of each currency is fixed and immutable which was the final goal of Werner; merely that you will try to follow policies which are compatible with that parity and, if you fail, then the parity can be changed. In spite of all the evidence to the contrary, there are still quite a number of people who regard floating—that is, the right to let a currency lose value—as a useful and precious national asset. One can certainly see it as a useful alibi for Governments who can blame their own economic policy failures on blind and malevolent market forces.
But where has it got us? Where has depreciation got the United States and its powerful economy? Has a strong exchange rate ruined German exporters despite the enormous revaluation of the mark against the dollar—something like 100 per cent. in the 1970s? Of course, in EMS, the possibility of devaluation by general agreement remains. You must have a safety valve. But that means that a Government obliged to devalue must ask why. It must ask what has gone wrong with its economic policy that it should have to accept this punishment.
I rejoice that our Government have turned their back on exchange rate policy as a weapon. Mr. Healey said:
"We do not regard the soft option of depreciation as a desirable one."
The lessons have been well learned. He added:
"Stability in exchange rates cannot be achieved through intervention unless the underlying economic situation is appropriate."
We have learned a lot in the last seven or eight years.
"We do intend"—
he says—
"to pursue fiscal and monetary policies which are likely to keep our rates stable whether we are in the EMS or not".
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Finally, he argued, if you decide to maintain a fairly stable currency and if you think you can pursue the appropriate internal policy for the purpose, the question is whether the role of intervention will be easier and cheaper for you in a collective system than if you are on your own. I agree with that, though I think he was putting it too narrowly. Even if it is not so cheap, it might be as well to go ahead. It might be in Britain's wider interest to pay a premium to join the System.
We can now look back on the early years of the decade and believe that these were exceptional times. The dollar was finally laid low by the expenditure of the Vietnam war. That is not going to happen again. Then followed the rise in commodity prices as all nations tried to expand together. Is that going to be repeated? Then there was the gigantic rise in oil prices. Will they ever go up five-fold again? Then there was the incoherent response of floating, and each nation going it alone. This era of the permissive society applied to currencies may well be fading away. The dollar is no longer being neglected. It is being tenderly nursed. Throughout Western Europe we are all following counter-inflationary policies with some success. The voters are longing for stable prices. Most people have come to grasp that in today's conditions price inflation is not a creator of jobs, but a destroyer.
My Lords, I know the difficulties for the Government of timing. I believe that perhaps a summit will not produce satisfactory answers in time. I know that there are political difficulties—which would be lessened if the Opposition spoke out loud and clear in favour of EMS as it has tonight. Yet I still hope that, if not at once, before long, Britain may find it possible to join EMS and at last play a leading role in the construction of the Community.
9.57 p.m.
Lord REAY: My Lords, we can be grateful to my noble friend Lord Soames for having put down this Unstarred Question. Thereby this House has been given the opportunity to discuss this matter in the most unsatisfactorily brief

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and hurried period, as the noble Lord, Lord Cockfield, pointed out, that will have elapsed between the publication of the Green Paper last Friday and the meeting of the European Council next week, when this issue will have to be decided. Also, we can be grateful to my noble friend for the very interesting, powerful and, above all, constructive speech that he made—constructive in the way it pointed out some of the things that we could be saying in the councils of the Community, and some of the initiatives we ourselves could be taking rather than some of the complaints which we have tended to make in the recent past.
There is general agreement that the objectives of the proposed EMS are desirable, that greater monetary stability in the world at large is an objective worth pursuing—indeed an objective it is essential to pursue—and both major Parties would at least go so far as to say that we should not stand wholly outside the EMS and that, in principle, we should aim to be fully integrated members at some later date, if not now. The question I should like to ask is: If at some later date, then why not now?
The Green Paper makes very clearly the point that there has been a growing disillusion with floating exchange rates; that they have not eliminated payments balances in the way that had been hoped; and that currency movements have become exaggerated by speculative pressure if no restraints are operated. There has developed a strong desire which has been reflected in the policies and statements of Governments—and I quote from the Green Paper:
" … in situations as different as, for example, those of the United States, Japan, Germany, France, the United Kingdom and other countries of Western Europe"
—to move back towards greater exchange rate stability. In paragraph 33 of the Green Paper it is stated:
"The Government sees no objection of principle against entering into international agreement to maintain stability in the exchange rate with the help of a co-operative credit and reserve asset arrangement: provided they are satisfied that the timing and nature of the agreement is right. It is wholly appropriate that we should do this within the European Community to which we belong."
In other words, the Government accept the principle of a Community-based scheme
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to stabilise exchange rates. The question then is: Why should the timing be wrong?
Sterling, in terms of Smithsonian parities, is now stable and has been for almost two years. It is Government policy, moreover, to maintain the exchange rate. The Government do not wish to retain the freedom to devalue the currency as a stimulus to export. As the noble Lord, Lord Ardwick, has pointed out, that is perfectly plain from the Green Paper. It is because the Government now fear more the consequences of a depreciating pound on costs, and therefore in their fight against inflation, than they see its value as a stimulus to exports. The Government, of course, are afraid of the strength of the mark, and that is the reason why the Government earlier in the negotiations concentrated their criticism on the parity grid intervention system, because, unlike the basket system, this would not have left the Germans with the exclusive responsibility of intervening to bring their strong erring currency back into line.
But is it the British who are most vulnerable? What about the Italians, who do not have massive contributions from oil to help their balance of payments? What about the French, who have taken an enormous gamble in joining and in promoting the EMS, when their inflation rate is at least three times the German rate and is even higher than ours? Of course, EMS may break down—and it would be right, as my noble friend Lord Soames has said, to take every step to see that it did not—if we were members; but of course it might break down. As the Green Paper points out, inflation differentials between member States are much greater now than they were when the snake was set up in 1972, and yet the United Kingdom, Italy, Sweden and France on two occasions were forced out of it.
However, is the danger of it failing a sufficient reason for us alone not being a founder member? I would suggest it is not. In fact, of course, there is a reason why we are not joining—and I align myself here totally with my noble friend Lord Cockfield when he says that to pretend we can half-join is really far more akin to not joining; you cannot claim that

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you are joining a scheme and not join the basic exchange rate intervention system.
What I criticise the Government for is the fact that they were not more frank in their negotiations originally. If the Government had embraced the principle of the EMS even as warmly as they did last Friday in their Green Paper, and if they had done so when negotiations first began, and then if they had gone on to say, "Of course it will be very difficult for us to join now unless we can show that something really is going to be done to give us what we want in regional policy or in the establishment of a really substantial Regional Fund", and if the Government had proceeded along those lines, we might have got somewhere-even to the point of the Government's feeling that they could sell full membership to their own Party. Now I fear it is too late. I think we have squandered a negotiating possibility.
It is plain that concessions are won by countries who join a scheme like this rather than by countries who do not. Italy has gained the freedom to allow her currency to move in a 6 per cent. band on either side. Ireland is asking for £650 million over five years to offset any deflationary effects for her on joining the scheme. We get nothing—no promises of a Regional Fund, no promises to reform the CAP and no promises to renegotiate for the second time the budget arrangements. We are coldly told that all such questions have nothing to do with the matter in hand. All we get is a sort of permission not to join. To add insult to injury, it is Ireland who is likely to get even more in compensation if in the end we do not join.
The Government, I suggest, went off on the wrong track when they based their negotiations on criticism of the intervention system that was to be used, because everybody knew that the British Government either had already decided not to join for political reasons or else was postponing a decision. At worst, therefore, it even looked as though the Government were by this means preparing a false excuse for not joining the scheme. Neither this Government nor any other will win concessions in the Community
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if we negotiate in such a patently insincere manner.
If we were to join, we could emphasise that if necessary, as the Green Paper brings out, the scheme will include provision for currency realignments. The noble Lord, Lord Ardwick, emphasised this. It will not have to be permanently rigid. But there is also likely to be provision for temporary leave of absence, as it is put; also, as in the case of the snake, it will be possible for a member State to leave the system altogether in the last resort. It would be better to do this and to join than stay outside and say that we hope to join later.
Whether it is now too late for us to join, I do not know. All I can say is that taking account of the fact that influence in Community affairs is won by being inside rather than outside, taking account of the fact that this Government avow that they wish to pursue the same economic policies whether or not we join the EMS; that they accept the principles and purposes of the EMS; and, not least, taking account of the fact that our not joining will break our currency union with Ireland with quite unexplored consequences, I believe that we are likely to lose more than we gain if we stay outside, whether the scheme fails or succeeds.
As for the argument of economic sovereignty, the EMS will only prevent us from doing either what the Government have already ruled out in the way of policies, or pursuing the kind of undisciplined policies that I would not wish to see any Government pursue anyway. So far as the City is concerned, it would be very sad indeed, and we definitely run a risk of being excluded in the future from playing a proper part in the formulation of legislation coming from the Community, as it may affect our financial institutions. We run a great danger of not playing the kind of part that we would otherwise be able to play if we were a member of a scheme of this kind. If the die is cast, then I fear that this error, as I see it, will have to count as part of the long, painful and continuing story of Britain's path towards acceptance of the fact that she is a member of the European Community, and I hope that it will be corrected as soon as possible.
10.7 p.m.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, the noble Lord, Lord Soames, in posing this Question, went a good deal further in his remarks than the Question itself implied, and surprised me by being so lukewarm towards the actual proposals under discussion, which he suggested were rather too narrow and parochial, and what he said recognised the limitations in a world context of any EMS of the kind now being considered. What he desiderated was something on a much grander scale, and certainly I would go along with him in that. The Government have always attached great importance to stability in the international monetary system, and if EMS comes into being, as it surely will, we would hope that the European Monetary System will be a first stage towards greater currency stability worldwide. The Government have, indeed, publicly welcomed the measures taken by the United States Government to stabilise the dollar in this same context. But I do not want to follow the noble Lord any further down that road, because of the Question that has been asked.
I would also regret that the noble Lord found it necessary to make a ritual attack upon the Left of the Labour Party. There are cogent reasons, other than narrow political ones, for looking very carefully and very critically at a particular scheme that is evolving. The noble Lord, Lord Cockfield, and my noble friend Lord Kaldor—hardly wild men of the Left—gave some cogent reasons for looking carefully at the system that is evolving, and indeed as more than one noble Lord has pointed out, the history of the snake provides another reason for looking very carefully to see that the system that we are thinking of joining is technically sound.
I do not know how many of your Lordships have taken the trouble, as I have done, to read carefully the evidence that was submitted to the Expenditure Committee of the House of Commons—the General Sub-Committee. But your Lordships will find that there are very powerful economic arguments put forward there—I do not say that they are good or that they are bad—by many economists for doubting the technicalities of the present scheme. Accordingly, I think that one
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can properly say that the Government's position is a sound one: to look very carefully at what is proposed. Again, it was hardly a voice of the Left which wrote in the first leader of The Times on 25th November 1978:
"The Prime Minister is well justified in the position that he seems to be taking. On the one hand, this country has as strong an interest as any in any progress towards greater exchange rate stability. On the other, an enlarged Snake arrangement is almost certain to break down sooner rather than later, damaging the cause of European monetary stability in the process and perhaps provoking more of the currency instability that it was intended to reduce."
I think that there are powerful arguments, therefore, from sources other than the Left of the Labour Party for looking with great care at this scheme, particularly when we are reminded by the noble Lord, Lord Cockfield, that this is not the first such scheme of its kind to be tried with a view to dealing with the difficult situation that has arisen, particularly within the last eight years or so.
Again, in posing this question the noble Lord, Lord Soames, rather suggested that we were paying far too much attention to detail. Her Majesty's Government are not paying too much attention to matters of technical detail and losing sight of the grand design. I repudiate also what the noble Lord, Lord Reay, has just said. Her Majesty's Government have consistently supported the concept of a European Monetary System which included mechanisms for achieving stable relationships between exchange rates in Europe. The Green Paper—I have particularly in mind paragraph 8—is a clear reaffirmation of the Government's support for this principle. But the details do matter.
The experience of various European countries, including ourselves, with the snake has demonstrated that unless the details are thought through properly, unless the mechanics are properly worked out, unless the system properly takes account of the economic, political and international pressures which each member is likely to have to face after joining, it will not work. If a particular scheme were in this sense economically or technically unsound but, despite that, came to be adopted because of what was seen to be some overriding political imperative and

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if, because of its economic technical weaknesses it failed, in the sense that members had to leave it, as they left the snake, or had to adjust their rates frequently and prematurely, then that very failure would be likely to harm the aims and aspirations of those who fathered it or supported it for primarily political or idealistic reasons.
Lord SOAMES: My Lords, would the noble and learned Lord give his mind for a second to the fact that it is not only Her Majesty's Government who are interested in these matters and the technicalities involved? There are nine member countries of the Community. Why does the noble and learned Lord think that it is only the British who are not going to join this scheme, or who, apparently, are not going to join it in total? Does the noble and learned Lord attach no importance to the technicalities of the scheme?
Lord McCLUSKEY: My Lords, I have certainly made no such suggestion. I was dealing with the point that was made by the noble Lord, Lord Soames, in opening, that we were, in a sense, losing sight of some grand design by being obsessed with technical details. It is the details which matter at this particular stage.
Lord SOAMES: My Lords, for the others, too.
Lord McCLUSKEY: Yes, my Lords, for the others as well, of course. The others must look very carefully at the details and, indeed, they are doing so. I am astonished to hear from the noble Lord, Lord Reay, who has just spoken, that the Government are to be criticised for putting forward their basket proposal, a proposal which I understood the noble Lord, Lord Cockfield, at least mildly to favour. The noble Lord, Lord Reay, criticised the Government for putting forward this proposal because, somehow, it seems to be anti-European. It is right for us to put forward a proposal which we regard as being sound and one which will help the system to work. The system which is agreed at Brussels on 4th and 5th December is one which each country must decide whether or not to join.
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I would remind your Lordships that the proposals were not "heaven sent", to use the expression used by the noble Lord, Lord Soames. In fact, they emerged from proposals put forward by the French and German Governments at the European Council meeting at Bremen on 6th and 7th July. Since that time, if I may return to the Question itself, there have been regular meetings of the Finance Council of Ministers and official committees on this particular subject. There have also been a large number of bilateral discussions. Indeed, as your Lordships will know, within the past week the Prime Minister has had discussions with Signor Andreotti, President Giscard, Mr. Lynch and M. Thorn of Luxembourg today. In addition, my right honourable friend the Chancellor of the Exchequer has had frequent contact with Ministers of Finance in other countries. All this is leading towards the meetings in Brussels next week. Your Lordships will recall that at the Bremen meeting in July it was decided that at the meeting next week decisions would be taken and commitments made.
Many of these discussions have been technical, but a good deal of progress has been made, and subject to the European Council meeting agreement has been reached on the creation of a new European currency unit and its issue against deposit of reserves by those countries wishing to participate. Agreement has also been reached in principle that a European Monetary Fund will be set up. This major enterprise will take up to two years to accomplish and no doubt there will be detailed problems on the way. But the concept of the new fund is clearly established. In the interim period, the existing Community credit facilities will be expanded to the figure mentioned of 25 billion European units of account and that figure is now accepted by all members of the Community. So there has been some progress on this point since the Government published their memorandum on 1st November.
Discussions continue about the details of the proposed arrangements to apply margins of fluctuation to the Community currencies together with rules for intervention in the currency markets at these margins. There has been considerable progress here too, but, again, all the

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discussions have taken place without commitment by those concerned and subject again to a final decision by the Heads of Government at the European Council. Again, if I may reply to a point made by the noble Lord, Lord Reay, about concessions won by Ireland, nothing has been won by anyone so far. All matters remain to be resolved at the meeting next week.
Our Government have thought it right to contribute as fully as possible to all these discussions because they have always believed in the principle of greater exchange rate stability and regarded that as a highly desirable objective. Indeed, the Prime Minister—and I remind the noble Lord, Lord Reay, who seemed to think otherwise—made this one of the key features of his five point plan which he put forward in the early part of 1978, and this plan was adopted as the basis for discussion and decisions at the Western economic summit in Bonn in July.
The Government have put forward a number of basic requirements for a system of currency stability in Europe. Their principal requirements are set out at paragraph 10 of the Green Paper, and I am grateful to the noble Lord, Lord Banks, for recognising their value. All of these are important, but I want to draw particular attention to two of them which lie at the heart of the technical discussions about parity grid, baskets and deviant currencies, which are also described in detail in the Green Paper.
Requirement No. 3 is that the system should provide a basis for improved economic growth and higher employment in the Community, rather than impose further constraints on growth and employment. This is of course a key point. To many people exchange rate stability may be desirable in itself, but the main test of its usefulness must be whether it contributes to improving the rate of growth and reducing unemployment. As the noble Lord, Lord Soames, said, it is a means to an end, not an end in itself. If the European Monetary System were guaranteed to improve the rate of growth and reduce unemployment, that would be an extremely attractive proposition.
The Government's view is that the system will have a much better chance of achieving this desirable result if it provides
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for symmetrical or comparable obligations to fall on its stronger and weaker members. This is not a new point in international financial discussions. It was widely discussed, for example, when the IMF was set up in the 1940s, and some think that the IMF never achieved the desirable degree of symmetry in its treatment of the weak and the strong. It is certainly a difficult thing to achieve. A country whose currency is under attack is under great pressure to take action to stop the outflow of its reserves. We know this from our own experience in 1976. A country with a strong currency, on the other hand, experiences no such direct and immediate pressure. As its reserves rise it may experience some increase in money supply, which may in turn lead to upward pressure on its inflation rate, but this is a comparatively slow process compared with the immediate pressure faced by the deficit country.
That is why Requirement No. 4 is so important. The system should, in the view of the Government, impose obligations on its stronger members symmetrical with those falling on its weaker members, and it was with this requirement in mind that the Government proposed that the EMS should be based firmly on the ECU as its reference point. It was not a patently insincere proposal, as the noble Lord, Lord Reay, described it; it was a genuine proposal to try to solve a real problem. Each currency would have a margin of fluctuation round its exchange rate with the ECU. Thus a currency exceeding its margin could readily be identified as "deviant" and appropriate corrective measures could be applied. By contrast, other countries in the Community favoured continuation of the parity grid arrangement, which is an important feature of the present snake, which of course we and other countries left in 1972 and subsequently. Under that system each of the currencies is permitted a margin of fluctuation around its exchange rate with each other one. In this system two currencies will always reach their margins simultaneously at opposite ends. It is difficult to identify the deviant currency under such a system and thus it is hard to get agreement on corrective measures. Again this is a matter which the Government put forward with sincerity and in a desire to produce a workable system.

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Some progress has been made on this issue as well. The Government have modified their original position and are now studying a compromise proposal which another country has put forward in which both systems would have a place. But the Government have continued to urge their view that in the operation of the compromise arrangements comparable obligations must be placed on the weaker and stronger members of the system. So far the Government's proposals have not been accepted by all other members of the Community, although the United Kingdom is not isolated; there are others who support it. Discussions on this are likely to continue right up to the European Council meeting itself. I do want to emphasise this point. It cannot be "un-European" for the Government to go forward with what they believe is a technically sound proposal, to modify the proposal in the light of representations by others and continue to argue in favour of what they believe to be sound. That cannot be "un-European", and I do not see how it can be suggested that it is.
Another area where some progress has been made, and is still being made, is in the field of resource transfer. The Community has as one of its essential longstanding objectives that of achieving economic convergence between its different member States. This, of course, becomes even more important in the context of proposals for an EMS. Everyone recognises that without convergence of economic performance of members any monetary system is likely to come under strain. It was largely at the insistence of my right honourable friend the Prime Minister that it was agreed at Bremen that there should be studies of the measures necessary to strengthen the economies of the less prosperous members of the Community in parallel with the studies of the monetary proposals themselves. These studies have been carried out by the Community's Economic Policy Committee and their report will be considered by the European Council when it meets next week.
Lord SOAMES: My Lords, I wonder whether the noble and learned Lord would allow me to intervene. Do we have to take it for granted that this country is one of the weaker members? Is this something we just take for granted despite North Sea
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oil, that Britain has to be a weaker country within the Community? If so, why?
Lord McCLUSKEY: My Lords, the term I used, which is well understood in this context, was, "one of the less prosperous members". There are three countries regarded as the less prosperous members. They are Ireland, Italy and the United Kingdom. That will hardly come as an astonishing surprise to the noble Lord, Lord Soames. That is the context in which I used that term. The Government will be pressing for action to be taken on the basis of the report of the Economic Policy Committee. So far as the Community budget is concerned, it is well known that the Government believe that the resource transfers through the budget must be brought into line with the Community's own objective of economic convergence.
In conclusion and in relation to the Question which I have been asked, as a result of these bilateral and multilateral discussions no Government are finally committed to any particular aspect of a scheme for a European Monetary System, but it seems reasonably certain that decisions will, in fact, be taken as promised on 4th and 5th December. A scheme will probably start on 1st January 1979. It is reasonably certain that there will be fixed exchange rates with provisions for realignment by mutual consent. It is reasonably certain that realignments will be less frequent than now under the float. It is reasonably certain that the amount of credit will be, as I have indicated, 25 billion European units of account and that the EMF will replace the existing EMCF in about two years, and of course, there could be wider margins of fluctuation for those countries which wanted them.
I hope that the House will understand that I cannot go any further than I have gone tonight and, indeed, than the Green Paper has gone. I acknowledge with gratitude what noble Lords have said about the quality of the Green Paper. It saves me having to say it, but I acknowledge what has been said. I hope that your Lordships will understand that I shall rest upon the Green Paper and that the Government will, having listened to this debate and having listened to the debate tomorrow in another place, approach their decision in the light of the best judgment they can possibly make.

BRITISH RAILWAYS (SELBY) BILL
Brought from the Commons, read 1a, and referred to the Examiners.
TYNE AND WEAR PASSENGER TRANSPORT BILL
Examiners' Certificate that no further Standing Order is applicable: Ordered to lie on the table.
  AIRLINE TRANSFERS: HEATHROW TO GATWICK
  AIRLINE TRANSFERS: HEATHROW TO GATWICK
  CZECHOSLOVAKIA: CHARTER 77 MOVEMENT APPEAL
  CZECHOSLOVAKIA: CHARTER 77 MOVEMENT APPEAL
  HAMMERSMITH FLYOVER CLOSURE
  HAMMERSMITH FLYOVER CLOSURE
  IMPORT STATISTICS
  IMPORT STATISTICS
  NATIONALITY LAW: GOVERNMENT PROPOSALS
  NATIONALITY LAW: GOVERNMENT PROPOSALS