Sitting of 12 February 1979

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: It would be a help if we could have even greater brevity than Welsh Members normally show.
  WALES

    National Coal Board (Northop)
    Sir Anthony Meyerasked the Secretary of State for Wales what representations he has received from individuals and organisations concerning the operations which the National Coal Board proposes to carry out at Northop.
    The Under-Secretary of State for Wales (Mr. Alec Jones): My right hon. and learned Friend has received a total of five letters over the past four years.
    Sir A. Meyer: Is the hon. Gentleman aware of the great anxiety felt by people living in the village of Northop that the present planning permission may be taken to cover permission to start a mine in the immediate vicinity of the village, and that they will have no effective way of protesting against it?
    Mr. Alec Jones: I understand the great anxiety to which the hon. Gentleman refers but one has to try to strike a balance between the need to recover about 700,000 tons of steam coal, providing 50 additional jobs, and the environmental impact. The responsibility is principally that of my right hon. Friend the Secretary of State for Energy. If there were statutory objections, a public inquiry would of course be held.

    Liquor Licensing Laws
    Mr. Knoxasked the Secretary of State for Wales what are his statutory powers in relation to the liquor licensing laws in Wales.
    The Under-Secretary of State for Wales (Mr. Barry Jones): My right hon. and learned Friend has no such powers.
    Mr. Knox: I accept that, but the Secretary of State must have an interest in this question. Does the Minister agree that great benefits would accrue to the people of Wales, and indeed to tourists in Wales, if the recommendations of the Erroll report on liquor licensing were implemented? Will the hon. Gentleman try to persuade the Home Secretary to introduce such legislation?
    Mr. Barry Jones: The hon. Gentleman has raised a very sensitive subject. This is a matter for my right hon. Friend the Home Secretary.

    Public Transport
    Mr. Ronald Atkinsasked the Secretary of State for Wales whether he is satisfied with the state of public transport in Wales; and if he will make a statement.
    Mr. Barry Jones: Like all hon. Members, my right hon. and learned Friend and I would like to see improvements. But we are satisfied that, within the resources available, a good service is being provided by the organisations concerned, including the county councils, which have a statutory duty to ensure that an adequate public transport system exists within their areas.
    Mr. Atkins: Can my hon. Friend assure us that the central Wales line, the Cambrian coast line and the Shrewsbury-Cardiff lines will be kept open? If they are to be kept open, will my hon. Friend prevent them dying through lack of maintenance?
    Mr. Barry Jones: I am aware that my hon. Friend feels very deeply about this matter. British Rail is responsible for operating the passenager rail network. There are no proposals to close any of the passenger lines in Wales.
    Mr. Gwynfor Evans: Is the hon. Gentleman aware of the growing unhappiness of old-age pensioners about their

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    ability to travel by public transport when they have no private transport available? In many places in my constituency they can do no more than go to the chemist four or five times a year because that uses up their allocation. Can this matter be reconsidered?
    Mr. Barry Jones: This is a real problem in many parts of Wales. I should stress that the Government have already made clear their desire that there should be an off-peak half-fare concession for pensioners as a standard on local bus services. At the same time, the level of concession is a matter for the local authorities, which receive financial assistance from the rate support grant.
    Mr. Anderson: Is not one of the most salient factors of our rail system in Wales that not one mile of rail is electrified? In view of present uncertainties about the future availability of oil, will the Welsh Office press, at the highest level, for speeding up electrification in the Principality?
    Mr. Barry Jones: The future electrifiction of the rail network is primarily a matter for my right hon. Friend the Secretary of State for Transport. He is reviewing the situation with British Rail.

    Advance Factories
    Mr. Ioan Evansasked the Secretary of State for Wales how many advance factories were built in 1978; and how many are being proposed for the future.
    The Secretary of State for Wales (Mr. John Morris): Sixty two advance factories were completed by the Welsh Development Agency and the Development Board for Rural Wales in 1978. At 31 December 1978 a further 141 units were under construction. Work is already scheduled to start during 1979 on another 151 units. Last week I announced a new programme of factories to be built by the DBRW. I hope shortly to approve a further advance factory programme by the WDA.
    Mr. Evans: I thank my right hon. and learned Friend for that encouraging reply. Will he keep up the programme of building advance factories to meet future demands of industrial developers? Will he have special regard to the general requirements of the valleys of South Wales—the mouths, the heads and
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    the hearts of the valleys of South Wales —and in particular see that advance factories go up again in the Hirwaun industrial estate and the Aberamman lands estate, which is being developed by the WDA?
    Mr. Morris: Certainly, the needs of the valleys were very much in mind in all the allocations that have been made. As regards my hon. Friend's special plea for his area, he will know that nine units are under construction in the Cynon Valley travel-to-work area, and a further four units are in the pipeline. I shall bear in mind not only my hon. Friend's needs but those of the valleys all over Wales in a future allocation that I hope to make shortly.
    Mr. Wigley: Is the Secretary of State aware that many factories announced 18 months ago for Gwynedd have not yet been started and do not appear to be ready to be started for several months? Is he satisfied that there is a sufficient controlling mechanism over the WDA to ensure that the programmes, once announced, are carried out?
    Mr. Morris: I know the hon. Gentleman's concern, which I share. I discussed the matter with the chairman of the WDA only in the past few weeks. I am glad to say that by far the greater part of the factories programme for Gwynedd will be completed before the end of 1979. Already this year eight units at Holyhead have been started. There have been substantial difficulties in the area because of the difficulty of acquiring suitable land.
    Mr. Kinnock: Whilst I welcome the efforts of my right hon. and learned Friend and his Department and of the WDA to make provision for advance factories in Wales, can he tell me, in the interests of Wales, whether there is any material evidence to suggest that following the setting up of the Welsh Assembly there would be "better employment opportunities for Wales", in the words of the chairman of the "Yes for Wales" campaign?
    Mr. Morris: Matters for the general economy will remain at Westminster and will be the responsibility of the Secretary of State. That is made abundantly clear. But I very much hope that within its block grant the Assembly will so organise

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    itself as to ensure that there will be from that quarter assistance to develop the economy generally as regards housing, roads and matters ancillary to the development of the economy as a whole.
    Mr. Wyn Roberts: Can the right hon. and learned Gentleman confirm or deny the report in Saturday's edition of the Western Mail that the Development Board for Rural Wales has no more advance factories to let? Can he say whether the programme of advance factory building is running on time?
    Mr. Morris: I am glad to see that the hon. Gentleman shares my interest in the DBRW. As I was announcing and building advance factories over the years, the hon. Gentleman and others were criticising me for building factories and not being able to let them immediately. The DBRW was enormously successful in letting a vast number of advance factories last year. That is why, with that confidence, and knowing that my judgment was justified, I was able to announce a new tranche in excess of 24 factories. I announced a new programme of advance factories for Mid-Wales in the past fortnight, as the hon. Gentleman would know if only he had watched the press.
    Mr. Abse: With reference to his reply to my hon. Friend the Member for Bedwellty (Mr. Kinnock), does my right hon. and learned Friend agree that not one penny more will be given under the block grant to the Welsh Development Agency to create one job? Therefore, why does he not deny the spurious claims being made by the organisation that he supports?
    What criticism is my right hon. Friend making of the WDA now, when he speaks of greater efficiency in the disposal of its funds? Is he unable to control or direct the WDA? Is he asking, as usual, for thousands more new civil servants to come into existence because he goes around Wales claiming that he cannot do his own job and control the WDA?
    Mr.Morris: As my hon. Friend knows, I am the last person to claim that I am not able to do my job. I have never suggested that there would be any excess money as a result of the Assembly. If he would do me the courtesy of listening to what I have to say, my hon. Friend would know that what I said was that
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    the economy would be, and would remain, a matter for the Secretary of State and the central Government agencies—that is, the other Secretaries of State. But other matters which appertain to the economy, and are ancillary to it, such as housing, the building of roads and good hospitals, will be for the Assembly, and I hope that in that way it will help the economy.
    It is not for me to deny or support everything that is said in the campaign. I have made my position perfectly clear from the start, although my hon. Friend is trying to misquote what I said quite clearly a few minutes ago.
    Mr. Speaker: We took a long time over that question. We shall have to move faster.

    Education
    Mr. Gerry Fowlerasked the Secretary of State for Wales what is the intended relationship between the proposed Advanced Further Education Council for Wales, the Welsh Assembly, and the Secretary of State; and if he will make a statement.
    Mr. Barry Jones: The Education Bill now before the House provides for the Council to be appointed by the Secretary of State for Wales and to advise and make recommendations to him on the matters specified in the Bill. It also provides for his functions in this respect to be transferred to the Welsh Assembly Upon its establishment.
    Mr. Fowler: Is it not extraordinary that we are proposing to set up another nominated body, even if it be nominated by the Assembly in due course, when we are creating an Assembly partly to get rid of nominated bodies? Would it not be more rational to have no new Council but to give its powers to the Assembly, albeit leaving the Assembly the right to co-opt additional members to its education committee when dealing with advanced further education?
    Mr. Barry Jones: I look forward to hearing my hon. Friend developing his views upstairs in Committee when we reach the appropriate clauses, but I disagree with him. When the education functions in Wales and the Council pass to the Assembly, it will probably be for the better in Wales. I believe that a further education council for Wales will be

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    needed whatever the result of the poll on 1 March.
    Sir Anthony Meyer: As only six people turned up to hear the hon. Gentleman and his right hon. and learned Friend, when they came to Deeside, to explain what devolution would do for Wales, will he return there and explain how a Welsh Assembly will bring education closer to the people than it is now, when the function is exercised by the county councils?
    Mr. Barry Jones: Of course it could bring education closer to the people. If there were elected Assemblymen from various parts of Wales who were looking at the education problems of Wales, there is no doubt in my mind that there would be a better response from the localities to needs in the areas. I understand that when the hon. Gentleman holds his meetings he does not even get six people attending.

    Water Supplies
    Mr. Wigleyasked the Secretary of State for Wales if he is satisfied that there exists generally in Wales a water supply of adequate standard to meet domestic and industrial requirements.
    Mr. Alec Jones: Yes, Sir.
    Mr. Wigley: Is the Minister aware that there is a great body of concern in Wales over the recent announcement by the Welsh Water Authority of a 15 per cent. increase in its charges, when the Government are advocating a 5 per cent. limit on wage increases? In view of this apparent taxation without representation, what do the Government propose to do to secure better control over this type of price increase?
    Mr. Alec Jones: I am not sure what that has to do with the standard of water supply, but I take the hon. Gentleman's point. The responsibility for water charges rests with the water authority. As the hon. Gentleman has probably seen, it has suggested that its percentage increase spread over two years would come within the guidelines. One factor is that last year there was a substantial reduction in water charges in Wales as a direct consequences of the Water Charges Equalisation Act, which we introduced.
    Mr. Cledwyn Hughes: Is my hon. Friend aware that one of the problems
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    that afflict small businesses and the owners of shops is the very high charges in relation to the negligible amount of water that they use? Will he confirm that it is within the power of the Welsh Water Authority to install meters? Would he regard that as a sensible step forward in relation to industrial and commercial premises?
    Mr. Alec Jones: It is certainly within the authority's competence to install meters, but I am not yet convinced that to install a meter for every consumer in Wales would be in the best interest of all consumers. Undoubtedly, some commercial and industrial users which do not have meters now would benefit from their installation.

    Unemployment
    Mr. Wyn Robertsasked the Secretary of State for Wales if he will list the employment exchange areas in Wales where unemployement is above the Welsh national average.
    Mr. John Morris: In January 1979, 18 of the 40 travel-to-work areas in Wales had an unemployment rate above the Welsh average. With permission, I will publish details in the Official Report.
    Mr. Roberts: What prospects of future employment does the Secretary of State hold out for those areas? Will he be the main provider of employment, or will it be provided by the Assembly? Is he aware that there is much confusion in the Welsh mind as to who will be the provider of jobs—the Assembly, as propounded by the "Yes" campaigners, or the right hon. and learned Gentleman, as he puts forward in his own claim?
    Mr. Morris: I am sorry that the hon. Gentleman, who I understood had been following the debates on the Wales Bill, has suddenly become so confused. I regret that. However, one day I shall take him aside and explain to him what has been explained time after time in debate, that matters for the economy remain at Westminster. If he does not know that now, he will never know it.
    Mr. Hooson: Does the Secretary of State agree that the pattern of unemployment tends to show some differences from the past, in that the success of the Development Board for Rural Wales indicates that there is a tendenecy for more

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    and more employers to want to go to rural areas? There is, therefore, a change in the pattern. Does the right hon. and learned Gentleman intend to provide more funds for the Board?
    Mr. Morris: The Board has had an increased amount of funds. It has been exceedingly successful. The fear put into the officials and the board of the DBRW by the Opposition has been a matter of great regret. They have recanted. But it is a deathbed repentence on their part. These important weapons—the WDA and the DBRW—are performing a real and important role in developing the economy of Wales. I give them every support.
    Mr. Kinnock: Whilst totally accepting the view of my right hon. and learned Friend that improvements in the social and transport environment and the infrastructure of Wales will have an impact on the economic prospects of our country, will he say from where, under an Assembly, additional resources could be gained, without loss to those who are still desperately in need, to promote such improvements to a greater extent than he and local authorities try to do now?
    Mr. Morris: I am sure that my hon. Friend followed the discussions in detail. He should know by now that the block grant will be negotiated on, I hope, a basis that will recommend itself to him, namely, the basis of need—need in the past and need in the future. That is the basis of the negotiation. I find it odd that my hon. Friend should be going around Wales saying that there will be a dimininution of £1,000 million in the moneys for Wales.
    Mr. Kinnock: I never said that.
    Mr. Morris: That is my understanding. If my hon. Friend did not say it, all the better.
    No one should be under any misapprehension. The basis of negotiation will be the same—the needs of Wales—but the mechanism will be different. I do not suggest that there will be any extra money. [HON. MEMBERS: "Hear, hear."]—I wish that my hon. Friends who say "Hear, hear" had heard the debates, when we made it abundantly clear, time after time, that negotiations would be on the basis of need. No Socialist in the House would demur from the basis of need as the method of apportionment.
    Mr. Speaker: Order. Hon. Members are taking too long. I am the only person who can say nothing.
    Following is the information:

    January 1979

    Travel-to-Work

    Total Unemployment Rate

    Area

    per cent

    Aberdare

    9·0

    Abertillery

    12·9

    Anglesey

    13·5

    Bargoed

    11·9

    Blaneau Ffestiniog

    13·2

    Caernarvon

    9·7

    Cardigan

    16·7

    Fishguard

    12·5

    Lampeter

    16·0

    Langollen

    8·9

    Milford Haven

    9·8

    Monmouth

    10·2

    Pembroke Dock

    12·3

    Porthmadog

    11·4

    Rhyl

    13·9

    Tenby

    14·7

    Tywyn

    13·7

    Wrexham

    12·9

    (Welsh Average at January 1979=8·6 per cent.)

    General Hospital (Construction)
    Mr. Kinnockasked the Secretary of State for Wales what is the current estimated cost of constructing and commissioning a 300–bed general hospital in Wales.
    Mr. Barry Jones: It varies according to site conditions and other factors but will not be less than £10 million.
    Mr. Kinnock: Is my hon. Friend aware that that would be a small price to pay if such resources could be allocated for bringing much needed relief and a new service to the people of Gwent—specifically, my area of Gwent—and mid-Glamorgan? Does the Minister find it defensible, in those cicumstances, at a time of extremely limited resources, that roughly twice that amount will have to be spent evey year for the maintenance of an Assembly which the people of Wales do not want, whereas they desperately need new hospitals?
    Mr. Barry Jones: I know of my hon. Friend's interest in the district general hospital for his valley. I know that he and others of my hon. Friends will be meeting me about it in the near future. I look forward to a discussion on that issue.
    Yes, I find it defensible. Perhaps my hon. Friend should look at the huge underspend on housing in Wales over

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    the past few years. I should think he would agree that in the Welsh Assembly it might be possible to obtain greater savings so as to build more district hospitals.
    Mr. Grist: Will the Minister explain how the underspend will be remedied under a Welsh Assemby and what the difference will be for the local authorities?
    Mr. Barry Jones: I am not sure that I can say why my hon. Friend needs a hospital in his valley. However, I can say why I think the underspend could be controlled better. If men and women are elected in their constituencies and come to Cardiff specifically with housing in mind, they will take an interest in such a way as to make sure that the technical officers who run the housing programmes do not underspend.
    Mr. Cledwyn Hughes: If there is a "No" vote on 1 March, is there any guarantee that my hon. Friend will get his hospital any sooner?
    Mr. Barry Jones: My right hon. and learned Friend and I know that if by some mischance Opposition Front Bench Members were transferred to the Treasury Bench there would be no prospects of getting such a district hospital.

    Government Expenditure
    Mr. Gristasked the Secretary of State for Wales what proposals he has to increase expenditure on those sectors of the Welsh economy as detailed in table 4.3 of the Government's expenditure plans, Cmnd. Paper No. 7439.
    Mr. Alec Jones: The Government's plans for expenditure are as shown in the table mentioned in the question.
    Mr. Grist: In view of that and previous answers this afternoon, how can the "Yes" campaigners for the Welsh Assembly promise more jobs, better housing and much better health services, all of which involve greater expenditure? Will not that mislead the people of Wales?
    Mr. Alec Jones: I do not know. I have read a good many speeches on both sides in the campaign. I have seen far more fantasies than facts, and a great deal more heat than light. It is certain
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    that within the block grant announced by my right hon. and learned Friend, the Assembly, as an elected body representing men and women from all over Wales, is more likely to accept and fix priorities in keeping with the needs of Wales.
    Mr. Anderson: Is my hon. Friend prepared to act an an umpire between my right hon. and learned Friend the Secretary of State, who said that the block grant would be assessed on the same basis, as at present, and my hon. Friend the Member for Flint, East (Mr. Jones), who said that there would be more hospitals after an Assembly was set up? How can we possibly get more hospitals and roads if the block grant is the same? How can we get more from the same, or even less?
    Mr. Alec Jones: I believe that the quality of decisions will be improved as a result of the democratic process.
    Mr. Wyn Roberts: The Minister must be joking.
    Mr. Alec Jones: On many occasions we have debated decisions and priorities decided by nominated bodies and bureaucracy.[Interruption.] Few hon. Members —including some of my hon. Friends who are bellowing from behind—accepted the priorities which I might personally have supported.
    Mr. Wigley: Is the Minister aware that the table of housing allocation of funds to Wales shows that Wales receives about £50 million less—on a per capita basis—than it would if it had the average for the United Kingdom? On a needs basis, the housing stock in Wales is older than that of the United Kingdom. Therefore, there is a greater shortfall. Does not that indicate a need for a better mechanism for allocating funds to Wales, which the Assembly would provide?
    Mr. Alec Jones: One thing stands out in the housing figures. I have reported it to the House on several occasions. For two consecutive years there were considerable underspends on housing in Wales. However, the figures referred to show that there would be an annual average increase in spending on housing of 5 per cent over the four-year period. Last year—and next year—the allocations for house building in Wales were such

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    that all local authorities were told to proceed with their capital programmes intact. If they failed to do so it was their fault, because they failed to live up to the needs in their areas.

    Welsh Assembly
    Mr. Gwynfor Evansasked the Secretary of State for Wales what increase has occurred in the capital cost of the buildings and the services for the Welsh Assembly since the original estimate was made.
    Mr. Alec Jones: The estimated cost of adapting and equipping the Exchange is £·5 million at 1978 prices. The estimate for additional office accommodation remains the same as given in the explanatory and financial memorandum to the Scotland and Wales Bill.
    Mr. Evans: Is the Minister aware that some hon. Members have been unscrupulously misleading the Welsh public by asserting that impoverishment would be caused to them by the imposition of £20 million on them as a result of the Assembly? Will the Minister confirm the parliamentary answer which I received which said that the cost to the people of Wales and other parts of the United Kingdom would be about 1p per head per week—less than the cost of a packet of cigarettes per year and less than the cost of one pint of beer per year?
    Mr. Alec Jones: As I mentioned earlier, there have been far too many fantasies and far too few facts given on this subject. But certainly I confirm the parliamentary answer given to the hon. Gentleman on this subject. However, the additional cost is not £20 million, but £13·5 million. That figure is the fact. The other is the fantasy.
    Mr. Roderick: Is my hon. Friend able to give the House the costs of providing new accommodation for local authorities in Wales in the last three or four years? Will he explain to the House why there has been less fuss here about those costs than about the costs of the Assembly?
    Mr. Alec Jones: I do not have to hand the figures for local authority capital spending on new offices in recent years. What is a certainty is that whenever any local authority proposes such expenditure the Welsh Office is inundated
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    with objections from those who believe that it is a wasteful use of public money.
    Mr. Michael Roberts: Will the Minister confirm that if expenditure in Wales is worked out on a United Kingdom basis, based upon all families and people in the United Kingdom, it appears to be very little per head for the people of Wales? Will he also confirm that the £13·5 million running costs will come out of the block grant for Wales?
    Mr. Alec Jones: Yes, and the cost of the Exchange and that sort of thing will be taken into account in deciding the block grant. It is natural that one should work out the expenditure on a United Kingdom basis, because, after all, that is how the block grant itself will be decided —according to the need of the United Kingdom. Therefore, it is fair that the costs should likewise be allocated on a United Kingdom basis.

    Local Authorities (Expenditure)
    Mr. Abseasked the Secretary of State for Wales whether he intends communicating with the Gwent council on the issue of the implementation in Gwent of section 137 of the Local Government Act.
    Mr. John Morris: No, Sir. I have already made public my views on the use of this section for voting money to oppose the implementation of the Wales Act.
    Mr. Abse: Is it not quite clear that this is a matter of the Secretary of State's failure to communicate despite his intemperate attack upon the stalwart Gwent Labour county councillors, who came into the movement before he had even considered joining it? Is it not because his statement is a complete bluff and that he lacks both the legal and the political power to coerce Gwent county council? Does he agree that when ratepayers are being called upon to bear grievous burdens—the £15 or £20 million which will come out of the block grant or will have to be found from somewhere—it is right that Gwent county council should spend a mere £1,000 in order to save them from the expensive folly in Cardiff which he is attempting to impose upon them?
    Mr. Morris: Certainly I would not like to compete with my hon. Friend in making intemperate remarks. He has made some this afternoon.

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    I find it odd that ratepayers' money is being used for essentially political purposes. It was hardly ever the intention of Parliament, when this discretion was given to local authorities, that they should do this. I wonder what the next stage is. I wonder whether the money could be given direct to the Conservative Party or to Aims of Industry. I wonder what my hon. Friend's reaction would have been when he was campaigning for the "Yes" side in regard to the EEC for many years, and whether he would have allowed money to have gone in that way.

    Hospitals (Industrial Disputes)
    Mr. Michael Robertsasked the Secretary of State for Wales what steps he has taken to reduce the detrimental effects of industrial action on the lives of the patients, nurses, doctors, administrators and others who work in hospitals in Wales.
    Mr. John Morris: Action to minimise the detrimental effects is the responsibility of individual health authorities, with which I am in daily contact. I have sought to sustain their efforts and those of all who are working to maintain the service. Last Thursday my hon. Friend the Under-Secretary of State met all the health authority chairmen, who believed that services would be maintained. I cannot praise too highly the efforts of the dedicated staff who are doing their utmost in difficult circumstances.
    Mr. Roberts: Does the Secretary of State accept that the industrial action taken in the hospitals of South Glamorgan, for instance, is probably having a much greater effect on nurses and on patients and their relatives than the unions anticipated when they reluctantly undertook these actions? Does he, therefore, consider it worth while calling the unions together to discuss with them and the area health authorities how best to remove the worst and most detrimental effects to patients?
    Mr. Morris: I know that the hon. Member is concerned about this matter. I think that we must move in the best way for the whole of the service, and for patients in particular. From my intervention in his speech in the House last week, the hon. Gentleman will know that while negotiations are taking place nationally, of which I am fully cognisant
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    and to which I am a party, it is best for local matters to be discussed and dealt with locally. The Opposition spokesman, wrongly informed as he was, joined issue with my right hon. Friend for having intervened locally. That is not the best way of doing it. I am keeping in very close touch. I am watching the situation very carefully. I shall do whatever is necessary.
    Mr. Ioan Evans: Whilst we are concerned about the industrial action, will my right hon. and learned Friend consider that the low-paid workers in the Health Service have a case? Has he seen the report today by doctors who are expressing deep concern about the effect that an Assembly will have on the Health Service? There is a feeling that if an Assembly is created and the Health Service is administered by that Assembly we shall move away from Nye Bevan's desire to have a uniform Health Service for the whole of Britain.
    Mr. Speaker: Order. The hon. Gentleman is moving on to a totally dfferent question. This question concerns industrial action in Wales. There will be a further opportunity to discuss the other issue.
    Mr. Grist: Does the Secretary of State agree that the people of Cardiff and Aberavon are having to bear a grossly unfair penalty for having elected his right hon. Friend the Prime Minister and himself?
    Mr. Morris: I thought that the hon. Gentleman had a useful contribution to make. Obviously that is not so.

    Welsh Development Agency
    Mr. Cledwyn Hughesasked the Secretary of State for Wales what plans have been approved by the Welsh Development Agency for further industrial development in Anglesey; and if he will make a statement.
    Mr. John Morris: I have already asked the Agency to submit a further programme of advance factory building for my approval. In considering the appropriate balance of provision throughout Wales, I shall bear the needs of Anglesey fully in mind.
    Mr. Hughes: I am grateful to my right hon. and learned Friend for that prospect. However, will he bear in mind that the

    777
    recent decision not to proceed with the expansion of Anglesey Aluminium indicates that some special effort is needed to bring new employment to the island, in view of the present unsatisfactory level of unemployment?
    Mr. Morris: I know how hard my right hon. Friend worked for the expansion, and I know the disappointment that we all share that it is not to come about. However, the company is still seeking other ways of expanding its operations. My industry department is in touch with the company and has indicated that the Government would consider giving financial support to any viable project that the company may propose to establish downstream activities in Anglesey.

    Public Bodies (Ministerial Appointments)
    Mr. Roderickasked the Secretary of State for Wales how many persons he appointed to public bodies in Wales in the past 12 months.
    Mr. John Morris: I had sole responsibility for 225 such appointments in the period 1 February 1978 to 31 January 1979.
    Mr. Roderick: Can my right hon. and learned Friend claim to know all these people he has appointed? Can he think of a better way of running these public authorities?
    Mr. Morris: Even though I traverse a great deal of Wales, I cannot admit to knowing everyone. I think that there is a better way. The best way of all is to ensure that, where possible, decisions are taken not by nominated bodies but by democratically elected people.
    Mr. Gwynfor Evans: How much do these quangos cost annually? To whom are they democratically accountable, and to what extent?
    Mr. Morris: Speaking from memory, I think that they expend about £400 million to £500 million each year. However, if the Assembly comes about it will control the expenditure of about £1,400 million, including the work of the nominated bodies.
    Mr. Wyn Roberts: Does the right hon. and learned Gentleman agree that even if we have an Assembly—which is most un-
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    likely as things stand, in view of the way in which the campaign is going—there will still be nominated bodies, or does he think that the jobs of those bodies will be taken over by the Assembly?
    Mr. Morris: I am sorry that I must continue to try to educate the hon. Gentleman, even after the prolonged discussions that we have had on the Wales Act. Of course it will be possible for some of these bodies to remain. It will also be possible for the Assembly to subsume some of these bodies. As regards those that it can subsume, it will be a matter for the Assembly to ensure the best way of conducting those functions, be it through a body or directly through the Assembly. However, I hope most fervently that as many as possible of these bodies will come under direct democratic control.
    Mr. Ioan Evans: Does my right hon. and learned Friend realise that the latest opinion poll in Wales confirms all the other opinion polls in saying that there will be a "No" vote? In view of the fact that there may well not be an Assembly after 1 March, will my right hon. and learned Friend address himself to the problem of nominated bodies, bearing in mind that there are those of us who are opposed to an Assembly who have put up alternative suggestions whereby there could be greater democratic accountability by nominated bodies?
    Mr. Morris: I enjoin my hon. Friend not to put too much faith in polls—no more than the Conservative Party should. One of the encouraging features of the latest poll was the increase in the Labour vote, contrary to some other polls. We should be encouraged by that. I am glad that my hon. Friend wants to ensure that nominated bodies are controlled. This is of the essence of the case which I am putting forward about the need for more democracy in Wales, and I look forward to that.

  CIVIL SERVICE

    Dispersal
    Mr. Viggersasked the Minister for the Civil Service what are the Government's current intentions regarding the redeployment of Civil Service jobs in the light of the Hardman report.
    The Minister of State, Civil Service Department (Mr. Charles R. Morris): The Government remain committed to their programme of Civil Service dispersal to the locations already announced.
    Mr. Viggers: Is not the position that the Government have promised 5,500 jobs to Glasgow without knowing from where the jobs are coming? Is it not a major scandal that civil servants have had this threat hanging over them for two years, that the move might cost as much as £500 million, and that in practice the Government have decided to drop the proposal? Will they now admit that they have dropped the proposal?
    Mr. Morris: The Government's dispersal programme is going ahead as envisaged. If there are civil servants who are anxious about their position in the Civil Service dispersal programme, they can consult their controlling officers to discover whether their Departments are involved. But the dispersal programme is going ahead.
    Mr. Madden: Is my right hon. Friend concerned about the apparent ease with which senior civil servants can redeploy themselves into lucrative jobs in private industry? Does my right hon. Friend agree that there should be a bar on senior civil servants joining companies which have received large amounts of taxpayers' money from Government funds? Will he publish in full the present rules and regulations relating to the seeking of jobs in private industry by civil servants?
    Mr. Speaker: Before the Minister replies, I might point out that I allowed the supplementary question although it is not related to the original question on the Order Paper. The Minister may take that as a tip.
    Mr. Morris: I am grateful for your protection, Mr. Speaker, but I give the House the undertaking that I shall publish and make available the rules under which senior civil servants take up such appointments.
    Mr. Christopher Price: Will my right hon. Friend put it to the Government that the Hardman report is completely out of date in today's circumstances? Is he aware that it was conceived at a time when there was a tremendous disparity between London and the other regions,
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    but that today parts of the borough of Lewisham, for example, have unemployment rates of more than 10 per cent. and far worse unemployment than exists in some parts of the development areas? Will my right hon. Friend look especially at the dispersal of the office of the Government Chemist to Cumbria, which is the biggest piece of nonsense in the Hardman report, and will he see whether he can make some arrangements to redeploy back into areas of severe unemployment in London some of the jobs dispersed as a result of decisions taken many years ago?
    Mr. Morris: I appreciate fully my hon. Friend's anxiety about the job prospects of his constituents in Lewisham. However, at present 1,900 Civil Service jobs are vacant in London. Civil Service dispersal makes a real contribution to solving the structural economic difficulties which exist in provincial areas.

    Mr. K. Brown
    Mr. Jesselasked the Minister for the Civil Service if he will make a statement on the provision being made for Mr. K. Brown, details of which have been sent to him by the hon. Member for Twickenham.
    Mr. Charles R. Morris: I have studied very carefully the facts of this very sad case, and I am confident that Mr. Brown has received, and will continue to receive, the maximum benefits that the rules of the Civil Service pension scheme provide for cases of this nature. However, in addition, I have also undertaken to seek advice on the legal position generally and on the amount of any ex gratia additional payment that it might be proper to make from public funds.
    Mr. Jessel: I thank the Minister for that answer, as far as it goes. However, since it was whilst serving his country abroad as a Foreign Office official in Swaziland that Mr. Brown's appendicitis was mis-diagnosed and, as a result, he had one leg amputated above the knee and a major internal operation, leaving him permanently crippled and with his life virtually ruined, do the Government accept in principle that he should be paid a very generous lump sum by way of compensation?
    Mr. Morris: Again, I emphasise that I have a great deal of sympathy with

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    this particularly distressing case. I hope that hon. Members in all parts of the House will be assured that additional compensation will be considered carefully and compassionately. However, I cannot prejudge the legal advice which I am seeking. Therefore, I cannot make any firm commitment at this stage about the amount of any additional payment.
    Mr. Wrigglesworth: May I thank my right hon. Friend for the concern that he has expressed? Is he aware that Mr. Brown's union is very concerned about this case, which, as has been made clear, is a very tragic one? It has dragged on for a very long time. Therefore, will my right hon. Friend try to expedite his inquiries so that a generous settlement can be made as soon as possible?
    Mr. Morris: Certainly I undertake to proceed as urgently as possible with this case.

    Trade Unions
    Mr. Canavanasked the Minister for the Civil Service when he expects next to meet representatives of the Civil Service trades unions.
    Mr. Skinnerasked the Minister for the Civil Service what recent meetings he has had with Civil Service trade union leaders; and if he will make a statement.
    Mr. Charles R. MorrisMy right hon. and noble Friend the Lord Privy Seal and I met last week with representatives of the non-industrial Civil Service unions. Frequent contact is maintained with representatives of all the Civil Service trade unions.
    Mr. Canavan: Is my right hon. Friend aware that many civil servants and, indeed, other public service workers, such as nurses and teachers, are complaining that their wages have fallen behind those of comparable workers in the private sector mainly because of the excessive wage restraint of recent years? In view of the fact that their complaints are backed by the independent findings of the Pay Research Unit, is it not a dishonest farce for the Government to have agreed to reconstitute the Pay Research Unit unless they also give a firm commitment to implement its findings from April of this year?
    Mr. Morris: The Government's position in regard to the pay of the Civil Service has not been wholly ungenerous. In 1975, on the basis of a Pay Research Unit report, we conceded pay increases of up to 30 per cent. In all stages of the Government's pay policy since then—in 1976, 1977 and 1978—civil servants have received the maximum available under those phases of Government pay policy. We have reactivated the Pay Research Unit. We are now processing the reports emanating from the unit.
    Mr. Skinner:Does my right hon. Friend accept also that those civil servants who form the bulk of the Civil Service trade unions are in the relatively low-paid category, such as those who serve behind DHSS counters, some of whom receive less in wages than they are paying out—and that is not to make an argument for reducing unemployment benefit, but rather the other way? Is my right hon. Friend aware that there is talk of industrial action? I suppose that that is the last thing the Government want at present.
    Mr. Morris: Let me take up one phrase that my hon. Friend used. He described certain groups of civil servants as "low paid". This will be established only when we have processed the Pay Research Unit reports. There are 450 of those reports, the last of which was updated on 7 February. We are only in the process of examining those reports at the moment. This is by no means the time to be talking of industrial action.
    Mr. Hayhoe: Will the right hon. Gentleman make it clear when next he meets Civil Service trade union leaders that Government public relations officers are not available to them for the purpose of advising them on ways of busting the Government's pay policy? Does he regard this as a suitable opportunity to comment on the most disturbing press reports which have appeared about the activities of a certain public relations officer in the DHSS?
    Mr. Morris: I appreciate the point which the hon. Gentleman is making about my right hon. Friend the Secretary of State for Health and Social Security, who has responsibility for the decisions which were taken in that case.
    Mr. Ovenden: Although my right hon. Friend needs more time to process the reports, is he not in a position to say what broad level of pay increases is represented by the PRU findings? Will he give us an assurance that he will accept the findings and not try to tie the Civil Service to a 5 per cent. limit, which would be totally out of line with the findings of the PRU?
    Mr. Morris: My hon. Friend suggested that I was seeking more time to process the reports. I am not. We are going through the normal process of negotiation. We reactivated the PRU towards the end of 1978 and it has been collecting the evidence of fair comparisons. We are now processing that evidence. The operative date for the next pay settlement is 1 April. Let us complete the negotiations before anyone suggests a mad leap into industrial militancy and conflict.

  LORD PRESIDENT OF THE COUNCIL
  Mr. Adleyasked the Lord President of the Council if he is satisfied that he has sufficient powers to enable him to carry out his responsibilities; and if he will make a statement.
  The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Yes, Sir.
  Mr. Adley: The House will be glad to hear that. In view of the Prime Minister's predeliction for gerrymandering and the Government's obvious determination to stay in office—until October if they can—will the Lord President give us, in as clear, short and precise a way as he answered my original question, an assurance that the Government have no proposals to amend, alter or play around with the Parliament Act?
  Mr. Foot: The suggestion in the second part of the hon. Gentleman's question is absolutely ludicrous. We have no such proposals. On the first matter, the hon. Gentleman is under a considerable misapprehension. It is not only that we intend to stay in power for the rest of this year, but that we intend to be in power for several years to come.
  Mr. Lee: What does my right hon. Friend and the Government propose to
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  do about their Lordships' decision to louse up the Rhodesian sanctions commission inquiry?
  Mr. Foot: That does not really arise from the original question, but I agree that it was a serious decision made by another place and it is most regrettable that their Lordships should have come to a conclusion which was in conflict with the motion passed by this democratically elected House. It is always highly regrettable when another place, which has no responsibility in this sense, decides to take action in such direct conflict with a decision of this House. I am sorry to say that that is bound to lead to further difficulties in future.
  Mr. St. John-Stevas: The right hon. Gentleman will appreciate that the difficulties are not in the future, but have already arisen. On the important question of the sanctions commission, which concerns this House intimately, can the Lord President tell us what action the Government propose to take?
  Mr. Foot: The Government will come forward with proposals for dealing with the situation. The House of Commons made a decision to set up a commission, and we shall abide by that decision. I hope that the hon. Gentleman will do the same.
  Mr. Lawrence: Is the right hon. Gentleman aware that industrial action is yet again being taken in Her Majesty's Stationery Office? Can he say how often such industrial action has taken place and harmed the activities of Parliament while his Government have been in power? Since the right hon. Gentleman has a special responsibility in this matter, can he tell us what he is doing about it, bearing in mind that it has been shown again that the Government have no special relationship with the trade unions which can avoid industrial action?
  Mr. Foot: I repudiate the last part of what the hon. Gentleman said. No doubt these will be matters for discussion and debate later this week and for several weeks or months to come. I certainly regret any industrial action which interferes with the flow of documents to the House. That has happened afresh in the past day or two. We are taking every possible step to try to overcome the problem. The hon. Gentleman asked what

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  further steps we were taking. We have had an investigation into the matter, and I believe that if all parties will follow the sort of recommendations contained in the report of that investigation we can overcome the difficulties.

  REFERENDUMS (WALES AND SCOTLAND)
  Mr. Ioan Evansasked the Lord President of the Council what are the target figures to determine a "Yes" vote in the referendums to be held in Wales and Scotland.
  Mr. Foot: The electoral registers are not required to be published until 15 February. Target figures cannot be established until after that date.
  Mr. Evans: Will my right hon. Friend join me in appealing to the people of Scotland and Wales to turn out in force on 1 March, recognising that those of us who are opposed to the establishment of the Assemblies made the strongest demands for referendums? Will my right hon. Friend ensure fair play by making representations to ensure that there are no party political broadcasts before the vote?
  Mr. Foot: It would be a gross interference by the Government in the normal way in which these matters are conducted if we intervened to try to ban party political broadcasts. That would be a grave infringement of the way that these matters are normally conducted, and I am surprised that my hon. Friend should recommend such an undemocratic practice.
  Mr. Gwynfor Evans: Is the Lord President aware that a BBC poll published on Friday night showed that many of the people of Wales do not think that the Government are in favour of an Assembly for Wales and that many people in Wales do not know what is the Government's attitude? I absolve the Lord President from responsibility for that, but does he not think that those findings reflect sadly upon the inactivity of the Government in putting across their policy?
  Mr. Foot: I assure the hon. Gentleman and the House that the Government's views have been made well known in the House, and the more widely they can
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  become known throughout Wales and Scotland, the better. Several of us will be taking special steps in the next two or three weeks to ensure that our views are still more widely known.
  Mr. St. John-Stevas: Will the Lord President be kind enough to tell the House that, in the event of there not being the necessary qualifying 40 per cent. of the electorate voting affirmatively in the referendums, the Government will not only lay an order in the House, as required by the Act, but will support the order to annul the Act?
  Mr. Foot: The Government will abide by the decision of the House. I revert to the reply that I gave the hon. Gentleman a few minutes ago. I only wish that he had shown the same democratic spirit as regards the resolution that we passed on the Bingham report.
  Mr. Arthur Latham: Will my right hon. Friend accept my congratulations on the precedent established in Wales and, presumably, Scotland, in the delivering to every household of a printed leaflet, financed by the Government, explaining how people can qualify and obtain postal votes? Will my right hon. Friend have a word with the Home Secretary and the Secretaries of State for Scotland and Wales to see whether we can follow that practice for general elections in the United Kingdom?
  Mr. Foot: There is a great deal to be said for what my hon. Friend has suggested, and I think that we should have discussions along those lines. I believe that the whole House will welcome the action that we have taken, since I trust that the whole House wishes every elector in Scotland and Wales to know what his possibilities are in the referendums?
  Mr. St. John-Stevas: Is the Leader of the House aware that I entirely agree with him that both of us should abide by the decision of the House of Commons? I shall be happy to follow his example in that respect, but can he tell us what is the position of the House in a situation where their Lordships have rejected the Commons proposal for a sanctions commission? Does he intend, on behalf of the House, to set up a commission of hon. Members of this House only?
  Mr. Foot: I have already told the hon. Gentleman that the Government will

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  make proposals to the House in the light of the decision of another place. All that I was asking the hon. Gentleman to do was to say—and I am glad that he has said it, even if it was a little grudgingly—that he respects the decision of this House. We have to take that into account. We deeply regret that their Lordships should have decided not to pass their resolution because it gives rise to strains and stresses between the two Houses, and when this House goes out of its way to pass the sort of resolution that we approved it is most unwise for another place to neglect it as it did.
  Several Hon. Members
  Mr. Speaker: Order. I allowed the question of the hon. Member for Chelmsford (Mr. St. John-Stevas), but it was related to an earlier question. I must tell Members on the Front Benches that the same rules apply to them as apply to Back-Bench Members.
  Mr. Canavanasked the Lord President of the Council whether he is satisfied with the arrangements being made for the forthcoming referenda in Scotland and Wales; and if he will make a statement.
  Mr. Foot: Yes. Instructions have been issued by the Scottish and Welsh Offices to returning officers and arrangements are proceeding satisfactorily.
  Mr. Canavan: Is my right hon. Friend aware that some reliable estimates of the discount required for a fair application of the 40 per cent. referendum rule are as much as five times the official Government estimate of 2½ per cent.—because of additional double registrations, illness, disability and removals? Will my right hon. Friend take that into account, because he must bear in mind that there are many people who, through no fault of their own, will be virtually incapable of exercising their right to vote on 1 March?
  Mr. Foot: It is true that all these difficulties were discussed, as my hon. Friend has legitimately pointed out. All these factors will be taken into account when the Government make their statement, I hope before the recess, on the matter that has been raised, although I know, Mr. Speaker, that I must not refer to a previous question. The matter was referred
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  to obliquely by my hon. Friend earlier. We shall take all these factors into account. These are some of the difficulties that have arisen from the decision that the House made. We have to abide by that decision.

FISHING VESSEL "TARRADALE II" (LOSS)
Sir John Gilmour Sir John Gilmour (by private notice) asked the Secretary of State for Trade if he will make a statement on the loss of the motor fishing vessel "Tarradale II".
The Under-Secretary of State for Trade (Mr. Clinton Davis): The fishing vessel "Tarradale II" sailed from Peterhead at 1520 hours on Thursday 1 February, bound for the Norwegian fishing grounds, with a crew of seven on board. On Friday 2 February, the skipper of "Tarradale II" reported to his owners, via Stonehaven radio, that he had commenced fishing off Norway. The last known contact with the vessel was with Stonehaven radio at 1600 hours on the same day. Her position at that time was about 170 miles east-north-east of Peterhead. On 2–3 February, storm force 10 winds were reported locally. This was more severe than had been generally forecast.
At about 1500 hours on Wednesday 7 February, the agents for the ship reported to the Aberdeen coastguard that the vessel was overdue. Coastal radio stations in Scotland and Norway immediately broadcast an alert. In addition, United Kingdom and Norwegian helicopters en routine flights in the area were asked to keep a look-out for the vessel.
A co-ordinated air search of the fishing area was also undertaken and an RAF Nimrod commenced searching at 0830 hours on Thursday 8 February, assisted by aircraft from Danish, German and Norwegian rescue services. At 1500 hours on Saturday 10 February a Nimrod sighted a fishing marker buoy, fish boxes and wreckage in the possible area of loss. These were recovered by a Norwegian coastguard cutter on Sunday 11 February and are being taken to Aberdeen for possible identification. Search action was finally concluded at dusk on Saturday 10 February.
I very much regret having to inform the House that the "Tarradale II" must now

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be presumed lost. My Department has accordingly commenced a preliminary inquiry into this casualty. I am all too well aware that tragedies of this kind cast a shadow over the whole of the fishing community and I am sure that hon. Members will particularly wish to join with me in expressing deepest sympathy with the families and relatives of the crew of the "Tarradale II".
I would say, in conclusion, that I have agreed to the Fishing Industry Safety Group's recommendation that there should be a special radio communication channel for the exclusive use of fishing vessels. It is proposed that this will operate overnight, between 1700 hours and 0900 hours, on 2381 kHz. It is not intended to replace distress calls on the frequency of 2182 kHz, but will enable vessels to make quick contact with the shore in the event of difficulties developing. It should also encourage more frequent contact, thus helping to establish the whereabouts of vessels while fishing.
Urgent talks are to be held between my officials, the Scottish Fishing Federation and the Post Office on the detailed arrangements for the scheme. These will commence on Thursday 15 February. It is hoped that the scheme will operate from 1 April 1979, initially for a period of two years.
Sir J. Gilmour: I thank the Minister for that statement. Although, as he will know, the vessel sailed from Peterhead, almost the entire crew came from East Fife and, therefore, my constituents and I would join with the Minister in his condolences to the families concerned. I would also like to pay tribute to the search undertaken by the Nimrods, by other fishermen and by the coastguards.
Is there any possibility that this new frequency, due to come into force from 1 April, can be brought forward, say, to the middle of March? As the Minister will know, this is the second time that a vessel has been lost in the same area, and the matter is giving great concern. Will priority also be given to the possibility of an efficient marker buoy for discovering wrecks, so that some of the vessels that founder can be raised and we can try to find out the cause of the trouble?
Mr. Davis: I am sure that the whole House will join with the hon. Gentleman in the remarks that he has made and the
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tribute that he has paid to those engaged in the search and rescue operation. It is difficult to bring forward the date, because instructions and guidance have to be given on the operation of this new system. It is important, in order to have proper effect, that the system should be readily understood. If the matter can be brought forward, this will be done. We are giving the matter the most urgent consideration, as I have already indicated.
The hon. Gentleman mentioned the question of the marker buoy. I presume that he is also referring to the emergency radio beacons—the EPRBs. This matter was considered again by the Fishing Industry Safety Group at a meeting a few weeks ago. The group is not convinced that a fully efficient system is yet capable of being brought into operation. Until that happens, there would be no point in making a system mandatory.
Mr. Robert Hughes: I should like to associate myself with the remarks of sympathy for the bereaved, as I am afraid we must now accept they are, made by the Minister and by the hon. Member for Fife, East (Sir J. Gilmour). Although I do not represent the constituency from which the crew came, I have close associations with that part of the country.
I congratulate the Minister and the Fishing Industry Safety Group on its proposals to try to achieve a much better system of reporting and quick action when a vessel goes missing. Is it possible to set up a full-scale search when a vessel does not report in? Often in these waters, at this time of year, the length of time a survivor is in the water makes a difference between life and death. I realise that this would be expensive and difficult. But given the good will of the fishing industry over reporting in every day, could more not be done to achieve earlier identification of a missing vessel, as opposed to a vessel that has simply not reported?
Mr. Davis: I am grateful to my hon. Friend for the observations that he made about the new system. I pay tribute to those representatives of the industry and various Government Departments represented on the Fishing Industry Safety Group in making this proposal. The suggestion that my hon. Friend makes is not practicable, because we must depend upon fishermen reporting in. In this respect,

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the system breaks down. Regrettably, fishermen do not comply with instructions, sometimes, possibly, for very good reasons.
It would be impossible to mount a search and rescue operation every time the present system, which is voluntary, breaks down. One of the reasons why I want to see the new system brought into operation as quickly as possible is that it will, we hope, encourage people to adopt more efficient reporting-in systems.
Mr. Grimond: I join in the expressions of deep regret over the loss of this fishing boat and in the sympathy expressed to the families of those lost. Were the initial calls from the boat picked up anywhere else except Stonehaven?
I am glad that the new frequency is to come into operation. Will it cover virtually all the sea areas around the coast of Scotland? Will the Minister confirm that this fishing boat was presumably lost so far away that the helicopter rescue services could not have reached the scene of the tragedy?
Mr. Davis: So far as I know, the call from the boat was picked up only in the place that I have mentioned. The intention is that the trial period of two years will operate not simply around the coast of Scotland but far wider. As for helicopters, as I said, United Kingdom and Norwegian helicopters were on routine flights in the area, but it was not possible, as I understand it, for helicopters operating under the search and rescue aegis to get to the scene in time. It was just not possible.
Mr. Younger: Is the Minister aware that I should like to associate my right hon. and hon. Friends with all the expressions of sympathy for the relatives of those concerned—which we warmly endorse? Will he, in the discussions that he mentioned, pay particular attention to the time lag in this case? Does he agree that, even allowing for the difficulties about reporting and so on, it seems an extraordinary length of time from 4 p.m. on 2 February until 7 February, when the vessel was reported missing? Does he not think that a completely fresh look at reporting is urgently needed?
Mr. Davis: The question of reporting in has, of course, been in the forefront
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of the considerations of the Fishing Industry Safety Group, but unfortunately the industry has not found it possible to conform with any regimental procedures which were originally devised, so they broke down. We can only exercise persuasion and influence to try to bring some reason to bear on this matter. I hope that what I have announced will be of some assistance in that direction.
As for the extraordinary lapse of time, to which the hon. Gentleman rightly referred, that will be in the forefront of the minds of those carrying out the preliminary investigation and any possible formal investigation which will have to follow. It would not be appropriate for me to comment on that, save to say that I understand that the owners in this case had issued certain instructions for reporting in. There appeared, however, to be no reporting in within the periods to which I have referred.
Mr. James Johnson: May I associate myself and, I am certain, all English Members with fishing constituencies with the deep sympathy expressed from all parts of the House for the bereaved of these men who have gone down? May I turn my hon. Friend's attention to what he said about the EPRBs, the emergency radio beacons? He said that his advisers in the fishing group were not yet fully convinced about the need for or the efficiency of these beacons. I thank him for having had two of his advisers in Hull looking at an EPRB indicator made by a firm in my constituency. We do not ask my hon. Friend, as the Minister, to make the use of this device mandatory, in the sense that the Norwegians, the Canadians or even the Americans do, but if he is satisfied with the findings of his two advisers who went to Hull, will he give it his blessing? We think that it will make an enormous difference throughout the fishing industry.
Mr. Davis: I am obliged to my hon. Friend, who has courteously drawn these matters to my attention over a fairly long period and who has shown a long interest in this topic. The situation in the other countries to which he referred is somewhat different, and does not, therefore, persuade those in the industry that we ought to make mandatory the system that my hon. Friend would like. However. there is nothing to prevent owners

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of fishing vessels from installing these devices. I am sure that it would be helpful. I agree with my hon. Friend on that. Perhaps those who are concerned will recognise the great interest, not simply in the industry but among the wider public, in matters of this kind, as has been shown in the House today. Perhaps they will take that to heart.

CARDIFF HOSPITALS (REFUSE DISPOSAL)
Mr. Michael Roberts: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter which I believe should have urgent consideration, namely,
"the seriously deteriorating condition in Cardiff hospitals—Ely, Whitchurch and the Royal infirmary."
The Whitchurch hospital is in my constituency, Mr. Speaker, the Ely hospital you will know very well, and the Royal infirmary is in the constituency of the Prime Minister. However, all these hospitals serve the people of the whole of the city of Cardiff and its surrounding areas.
This matter is specific, in that officers of the Department of the Environment at the city hall have inspected the growing piles of rubbish which have been collecting at these hospitals and others, and at these three hospitals they have actually issued certificates stating that the rubbish piles constitute a serious health hazard. This is not a speculation in the press; it is specifically certified by experts that the serious health hazard exists.
The matter is important, because the patients could not possibly be evacuated to any other hospital if it were decided that these three had to be closed. It is important also because the Royal infirmary has the only major accident unit in the area to deal with all accidents and emergencies.
The matter is urgent, because the situation could deteriorate in other hospitals and areas. The additional factor which makes it extremely urgent is that the emergency procedures have broken down. Although the hospital workers are perfectly prepared to allow people to come in and remove the piles of rubbish which constitute the health hazard, there is a
794
dispute between the dustmen and the city authority which precludes this from being done.
Therefore, we face the total disruption of hospitals in the Cardiff area.
Mr. Speaker: The hon. Member for Cardiff, North-West (Mr. Roberts) gave me notice before noon today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the seriously deteriorating condition in Cardiff hospitals—Ely, Whitchurch and the Royal infirmary."
May I take the unusual step of telling the House that this Standing Order No. 9 application applies to my own constituents, who are mentioned in it? The House will understand, therefore, that I have listened with anxious care to the hon. Member and to the serious statement that he has made.
The House will also be aware that my powers are very limited and that I have to decide only whether this matter shall be discussed by this House tonight or tomorrow. After the most anxious consideration, I have to tell the hon. Member that I cannot submit his application to the House.

PUBLIC SERVICES (HAMPSHIRE)
Rear-Admiral Morgan-Giles: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the total paralysis of local government services in the Winchester area."
The words "total paralysis" are not mine; they are those of Mr. Shaun Hilliard, the area organiser for NUPE, in a press statement on Wednesday last, printed in the Hampshire Chronicle of last Friday. His statement said that an all-out strike was to be held in a particular part of Hampshire, that it would be designed to "paralyse and totally disrupt" the area, and that no prior warning would be given.
The matter is specific, as anyone who visits Winchester can see. We have had

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our fair share of disruption during the last few weeks. Our garbage has been stacking up in the streets, and there have been difficulties with hospitals, ambulances, schools, and so on. By and large, it has not been unreasonable and not as bad as in some other places. The Winchester people, after all, are decent and reasonable people. But from a statement by the union this morning it is apparent that Winchester is to be the chosen area for the all-out strike action, and disruption is now a great deal more widespread.
The situation is rapidly getting worse. The streets are ungritted, and we have this morning had a sudden and considerable snowfall. The gravediggers have joined the strike, as have many other council manual workers, although I am glad to say that at present the housing maintenance people have not. There is an increasing health risk from rotting garbage.
I had a telephone call this morning from the warden of an old people's home in Winchester. When she looked out of the window she was horrified to see one of the elderly residents out on the slippery pavement with her walking stick and a big bag of garbage, trying to get the garbage down to the end of the road to dispose of it.
On Sunday, the local branch of the National Federation of Self-Employed mustered beside King Alfred's statue at 9 a.m. With 40 or 50 volunteers and privately owned trucks, they spent the whole morning clearing away rotting garbage from the commercial premises in the centre of town, where it was most expensive and offensive. They did a good job, and shifted about 10 tons of the worst garbage to one of the emergency dumps that had been arranged by the council outside the city. This action was used as a pretext by the union spokesman to escalate the strike and cause total paralysis in the words that I have quoted.
A great many of my constituents are confused and bewildered. The members of the National Federation of Self-Employed who carted the rubbish away yesterday are asking me whether they did the right thing. People concerned with the cathedral are asking me whether I
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saw the television broadcast by the Archbishop of Canterbury over the weekend and also know of the remarks made by the hon. Member for Paddington (Mr. Latham) about the Archbishop being a hypocrite. Many people heard the Prime Minister recently saying that strikes should be a weapon of last resort, and are asking how this situation can occur in Winchester.
The Winchester council workers are also confused. They are reasonable people. I am as much their Member of Parliament as I am of any others in Winchester, and I am sorry that they feel that they have a sense of grievance. But I am even more sorry that they should be led into taking militant action, which I believe is foreign to their instincts and contrary to their interests.
Other groups of volunteers are seeking to help in the hospital—
Mr. Speaker: I am sorry to interrupt the hon. and gallant Member, but he must not make the speech that he would make if I had granted his application.
Rear-Admiral Morgan-Giles: Thank you, Mr. Speaker; I shall take a short cut. Above all, the National Federation of Self-Employed and the volunteers who yesterday joined them ask whether there is any reason why their action should be considered provocative, and whether there is any obligation on private citizens to seek the approval of NUPE before clearing the streets of their city. Yesterday's events have had wide publicity, and constituents and people from other areas have telephoned to ask me the same question.
In conclusion, the matter is specific, urgent and important. The public, not only in Winchester but over a wide area, are asking how much longer they have to be pushed around like that.
Mr. Speaker: The hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles) gave me notice this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the total paralysis of local government services in the Winchester area".
I listened with anxious consideration to the facts outlined about the circumstances in Winchester. After careful consideration, I cannot submit the hon. and

797
gallant Gentleman's application to the House. I am not saying that it shall never be discussed; I merely have the right to say whether it should be discussed tonight or tomorrow.
Mr. David Price: Following your ruling, Mr. Speaker, would it be an abuse of a point of order to ask, in view of what my hon. and gallant Friend said, whether the Government would indicate that within the next day or two they would make a statement about the position of volunteers in this difficult time? We are all being asked the same question as my hon. and gallant Friend, and it would be an enormous help to have guidance from a Minister.
Mr. Speaker: I have had no request, but I am sure that the hon. Gentleman's words will have been heard.

STANDING ORDER No. 9 PROCEDURE
Mr. Powell: I wonder whether you would think it right, Mr. Speaker, to use your influence to secure the reference to the Committee on Procedure of a renewed consideration of our procedure under Standing Order No. 9. Without disrespect to any hon. Member, it might be felt in many quarters of the House that the procedure leads to unfairness towards Members generally on the part of those who, in some cases, seek to make
798
applications to you. I do not cast aspersions; I ask whether you would think it helpful to the House once again to secure the reconsideration of the procedure by the appropriate Committee.
Mr. Speaker: The words of the right hon. Gentleman will have been heard, and I am sure that they will be noted by those who are responsible.

BILL PRESENTED
  CONFIRMATION TO SMALL ESTATES (SCOTLAND)
  Mr. Michael Clark Hutchison, supported by Mr. Hamish Gray, Mr. Malcolm Rifkind, Mr. Neil Carmichael, Mr. Ian Campbell, and Mr. James White, presented a Bill to amend the law relating to small estates in Scotland; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 16 February and to be printed [Bill 821.

BUSINESS OF THE HOUSE
Resolved,
That, at this day's sitting, this House shall not adjourn until Mr. Speaker shall have reported the Royal Assent to any Act which has been agreed upon by both Houses.—[Mr. Graham.]

ORDERS OF THE DAY

  CREDIT UNIONS BILL
  Order for Second Reading read.
  3.59 p.m.
  The Minister of State, Treasury (Mr. Denzil Davies): I beg to move, That the Bill be now read a Second time.
  This Bill provides a statutory framework for credit unions, together with a system for their registration and supervision. Credit unions are not widely known in Great Britain, although they have been successful in Northern Ireland and abroad.
  A credit union is a self-help association, run on mutual lines, in which members agree to pool part of their savings, in order to provide themselves with a source of low-cost credit. Interest—in the form of dividend—is paid upon money invested in the credit union, and, from the funds accumulated from those savings, loans are made to members upon which they pay interest to the credit union. Members of a credit union will have a "common bond"—the significance of which I will explain later—and only members of a credit union can borrow from it.
  The loans that a credit union makes are made on a personal basis and borrowers do not necessarily have to give security. Credit unions are, in effect, therefore, financial co-operatives whose main object is to provide their members with loans for everyday requirements—whether goods or services—at the lowest posible rates of interest.
  Northern Ireland and the Republic of Ireland, New Zealand, the Caribbean and Latin American countries and the United States all have strong credit union movements. Since 1969, credit unions in Northern Ireland have been regulated under the Industrial and Provident Societies Act (Northern Ireland) of that year. The terms of the Credit Unions Bill now before us owe much to the experience gained in administering the Northern Ireland credit union legislation.
  There are already more than 50 credit unions operating in Great Britain, 10 of which are registered under the Companies
  800
  Acts, and four under the industrial and provident societies legislation. But the Companies Acts do not provide an entirely suitable statutory framework. Neither does the Industrial and Provident Societies Act, as it stands at present. The majority of the credit unions so far established in this country have, therefore, preferred to operate as unregistered societies. Moreover, neither the Companies Acts nor the Industrial and Provident Societies Act provide the kind of prudential or supervisory requirements nowadays regarded as appropriate to a financial organisation of the savings and loan kind.
  The Crowther committee on consumer credit considered credit unions in its report in 1971, and concluded that there was a
  "… case for encouraging the credit union movement and for taking steps to make its existence, its aims and methods widely known in the hope it may take root here …"
  Since then, support for the concept of credit unions and for the need for legislation has increased. I would like to pay tribute to the work done in this direction by my hon. Friend the Member for Farnworth (Mr. Roper), who sought to introduce a Credit Unions Bill in 1972 and who has frequently since then spoken on behalf of the credit union movement. Support for the Bill has been given by the National Consumer Council and by the two organisations which sponsor and encourage credit unions in Great Britain—the National Federation of Credit Unions and the Credit Union League of Great Britain, which is affiliated to the World Council of Credit Unions.
  A basic feature of a credit union is that it is owned and run by its members on a democratic basis. It will normally be run through committees which are elected by the members. Credit unions are non-profit-making in the sense that, having made provision for interest on the savings placed with them by their members, and for running expenses, they do not aim to make any profit on lending other than a marginal amount to provide and service their reserves for the ultimate protection of members. In a credit union there is normally very little restriction on the purpose for which loans may be made to members. The loans may, for example, be for household goods, season tickets.

  801
  and so on. There will, however, be statutory limits to the amount which a member can borrow, and the loan will normally have to be approved by a committee of the credit union concerned. Subject to the limitations which the Bill lays down, the arrangement for repayment of the loan will also be determined within the credit union itself.
  Hon. Members will no doubt ask how safe is this kind of lending, bearing in mind that loans are often unsecured. The experience of existing credit unions suggests it is very safe indeed. For example, in the few cases where credit unions registered in Northern Ireland have been dissolved, there has been no loss of money whatsoever, nor have any defalcations been reported. By the end of 1977 there were 97 credit unions registered in Northern Ireland, with a total membership of nearly 85,000, total assets of £16 million and total loans outstanding of £14 million.
  There are several reasons for this good record. The first is that members of a credit union already have something in common. They may, for instance, live or work in the same place, or be members of the same church or group. This means there is a degree of co-operation and trust among them, and a network of personal acquaintance. Borrowers are generally no strangers. A credit union can usually assess their creditworthiness on the basis of at least some personal knowledge. Deliberate defaulting is also rare, because the money belongs to workmates, friends, or neighbours.
  A second factor is that a well-run credit union is more than simply a savings and loan club. When someone comes for a loan, for example, the credit committee may give advice on how rapidly it would be sensible to repay this and other debts. A third point is that most credit unions are comprehensively insured against fraud and theft.
  These features will be reinforced by the many prudential rules in the Bill, which will substantially reduce any remaining risk of insolvency. I shall come to these later. In addition, the credit unions have agreed that they should have some sort of scheme for share and deposit protection, comparable to those which other institutions are setting up under the impulse of the Banking Bill. We are discussing with the credit union organisations what form this should take.
  802
  I turn now to the Bill itself. If it is accepted that the credit union movement should be given a full opportunity to develop and expand, a new statutory framework is essential.
  Hon. Members should be aware that this Bill needs to be considered together with the Industrial and Provident Societies Act 1965, because it provides an extension of the provisions of that Act to cover credit unions. The provisions of the Bill will be administered by the Chief Registrar of Friendly Societies and the assistant registrars for England, Scotland and Wales.
  Registration of a credit union will be accomplished under the Industrial and Provident Societies Act 1965. Provided that the rules of the credit union contain those matters specifically required by the Bill and provided also there are the requisite number of members—a minimum of 21 and a maximum, normally, of 5,000—registration will be effected if the registrar is satisfied on two main factors. These are, first, that the objects of the applicant society are those, and only those, of a credit union, and, secondly, that admission to membership is limited to those persons who satisfy the conditions of a common bond, which must be set out in the credit union's rules.
  The Bill defines what are to be the objects of a credit union. They are the promotion of thrift among the members of the society, by the accumulation of their savings; the creation of sources of credit for the benefit of the members of the society at a fair and reasonable rate of interest; the use and control of the members' savings for their mutual benefit; and the training and education of the members in the management of their financial affairs.
  Clause 1(4) lists the common bond qualifications which are appropriate, as being one or more of the following: following a particular occupation; residing in a particular locality; being employed in a particular locality; being employed by a particular employer; or being a member of some other bona fide organisation. The Bill also makes provision for such other qualifications as are approved by the registrar. This will enable the registrar to approve other forms of common bond, from time to time, which are appropriate to a credit union.

  803
  It is also necessary to ensure that the common bond is a real one. A society whose only qualification for admission to membership was one which was so wide as to lack any real element of community would not provide the necessary foundation of mutual trust and co-operation. For example, a requirement that all members must reside, or be employed, in Greater London would be unlikely to be acceptable as a qualification for registration even though, on the face of it, it might be said to meet the criterion of residence in a particular locality.
  So, Clause I gives the registrar some discretion to consider the circumstances in deciding whether the qualification is appropriate to support the existence of a common bond in any particular case.
  There is one exception to the "common bond" requirement for joining a credit union. Provided the rules of the credit union concerned so allow, a person may be admitted to membership of a credit union if he belongs to the same household as someone who is already a member and who fulfils directly the specified qualification for membership.
  When the registrar is satisfied that the rules, objects and common bond provisions of the applicant society conform to the statutory requirements for registration, and he is also satisfied as to the society's name, an acknowledgment of registration is given. The credit union thereupon becomes a body corporate under its registered name by which it may sue and be sued, with perpetual succession and a common seal, and with limited liability.
  I should also mention that the Bill makes special provision for the re-registration of those few credit unions already registered under the Industrial and Provident Societies Act, and for conversion of credit unions registered under the Companies Acts into societies registered under the new provisions in the Bill.
  The registered rules of a credit union, like those of any other industrial and provident society, are broadly equivalent to the memorandum and articles of association of a company.
  Within the limitations of the Bill, a credit union can make whatever provisions in its rules for the society's
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  management that it wishes. It must, however, include those particular matters which are set out in schedule 1 to the Bill.
  In addition to the name, objects, registered office and membership qualifications, the following matters must also be covered in the rules: how meetings are to be held, and how rules are to be made or altered; the methods of appointing and removing a committee of management and of officers, their powers and remuneration; the maximum shareholding of a member, and the mode of withdrawal of shares; how loans to members are to be made and repaid; audit of the society's accounts; provision for the withdrawal of members, and for terminating the membership so as to keep members within the permitted maximum, and for the repayment of shares of, or loans to, any member whose membership is terminated in this way; the manner in which the society may be dissolved.
  Membership of a credit union will be limited to individuals; a body corporate may not be a member. Each member must hold at least one fully paid-up share in the credit union; though he cannot be required to hold more than £5 in fully paid-up shares as a condition of membership, a member may hold up to a maximum of £2,000 in shares in a credit union.
  To join a credit union, a person must qualify through the common bond. However, it will occasionally happen that a member may cease to be within the common bond of his union. For example, if the common bond is employment by a particular employer, a member may leave that employment and thus might no longer qualify for membership. In such a case, where a member ceases to enjoy the common bond qualification, he will be allowed nevertheless, to continue as a member, provided that the number of such persons does not at any time exceed 10 per cent. of the total membership of the credit union.
  One of the principles of all registered co-operative societies—and credit unions will be no exception—is the entitlement of each member to cast one vote, regardless of the number or value of the shares he holds, on any matter which falls to be decided by vote. This is specifically provided for in clause 5(7).

  805
  The Bill provides that each society must have a minimum of 21 members and a maximum of 5,000 members. The registrar has a discretion, however, to permit the maximum to be exceeded.
  The actual operation of a credit union is, like that of any mutual society, very much a matter for the society itself. The registrar has powers to intervene in certain circumstances but, provided it keeps within the law and remains financially sound and viable, a credit union will be left to manage its own affairs without interference by the registry. The Bill does, however, make certain provisions in relation to the administration of a society, and I shall refer briefly to those matters now.
  First, I will mention some provisions with regard to those who put their money into a credit union. As distinct from a company, a credit union, in common with other industrial and provident societies, is not required to provide in its rule for the number or value of shares which it may issue. Every member must hold at least one fully paid-up share, and he may hold shares up to a maximum of £2,000, but he cannot be required to hold more than £5 in fully paid-up shares as a condition of membership. In practice, there-force, the share capital of a credit union will vary from time to time according to the shares allocated.
  All shares have to be of £1 denomination, and the dividends payable are not to exceed 6 per cent. per annum, or such other rates as may be specified from time to time. Shares are not transferable, the only exception being that they may be transferred by nomination on the death of the holder. Shares are withdrawable, but they may be issued only on terms enabling the credit union to require not less then 60 days' notice of withdrawal. There is, however, as I understand it, nothing to prevent a credit union in practice waiving this notice of withdrawal.
  Generally speaking, a credit union will not be able to accept money on deposit, but there is one exception. No one under the age of 16 can be a member of a credit union, but a credit union is to be allowed to accept sums on deposit up to a specified total amount from young persons under 16, which will be held in a separate fund on trust for them and invested so
  806
  as to produce an income, which will be distributed as interest to the depositors.
  There are a few provisions relating to those who may wish to borrow from a credit union. A credit union may only lend to a member, who is of full age, for a provident or productive purpose. It is left to the credit union concerned to provide, by its rules, whether, and if so what, security is required, but, if present practice is followed, most loans will be unsecured.
  The total amount which may be lent to any one member at any one time may not be more than the sum of his paid-up shareholding at the time, plus £1,250. This last figure may be varied from time to time by an order made by statutory instrument. Thus, if a person's paid-up shareholding is £250, his total borrowing must not exceed £1,500. In practice, the amounts borrowed are, on present experience, usually likely to be very much smaller than this.
  Any loan must be repaid in full within two years if it is unsecured, or within five years if it is secured. Again, these periods may be varied by statutory instrument from time to time.
  The statutory limit at present proposed for interest charged on loans is 1 per cent. per month on the reducing balance, and, although the rate charged by a credit union may be less than this, the rate may not be exceeded.
  The Bill makes provision for the holding and investment of a credit union's surplus funds, the funds received or accumulated from members, which are not currently required for its purposes.
  Apart from working cash, such funds will be kept in banks designated for the purpose by the Chief Registrar or invested in investments according to the manner laid down by the Chief Registrar in an order made by statutory instrument. This order will, I expect, be somewhat similar to the authorised investments orders made under the Building Societies Act 1962.
  In addition to holding a proportion of its funds in liquid and near-liquid form, the building up and maintenance of adequate reserves is obviously essential for the sale and successful operation of a credit union. The Bill therefore requires that at least 20 per cent. of any profit in any year of account is to be transferred to a general reserve, until such

  807
  time as the reserve is equal to at least 10 per cent. of the total assets of the credit union. Thereafter, the general reserve is to be maintained at not less than 10 per cent., but not more than 20 per cent., of the total assets.
  This provision for the building up and maintenance of the general reserve has first call on a credit union's profits. After that, not less than 90 per cent. of any profits remaining must be applied in payment of a dividend to members on their paid-up shares; or as a rebate of interest paid by or due from members who have received loans; or, provided that a dividend of at least 3 per cent. is paid to members on their paid-up shares, up to 10 per cent. of the year's profits may be applied for any social, cultural or charitable purpose.
  Exactly how the profits are to be applied within these guidelines is determined by the credit union itself—that is to say, by its members in general meeting.
  The bulk of a credit union's income will come, of course, from lending to its members, and the Bill provides that this will be completely free from tax.
  Credit unions will also have some income from investment, but this will be relatively small. It will be subject to corporation tax at the special rate of 40 per cent. which applies to all industrial and provident societies. The dividends that a credit union pays its members will be subject to personal tax, but because these dividends have not so far been taxed in Northern Ireland—with the knowledge and approval of the previous Government—the dividends paid by existing credit unions throughout the United Kingdom will, as provided in the Bill, be exempt from tax.
  The registrar is also to be given powers which may be exercised in the interests of members of a credit union or those who are likely to become members. These powers broadly correspond with the powers which he already has in relation to other societies, in particular building societies and friendly societies. For example, he may, with the consent of the Treasury, if he considers it in the interest of members or potential members, suspend the operations of a credit union, by prohibiting it from borrowing money,
  808
  from lending money, from accepting new subscriptions or making repayments of shares, or from doing one or more of these things.
  Mr. John Lee: Concerning the registrar's powers, will my right hon. Friend indicate the sorts of circumstances in which he would envisage that the registrar might permit a maximum to go beyond the statutory provision of clause 6(2), namely, 5,000?
  Mr. Davies: I think that they would be fairly exceptional circumstances, as far as one can see at the moment, but if credit unions were to develop and the 5,000 limit appeared to be a little low—that might take a considerable time—no doubt the registrar would consider exceeding the maximum. But, apart from one or two specific cases, it is very unlikely at the moment that the maximum limit would be allowed to be exceeded.
  The registrar may also cancel or suspend the registration of a credit union in certain circumstances, for example, if it appears that there no longer exists a common bond among its members.
  There are also fairly wide powers to appoint an inspector to investigate and report on the affairs of a credit union as well as to petition for winding up.
  I have touched only upon what I think to be some of the more important provisions of the Bill, but I hope that this will have been of some assistance to hon. Members in providing a broad outline of the proposals in it.
  Credit unions have the twin virtues of providing a source of low-cost domestic credit while encouraging saving. In recent years, we may have overlooked the value and advantages of such institutions operating on a smaller, more human scale, and particularly of institutions which embody mutual co-operative principles of self-help. The Bill will rectify that omission and provide a statutory framework within which credit unions can be recognised, supervised and made accountable. This is a goal for which credit unions themselves have fought, and I believe that it is a worthy one.
  4.19 p.m.
  Mr. Peter Rees: I am sure that the whole House is grateful to the Minister of State for the

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  moderate and lucid way in which he expounded the Bill. The debate on the Bill might he regarded as a tranquil interlude amid rather more contentious business. Some people outside the House might even wonder why we should be devoting our time, at this juncture in the nation's affairs, to a matter apparently of such small importance, but I hope that the speech of the Minister of State—and, indeed, the contributions from each side of the House—will persuade those in the country outside that this is a small but important matter.
  Credit unions, as the Minister of State, I hope, has demonstrated, are both interesting and useful phenomena. I pay tribute to the hon. Member for Farnworth (Mr. Roper), who has drawn to the attention of the House the possibilities of credit unions. I have no doubt that he will take personal satisfaction in this Bill.
  The House will have become used to industrial co-operatives, and so we perhaps could describe credit unions as banking co-operatives. But in so describing them I should not like to be thought to be encouraging either the NEB or the right hon. Member for Bristol, South-East (Mr. Benn) to take a closer interest in them.
  Mr. John Tilley: Why not?
  Mr. Rees: Because I believe that credit unions have flourished without undue Government interference or supervision. So far as possible we should encourage that. Where it is necessary to regulate and provide a legal framework, it is the duty of the House to do so. But, subject to that, I believe that if people can regulate their own affairs and can develop a useful, practicable and profitable vehicle for saving and for credit, they should be allowed to do so without excessive public interference.
  The history of credit unions shows that they have flourished without undue attention from this House. As a matter of historic interest, I remind hon. Members that credit unions were first devised in Bavaria in the middle of the last century. They were exported to the United States and to Quebec, and they found their way back to these islands through Ireland, where I suppose they have become the successor to the gombeen man. I have no doubt that the right hon. Mem-
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  ber for Down, South (Mr. Powell) will have pertinent comments to make about that. They have also come back through the West Indian community in Great Britain.
  The Minister of State told us how the Crowther committee gave them a favourable nod, and I suppose that the House today is taking up the story where the committee left off. The Minister of State commended them to the House as providing a form of low-cost domestic credit. At this juncture in our affairs, with the minimum lending rate at 14 per cent., that must be a laudable and praiseworthy objective, and one that I am sure will commend itself to the country. Perhaps as a result of the combination of this debate and current financial circumstances more people will be induced to take a closer look at credit unions and their advantages for themselves and their families.
  The Minister of State referred to the objects of the credit unions and he quoted from clause 1(3), which demonstrates clearly what they are all about. I have some slight reservations about subsection (3)(d), which states that one of the prescribed objects of a credit union must be
  "the training and education of the members in the wise use of money and in the management of their financial affairs."
  Without seeking to introduce a contentious note, that strikes me as being a little paternalistic, not to say patronising. It smacks a little of a committee of prosperous members of that Edwardian middle class, presided over, perhaps, by the Webbs, devising a form of uplift for the Edwardian working class. I hope that we have moved beyond those days and that if there is to be training for the members of the society in the management of their financial affairs it will be merely as a pleasant by-product of a credit union rather than a prime objective.
  Mr. J. Enoch Powell: Did the hon. and learned Member for Dover and Deal (Mr. Rees) happen to notice that in his opening speech the Minister of State omitted the words
  "the wise use of money"
  from his quotation from subsection (3)(d), which suggested to me at the time that he, too, might be sharing some of

  811
  the sensations experienced in this connection by the hon. and learned Gentleman?
  Mr. Rees: I noticed that, but since, as I said, I did not want to introduce a note of acrimony into what I hope will be a constructive and friendly debate, I did not wish to make excessive use of the Minister of State's sensitivities on this point. It is fair, however, to bring to the attention of the House the precise wording of the object prescribed in the clause. If a credit union cannot demonstrate that one of its prime objects is the training and education of its members in the
  "wise use of money and in the management of their financial affairs",
  the registrar would be within his rights, or even bound, to deny it registration. But perhaps this a minor matter best probed in Committee. I am glad that the right hon. Gentleman's sensitivities on this point are the same as mine and, I suspect, the same as those of the Minister of State.
  I suppose that the first question that we ask is whether we need legislation of this kind. Certainly we Conservatives do not applaud legislation for its own sake. However, I understand that there has been pressure from a steering committee of the credit unions, over which the hon. Member for Farnworth presides, because it feels that they need to be legitimised in some way. Perhaps they feel that it enables them to exercise a closer claim on the loyalties of those who might participate, especially if credit unions are to expand. I am not entirely certain whether I understand their fears and anxieties on this point, but perhaps I had best leave the matter to the hon. Member for Farnworth to tell us in what way the committee feels that the position of credit unions would be made more secure under the Bill.
  I well understand that there is a problem about how credit unions should be fitted into an extremely complex legal and financial mosaic. Somehow they must be reconciled with the Industrial and Provident Societies Act, the Consumer Credit Act and the Banking Bill, of which my hon. Friend the Member for Hitchin (Mr. Stewart) will be able to tell the House something since he has been on the
  812
  Standing Committee examining the Bill. We shall no doubt have to explore in Standing Committee how this Bill fits into this complicated jigsaw.
  We shall have to explore such esoteric questions as how far the committees or members of credit unions should be regarded as debt counsellors for the purpose of the Consumer Credit Act, but I do not think that it is necessary to take up the time of the House on that subject now.
  The next question is whether, in deferring to the steering committee of credit unions and in helping credit unions to achieve the laudable objectives set out in the Bill we may not be trussing them up a little too tightly.
  The Minister of State, with his customary fairness, has drawn attention to some of the restrictions, limitations and safeguards which are to be built in. I merely draw the attention of the House —briefly now, because this matter is more appropriate for examination in Committee —first to the limitation on dividends in clause 7(6), and, secondly, to the provision for 60 days' notice of withdrawal. I was not entirely certain from what the Minister of State said whether this is merely an enabling provision for the committees to impose a 60-day limit or whether it is mandatory. The Minister of State has a keen eye for these legislative details, and perhaps mine is a little blurred.
  I am a little perturbed, too, about the inability of credit unions to accumulate their investment income because of the restriction in clause 8 about the requirement that they are to sell any land required as a security as soon as may be, under clause 11(4), and, finally, at the power of the registrar to suspend the operations of a credit union.
  This has always been found to be a particularly difficult power for any registrar to operate. I call to mind particularly the operation of the power in relation to insurance companies. There will always be the temptation, so as not to prejudice the existing members of a credit union, not to exercise such a power until the horse has bolted from the stable.
  Hon. Members may feel that, having made these points on the limitations imposed by the Bill, if I should now suggest that, if credit unions are to expand

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  this framework might not be adequate, I am being inconsistent. I hope not. It may be that what has been devised by the Minister of State is suitable where a credit union involves 21,210 or maybe 2,100 members. The House knows that the present limits are now set at between 21 and 5,000 members. However, the registrar has a discretion to accept a greater number of members for a credit union. If the experience in other countries is anything to go by, it could be that if credit unions catch on we could be faced with credit unions with many more members.
  I understand, for example, that the Caterpillar Credit Union of Illinois has 55,000 members, while the Navy Federal Credit Union, again a United States organisation, is worldwide in operation, presumably because it recruits from the United States Navy and has about $500 million of assets. If credit unions expand to that extent, we shall have to consider whether the framework of this Bill is appropriate and whether we should not go over to something that is more akin to our Companies Acts.
  I hope that whoever replies to the debate on behalf of the Government will say what will be the registrar's policy if a particular credit union is so successful that it wishes to expand beyond the 5,000 members mark, and whether he will insist that a new credit union is formed or will feel that a credit union of, say, 10,000 members can be comfortably contained within the provisions of this legislation.
  If the figure goes beyond the 5,000 mark, the House may wish to impose rather more restrictive conditions on those who form the committee of the credit union. Indeed, we may have to consider whether there should be any restriction or regulation on the transmission of money between various branches. If a credit union has as many as 55,000 members, it will be not much less than a clearing bank, although perhaps devoid of some of the functions of a clearing bank. It will be necessary to see whether it should be supervised in a closer and more professional way.
  I now turn to the subject of taxation. I hope that the Minister of State will forgive me if I say that I thought he skated a little cursorily over the thin ice of that pond. We are told that the profits of a registered credit union are not to be sub-
  814
  ject to corporation tax or income tax. That may seem to be a massive privilege and one that offsets all the limitations and restrictions imposed by this Bill.
  I wish to remind the House—and I hope that the Minister will be able to confirm this later—that most credit unions will probably not be subject to corporation tax or income tax in any event because of the principle of mutuality. I am referring to the mutual interest of all the members involved who will be borrowing from and lending to each other. This is not a massive privilege. I also notice that interest on loans is not to be taxable.
  Mr. Denzil Davies: I should make it clear—and I shall expand on this later if I have the opportunity to do so—that the Inland Revenue has taken the strong view that without legislation credit unions will not benefit from the exemption of mutuality to which the hon. and learned Gentleman has referred. Without this legislation giving them a specific exemption, they would be taxable and would not gain the mutual benefit exemption.
  Mr. Rees: We are grateful to the Minister for making the position clear. He is right to state the Inland Revenue's view. I can only say to the House, with a certain diffidence, that I should have thought that the mutuality principle did apply. There has been no test case taken, so far as I know, and no doubt the hon. Member for Farnworth will be able to confirm this. Certainly, so far as I know, no case has gone to the general or special commissioners—and certainly none has been heard by any higher court which supports the proposition just advanced by the Minister of State.
  I do not think there is a great gulf between us on whether credit unions should be exempted in the future. This Bill will put the matter beyond doubt. It may be a matter of academic interest for tax lawyers as to whether credit unions should or should not have been subject to tax in the past. But if a credit union is not eligible for registration, or if it is de-registered, the point may become somewhat acute. I have no doubt that such unions will take advice and test the position in the courts.
  I see from the Bill that interest on loans to members is not to be taxable. I would have thought that such interest

  815
  would also be subject to the mutuality principle. The Minister has said that income from outside sources is to be taxable. It may be that my attention wandered at that point in the Minister's speech, but I was not sure at what rate it would be taxable. Perhaps he will say whether it is to be at 40 per cent.
  Mr. Denzil Davies: Yes.
  Mr. Rees: I am grateful to the Minister for that information. If that is so, there may be a case—and this point is more appropriate for Committee—whether they should be entitled to at least a measure of relief for their management expenses against their outside investment income. I do not think that we have a concluded view from this side of the House, and we should like to hear the arguments deployed in more detail.
  The next, and perhaps the most important, point to be considered is how the distributions of a credit union to its own members should be treated. The Bill appears to say that credit unions which now exist, or new credit unions that take over the business of established credit unions, will not be subject to tax on any distributions which they make to their members. This is certainly the position that has obtained until now in Northern Ireland, and it may be the position that has obtained until now in Great Britain. However, henceforth new credit unions, whether formed in Northern Ireland or Great Britain, will be subject to tax on distribution to their members.
  This may be a point of some importance since they are obliged after a certain level is reached to distribute their surpluses. This will bear hardly on new credit unions and will provide an incentive to people to try to join old credit unions rather than to form new ones. I do not believe that such a move would necessarily be for the good of the credit union movement. Indeed, it will increase the pressure to push credit unions beyond the 5,000 members mark. Therefore, there is an inconsistency which we shall have to explore. The position is a little untidy, but that is not the important point. The important point is that there should not be discrimination between old and new credit unions. We shall have to press the Minister more closely in Committee about why he feels that this distinction
  816
  should be drawn. I do not know whether the Minister of State now wishes to add to his earlier remarks.
  Mr. Denzil Davies: Perhaps I may ask the hon. and learned Gentleman—I do not necessarily wish to have an answer now, and I appreciate that there is a certain inconsistency—whether he is arguing that in all credit unions dividends to members should be free of income tax or that dividends to members should be taxed in respect of all credit unions.
  Mr. Rees: The Minister of State is right to press me on this matter. There are two logical positions. One can argue that the exemption should apply to all credit unions, notwithstanding what has happened in the past, or to none. I concede that the Conservative Administration tolerated, connived at and perhaps even encouraged the exemption from tax for credit unions in times past. All one can say is that logically all should be exempt on distributions to members or none. We should like to hear the arguments deployed a little more fully, because the Minister of State will readily concede that he merely indicated the position without advancing any arguments for either course of action.
  Since I have not had the chance to consider the matter in the light of any further arguments to be advanced by the Minister of State, I prefer to reserve our position. This was a point which the Minister did not explore very fully in his introductory remarks and perhaps this is a matter which we shall wish to examine in Standing Committee.
  In conclusion, I shall say that we on the Opposition Benches support credit unions. We support any measure that will give them legitimate encouragement and, therefore, in principle we welcome the Bill. We have reservations about the details, but these we can explore in Committee. We welcome the introduction of the Bill and we hope that it has a fair wind tonight.
  4.40 p.m.
  Mr. John Roper: I begin by declaring an interest in the Bill, albeit a totally non-pecuniary interest. For the past eight years I have advised, in an honorary capacity, the Credit Union League of Great Britain on matters associated with credit union legislation.

  817
  More recently I chaired the credit union steering group, bringing together the various credit union organisations in this country.
  The debate marks an important milestone in the efforts of the league and the National Federation of Credit Unions to obtain a satisfactory legislative framework. In a moment I hope to come back to the point raised by the hon. and learned Member for Dover and Deal (Mr. Rees) about why it is necessary to have a satisfactory legislative framework for credit unions.
  I begin by paying tribute to the considerable efforts made by my right hon. Friend the Minister of State and his officials in the Treasury to understand the practice and problems of credit unions and to incorporate the result of their understanding in the provisions of the Bill. I should also like to mention the helpful advice provided by not only the Chief Registrar of Friendly Societies for Great Britain but those in the Department of Commerce in Northern Ireland responsible for the administration of credit unions and the registrar in that Province. As I believe my right hon. Friend said, that advice led to a number of important changes in the Bill.
  The hon. and learned Gentleman, in the historical excursion with which he began his speech, went back to Bavaria. Indeed, one of the roots of the credit union movement is the Schultze-Delitsch in that country. It is interesting that, according to the autobiography of Ed Filene, who was a prosperous Bostonian largely responsible for the development of the credit union movement in the United States, he discovered the idea of small-scale credit co-operatives on a world tour during the opening years of this century. He made the discovery in India, where, in the province of Bengal, a Scottish agricultural development officer had started small-scale credit co-operatives. It is perhaps approprate that what Filene learnt from a British—I was going to say colonial British—administrator in Bengal in the early part of the century has gone round the world and, in a sense, is now coming back to this country through the Bill—although, of course, we have learnt from other movements such as Desjardins, started by the French in Canada, and the German tradition.
  818
  I should like to say a word about the points made by the hon. and learned Gentleman on the need for legislation. Quite clearly, whenever we consider additions to the statute book, a case must be made for them.
  There are three reasons for legislation. The first is to find an appropriate form of corporate law in which a cooperative body such as a credit union can fit. The Companies Acts sit somewhat heavily on a co-operative body. That is why we have a separate body of co-operative law and the industrial provident societies legislation in general. That legislation does not provide for a financial co-operative's making small-scale loans to members. For example, it is not able to make unsecured loans. Therefore, there is clearly a need to amend the existing industrial and provident societies legislation if there is to be a corporate structure for credit unions.
  Secondly, as the hon. and learned Gentleman hinted, within the new framework of legislation for financial institutions in general, which was introduced by the banking legislation and which, as the right hon. Member for Down, South (Mr. Powell) is noting with some glee, derives from the EEC directive on financial institutions, there is a need to make provision for credit unions.
  Thirdly, there is a case for protecting against abuse the good name of a body such as a credit union which is acting on a relatively small scale, in a voluntary way in many cases. If we did not have —as we do in this legislation—restrictions preventing people from using the words "credit union" unless they operate in a proper way, a way laid down in statute, there would be a risk of abuse of the concept of a credit union. We could have people setting up something which they called a credit union but which operated in a totally unscrupulous way. If such institutions are to develop, which I think would be a good thing, we need a legislative structure.
  It is interesting to note that in almost all Commonwealth countries—I have checked most of them—there is already credit union legislation, much of it broadly falling within the general structure of their co-operative and industrial provident society legislation.
  I should like to make one or two comments about the matters contained

  819
  in the Bill and then say something about the general position of credit unions in the United Kingdom in the light of the Bill. As my right hon. Friend said, the Bill draws very largely on the legislation adopted in Northern Ireland in 1969. Indeed, that was the basis for the Private Member's Bill which I submitted to the House in 1972. The Government have taken advantage of this opportunity to make a number of changes. Many of them were foreshadowed by last year's White Paper, and many are based on the experience of credit unions, both in Northern Ireland and this country, since the passage of the original Act in Northern Ireland. Indeed, I think that power is taken in the Bill to enable these improvements to be made in Northern Ireland by statutory instrument in due course.
  Almost all of the changes are welcomed by the credit union movement as providing a firmer and more secure framework for the small-scale financial co-operatives. I would rather call them financial co-operatives than banking co-operatives. The concept of a bank is rather precise. I thought that the use of the phrase "banking co-operatives" by the hon. and learned Member might be misconstrued by the public.
  I am convinced that in the early stages of the development of the credit union movement it is right to have certain restrictions on their scale of operation and on the financial size of a member's participation in a credit union or, indeed, his borrowing from it. I should, however, warn my right hon. Friend that the figures quoted in the Bill—£2,000 and £1,250—as the limits of shares and the limits of borrowing beyond a member's shareholding were fixed about three years ago. In the light of inflation it may be necessary to increase them in Standing Committee so that they are more realistic.
  The role of the registrar, referred to by my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee), is very important in connection with credit unions, as has been seen in Northern Ireland, where the registrar has played a particularly constructive role. Certainly, until a credit union reaches a membership of about 800 to 1,000 it is likely to be run largely by volunteers with limited professional assistance. In that
  820
  situation a clear legislative framework and satisfactory rules approved by the registrar—and, if necessary, the intervention by the registrar as outlined in clauses 15 to 18—are safeguards which I believe should be welcomed.
  I should now like to turn to two matters to which reference has already been made and which will no doubt take up some time in Committee. The first is the question of the best method of protecting the shareholdings of members of credit unions. There would appear to be two kinds of risks to which members' shareholdings might be subject—the first the risk of loss through fire or theft and the second the risks of loss through financial mismanagement or through a credit union's getting into financial difficulties.
  Although clause 14 makes some provision for insurance arrangements, I hope that in Committee we shall be able to look at the matter more carefully and, in particular, examine ways whereby it would be made obligatory for credit unions to provide insurance against loss of their members' savings through fire and theft.
  I hope that in the foreseeable future arrangements will be developed so that all credit unions have to provide obligatory insurance for their members' share accounts, as is already the case in most other countries, and as will apply to many of the other financial institutions covered by the Banking Bill. It may be difficult for what is at present an embryonic credit movement in this country to establish such an arrangement overnight, but it does not seem to me at all unreasonable for credit unions to be expected to do so within the next five years or so.
  The second subject, which was treated in a most interesting way by the hon. and learned Gentleman, and which will no doubt take up a good deal of our time in Committee, is the question of taxation of credit unions. The problems of mutuality when it comes to individual organisations are very complex. Although it is true that credit unions would presumably have been able to pursue the idea of mutuality, through the special and general commissioners, to lay down a satisfactory tax structure for them in a Bill of this sort may well be more

  821
  satisfactory than that somewhat risky alternative, particularly in view of the limited funds available to organisations such as credit unions to take cases through several stages of litigation. Unlike my right hon. Friend and the hon. and learned Gentleman, I am not expert at the tax bar. One of the points to which we shall need to return in Committee is the one that the hon. and learned Gentleman made about the need for relief for management expenses, which I do not think is totally satisfactorily dealt with in the Bill.
  On the more general problem of relief on share interest, my right hon. Friend has a most difficult task to be fair to the existing credit unions—especially those in Northern Ireland, which has so far enjoyed a very favourable tax regime—without creating unacceptable anomalies in the treatment of credit unions and comparable financial institutions. Clearly, the movement is very unhappy about the situation that will now be created, in which there will be a distinction between new and old credit unions. I know that in Northern Ireland this matter has given rise to serious concern. We shall no doubt return to the matter in Committee, where I hope it will be possible to find a satisfactory solution, although I think that it will be a difficult task.
  I now turn briefly to the broader issues of the movement's future in this country. It is still relatively small in scale, although the remarkable progress that has been made in Northern Ireland since 1969, in a period which has not been very likely to be conducive to the growth of a new social movement, but where the movement has grown so that it now has assets of about £16 million, is an indication that the passage of legislation may well provide an important spur to growth in this country.
  There are some—the hon. and learned Gentleman referred to them in passing—who point to the United States credit union movement and in particular the rather atypical giant credit unions there. They suggest that the British credit union movement will suddenly follow their example. The hon. and learned Gentleman referred to the navy credit union. I was interested to learn recently that it has two branches afloat in aircraft carriers of the United States navy and has a branch in the British Crown colony of
  822
  Hong Kong—and, for all I know, in other places.
  Having said that, I think it is worth remembering that 80 per cent. of credit unions in the United States have fewer than 1,000 members. The typical American credit union is not one of the giants but is something much more closely linked to a particular workplace or community. Although there are the giants, somewhat atypical, they should not be allowed to distort the general national picture. Rather less than 10 per cent. of American credit unions have moved from the bread-and-butter business of credit unions into such matters as credit cards and share draft arrangements.
  I believe that, in spite of the extra range of financial services already provided in the United Kingdom, there will be a place for credit unions in Britain and that additional competition in the provision of financial services can only benefit the consumer. In particular, we may see a fairly rapid development of credit unions associated with people's workplaces. This has proved an important aspect of credit union development in Australia and Canada.
  When in the United States recently I was interested to see that both the Senate and the House of Representatives had their own credit unions. I hope that the day will not be too far off when we establish a Palace of Westminster credit union. I was glad to hear what my right hon. Friend said about the fact that those ceasing to enjoy membership of the common bond could retain their membership of the credit union.
  The Bill is no guarantee of the successful growth of credit unions in this country. However, its passage will ensure a fair base for their future competition in the financial market place in bringing basic financial services to their members on a co-operative basis.
  I am very pleased to have heard Second Reading moved in the way that it was on behalf of the Government and to hear the words of support from the Opposition.
  4.57 p.m.
  Mr. J. Enoch Powell: If I had dozed off and then woken with a start to see you in the Chair, Mr. Deputy Speaker, and to hear myself called to follow the hon. Member for Farnworth

  823
  (Mr. Roper), I should certainly also have seen the hands of the clock move to about midnight and reached instinctively for the latest piece of EEC legislation. It is, indeed, ironical that even in this debate the hon. Gentleman and I have found ourselves dogged by the subject, but it is at any rate a relief to be only tangentially concerned with it, and I am glad to follow someone who is so much better informed on this subject not only than I am but, I think, than most hon. Members.
  As the explanatory memorandum asserts, and as the Minister of State made clear in his opening speech, in this legislation the House is following a precedent set by Northern Ireland. For once, Northern Ireland has been in this respect the pacemaker for the kingdom.
  The Bill will, however, also alter the law governing credit unions in Northern Ireland. Indeed, if hon. Members look at clause 30(4), a newly devised but useful formula, they will realise that the various stages of this Bill are effectively the only opportunity that hon. Members representing Northern Ireland constituencies will have to influence the law that will apply in Northern Ireland.
  Therefore, I should be obliged if before the Committee stage the Minister of State could possibly provide a brief analysis which would show how the law as it will result from the Bill as it stands differs from that obtaining now in Northern Ireland under part III of the Industrial and Provident Societies Act (Northern Ireland) 1969. That would be a convenience not only in Committee but in the consultations which it will be the duty of my hon. Friends and myself to hold with those who are managing credit unions in the Province.
  There is, however, a mysterious rumour—perhaps it is no more—going about which perhaps the right hon. Gentleman could clear up before we end this debate. I was told in a communication from one of the credit unions in Northern Ireland that the board of the Irish League of Credit Unions had a meeting with officials of the Department of Commerce in Belfast, who informed them that credit union legislation in Northern Ireland
  "would not always have to run parallel to credit unions on the mainland and that it was
  824
  the intention of the Northern Ireland administration to commence drafting a consolidated Credit Union Act for Northern Ireland credit unions. This Act would be completely separate from the Industrial and Provident Societies Act."
  I find that statement—it is evidently an impression which has been gained by credit unions in Northern Ireland—difficult to square with the purpose and content of this Bill. While obviously consolidation is always useful, I should have hoped that the result of legislation would not be to continue the development of the law in the two parts of the kingdom on different lines but to bring them into one corpus. Perhaps any misunderstanding on that score could be laid to rest by the right hon. Gentleman.
  Incidentally, it may be that this and other misunderstandings have been assisted by the fact that whereas in Great Britain the Association of Credit Unions covers Great Britain only, in Northern Ireland the relevant association, which is the Irish League of Credit Unions, covers credit unions which are operating in two different countries under different codes of law—perhaps under codes of law which will continue to be different. It might well be that it would be to the advantage of credit unions operating in Northern Ireland to form their own association, especially now for the purpose of dealing with this legislation and with the changes which will flow from it. I say that in no desire to create division where division does not exist but simply because it is obviously more convenient for collective representations to be made in respect of one system of law only.
  Clause 30, to which I have already drawn attention, provides for certain reciprocal arrangements between the Treasury and the Northern Ireland authorities to be made under subsections (1) and (2). I wonder whether the Minister of State could explain a little more fully what is the purpose of those reciprocal arrangements. It may be that they are simply to facilitate the operations of Northern Ireland credit unions, whose members are resident, either temporarily or permanently, in Scotland and in England, and vice versa, or there may be some deeper purpose in these reciprocal arrangements which are to be made under clause 30. If the right hon. Gentleman can obtain the information in time, I

  825
  wonder whether he could give some enlightenment on that matter, as it may be of guidance in preparing for the Committee stage.
  Certainly there is one feature of clause 30(1) which, for those not in the know, may require a little elucidation. The clause refers to the Treasury making reciprocal arrangements
  "with the Department of Commerce or such other authority as may be specified … by any measure of the Northern Ireland Assembly."
  There is, however, no such body as the Northern Ireland Assembly. It may be that we are not within sight of the existence of such a body as the Northern Ireland Assembly. Nor would the Treasury, I believe, under present arrangements, deal direct with the Department of Commerce for Northern Ireland. The Treasury, as is well known to cognoscenti, is in fact a Minister, although it does not sound like a Minister. One Minister would presumably deal with another Minister—in this case the Secretary of State for Northern Ireland.
  The secret—or part of the secret—is that all these terms are reinterpreted by a schedule to the Northern Ireland Act 1974, the constitutional Act under which we are at present working. I shall not repeat, other than formally, my protest against writing into current Acts of Parliament provisions which relate to hypothetical and improbable circumstances, but perhaps the Minister of State would indicate how these reciprocal arrangements will be made and between which actual authorities they will be agreed; for it is obvious from the commencement clause—clause 31—that the reciprocal arrangements are intended to be made without appreciable delay, so that they clearly cannot be made as a result of anything done by the Northern Ireland Assembly. Perhaps the right hon. Gentleman will indicate how this will be organised.
  Not unnaturally, a good deal of what has been said already—and I am sure that this will hold true of the remaining stages of the Bill—has related to taxation. It is unfortunate that clause 23, relating to taxation, is the only clause which was not in the form of the Bill previously published in Command Paper 7303 issued in the summer. Certainly we should have come better prepared and better briefed
  826
  on this subject if that clause had featured in the White Paper edition of the Bill. It might even be that the hon. and learned Member for Dover and Deal (Mr. Rees) would have been in a position to answer the question put to him by the Minister of State; but he and I have been under the disadvantage that it was only when the Bill appeared that we were able to concentrate our minds upon the problem of taxation.
  As was indicated, the impact of this clause on credit unions in Northern Ireland will be severe. Owing to arrangements which were made locally under the Northern Ireland Administration, the outside income of credit unions—if I may use that convenient but inaccurate expression; I hope that it is understood—has borne only 20 per cent. corporation tax instead of the proposed concessionary 40 per cent. and members of unions have been free from taxation altogether on the share interest which they received.
  Incidentally, I wonder whether I am right in thinking that hon. Members who received loans from credit unions were not able to offset against tax the interest that they paid on those loans. I have seen a suggestion to that effect. It would perhaps bear upon the principle of mutuality and might be relevant to our subsequent debates if that were the case.
  I gather that the arrangements so far for credit unions in Great Britain have not been on the same advantageous lines tax-wise as those prevailing in Northern Ireland.
  Mr. Roper: As I understand it, the position in Great Britain is far from clear. The credit unions are not a homogeneous group. Some of them are incorporated and some are unincorporated. Some may have enjoyed the same position as those in Northern Ireland. Certainly there is no clear position for the credit unions in Great Britain.
  Mr. Powell: I am much obliged for that clarification.
  It is obvious that if we are now enacting what is in effect to be a United Kingdom code for credit unions—and surely a matter such as this should be regulated upon a United Kingdom basis —there must be uniformity in taxation.

  827
  Whatever might be the private feelings of the citizen about taxation in general or in particular, those whom my hon. Friends and I represent have no desire to be differentiated, for good or ill, in matters of taxation, from their fellow citizens in the rest of the United Kingdom. So we start upon the problem which is undoubtedly present with that presupposition.
  However, the solution which has been proposed in the Bill is unsatisfactory. It is unsatisfactory because it treats differently for tax purposes individuals who are in the same position: an individual who becomes a member of an existing credit union will be treated differently for tax purposes from an individual who, in identical circumstances, becomes a member of a new credit union. That seems to offend against one of the canons of taxation—that taxpayers in like situation should be treated alike.
  It also creates two classes of credit union, as well as two classes of taxpayer—the pre-1979 and the post-1979 credit unions. I wonder whether it can be in the interests of the development of this movement, to which evidently the House generally looks forward, to place disadvantages upon new credit unions. As the hon. and learned Member for Dover and Deal said, it must obviously stimulate the growth in size of existing unions. It may even generate pressure towards increasing the upper limit upon the size of unions. What it must do is to deter the creation of new credit unions. I do not think that this can be desirable.
  Credit unions reflect a common bond of many different kinds, sometimes connected with the place of work—I gather that that is the norm in the United States—at other times connected with place of residence. Almost without exception, the credit unions in Northern Ireland represent common residence and have, in fact, become credit unions for localities or communities. Surely we do not want to introduce into the Bill anything which will freeze the development of the movement exactly at the point which it has reached. If there is benefit in the spirit of this process— that was a view which the right hon. Gentleman the Minister of State evidently espoused—we ought to place no obstacle in the way of the establishment of new credit unions and new varieties of credit
  828
  unions. Yet here we are placing the most gross obstacle in the way by saying that existing credit unions are to live under one dispensation but the members of new credit unions will suffer comparative disadvantages.
  On the other hand, it would clearly be harsh for the credit unions in Northern Ireland suddenly to be brought into the full rigour of the proposed regime of taxation.
  I hope that it is in the light of the three factors which I have brought out—first, the desirability of a uniform United Kingdom tax system; secondly, the desirability of not making two classes; and, thirdly, the desirability of shielding the Northern Ireland credit unions from the wind of tax liability—that we ought to seek a more satisfactory solution in our deliberations in Committee.
  That said, I welcome, on behalf of my hon. Friends and myself, the introduction of this Bill. We believe that it will be beneficial in the Province from which we come, and we welcome it as another step towards uniformity of law and uniformity of practice between that part and the other parts of the United Kingdom.
  Obviously, there are many matters that will be dealt with in Committee; but if the right hon. Gentleman can contrive to respond to some of the points which have been put to him this afternoon before the close of the debate we shall enter upon the Committee stage better prepared.
  5.15 p.m.
  Miss Betty Boothroyd: The right hon. Member for Down, South (Mr. Powell) rightly indicated that Northern Ireland had been in the vanguard in the establishment of credit unions. He posed a number of questions about their future functioning under the proposed legislation. Alas, I am not in a position to respond to many of his questions. However, I believe that he is far too modest in saying that his knowledge of this matter is limited and that he was not particularly well briefed. He seemed to me to be particularly well briefed. No doubt he will go on posing his questions to my right hon. Friend the Minister of State, perhaps during this debate and certainly in Committee, so that, rightly, we are able to resolve this matter between

  829
  Northern Ireland and the rest of the United Kingdom.
  Those of us who are interested in the credit union movement and anxious to see that it flourishes in this country welcome the Bill as a worthwhile measure of social legislation. My hon. Friend the Member for Farnworth (Mr. Roper) introduced the subject into the House many years ago. I think that it was as a result of the basic work that he had done that almost a couple of years ago I initiated an Adjournment debate on this subject. Because of the procedures of the House, all that could be done at that time was to give the subject a general airing. Even so, it received a good deal of publicity. I probably had as much correspondence from individuals interested in this matter as on any other subject during my membership of the House. There is a great deal of interest in the whole subject.
  In replying to that Adjournment debate, the Minister of State naturally had to walk a tightrope over the question of legislation, but it appeared obvious then that the Government favoured such a development. Now, a couple of years later, it is with some satisfaction to me, at any rate, that the proposed legislation is before us.
  I am pleased, too, that the Minister of State introduced an international flavour in discussing the credit union movement, because it flourishes not only in Australia and Canada but in other countries throughout the Commonwealth. There are Commonwealth countries in which certainly the movement meets with success and performs a very valuable function. It is also very successful in those parts of the Commonwealth which are not, perhaps, as socially and economically developed as others.
  A good deal has already been said about Northern Ireland, so I shall not develop that point. However, I believe that in Eire there are about 280,000 members of credit unions, with assets totalling about £50 million.
  In all these countries there appears to be a legal framework. The framework and regulations which ensue from it have stimulated growth. We certainly look forward to similar success here for those unions which already exist.
  As I see it, the most important aspect of credit unions is that they encourage
  830
  regular savings. However small those savings are, regular savings are important. In turn, the way in which this operates also encourages a spirit of self-help and it fosters the community spirit. However, I share the sensitivity of the hon. and learned Member for Dover and Deal (Mr. Rees) in his point about clause 1(2)(d) and the wise use of money. Certainly I want to see fostered an educational objective by providing members with experience of financial management, but we must not be too paternalistic about the use of the words in the subsection.
  While savings are commendable, the loan facilities are also important. It may be no surprise to hon. Members to learn that half of Britain's working families do not have a bank account or a building society account. In times of real need, when a crisis arises and ready cash is needed, or when some unforeseen event strikes the family, it is in seeking to borrow money to cover that type of eventuality that people who have few savings and no collateral in terms of a bank account have to pay the high interest rates usually charged by the finance houses or the extortionate rates demanded by moneylenders.
  Those of us with bank accounts are able to provide some evidence of a track record, albeit not a very consistent one, and there is at least some collateral there. But the real problem for low-income families and small savers is not that they are unreliable borrowers. The contrary is the case. There is a good deal of evidence to suggest that it is not the poorest borrowers who default frequently. However, they lack the evidence to reassure those commercial lenders that they are reliable in their repayments. In this respect, therefore, the small borrower is assisted through credit unions.
  It needs to be emphasised that there have not been any cases of fraud. The existing credit unions are managed by very honest people who are leaders in their own communities and who are seeking to help their communities. But there is a potential danger that even one case of fraudulent practice could tarnish the image of the credit union movement and do considerable harm to its growth and to the individuals working in it. The earlier clauses in the Bill which provide for the legal framework obviously stem

  831
  from the realisation that there is at present little protection under the law in terms of a framework which is an essential ingredient for the movement's prosperity.
  Clauses 5 and 6 deal with membership and the rules of credit unions. The minimum membership is to be 21. This is quite realistic, bearing in mind the distinctive feature of credit unions, which is that those who form their membership have a common bond. The members of a credit union are known to each other. They work in the same shop or factory. It may be that they belong to the same voluntary organisation. They may be members of the same tenants' association or immigrant group. There is an interdependence and, because of this feature, it is necessary to have a fairly low minimum membership. Many of them are in small communities. If the members make up a tenants' association, it may be that there are few people involved. The same often applies to those on the shop floor in a small factory. So I do not challenge the number, but it will be interesting in Committee to discover how the number has been arrived at.
  I was grateful for my right hon. Friend's explanation about the procedure to be followed when because of a member's mobility he moves out of the neighbourhood or changes his job and has to break the common bond and withdraw from the credit union. No doubt a good deal further will be said about this in Committee.
  Moving on to clause 10, I hope that my right hon. Friend will explain the thinking behind the sum of £1,250 which is to be the total amount of a loan to a member. I confess that I did not understand his opening remarks, and I hope that he will say how the sum has been arrived at. Has it been arrived at by examining the loans to members in similar societies in Northern Ireland or Canada. and has their experience been drawn upon?
  I do not wish to delay the Bill any further. As I said earlier, we had a debate on the matter some time ago. The Bill does not seem to be particularly contentious. At least that is the impression of the hon. and learned Member for Dover and Deal (Mr. Rees). I hope
  832
  that any creases in it can be smoothed out easily in Committee.
  It may be that the Bill is not too contentious because of the back-room work which has been put in over many years by the Treasury and by representatives of the credit unions and because of the early agreement which was reached on the rules for operation and supervision. I understand that the draft Bill has received support not only from the organisations directly concerned but also from the National Consumer Council, which acknowledged that such legislation would provide a proper foundation for the successful operation and the further growth of the credit union movement.
  All that I need say in conclusion, therefore, is that I hope to see the Bill make speedy progress not only this evening but in Committee, too.
  5.25 p.m.
  Mr. Jim Craigen: I, too, welcome the Bill. My colleagues in the Co-operative parliamentary group feel that this is a very useful measure which will do a great deal to develop the role of credit unions as genuine self-help co-operatives and assist them at the same time in encouraging sensible borrowing arrangements and mutual aid to the members of credit unions.
  The credit union movement has developed quite distinctly from the traditional consumer co-operative movement in this country. However, they have common aims in the operation of the co-operative principle. Unfortunately, until now they have not had the advantage of operating under the industrial and provident legislation.
  Tribute has been paid to my hon. Friend the Member for Farnworth (Mr. Roper) for his efforts to achieve a framework of legislation through a Private Member's Bill a few years ago. In essence he was trying to do for Great Britain what Northern Ireland had done for itself back in 1969.
  I take up a comment by the hon. and learned Member for Dover and Deal (Mr. Rees) about the timing of this Bill. I suppose there is never an appropriate time to deal with what appears to be a small piece of legislation. Yet, ironically, the Bill comes along at a, significant time when we are all concerned with inflation and the means of reducing it. I have no

  833
  doubt that in the years to come this legislation will do a great deal to accommodate those who do not readily find themselves catered for by the banks. hire purchase or the money-lending institutions. Moreover, it has the advantage of ensuring that the borrower knows the true cost of his borrowing.
  It is understandable that the Government should be sympathetic to the credit unions, since they are non-inflationary. They make loans out of existing savings and therefore do not create additional credit in the way that the banks do or more particlularly in the way that the credit card system is operating and creating a massive expansion of credit.
  Many detailed matters will be dealt with in Committee, and reference has been made already to the special problem of taxation on the dividend on members' share capital. I agree with the right hon. Member for Down, South (Mr. Powell) that it is quite wrong to operate double standards between new credit unions throughout the United Kingdom and those already in existence in Northern Ireland. Moreover, the idea of taxing all the dividend on share capital paid to members is unlikely to facilitate the type of growth which the Government clearly envisage for credit unions. such a liability to tax obviously will inhibit that initial growth and may oblige the credit unions to break through the 6 per cent. maximum dividend since they will come up against competition from the building societies and the National Savings Bank, for example. The answer is surely for the Treasury to exempt, say, the first £6 of interest on share capital. That would make it possible for any member of a society registered under the industrial provident legislation to invest the modest sum of £100 in fixed interest shares without being liable to tax.
  The cost of such an exemption to the Treasury would be insignificant, particularly bearing in mind the savings that would be involved through the Inland Revenue not having to deal with thousands of forms returning only minimal amounts liable to tax. If the Government are serious about wishing to see the increased development of credit unions, I suggest that such an exemption would be a considerable act of faith which would facilitate their growth.
  834
  Without detracting from earlier legislation on industrial common ownership and the Co-operative Development Agency, I suggest that this Bill will lead to the biggest development of co-operative organisation in the post-war years and do much to develop the idea of social and financial co-operation.
  I welcome the Bill and I hope that it will be strengthened in Committee, particularly in respect of the taxation provisions.
  5.32 p.m.
  Mr. Michael McGuire: The story of credit unions is not well known, but, while it has not been spectacular, it has been a success. Credit unions have a record of solid achievement and it is incredible how little is known about them in this country.
  The right hon. Member for Down, South (Mr. Powell), quite properly from his point of view, always looks at the connection between Northern Ireland and Great Britain. He skated over the fact that although legislation already exists in Northern Ireland, credit unions did not really start there. The movement started in the Republic. I am not sure when it spread north or whether the credit unions existed in Ireland when it was a united country.
  Mr. Powell: I am advised that the first credit union in Northern Ireland was established in Londonderry in 1961. There had been credit unions in the Republic a few years previously, but much later than the 1920s.
  Mr. McGuire: Credit unions have certainly been much more a feature of life in Ireland than in this country.
  I agree with my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) that the Bill will give an impetus to the co-operative principle. My hon. Friend is always magnanimous and, although he wants to pay tribute to the Co-operative Party, to which he proudly belongs and of which he is such a capable spokesman, I think that he will agree that the Bill will lead to an extension not of the Cooperative Society movement but of the spirit of self-help—though in a different form from the self-help that most of us know in our working-class communities.
  Immediately before becoming an hon. Member, I was a pit secretary and, before

  835
  that, a miner. We had our mini versions of self-help, including help with funeral expenses. That is an area that will become increasingly important because the State grant for burials is abysmally low and needs to be substantially increased. Our self-help schemes were well received and most members appreciated them, particularly when their families were in trouble. However, we had nothing like the framework of credit unions.
  The Bill will strengthen credit unions. I do not suggest that the movement lacks respectability, but the Bill will reassure people that legislation exists to guarantee various aspects of credit unions' affairs and it will encourage their growth.
  I join the tributes to my hon. Friend the Member for Farnworth (Mr. Roper). He has been a good advocate of credit unions and, as the right hon. Member for Down, South said, my hon. Friend probably knows more about this subject than anyone else. He would probably disclaim that because he is a modest man, but it is generally acknowledged.
  I know a little about credit unions because their headquarters is in Skelmersdale, which has one of the biggest single groups of members. There is a group in London which may have just a few more members than the Skelmersdale group. The movement in Skelmersdale has been a success story. The great value of credit unions was demonstrated when we had the massive blow of 3,500 jobs being lost in the town a few years ago. The credit unions were able to help the casualties of those factory closures in a way that even the best organised tontines and working men's clubs did not have the capacity to match.
  The credit unions have gone from strength to strength. The national organiser, Mr. Len Nuttall, is a personal friend of mine and he told me recently that even in advance of the Bill, which redeems a promise given by the Government, he is busier than ever. I hope that he has to take on more assistance and that credit unions will become as well known here as they are abroad.
  My hon. Friend the Member for Farnworth said that the American Senate and the House of Representatives have a credit union. He suggested lightheartedly
  836
  that perhaps we may soon have one in the Palace of Westminster. I do not know what our common bond would be, but apart from hon. Members and their Lordships we have about 2,000 people looking after us and it may be that the common bond would be the fact that we all work here.
  The Bill includes a provision that 10 per cent. of the members of a credit union can leave the common bond and retain their membership. In view of recent opinion polls, we may have to stretch that a bit in the Palace of Westminster, but polls are volatile and, when the good things that we are trying to do get through, the polls may turn back in our favour.
  A number of matters have cropped up in the debate on which we shall need reassurance. An important one is the question of taxation, and the exemption suggested by my hon. Friend the Member for Maryhill would be an act of faith that would positively encourage the growth of credit unions. This could be done without our feeling that we were conferring an extraordinary benefit on credit union members.
  I give my support to the Bill. It should have a speedy passage tonight, judging fey the number of hon. Members present. I hope that it will have an equally speedy and not particularly contentious passage in Committee. The result will be a Bill which will make credit unions much better known. They should be better known. The Bill will facilitate their growth. We will have helped positively to make a great success story out of what is at present a modest but solid success story.
  5.41 p.m.
  Mr. Ian Stewart: I am happy to follow the hon. Member for Ince (Mr. McGuire) and other right hon. and hon. Members in welcoming the Bill. The hon. Member for Ince was right in saying that a certain obscurity surrounds credit unions in this country. I have learnt much about them in the past few weeks since this Bill appeared on the horizon. I have learnt more today listening to some of the instructive speeches that have been made.
  Some hon. Members have made incursions into the history of the credit union movement. I want to make one lesser

  837
  incursion into history in my congratulations to the hon. Member for Farnworth (Mr. Roper) for his work to promote the idea of credit unions in this House in recent years. He has an impeccable financial background. He and I, 24 years ago, used to sling our hammocks in the same mess deck of HMS "Theseus". Between us, if I remember rightly, was the hammock of my hon. Friend the Member for Blaby (Mr. Lawson). How could anyone, having that sort of background, speak with greater knowledge and authority?
  There is little quarrel with the main body of the Bill. Like other hon. Members who have spoken, I welcome the objectives that the Bill sets out as justifying the development of credit unions. The emphasis on Scottish thrift and Victorian self-reliance appeals to the instincts of one with my Presbyterian ancestry. Hon. Members have been right to emphasise how helpful could be the development of credit unions in making finance available to those who have found it difficult to borrow from traditional sources. The remarks of the hon. Member for Glasgow, Maryhill (Mr. Craigen) were apposite on this point. If all goes well, the credit unions set up under this legislation could prove a useful form of co-operative activity.
  I do not know exactly what is meant by the phrase in clause 10 about lending for
  "a provident or productive purpose".
  I hope that it does not refer only to funerals, illnesses and such like. It seems to me that much more general, unexpected or unusual demands on credit, such as the cost of moving house, a holiday, a wedding or some family occasion may be financed in future by members of credit unions through borrowings from them.
  Mr. Michael McGuire: The hon. Gentleman mentioned funerals, to which I referred in an aside. I spoke of how people try to provide for that eventuality. The hon. Gentleman will be aware that the present scheme of credit unions provides a free insurance scheme which caters essentially for that purpose. It is provided as an extra benefit provided small conditions are met.
  Mr. Stewart: I agree that the guarantee fund idea and the arrangements under it providing for lump sums in such circumstances are a benefit of the system and
  838
  could be one of the factors which enable the movement to develop.
  The hon. Member for West Bromwich, West (Miss Boothroyd) emphasised, rightly, the value of the common bond and the personal knowledge between members of a credit union and potential borrowers which resulted. If that is preserved throughout the structure of credit unions, as governed by this Bill, all will probably be well. Doubts arise perhaps in cases where the common bond may become diluted or so extended that it is not meaningful. That may be one reason why there have been problems in other countries.
  It is true that there have been few credit unions in Great Britain. The hon. Member for Farnworth, with his great experience of the subject, explained why the legislative framework had not been suitable to credit unions in the past. Several hon. Members have contrasted this situation with that in Northern Ireland, where credit unions in the past 10 years have flourished and have more than doubled in number. The savings that they contain have risen more than eightfold in that time.
  This Bill is in many ways parallel to the provisions for Northern Ireland. It contains many detailed items which we shall need to examine in Committee. These include the criteria for registration, methods of supervision, rules for accounting, the size of membership, the use of funds, procedures for suspension and amalgamation, and so on.
  My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) picked on the problems which may arise from anomalies in treatment for taxation. This point was also made, with his usual clarity, by the right hon. Member for Down, South (Mr. Powell). I do not wish to rehearse the points which have been made. It is clearly an area to which we shall have to pay further attention. I can think of a number of detailed implications. I give one example. If one credit union has a tax advantage over another, what would be the position on amalgamation? Would this preferential tax position carry through if one of the parties to the amalgamation had the tax advantage and the other did not? These sorts of matters, although proper for Committee stage, need to be mentioned now, not only to give the Minister and his

  839
  advisers notice of the issues we shall want to discuss but because they are typical of the difficulty of all regulatory legislation of this kind. When, a few months ago, we were discussing the equivalent stage of the Banking Bill, I had not realised the degree of complexity that could emerge when one considered detailed provisions in Committee.
  Another area to which we shall have to pay attention is the relationship of the Bill to other legislation. I mention the Consumer Credit Act. Will credit unions need to be licensed under part III of that Act? Will they be governed by the subsequent parts of the Act on seeking business, advertising, agreements and so on? Perhaps there is a clear answer. I ask this question because there is a strict requirement under the Consumer Credit Act that the true cost for all lending should be expressed at an annual rate of interest in very specific terms. In clause 10 of the Bill there is a limitation of 1 per cent. a month, but it is not expressed on an annual basis. This is the sort of issue on which we need to check.
  Another point comes to mind. In one of the schedules to the Banking Bill we already exclude credit unions in Northern Ireland, but, I imagine, for technical reasons, we are not yet ready to exclude credit unions which may be set up under a hypothetical Credit Unions Act 1979. I would think that a Credit Unions Act 1979 is at least as imminent a possibility as a Northern Ireland Assembly, referred to in clause 30. Perhaps we are allowed in legislation to anticipate the future to some extent. Obviously credit unions do not impinge on the Banking Bill but they are part of the financial framework which flows from it.
  Another point which is reminiscent of some of our debates on the Banking Bill relates to clause 3, which provides that
  "a person shall not, unless registered as a credit union … use in reference to himself a name, title or descriptive expression containing the words 'credit union' or any cognate term or any derivative of those words".
  Does that prevent anyone from describing himself as the treasurer of the XYZ credit union? I am sure that that is not the intention—it is tightly drawn and one can see that the intention is that unscrupulous people should not be allowed to use this term to make their activities respect-
  840
  able—but if it were to cause technical problems for credit union officers, that would be an absurdity.
  More importantly, we need to consider the position of credit unions within the country's financial structure. I hope that the Bill will enable credit unions to grow so as to enhance that structure rather than threaten it. There have been unexpected financial developments in recent years, such as the dramatic growth of the building societies and the pension funds.
  Probably few people would a few years ago have expected those bodies to reach their present size, yet both have developed by attracting funds from a large number of small contributors. That is exactly the basis that we are now planning for the future of the credit unions. Nowadays, the building societies and the pension funds are major components of our financial system. Credit unions may, and I hope will, also play a more significant part in future.
  That is why there has been some point in the discussion tonight of comparative international figures. I have been told that one-sixth of all the consumer credit in the United States is provided through credit unions. That is a high percentage. We have heard figures for the numbers of credit unions in Ireland, parts of the Commonwealth and the United States. I believe that there are almost 4,000 in Canada, covering almost one-third of the adult population. We must therefore be concerned about size.
  There are some anxieties about clause 6. As drafted, it appears to suggest that the Chief Registrar could have wide powers to circumvent the limit of 5,000 members for a credit union. As I said, the common bond factor might quickly become diluted in that case. That may not be the way in which the Chief Registrar will operate—creating joint credit unions on the pattern of other countries—but the powers seem to exist, so we should be aware of the dangers.
  The other area of anxiety relates to the functions of credit unions. Wisely, the Bill is fairly tightly drawn here. In America, what is called "correspondent credit unioning" has developed, under which credit unions interlock and provide reciprocal arrangements, thus creating a wider financial framework than the local or narrower common bond which was first

  841
  envisaged. They have even gone into money transmission with cheque-like instruments, the status of which is at present subject to litigation. In this respect the Bill is, and should be, tight.
  I hope that the Bill will prevent the exploitation of the credit union movement in undesirable ways. If we can avoid those dangers, it could have a substantial and valuable part to play. Parliament should be aware of the implications and the dangers, but I hope that it will not be frightened of accepting the Bill, after looking at it carefully and ensuring that it provides the proper basis for the development of credit unions.
  Regulation is obviously needed, and it must not be so tight as to stifle the movement altogether. Nor should it be so loose as to permit the uncontrolled proliferation of credit unions and their entry into areas of finance from which they are at present excluded in this country. I hope and believe that the Bill will achieve that balance.
  The acid test in such a matter is whether a Member would welcome such institutions in his constituency. I have not been able to discover that there are any credit unions in Hitchin—
  Mr. Deputy Speaker (Sir Myer Galpern): I have one at home, but my wife does all the borrowing.
  Mr. Stewart: You have possibly put your finger on one of the complications of credit unions that I was too tactful to mention, Mr. Deputy Speaker. But, avoiding the domestic aspect, from the constituency point of view, if there are not credit unions in Hitchin now, I hope that there will be in future. I shall have no hesitation in encouraging them.
  Subject to some of the anomalies which have been mentioned and questions which have been raised, which we can pursue in Committee, the Bill has been welcomed on both sides of the House. I trust that it will have an uncomplicated passage.
  5.56 p.m.
  Mr. Denzil Davies: Hon. Members on both sides of the House have welcomed the principles of the Bill. Some of their points are better left for Committee, but I shall try to deal with the major ones now.
  842
  The hon. Member for Hitchin (Mr. Stewart) asked whether the Consumer Credit Act applied to credit unions. Yes, it does, except that there is provision for the exemption of organisations which lend money at a certain rate of interest. In other words, because the interest is 12 per cent. the credit unions come within the exemption laid down by order in 1977. That exemption is not specific to credit unions. It is common to other organisations as well. Thus, basically, that Act applies, subject to the exempting order.
  On a technical point, the hon. Member asked whether a person would be able to describe himself as the treasurer of the XYZ credit union. The drafting may not be entirely accurate here. We shall look at that and see whether any change is necessary.
  The hon. Member also mentioned, as other hon. Members have done, the membership limit of 5,000 and the powers of the registrar. The registrar will have a fairly wide discretion. At the moment, I do not think that there is any problem. Most credit unions are far below the 5,000 limit. There may be one or two—there is certainly one in Northern Ireland—above that limit, but generally they are well below it and will stay below it for a long time. These matters may have to be considered again eventually, but not in the immediate future.
  The hon. and learned Member for Dover and Deal (Mr. Rees) asked why we needed legislation. I assure him that Treasury Ministers in this Government are not over-enthusiastic about promoting legislation, since we have now been legislating for almost four years. I ask that question, too, when any proposal for legislation is made.
  However, my hon. Friend the Member for Farnworth (Mr. Roper) answered the point about why a statutory framework is necessary. There is one in Northern Ireland which has encouraged and helped credit unions, and it is only right that they should be encouraged statutorily.
  The hon. and learned Member also asked about the 60-day notice of withdrawal. This is a backstop to enable a credit union, if it wishes, to lay down such a limit. It does not have to do so and in most cases it would not, but if it wanted to stop a run on the credit union

  843
  —a rare situation—it would have this power.
  The hon. and learned Member also mentioned accumulating investment income. One does not want credit unions to turn themselves into discretionary trusts accumulating all their discretionary income. They do not exist for that purpose. The same goes for selling land. They are entitled to own land for their own purposes, but one does not want to turn them into a kind of property company.
  Mr. Peter Rees: The Minister said that he did not wish to see credit unions develop into accumulating trusts, but there is a certain inconsistency between that proposition and the provision in the Bill that stipulates that they must accumulate part of their income until they have built up a certain reserve fund. I ask somewhat plaintively why they may not also accumulate their investment income to build up their reserve fund.
  Mr. Davies: I did not gather that the hon. and learned Gentleman's question was directed to building up the reserve fund. I thought that he was criticising the fact that they could not accumulate investment income. They obviously have to build up their reserves.
  My hon. Friend the hon. Member for Farnworth, from his great experience, made some important points. He thought that insurance should be made obligatory. We are examining insurance and the protection of deposits. It is difficult to deal with that in the context of small credit unions, but we shall no doubt come back to it in Committee.
  The right hon. Member for Down, South (Mr. Powell) raised a number of points on the Northern Ireland constitutional position and taxation. Before the Committee stage I shall provide him with a synposis of the difference between the present position and the position under the Bill.
  On clause 30(4), if the Bill becomes law it is intended that the Department of Commerce in Northern Ireland will bring forward legislation by an affirmative resolution—similar in substance, though there may be slight technical differences—to apply the provisions of the Bill to Northern Ireland. I do
  844
  not wish to encourage the right hon. Gentleman to put down too many amendments in Committee, but because of clause 30(4) he has the opportunity to influence the content of the affirmative resolution.
  Mr. Powell: The right hon. Gentleman may have made a slip of the tongue when he said "affirmative" resolution. I think that he means legislation subject to negative resolution.
  Mr. Davies: I stand corrected. Under the normal procedures it would be subject to negative resolution. But my point is that, although there may be one or two technical differences, the legislation will not substantially differ from the Bill, and the right hon. Gentleman will be able to influence the content of the Bill as it goes through the House.
  The right hon. Gentleman correctly suggested that in clause 30(1) the mutual arrangements are to enable Northern Ireland credit unions to have members in Great Britain and vice versa. That is not exclusive to trade unions, and applies to other provident and industrial societies.
  The point on the Assembly is that, if and when it is set up, it will be able to change the persons or authority whom the Treasury would consult. Under clause 31, the Treasury consults the Department of Commerce. If the Assembly were set up and wished the Treasury to consult its own officials rather than the Department of Commerce, it could do that under clause 31.
  Mr. Powell: Does that mean that at present it is with the Department of Commerce that the Treasury consults? If so, is it not an abnormal form of legislation to provide for a Minister—the Treasury is a Minister—to consult a Department? I do not necessarily expect the Minister to respond.
  Mr. Davies: It is not particularly abnormal. The consultation is between Treasury Ministers and Ministers of the Department of Commerce. But I shall consider whether this is the correct form of drafting.
  It has not been easy to resolve the taxation problem. There are three areas of taxation. The first is the mutual profit or the profit from the internal

  845
  activities of the credit union, taking money from and lending it to members. Under common law the position has not been clear. The hon. and learned Member for Dover and Deal might be prepared to write a strong opinion that that profit is not taxable on the mutuality principle. But the Inland Revenue would not accept that argument. We have considered this carefully. Ministers can only work with the advice of the Inland Revenue, and it is strongly of the view that the mutuality principle does not apply. There is great doubt whether these profits are taxable. That is unsatisfactory. For a long time these profits have not been taxable in Northern Ireland. In the United Kingdom, some bodies have been taxed and some have not. There is no uniformity, and taxation matters should not be dealt with in that way. The Bill makes it clear that throughout the United Kingdom the surplus of the internal profit is exempt from taxation.
  There is then the outside income, which is usually small in relation to the total. This incomes comes to the credit union from depositing surplus funds with a building society or bank. In Northern Ireland, in the past that income has been taxed at two-thirds of the basic rate. This was the result of some confusion several years ago about the true nature of credit unions. In the rest of the United Kingdom there has been no problem. That income has been taxed at 40 per cent., which is the normal rate for industrial provident societies. Again, the position in Northern Ireland was different, and it was only right that, where possible, taxation arrangements should be similar throughout the United Kingdom. There was no reason why in Northern Ireland outside investment income for credit unions should be taxed at only 20 percent.
  The dividend paid by credit unions to their members is the most difficult problem. Again, in Northern Ireland, as a result of administrative decisions not backed by law, which were taken some years ago, dividends received by members of credit unions were exempt from tax. Dividends or interest received from small or large bodies are generally taxed. That should apply throughout the United Kingdom, but in Northern Ireland members of existing societies have in the past received
  846
  dividends exempt from tax. We have tried to solve this problem and achieve uniformity in the legislation. The solution is not perfect. I shall be interested in other solutions put forward in Committee. But the only fair solution, in view of the position in Northern Ireland, seemed to be to exempt from tax all existing dividends of members of credit unions.
  Mr. Peter Rees: I understand the Minister's proposition on the past and future surpluses of a credit union. But what about that part of the surplus that is income from some other source, such as a building society or bank? Has there been any distinction between that income when distributed to members and the internal profits of a credit union? If there has been any distinction, does the right hon. Gentleman propose that that distinction should be carried forward when taxing profits of new credit unions? Is it to be treated as franked investment income, and can a member claim his personal allowances against such dividend income?
  Mr. Davies: Perhaps we should leave such intricacies for the Committee stage. There is a distinction between internal profits and outside investment income. The latter is taxed at 40 per cent., but when it comes into the credit union that is the end of it. But I shall look into this point.
  I have tried to explain to the House the difficulties that we have faced with these taxation proposals, and we shall look forward with interest to see what solutions are put forward in Committee. We are prepared to look at other amendments in order to get as much justice and uniformity as possible. But I certainly do not believe that these proposals will inhibit the growth of credit unions in Northern Ireland or anywhere else. I do not believe that people will be deterred from setting up credit unions because they must pay tax on their dividends.
  Finally, I welcome the general agreement in the House that this is a desirable Bill. Credit unions provide individuals with a reasonably cheap form of credit, an ability to save and to use their savings when the money is needed. I hope to see them grow, though I do not want to see them grow to the size of the Pentagon Credit Union or the Navy League Credit Union in the United States, and I do not

  847
  think that is likely. On the other hand, one wants to see them grow, and, with the statutory backing provided in this legislation, I hope that we shall see considerable growth over the next few years in the credit union movement.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

CREDIT UNIONS [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present session to enable certain societies in Great Britain to be registered under the
848
Industrial and Provident Societies Act 1965 as credit unions, it is expedient to authorise—

(1) the payment out of money provided by Parliament of any increase attributable to the said Act of the present session in the administrative expenses of the chief registrar of friendly societies and any assistant registrar of friendly societies; and

(2) the payment into the Consolidated Fund of any fees received by any such registrar by virtue of that Act—[Mrs. Ann Taylor.]

WAYS AND MEANS

  CREDIT UNIONS
  Resolved,
  That for the purposes of any Act of the present Session to enable certain societies in Great Britain to be registered under the Industrial and Provident Societies Act 1965 as credit unions, it is expedient that charges to corporation tax be imposed by provisions relating to the taxation of societies registered as credit unions in Great Britain or under the corresponding Northern Irehnd legislation.—[Mrs. Ann Taylor.]

PRICE COMMISSION (AMENDMENT) BILL
6.15 p.m.
Lords Amendments considered.

Clause 1

  AMENDMENT OF PRICE COMMISSION ACT 1977
  Lords amendment: No. 1, in page 1, line 17, at end insert—
  "( ) In section 4(5)—
  (a) after paragraph (a) inserted—
  "(aa) that the whole or part of the increase ought not to be so restricted because of an increase in the costs of imported raw materials,"
  (b) after paragraph (i) there shall be inserted—
  "(ia) it shall be the duty of the Commission, in a case falling within paragraph (aa) of this subsection, to give to the relevant person a variation notice allowing so much of the increase as they consider ought not to be restricted for the reason mentioned in that paragraph.".
  ( ) In section 5(4) (application of section 4(5) in relation to notifications in respect of prices) for the words "and for any other reference to the increase there were substituted a reference to the price" there shall be substituted the words "and as if—

  (i) in paragraph (aa), for the words from "the whole" to "restricted" there were substituted the words "a particular increase in the price ought not to be restricted by virtue of section 5(3) of this Act";

  (ii) in paragraph (ia), for the words from "so" to "as" there were substituted the words "the increase in the price which"; and

  (iii) for any reference to the increase (except those in paragraphs (a), (aa) and (ia)) there were substituted a reference to the price;"."

  The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): I beg to move, That this House doth agree with the Lords in the said amendment.
  Question put and agreed to.

Schedule 1

  REPEALS
  Lords amendment: No. 2, in page 4, column 3, leave out lines 4 to 10 and insert "Section 4(5)(b) and (ii)."
  Mr. Maclennan: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mrs. Sally Oppenheim: These amendments, moved so swiftly by the Under-Secretary without any accompanying remarks, represent a considerable and humiliating climb-down by the Government. The fact that the Government have been forced to move these amendments in direct contradiction to their position in this House on all stages of the Bill is not so much an indication of any wish to be reasonable and accept the legitimate concern of people in industry and elsewhere as a reaction to the fact that they did not think they could defeat in this House the previous amendment moved in another place. Thus, they have demonstrated clearly that they can no longer get even a one-clause Bill through both Houses of Parliament without significant and important amendment. Therefore, they have lost control not only of events in the country but in the House as well.
  Despite the Secretary of State's remarks on Third Reading that the basic principle of the Bill would be achieved only if it was returned unscathed from another place, he has not so far indicated anything to show that he now considers that the basic principle of the Bill has been undermined by the amendments proposed. Similar amendments to those that were carried in another place stood on the Order Paper—
  Mr. Deputy Speaker (Sir Myer Galpern): Order. I am sure the hon. Lady is fully aware that the House has already agreed to amendment No. 1. We cannot discuss that one again. We are discussing amendment No. 2.
  Mrs. Oppenheim: I, too, am discussing amendment No. 2. Similar amendments appeared on the Order Paper in Committee in this House dealing with raw materials and the question of the Price Commission's complete discretion in this respect. Those amendments were supported by Members of all four parties. That was an indication of the concern that was felt throughout this side of the House for the position of companies in circumstances where raw material costs rose beyond their control and where they might have been penalised.

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  The Government amendment which we are now discussing and the one before, which we are not debating, do not go as far as we would have wished, and they certainly do not make this measly little Bill any more acceptable to us. Nevertheless, they represent an important concession on the Part of the Government. The situation which existed previously, in which a company could have its prices frozen at a time of rising raw material costs beyond its control, and with the whole question of an interim award lying entirely within the discretion of the Price Commission, is now substantially changed as a result of the amendments.
  In another place the Government spokesman maintained, in his resistance to the original amendment, that the ability to pass on raw material costs was dependent upon whether the Price Commission considered that the company was efficient. What more irrelevant qualification could there be? One has only to look at the record of industry in the past year. In a period when The Economist commodity index in sterling terms rose by 25 per cent. and labour unit costs rose by more than 15 per cent., the retail price index rose by only 8·4 per cent. Clearly, industry does not need any advice from the Price Commission about the efficient absorption of costs. Indeed, the fact that that degree of absorption took place last year makes it all the more dangerous, in investment and growth terms, that more pressure should be put on industry this year.
  In another place, when the amendment which we are now discussing was moved, the Government acknowledged what the Secretary of State has strenuously denied at every stage of the Bill—namely, that the Price Commission needed a more precise obligation than the one in section 2 of the parent Act to take account of raw material cost increases. The Price Commission's discretion must be more circumscribed than it was originally, and that is the effect that these amendments seek to accomplish. Their significance lies in the fact that the Price Commission will not merely be permitted to take account of raw material cost increases but will be specifically exhorted to do so. This exhortation may well be interpreted in the courts—if a company were to bring legal action against the
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  Price Commission—as laying a mandatory duty on the Price Commission.
  The other important concession inherent in these amendments is that made in another place, that an increase in Government rates would automatically be an allowable cost under section 2 of the Act. Two important concessions have been made which, even though not exactly spontaneous, are nevertheless welcome. As a result, this vindictive little measure, which, according to the latest opinion polls, has singularly failed to impress the electorate—as I predicted—is rendered slightly less obnoxious than it otherwise would be.
  Mr. Michael Neubert: It may come as a surprise that anybody else should be interested in the fate of this Bill. I call upon the Under-Secretary of State to give some explanation of his silence this evening, because these amendments—
  Mr. Deputy Speaker: Order. The Minister has not been silent. He has moved "That this House doth agree with the Lords in the said amendment". We have already agreed to amendment No. 1, so we are dealing only with amendment No. 2.
  Mr. Neubert: Perhaps the Under-Secretary will go beyond the mere moving of the amendment and give some explanation to the House, first of its purpose and secondly how it is that within the space of less than a fortnight the Government are prepared to accept an amendment to the Bill when in Committee on 31 January they were adamant that the Bill must stay as it was, inviolable, except for the point that the Government conceded to the Scottish nationalists that it ought to be reviewed at the end of one year.
  May I also ask, Mr. Deputy Speaker. why it is that the amendment is set down as the only business for the evening, with nothing to follow? It is only 6.20 p.m. Could not the Under-Secretary fill out a little of the time left to us by explaining the purpose of the amendment?
  Mr. Giles Shaw: In so far as we are discussing, under the amendment, the schedule to the Bill, may I ask the Under-Secretary of State—or, indeed, the Secretary of State. if it is worthy of his

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  time to reply—to say whether he considers that it is now necessary to issue, possibly within a revised schedule or in some other way, definitions of what is meant by "imported raw materials"? Without such a definition there could be a certain amount of difficulty in establishing how far the concession, which we so much welcome, is to run.
  I have three specific questions to put to the Minister. First, would raw materials include those materials which are not directly raw but part-processed, such as steel for manufacture, which is clearly not raw steel but is in the form of tinplate, or whatever it might be?
  Secondly, would they also include, in terms of importation, imports from within the Community? I assume that they would, because imports are now generally considered to be both within and without the Community. It may be important fur that to be defined.
  Thirdly, in relation to the commitment given by the noble Lord, Lord Jacques, with respect to rates, may I ask the Secretary of State whether such a concession would apply also to changes in subsidy which would directly affect price? I have in mind certain agricultural produce, such as milk, butter and so on, which reflects the subsidy. If the subsidy is removed, one assumes that consequentially the price Increase thus generated will be admissible under the Bill.
  The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley): I hope, Mr. Deputy Speaker, that I can remain within the rules of order, in discussing the amendment to the schedule, by at least observing the rule of brevity.
  Three things need to he said about the second amendment, which the Government commend to the House. First, like the first amendment, which was passed unanimously and without discussion, it reflects exactly an amendment which was tabled in Committee by the Scottish National Party and which I said was acceptable to us at that point, although it was not called by the Chair. The point made in the schedule, therefore, is not a new point but one that was conceded by the Government in Committee, although it was one on which a vote was not possible since the appropriate
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  amendment was not selected for debate. The idea that the point made in the schedule, or anywhere else in this item of business, is a new concession is pure and absolute fantasy.
  Mrs. Sally Oppenheim: Why was it not introduced by the Government in Committee?
  Mr. Tim Smith rose—
  Mr. Hattersley: May I answer the hon. Lady, who talks all the time from a seated position and therefore has precedence over her hon. Friends who get up in a well-mannered fashion? The hon. Lady asks why we did not concede the amendment in Committee. You, Mr. Deputy Speaker, ought to answer that, with respect. We did not concede it because you did not call it. Had you called it, we would have conceded it.
  Mr. Tim Smith: How can the Secretary of State say that, when he said on Second Reading that any concession of that kind would be completely inconsistent with the principle of the principal Act, which, as he knows, says in section 2 that all these matters are for the discretion of the Price Commission?
  Mr. Hattersley: The hon. Gentleman is almost right, but his error invalidates his question. He is quite right in saying that I could not possibly commend this amendment to the schedule to the House, or the principal amendment, were it to impede the Commission's discretion. If the hon. Gentleman will do the House the courtesy of reading the Act and discovering the parts of it to which these amendments apply, he will see that the passing of these amendments in no way impairs the Commission's discretion, and therefore I have been able to concede them.
  Mrs. Sally Oppenheim: As the right hon. Gentleman has misheard and misrepresented my remarks, I shall now make them clear to him in the form of a question. What I was asking was this: if the Government had accepted the principle of the amendment and the only reason why it was not moved or voted upon in Committee was that it was not called, why was it not introduced by the Government in Committee in another place? Why did the Government have to wait for the Report stage to introduce it, and after a singular defeat in Committee in another place?
  Mr. Hattersley: All that the schedule seeks to do, and all that the amendment to which it relates seeks to do, is to emphasise what already exists, which is the Commission's obligation to take into account, where it regards it as appropriate, increases in the price of imported raw materials. It is a fine point whether the House would wish to do it, and whether the Government would approve it, simply to emphasise a point that is already in the parent Act.
  I am perfectly happy to see it emphasised if that suits the convenience of the Scottish National Party, if it is to the pleasure of the Upper House and if it gives some consolation to the hon. Lady. I am also perfectly prepared for it not to be emphasised, since it appears in the parent Bill already. In that sense of principle, I am agnostic about the amendment.
  My agnosticism enables me to answer the point asked of me directly by the hon. Member for Pudsey (Mr. Shaw), which was whether part-processed materials are to be included in the schedule, whether imports from the EEC are to be included in the schedule and whether subsidies which apply to the prices of imported raw materials—I take it that the hon. Gentleman means foodstuffs and things related to the common agricultural policy and to the green pound and other things which are subsidised in one form or another—are to be taken into account.
  I am happy to say that those questions arc wholly for the discretion of the Price Commission, because the amendment leaves the Price Commission's discretion unimpaired. In those terms, I am happy to commend it to the House.
  Question put and agreed to.

STATUTORY INSTRUMENTS
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.),

CIVIL AVIATION
That the draft Aviation Security Fund (Amendment) Regulations 1979, which were laid before this House on 14 December, be approved.—[Mrs. Ann Taylor.]
Question agreed to.

ART TEACHERS (SCOTLAND)
Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Ann Taylor.]
6.27 p.m.
Mr. Donald Stewart: I am sorry that the Minister concerned is not on the Treasury Bench, although I have only just arrived here myself.
I am glad to have the chance of airing this matter, because it has been going on for some time. Indeed, the art teachers in Scotland are considerably angry that nothing has been done about it. The background is that in August 1977 the Scottish Teachers Salaries Committee, the STSC, decided to recognise all first-class and second-class honours degrees from England, Wales and Northern Ireland approved by the Council for National Academic Awards as being equivalent to an honours degree of a Scottish university for salary purposes.
This decision has since been described by The Times Educational Supplement in Scotland as one of "stupendous folly and shortsightedness". Such a description could not be more apt when one considers the effect it has had on the Scottish art education scene, for what the STSC did with its decision was to recognise 83 per cent. of the total student output of English art schools as being eligible for honours salaries in Scotland. The 83 per cent. figure comes from the annual report of the CNAA.
At a stroke, the STSC has declared Scottish art teachers to be second-class teachers of their subject and so devalued Scottish art education that it is no longer in the interests of young Scots to study this subject in their own country. For that reason, quite a number of art teachers have been advising their students to go south of the border, to secure their qualifications there and then to come back to Scotland to enjoy the higher degree status.
The irony of the position is that the English qualification, the CNAA honours degree, is inferior to the Scottish Diploma of Art, as it has much lower entry qualifications—five O-levels as opposed to the Scottish three higher and two O-grades. Or, given equivalent entrance qualifications, it can entail a year's shorter study

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—three years as opposed to the Scottish diploma's four years. Both require an additional one year's teacher training.
The minimum qualifications for the English course are five O-levels, and for the Scottish course three higher and two O-grades, or two A-levels and three O-levels. The English course consists of a one-year foundation course and a three-year degree course. The Scottish course consists of a four-year diploma course. Teacher training lasts for one year in each case. The final qualification for the English course is an honours degree, and 99·5 per cent. of those graduating from English art schools do so with an honours degree. That is shown in the CNAA annual report. The end result of the Scottish course is the diploma.
The Minister said the other day that the responsibility lay with the STSC, and there is some substance in that. But its decision affects Scottish art teachers and makes them second-class teachers of the subject—that is, second class to those with five O-levels who complete a course which is shorter by one year. This greatly impairs the diplomate's promotion prospects. What education authority would even consider an apparently lowly diplomate when it could secure an honours graduate?
A young Scot at this moment can study in Glasgow, Dundee, Edinburgh, Aberdeen, or in any English art school. But a student who studied at Glasgow after June 1975 for an honours degree would have had only a 25 per cent. chance of success. The reason is that the Scottish Education Department has demanded that there should be a Scottish dimension to CNAA degrees awarded in Scotland. The figures for Scottish universities for other subjects are 25 per cent. honours and 75 per cent. ordinary degrees. The conclusion from that is that the STSC has, with this decision, devalued Scottish art education.
The Minister must accept some responsibility for the fact that the Scottish Education Department and the EIS have compromised. My impression is that the institute does not want to hear anything about the matter. The STSC has been involved from the beginning, and, as the Minister said, it has some responsibility in the matter.
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A petition has been presented to the Minister, signed by 1,543 Scottish art teachers. There are 1,969 art teachers in Scotland, according to the Scottish Education Department's most up-to-date figures, and that means that 78 per cent. of art teachers in Scotland are highly dissatisfied with the present situation. It is grossly unjust that English students and Scottish students who study south of the border should have this advantage. I can quote a case from my own constituency of a young girl who was advised to go south of the border and who is now going on to one of the highest art schools in the country. She would not have got anywhere had she remained in Scotland.
Scottish art teachers are pressing only for elementary justice. The EIS may well continue to stall on the matter. Perhaps because of its involvement the STSC will continue to wash its hands of the matter. I maintain that the Minister is responsible for seeing that this injustice, which is creating great ill feeling among art teachers in Scotland, is remedied as quickly as possible.
6.34 p.m.
The Under-Secretary of State for Scotland (Mr. Frank McElhone): I am surprised not only at the early hour of the Adjournment debate but, given the number of hon. Members who wrote to me about the subject, at the fact that there has been only one contribution. I apologise to the right hon. Member for Western Isles (Mr. Stewart) for having been half a minute late for the start of the debate, although I heard the substance of what he had to say on a subject that he has raised with me before, particularly during Question Time last week.
I am grateful to the hon. Member for raising the subject and giving me the opportunity to put on record the facts of this issue. There has been a good deal of misunderstanding about what has happened and where responsibility lies. I am glad, therefore, to be able to give a more detailed reply than was possible during questions on 7 February.
I deal first with salaries. The assessment of teaching qualifications for salary purposes is a matter for the Scottish Teachers Salaries Committee. The committee, which is established under the Remuneration of Teachers (Scotland) Act

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1967, is composed of a management side representing education authorities and the Secretary of State and a staff side composed of nominees of bodies representing teachers. The committee can put forward to the Secretary of State only recommendations agreed by both sides. It is important to bear that in mind in considering the composition of the STSC. On receipt of recommendations, the Secretary of State has to prepare a memorandum setting out the provisions which have been recommended. After further consultation with the committee, he is then required to publish this memorandum as a Scottish teachers salaries memorandum with an order directing that the relevant remuneration of teachers shall be determined in accordance with it.
The staff side suggested in July 1977 that guidelines should be issued to education authorities describing in general terms the honours degrees taken outside Scottish universities which should be recognised for salary purposes. The management side agreed, and on 22 September 1977 a circular was issued which recorded the committee's agreement that the definition of an honours graduate would be extended to include those teachers who held a degree with first or second-class honours of a university in England, Wales or Northern Ireland or approved by the Council for National Academic Awards. A definition expressed in this way applied to honours degrees in art in the same manner as to other honours degrees. Since the two sides of the committee had agreed, the Secretary of State had no discretion to reject or modify their recommendation, and the Scottish teachers salaries memorandum 1978 issued in December contains the relevant provision in part B of appendix V.
Two questions arise at this stage. First, what was the effect of the decision on holders of such degrees? Its effect was that the holder of a first or second-class honours degree approved by the Council for National Academic Awards would be placed on point 4 of scale 1—the secondary school scale—and like honours graduates of Scottish universities could progress to point 13, the final point on the scale.
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Secondly, what was the effect of the decision on Scottish students and Scottish teachers of art? The short answer is that it had no immediate effect, because to date there is no holder of a first or second-class honours degree in art awarded by the Council for National Academic Awards who has obtained that degree at a Scottish college. That position wil change very soon, as I shall explain when I come on to the question of provision of courses.
The holders of qualifications from the Scottish art colleges at present have either a diploma or an associateship. The diploma has for many years been regarded as broadly equivalent in status to an ordinary degree. The holder of a diploma on appointment to scale 1—the secondary school scale—is placed at scale point 3 and can progress as far as point 12. The holder of the associateship which was introduced in 1972 and is awarded only by the Glasgow school of art is treated in the same way as an honours graduate and on appointment is placed on scale point 4 and can progress to point 13 at the top of the scale.
It is important to establish that there are some Scottish art teachers who, because they took the associateship qualification, are already paid as honours graduates. This point was recently made by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), and I told him that an opportunity was provided in 1972 for the three art colleges to involve themselves in associateship to give an honours degree. However, only the Glasgow college thought fit to take up that course. That is why some associates with honours degrees are covered in terms of salary at present.
I turn to the subject of training. The provision of courses is a matter for the Scottish central art institutions, subject to the approval of the Secretary of State. All four colleges have traditionally awarded a diploma. The associateship was introduced only by Glasgow school of art in 1972, although the colleges in Dundee and Aberdeen had approval, if they so wished, to introduce a course leading to that award.
The present position is that Glasgow already offers a course leading to a degree and an honours degree of CNAA in art

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and design; Dundee already provides courses which lead to a degree and an honours degree of CNAA in design and a college diploma in art; Aberdeen offers courses leading to a college diploma in art or design, but has submitted proposals to CNAA for validation of courses in both areas at degree and honours degree level; and Edinburgh offers courses leading to a diploma in art or design, but is negotiating with Heriot-Watt university for validation of these courses at degree and honours degree level. Thus, the pattern of course provision will eventually be the same, though the arrangements for validation will vary.
All the colleges will in due course provide courses at degree and honours degree level, and no further diplomas will be awarded. It is not possible at this stage to say what proportion of students will receive honours degrees and what proportion ordinary or undifferentiated degrees. The proportion would be likely to vary from time to time depending on the abilities of particular groups of students, hut in general the proportion would be like that awarded in similar areas in the university sector.
In England and Wales, courses leading to the diploma in art design were at one time validated by the National Council for Diplomas in Art and Design. Traditionally, a high proportion of those taking the diploma did so with honours. When the CNAA took over the functions of the National Council in 1966, it accepted as equivalent to an honours degree those diplomas which had been taken with honours. Such decisions were quite properly for the Council for National Academic Awards to take. It is a matter for it, and I make no comment on the relative merits of the courses in Scotland compared with those in England and Wales.
At this stage I should like to deal with the petition from Scottish art teachers which has been received by many Members of the House. The petitioners say that they would like to upgrade their diplomas of art and convert them to English CNAA honours degrees. They then go on to compare the entrance qualifications to both types of courses and the length of the courses. There are a number of factual corrections which can be made to the petition. First, there are
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no English CNAA degrees; there are only CNAA degrees. Secondly, an entrant to the English course with five O-levels would be expected to undertake a year's foundation course before undertaking the three-year degree course, and, as I understand it, not all foundation year students are admitted to the degree course. Thirdly, such an entrant would then, of course, require four years in all before taking his degree.
On the main issue, that of the conversion course, I hope, however, that the petitioners will obtain some satisfaction. The colleges of art in Glasgow, Dundee and Aberdeen are at present considering the question of bridging courses to enable Scottish diploma holders to convert them into honours degrees. Any course proposals would first need the approval of the Secretary of State; thereafter the form and content would be subject to the approval of the Council for National Academic Awards. In addition, the Council for National Academic Awards has consulted the colleges about retrospective recognition as degrees of the diplomas and associateships as degrees and honours degrees. I am pleased to inform the House that a final decision may he reached towards the end of this month. I have no doubt that when further progress has been made in the discussions on bridging courses and on the question of retrospective recognition of diplomas and associateships, the Scottish Teachers Salaries Committee will wish to look at the matter of assessment of qualifications for salaries again. But such assessment will remain a matter for the Committee, not for the Government.
I have dealt with this problem in the many replies I have given on this matter on other occasions. It has been suggested that only an English person can obtain the salary that goes with an honours degree and that in this context he or she can do so relatively easily. However, I have already told the House that opportunities were presented as long ago as 1972 within the three art colleges and that only Glasgow undertook to accept such a course.
Mr. J. Grimond: Is the Minister saying that when the present negotiations are completed and approved by the Secretary of State, the main point of the petition will be met and the grievances removed?
Mr. McElhone: My right hon. Friend the Secretary of State for Scotland is attempting to meet this point by encouraging agreement with the CNAA and the colleges to undertake bridging courses. The teachers already in posts in schools will be able to obtain such courses. The question of young people coming through the colleges is a different matter. I am referring to teachers who are now working in Scottish schools, and they will have the opportunity to take bridging courses leading to honours degrees.
In the meantime, the subject of salaries is essentially a matter for the Scottish Teachers Salaries Committee, which is an independent body.
Let me recall the history of the matter. It was the staff side which advocated this proposal—a proposal which largely emanated from the EIS representatives—and the management side then agreed. When such a matter goes before the Secretary of State he has no jurisdiction to change what has been agreed, and he must accept the decision.
I hope that the Scottish Teachers Salaries Committee will re-examine the matter of qualification for salary, because it is essentially a matter for that committee. This is a complex issue, but I have already told the right hon. Member for Western Isles that a decision will be reached before the end of the month.
The right hon. Gentleman has done a service to the House in raising this matter, and I hope that following my full and detailed reply the position will now be clear to art teachers. I hope that that reply will be satisfactory to the teachers and that the right hon. Gentleman will receive his just reward.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Speaker has asked me to tell the House that the remaining Adjournment debates will be called in the order in which notification of them was received in Mr. Speaker's office.

AGRICULTURE (SOUTH-WEST ENGLAND)
6.49 p.m.
Mr. Peter Mills: I am grateful for this chance to highlight some of the problems of the countryside, particularly in the South-West. I wish to thank the Minister of State, Ministry of Agriculture, Fisheries and Food for coming to the House at such short notice to reply to this debate.
My first point relates to the loss of agricultural land, which is undoubtedly taking place at an alarming rate. We have a large population which needs to be fed, and it is important that we should take far more notice of what is happening in the countryside, especially when valuable agricultural land is disappearing from the market. I understand that nearly 65,000 acres of land per year is being lost to roads, reservoirs, playing fields, housing and so on.
I ask the Minister to note this loss of agricultural land. I hope that the Ministry will take a much firmer line to see that this land is not lost—and it is lost for ever once it has gone under concrete. I hope that the Minister will strengthen his resolve to ensure that this loss is halted.
In my constituency recently, land was wanted in several places for reservoirs. On land that is flooded, it is impossible to grow food again. Land has also been used for roads and even playing fields. The extension of cities into rural areas also means serious loss of land.
My second point refers to what I call blighted agricultural land, which is a serious problem. Perhaps the Minister has heard of Dr. Alice Coleman and her work. Around our cities can be seen at least a mile, or perhaps two miles, of land that is no longer suitable for agricultural use. There are simply horses grazing there. Farmers face difficulties in farming that land properly when so many people come out of the cities and towns, leave their rubbish and are not very careful about the crops that are growing there. Consequently, there is this blighting of agricultural land all round our cities. As we travel around, we find that it is a fact. If we see horses simply grazing

865
in the fields, we can be sure that that land has been blighted and is no longer of agricultural use. Again, perhaps the Minister will take note of that.
Thirdly, there is the problem of farm accommodation. People, particularly in the South-West, are not only farming the land, but their wives and perhaps their sons and daughters are providing farmhouse accommodation for tourists. They are providing such things as farm museums, which are most interesting, and equestrian centres. The demand for horse riding and pony trekking is growing.
All this is right and proper. It all helps the rural scene and brings more money into the area. But one of the difficulties is—my hon. Friend the Member for Honiton (Mr. Emery) has similar difficulties and would agree with me on this—that we do not have the proper signs directing people to such places. Perhaps the Minister could have a word with the Secretary of State for Transport to see whether the proper signs can be erected, particularly on motorways and other places, directing tourists to such centres and accommodation. This applies not only to farmhouse accomodation but to hotels and restaurants. All over the South-West we find that it is a difficult problem.
Fourthly, there is the problem of caravans. I am not anti-caravan. I used to own a caravan for a long time and thoroughly enjoyed it, but there is no doubt that the numbers of caravans touring around are growing and causing many problems, particularly in the South-West. One way in which the Minister can help is by encouraging planning authorities and others to see that more sites are made available again with signs directing people to them.
In France signs are erected perhaps three, four or five miles away from a caravan site, directing the tourist to the right place. If there were more sites on farm land—properly licensed sites with proper signs directing the tourist to them—we would not have people wandering around, towing their caravans all over the South-West, causing endless bottlenecks and difficulties. Perhaps the Minister could do something to help. He has great powers of persuasion, and therefore if he spoke to the Ministers con-
866
cerned in the other Departments he could do something about it.
I believe that there is great need for further encouragement of forestry, particularly in connection with shelter belts, which help in the production of food and act as shelter for cattle and sheep. It is wrong for us as a nation to neglect forestry considering the enormous amount of timber required.
Much scrub land could be drained and planted with trees. That would have the spin-off of providing more employment and help in rural areas. I believe that that is very important. Perhaps the Minister could encourage the Forestry Commission not to sell off forestry workers' cottages or houses. This merely adds to the depopulation that is occurring. We should encourage forestry where there is scrub land. This would help the whole of the rural scene, stop the depopulation and provide more employment.
We must have a decision on fishing soon from the Minister of Agriculture, Fisheries and Food. I believe that my hon. Friend the Member for Honiton would agree with me on that. The European Community must come to a decision. Many of the fishermen around the coast of the South-West are deeply concerned about what is happening over fishing limits and all the other problems which need a decision.
As one of the members of the Select Committee on European Legislation, I know also that there is a whole host of legislation which will assist the fishing industry once a major decision is made on fishing limits and so on. I hope that the Minister will encourage his right hon. Friend to get a decision in Brussels on these matters.
Lastly, I am concerned about the depopulation of our rural areas. It is important that we have a prosperous agriculture. The Minister has a role to play here. If we have a prosperous agriculture, depopulation of our rural areas will not continue. I say nothing against retired and elderly people who come into our remoter villages in the West Country. but we want those villages to be filled with people who are working in agriculture. I know that it is difficult to stem the tide, but we must have a prosperous agriculture, which would help stop the depopulation

867
of our villages in the remoter villages of the South-West.
We need a fair end price for our products. We certainly need a knowledge of what is required of the farming scene— the type of production, whether more milk, more cereals, more pigs, more beef or more sheep. The Minister has brought out a White Paper on the subject, but it does not clearly spell out what is required. The agriculturist cannot be expected to guess. He needs encouragement and guidance from the Minister on what is needed.
We certainly need better marketing, as the Minister will agree. As we see in particular when we look at the more sophisticated marketing arrangements in the Community, we need more encouragement of better marketing if we are to have a prosperous agriculture, as well as right end prices and a knowledge of what is needed.
There are two small matters about which I, as a farmer, am very concerned when I look at the rural scene. They are matters that are perhaps forgotten by the House. One is the tremendous drop in the use of lime, which is essential if we are to have the right yields. As you know, Mr. Deputy Speaker, being a farmer as well, one can go on drawing lime out of the ground for some time
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without putting it back, but then the land starts to become sour. Therefore, I ask the Minister to look again at the problem of lime usage. Otherwise, we shall see the production of our crops start to fall.
The second matter is that of drainage. Because of the very wet weather in the South-West and elsewhere, it is important to look at the matter again. We can see land going back, as we say in Devon. That is very sad, because after a time it becomes sour and useless and does not produce the crops that are required.
If money is tight, if things are difficult in agriculture, one tends to forget about liming land, because one can make do for a bit. One also tends to forget about drainage. But it is absolutely essential to ensure that our drains are kept up to standard and that land does not become waterlogged.
I hope that the Minister will appreciate that I have asked him no difficult questions. I have been seeking to encourage him and his Ministry to do a little more in the various areas that I have suggested. If those things are done, agriculture will be prosperous, which is vital to the nation as a whole. I have said many times in the House, and repeat once more, that the consumer's best friend is a prosperous agriculture.

ROYAL ASSENT
Mr. Deputy Speaker (Mr. Bryant God-man Irvine): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Price Commission (Amendment) Act 1979.

2. Tyne and Wear Passenger Transport Act 1979.

AGRICULTURE (SOUTH-WEST ENGLAND)
Question again proposed, That this House do now adjourn.
7.4 p.m.
Mr. Peter Emery: I congratulate my hon. Friend the Member for Devon, West (Mr. Mills), a fellow Devon Member, on having the initiative to seize this vacant time in the business of the House to raise matters of great concern to him and the South-West. I am even more delighted personally, because, as he and my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) are both particularly interested primarily in agriculture, I normally refuse to seek to intervene in agriculture debates. The chances of three Devon Members being called during such a debate are small, and if I caught the eye of the Chair it is probable that one of my hon. Friends would not be able to contribute. Therefore, I am most grateful that this evening, when there is plenty of time, my hon. Friend has initiated a debate particularly concerned with aspects of agriculture.
My hon. Friend is probably the greatest expert in the House on farming. I say that begging Ministers' pardon, but I think that even they would concede that that is so. In best debating style, I follow up my hon. Friend's point that what is best for the consumer is a healthy and successful agriculture industry. What he failed to underline, and what so few people who are not concerned with farming ever understand, is the vast amount of money now needed for investment in farming. Compared with other investments in the whole of the industrial and commercial sectors, that investment as a whole probably brings the lowest return per £1,000. In other words, the capital
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intensiveness of farming today is immense and the return on the investment is as low as it is on anything in the investment market.
I particularly agree with my hon. Friend about the use of land. Every year that goes by, the ever-increasing fall in the amount of usable land because of the demand for housing, roads and other community needs is of major concern. I want to speak of one area about which Devon and the West are particularly concerned. We have always been in need of major road improvements. That is still true west of Plymouth and along the A35, the southern link between Dover and Exeter, where there are conditions that would be unacceptable in the North-East or North-West. We need improvements to the A30, a major link which in many areas is down to only two lanes of highway.
However, I hope that the Minister will consult the Secretary of State for Transport to try to ensure that as often as possible when improvements are carried out—not necessarily the building of motorways, but dual carriageway improvements and bringing roads up to modern standards—the old road is used in conjunction with the new dual carriageway or improvement. That is one of the easiest ways to save a vast amount of land which is now lost to agriculture when the planners seek perfection. I do not doubt that for the best possible roads there are better methods than those that I suggest, but the planners forget about the loss to agriculture. There can he such loss when they choose a marvellous new line and a marvellous new landscaped motorway as opposed to running a second road parallel to existing roads.
I reinforce my hon. Friend's point about signs on motorways. I have had battles with the Secretary of State for Transport about road signing. The last thing any of us wants is a massive increase in street furniture. We need some standardisation of the method of signalling on those large overhead motorway signs which provide tourist information.
I turn now to the subject of caravans. Here I am a little more concerned than my hon. Friend the Member for Devon, West about the problem being caused in certain areas. Because of a lack of planned caravan sites, of the type that we have seen

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on the Continent—with proper drainage and electricity—more and more farmers living off the beaten track are turning a field over to about five touring caravans during the summer. No planning permission is necessary.
This means that some of the narrow lanes of Devon have caravans driving down them, creating a considerable traffic hazard. These lanes were never designed for such traffic. This is something which should be properly licensed and controlled so that adequate provision is made on these sites. Caravans cannot simply be stuck in a field miles off the beaten track. The caravans have to make these journeys, away from the main centres, because of a lack of space elsewhere. On any evening in June, July, August and September every layby on the A30, A303 and the A35 is filled with caravans.
Turning now to the question of agricultural housing, I am concerned about the advice being given by agricultural officers to county councils, and subsequently housing authorities, concerning planning permission for new houses on a farm. I know of a number of instances where problems have arisen on smallholdings when the father wishes to encourage his son to remain on the farm. The time was when the son and his wife would move into the family house and bring up their children there until the grandparents passed away. Such conditions are no longer acceptable to young farmers. There is a need to allow the building of another bungalow or a cottage on the property to ensure the continuation of the family in agriculture. This is something which is a major part of farming throughout the country and particularly in the South-West.
The advice from the agriculturists has been that a new cottage must be built immediately adjacent to existing farm buildings. In two instances families have asked me whether they could obtain planning permission to build elsewhere on the farm because they did not want to live cheek by jowl with father. If a building is two miles from the main farm buildings, that is of no account nowadays. It may have been 50 years ago, when one had to saddle a horse or walk that distance. Then there was every
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reason for fresh housing to be adjacent or contiguous to the farm buildings. That is not the case today.
I do not want the Minister to imagine that I am advocating ribbon development. Nor am I suggesting that we should have houses splattered all over the countryside. There has to be a slightly more modern approach on the part of those making judgments about these planning permissions.
I wish to dwell briefly on the question of inshore fishing. I refer to the small fishermen sailing out of Beer, Branscombe, Sidmouth and even Exmouth. These all fish about four to 10 miles offshore. They have been seriously affected by some of the EEC regulations and by some actions of the Government, particularly with respect to herring. These fishermen claim, rightly I think, that the small shoals on the inshore side have nothing to do with international fishing problems. These men represent small communities who have lived on inshore fishing for many years. They have been especially concerned about the apparent lack of consideration given to them over conservation measures. I have seen the Minister about this problem and I know that he has discussed the issue with those concerned. However, I still find that there is worry among these people.
I know that the Minister has come to the House this evening especially for this debate. My hon. Friend and I thank him most sincerely for postponing his evening's schedule. I hope he appreciates that the points we have raised have not been brought up in any spirit of animosity or major criticism. All of those in the House who are interested in agriculture want to co-operate as much as possible to ensure that we continue to have the most prosperous industry, one that is expanding for the benefit of the whole community.
7.20 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. E. S.Bishop): Given a choice of subject to cover in an Adjournment debate, I should have mentioned the subjects raised tonight. Had I been invited to suggest who might take part, I should have thought of the hon. Members for Devon, West (Mr. Mills), and Honiton (Mr. Emery).

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I should declare an interest in the matters raised. My Ministry deals with agriculture, fisheries, forestry and food. As I was born there, I am a West Country man by birth and interest. I enjoy living in my present constituency. I am represented by a first-class Member of Parliament. However, I always appreciate the opportunity, all too rare, to visit the areas of the South-West which both hon. Gentlemen represent.
I am grateful for the short notice that I had of this debate. I feel like the layman who was asked to give a sermon in the absence of a minister. He said "Today I shall say what the Lord puts in my mouth; the next time I shall try to do better." Perhaps that remark sounds rather odd from someone named Bishop.
The points raised by the hon. Gentlemen always engage the interest and concern of my Ministry. I shall not deal with them in the same sequence. However, I appreciate the concern expressed by the two hon. Gentlemen, who stayed behind in school, when others had gone, to raise points which concern them and their constituents.
The items raised on land use, conservation, leisure, forestry, farming, food production, fishing and fish farming all engage the concern and interest of the Ministry. I do not suppose that there has been an occasion in recent times when so many of these matters have been dealt with by people who were concerned in so many ways. At the moment, there is the Northfield report, which is concerned with the ownership and use of land and the problems of persuading more young people to come back to or engage in farming. That is important. We await that report in the near future. We have also received the Strutt report, which is concerned with agriculture and land use. That is being issued just after the report of the Countryside Commission.
A few weeks ago I was privileged to take in Committee the Second Reading of the Forestry Bill, which is now before the House. Hon. Members will know of the Countryside Bill, which is also before the House. A number of these matters are receiving attention at the same time. It is right and proper that they should. Last week saw the publication of the White Paper "Farming and the Nation".
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I do not need to stress in present company the importance of agriculture. I know of the interests of the two hon. Gentlemen. The report points out that production from home agriculture will continue to provide nearly two-thirds of the food we grow here and more than half the country's total food supplies. Agriculture contributes about 2½ per cent. of the national income. It ran to £3,165 million in 1977. In addition, 660,000 people are employed in the industry. They represent a similiar proportion of the working population. Agriculture is one of the most productive industries in the country. The labour force is less than 3 per cent. of the total. Agriculture is so productive that the working population of farmers and workers—I pay tribute to both—has been producing about 3 per cent. of the GNP. I do not know of any other country where such a limited labour force produces that output. That is good.
I do not need to go back to the times of Tom Williams, who brought in the 1947 Act. Under all Governments, agriculture has had growing confidence. It faces the problems of weather, the world situation and harvests elsewhere. But there has been increased productivity. The point of the White Paper is to ensure that that continues. It looks ahead at the prospects and the way in which we should go. That is most important.
We want to make sure that agriculture can do the job that it must do in this country. It is important that agriculture should provide food for our own people. That helps the balance of payments situation. I am also keen that it should provide exports as well. Not even our own industry realises the potential in increasing exports. I am involved in this. I receive Ministers who come to Britain to see our agriculture. Some of them come from the biggest nations. Not long ago I met Ministers from the Soviet Union, India, the United States, and China, all in a few days. They and others realise just how productive we are. If other industries had the productivity record of agriculture, we should not have the problems that we now face. Those are the facts.
We must maximise our resources. I refer to the important matters raised by the hon. Member for Devon, West. He referred to the problems of the rural

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scene, especially in the South-West. Those problems exist in all areas. The problem is to look at the resources and see how, together with manpower, money. materials and land, we can maximise the output of agriculture and forestry. He was right to emphasise those points.
The hon. Gentleman mentioned the significant area that is lost to agriculture and food production each year. The Ministry is conscious of that. The total area of agricultural land in the United Kingdom is about 19 million hectares. Between 1971 and 1978 the average recorded loss of land from agriculture was about 50,000 hectares per year. That is a significant area. About half, mainly poorer quality land in Scotland, was transferred to forestry and woodland. The remainder went to urban, industrial, highway and recreational uses and other purposes. The Ministry is keen to ensure that any change of land use is known to us and that we have an opportunity of putting a point of view about future uses.
We must ensure that, as far as possible, only land which is not useful for agriculture is used for other purposes. I take note of the point made by the hon. Member for Honiton about road routes and the need to use existing routes as far as possible. I am sure that that point will be borne in mind by my right hon. Friends the Secretary of State for the Environment and the Secretary of State for Transport.
We must bear in mind that when land is taken out of agricultural use it is often irreversibly lost to other forms of development. That is very important. The Government intend to pursue vigorously their policy of protecting agricultural land, especially that of better quality, and to bring into use, wherever possible, derelict and disused urban land. We feel that authorities buying agricultural land under the community land scheme must have regard to the needs of agriculture and forestry, and they have already been advised to make arrangements accordingly.
It is desirable that land which is earmarked for development but which is unlikely to be developed until, say, more than seven years have elapsed should be kept in full agricultural production under normal agricultural tenancies. We are
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very anxious about these matters, not only to avoid losing agricultural land to further development but to bring it back into use.
In my own constituency, Newark in Nottinghamshire, which covers about 450 square miles of countryside and has over 80 villages and other communities, we have some very useful aggregates and sand and gravel workings. Here again, the public are very anxious that this land should not be lost to agriculture. We have plans for reinstatement. I think that is a point that we should all bear in mind.
The hon. Gentleman raised the subject of leisure use and so on. This has become increasingly a point of interest and concern at the same time, because we recognise that there will be some constraints on farming in areas around towns, and there is the demand for access for recreation, especially in the national parks in the delightful areas which the hon. Members represent in the South-West, with Dartmoor, Exmoor and other areas there. Further afield there are the national parks, the Scottish national park direction areas and other designated areas, areas of outstanding natural beauty and all those places which we appreciate. Millions of people are attracted to them, not only from within this country but from abroad.
Some controversy has been generated about land use. This was evident in the debate that we had a few days ago on the Countryside Bill. The Government have initiated studies into the ways in which the physical and social environment of areas can be reconciled with economic factors and agricultural production. As the White Paper "Farming and the Nation" points out, there have been studies by the Countryside Review Committee and the Advisory Council for Agriculture and Horticulture in England and Wales, and they have been supported by various upland and other management experiments initiated by the Countryside Commission. Then there is Lord Porchester's study on Exmoor. The recommendations in that have been taken into account in matters before the House at present.
The Forestry Commission has also played a notable part in making sure that we maximise our resources for producing the timber that we want. Most

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people recognise that we import far too much timber and that we must do much more to maximise the limited resources of this country.
I certainly endorse any tributes paid to the Forestry Commission and all connected with forestry and timber-growing in Britain. The Forestry Commission is concerned not only with forestry. One recognises also the timber pursuits. I recall that in the last year about 24 million visits were paid to our forests and their leisure areas. This has become an increasing feature in our countryside.
I recognise that many local authorities which are involved with open spaces and country parks also make their contribution. It is probably fitting that I represent the area of Sherwood Forest. When I am abroad and talk about my constituency, I only have to mention that I represent Sherwood Forest for people to know what kind of constituency I have. I may be following Robin Rood in other ways. I would not like to progress too far down that forest trail. I also have other Forestry Commission areas. I know how much these are valued and used by the public.
As I say, the Forestry Commission is involved not only in the growth of our forests. It has been concerned with the recent publication "The Wood Production Outlook in Britain", which talks about our use of forestry land into the 1980s. The Forestry Commission is also anxious about the development of leisure. Other authorities are also involved in this—the Ramblers' Association, the National Farmers' Union, the Country Landowners Association and others—and they have been consulted in regard to the Countryside Bill in order to get the maximum possible agreement.
The hon. Member for Devon, West mentioned motorways and farmhouses. Motorways are increasingly used by people who wish to get quite quickly to what used to be some of the remoter areas. They are some of the most pleasant areas of this country. Farmhouses are providing accommodation. This is a maximum form of recreation as well as providing some economic return to the farmer and his wife in areas which many more people are beginning to appreciate as the years go by.
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The hon. Member referred to caravans and the need for more sites. This is important, but there are problems as well. One needs very carefully to blend caravans into the rural scene so that they do not become offensive, and to do so in such a way that people can enjoy up-to-date amenities. That is very important. It is not good enough to leave a comfortable home and to go and live in accommodation which is not up to standard, so our local authorities and others have a very important role in that respect. I am sure that the points made by hon. Members will be drawn to the attention of my right hon. Friends and will be taken into account. They were quite right to stress the importance of blending caravans, country cottages, forest cottages and other types of residential accommodation for holiday times into the rural scene.
It is important that the land with which we are concerned is cared for as much as possible. The hon. Member for Devon, West mentioned the use of scrub land. He is right. He is concerned, as we all are, with the maximum use of marginal land. This is a matter which is always receiving the attention of the Ministry. The hon. Member spoke of the need for drainage. I am not able to tell him without prior notice what is in the pipeline regarding drainage, but I note his point.
The hon. Member for Honiton referred to having accommodation for relatives and others near or in the environment so that they have that benefit. We have done a great deal in two respects. First, we have dealt with the tied cottage. I shall not go into that matter in great detail, except to say that it concerned the right of farm workers to some kind of security in or near their place of work and the need to have some regard to their needs in retirement, and that measure has passed smoothly on to the statute book. I think that the work of the Agricultural Dwelling House Advisory Committee has done much to sort out some of the problems which were anticipated but have not, thankfully, arisen in the form that we had thought they would arise.
I come to the point made about the changes in the countryside. I know of these from the area I have the honour to represent. We see changes in the rural

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areas, with the markets going in some places, vicarages diappearing or being sold, a church may become redundant, with team ministries, and so on. Perhaps I ought to declare an interest here as a Church Commissioner who is involved with some of these problems. The closure of schools is another factor.
We are all saying—the hon. Members belong to a party which is always claiming this—that we are spending far too much public money and must cut down, yet when we look at things not on the social plane but on the economic plane we get this clash of trying to save money on the one hand and, on the other, trying to keep traditional and established institutions going. It is very difficult to put the two together.
When we witness these changes where schools, churches and vicarages are closing and some of the traditional scenes in our villages are disappearing, the public are rightly concerned. But this is a challenge to us all to see in what way we can keep some of the traditional characteristics of our countryside going into the next century. These are some of the matters about which I share the concern which hon. Members have expressed.
The hon. Member for Devon, West mentioned fishing. One of my first acts on becoming Minister of State was to go round our fishing ports in order to become acquainted in greater depth with our fishing industry. Our fishermen are members of an industry which is largely fragmented. In the areas concerning the hon. Gentleman and the hon. Member for Honiton, the South-West, I know of some of the problems, having been to Penzance, Plymouth, Brixham and other ports to discuss them with local fishermen.
Of course, many fishermen regard anyone who fishes from a beach only a few miles away as almost a foreigner. We do not have to talk about members of the Community as being foreigners. Many fishermen regard other fishermen not very far away as being foreign or strange to their patch.
The South-West has a special interest in fishing, and the mackerel fishing there is extremely important. I know that there has been concern about the transhipment of mackerel. However, this provides
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a valuable export outlet for our fishermen. We have taken steps by conservation and other means to ensure that our limited resources are maximised as far as possible and protected from over-fishing and undue exploitation.
I take the point about the value of the fishing industry in the South-West. I always recall how my father used to fish for mackerel off the coast of Weymouth, Abbotsbury and Dorset generally, and he engaged my deep attention and pleasure when he recalled the fishing in those days. Now, of course, we are in a period of some uncertainty. For several years we have been involved in close consultations with our partners in Europe to bring about a review of the common fisheries policy. We are making progress on this, although not as much as we should like.
It is important not least to bring about a greater degree of confidence and security to our fishermen in all parts of the country. When we recognise the very valuable contribution which we make to the resources of the CFP—more than 60 per cent. of the resources comes from within our 200-mile limit—it is natural that our fishermen want to ensure that they get the sort of future in fishing which represents the very significant contribution which we make to all those resources.
The hon. Member for Devon, West made an important reference to agricultural marketing. As a former Minister in my Department, he will recall some of the organisations which are already making a contribution to our marketing scene. He will be aware of the work of the Central Council for Agricultural and Horticultural Co-operation and bodies of that kind. There are bodies such as the marketing boards—the Meat and Livestock Commission, the Home Grown Cereals Authority, the Apple and Pear Development Council, the Eggs Authority and others—all of which are responsible for the promotion of various sectors in a very commendable way. They have an important role not only now but in the future, but it is essential that we ensure that farmers can seek to supply at competitive prices what the buyer wants, whether the buyer is a processor, a wholesaler, a retailer or a direct consumer. Obviously farmers will need to adjust their production to meet the demands of their customers.

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This is very important. Sometimes my right hon. and hon. Friends and I are accused of protecting the consumer more than we do the producer. But a careful balance must be kept between the producer and the consumer. If the producer gets too high a return, he is encouraged to over-produce and a surplus results. If the consumer has to pay a high price, resistance tends to come in and again we have surpluses. So there is this need to keep a careful balance all the time between supply and demand.
The hon. Member for Honiton also spoke about the importance of land use. I am sure that some of his comments about the use of old roads, carriageways and new routes will be borne in mind by my right hon. Friends who are responsible for those matters.
As we move into the era of microprocessors and chips, we have an increasing challenge to make sure that if people are working shorter days and weeks and retiring earlier the additional time which they have on their hands is spent with a sense of satisfaction. Therefore the increasing amount of leisure available to people will be an important factor in the future. In this connection the rural scene, rural crafts and the environment of our rural areas and our leisure interests, whether they be in the forests or the national parks, will take on an increasing importance.
Our job in the future will be an exciting one but also a demanding one as we try to reconcile the needs of food production, of our timber production and of our fishing industry to maximise output as far as possible, thereby cutting down on the balance of payments, and at the same time to leave enough room in our society so that those who have more time to enjoy their leisure shall be able to do so to the maximum extent possible. That is a challenge which my Ministry is meeting, as are other Government Departments, and I am sure that all right hon. and hon. Members will play their part in ensuring that we maximise to the full our limited resources as a country.

NURSES(PAY)
7.47 p.m.
Mr. William Hamilton: I am delighted to have this opportunity to ventilate a subject which is very dear to my heart and to that of my hon. Friend the Member for Ealing, North (Mr. Molloy). We both happen to be Members sponsored by the Confederation of Health Service Employees, which represents more than 200,000 National Health Service workers, including nurses, especially mental health nurses, and few people are more dedicated or more responsible and moderate in the claims which they make on our society.
Not for the first time in the past 20 years, our nurses are in an angry and frustrated mood. In that context, I wish to quote some comments made on this matter in The Guardian of 1 November last referring to documents presented to the Department not only about the wages of nurses but about their general conditions of work inside our hospitals and other related matters. The article said:
"The nurses are right to make a fuss. The National Health Service does need more resources."
Some of the complaints that the nurses were making were not new. They had been made almost ever since the National Health Service was established.
The article went on to refer to wastage in the profession:
"Disenchantment in fact comes so early that studies in the 1960s showed that 30 per cent. of nurses hung up their uniforms before completing their training. Similarly, too many nurses have always been put on the wards too early."
It went on:
"It says something about modern educational values that we are still prepared to spend ten times as much on the education of a university graduate as a nurse."
It said in relation to the building of hospitals and the dereliction that is so evident in so many hospitals:
"One third of our hospitals were built before 1900; but equally, it is foolish to ignore the advances we have made. One third of our district-general hospitals are now in new or remodelled buildings. At the end of last year another 117 schemes costing over £500,000 each were under construction. We have twice as many nurses as we had at the start of the NHS."
I put that on record because it is important to see the claim for increased

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remuneration in the context of the whole Service.
Nurses are even threatening strike action, of a sort as yet unspecified. I speak for myself when I say that I desperately hope that that situation will never arise because it would seriously damage the impeccable image of nurses in the community at large. It would be a thousand pities if the nurses took any action that destroyed or tarnished their image.
It was with amused contempt that I read early-day motion No. 164 in the names of several Tory Members. It was interesting that that motion on nurses' pay carefully did not ask specifically for more money for nurses. Why? Because the signatories were clearly embarrassed by the Conservatives' official commitment to slash public expenditure. In logic, they should not—though they do—argue for increased pay for nurses, firemen, the police and the Armed Forces and pretend that they can do all those things and, at the same time, cut public expenditure.
I want to spell out the Tory record on nurses' pay. It is a story of Scrooge writ large. I have been reading some debates of 1962—when we had no crisis of the proportion that we have now, either consequential on increased oil prices or because of a world crisis.
Mr Kenneth Robinson, who was Labour's official spokesman on health matters, said in 1962:
"A qualified staff nurse, after three years' training and aged at least 21, starts at about £l0 a week."
That was after 11 Tory years. A qualified staff nurse after three years' training earned £10 a week. The present right hon. Member for Down, South (Mr. Powell), who was Minister of Health while the incomes policy of the time was operating, said:
"The incomes policy … is a policy for the nation as a whole."
He presumably meant that the nurses could not be excluded from that policy.
The hon. Member for Orpington, the then Eric Lubbock, who is now Lord Avebury, said in his maiden speech that a ward orderly at that time was receiving £10 Os. 8d. for a basic 42-hour week and he went on to outline the overtime
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rates. The hon. Member for Maidstone (Mr. Wells) said:
"I have no objection to ward orderlies earning high money."—[Official Report, 27 March 1962; Vol. 656, cc. 1088–1109.]
High money! The hon. Member was referring to £10 a week, with overtime paid for more than 42 hours' work in a week. That was the attitude of the Conservative Government.
In a debate in that same year, during the second phase of the Tory Government's pay policy when the nurses and others were to get 21½per cent., the Minister of Health said:
"a rise in incomes which outstrips production has consequences from which all are bound to suffer, not least professions like that of the nurses themselves, which will always be at the tail of the rat race".—[Official Report, 14 May 1962; Vol. 659, c. 945.]
At the end of that debate there was a vote in which the right hon. Lady the present Leader of the Opposition, the then Prime Minister and most of the present members of the Tory Front Bench voted in favour of the 21½per cent. infliction on the nurses.
I put those facts on the record in order to try to convince nurses that, whatever their problem today, it will be solved only by a Labour Government.
Let us look at the position of the Conservative Party today. Its official policy document "The Right Approach" says of the NHS:
"When the service is short of funds … there is no case for holding down prescription and other charges."
The Conservatives believe that there is no case for holding down any of the existing charges in the NHS. On 29 October 1977, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), who is the Opposition's spokesman on health and social security, said:
"If… we are able substantially to reduce the burden of direct personal taxation, is it not reasonable to ask people to pay something towards their health costs?"
There it is in black and white. Direct tax reductions, mainly for the benefit of wealthy people, are to be recouped by increased health charges, mainly on the poorer sections of the community.
"The Right Approach" went on to say:
"We should encourage … private provision "—

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that is, the provision of health services via private medical insurance. It added:
"We see no reason for quantitative controls over the development of the private sector outside the NHS."
That is the background to the present claim and complaints of the nurses.
Everyone, including the Government, accepts that nurses' pay has fallen behind in the past few years. I passionately believe that they are a uniquely special case and I shall explain why. They are unique because support for their claim, above that for any claim made by any other section of the community, would meet with unanimous public approval—more so than in the case of the police, the firemen and the Armed Forces, who have all had exceptional treatment from the Government.
The nursing profession is also unique because use of the strike weapon, I like to believe, is unthinkable. It is unique, too, because these people are serving in a universally popular and vital national service.
I should remind the House and the public of what Labour Governments in the past decade have done, and what I hope they will do in the immediate future. In 1970 there was a great advance in nurses' pay. My right hon. Friend, the Secretary of State, said of the Labour Government of that time:
"They picked them up virtually off the floor."—[Official Report, 30 January 1979; Vol. 961, c. 1220.]
I do not think that that is an exaggeration. The Halsbury award in 1974 was very substantial. Despite those achievements, the right hon. Member for Wan-stead and Woodford was belly-aching about Government delay in settling the nurses' pay claim. He demanded an answer from the Secretary of State, who explained that the Government were considering the claim which was, in any event, not to be implemented before 1 April.
On 6 February, in answer to my question, the Secretary of State for Scotland indicated that nurses had certain claims outstanding from the previous round of negotiations. The Secretary of State also said, which I found disturbing:
"but these are not under active discussion at the moment."—[Official Report, 6 February 1979; Vol. 962, c. 212.]
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Why not?
Secondly, the Secretary of State indicated that the nurses would be considered in some future comparability study, subject to agreement with trade unions and employers. I do not know what commitments, if any, the Prime Minister gave when he met the nurses a week or two ago, but it is almost without dispute that every Member of this House and almost every member of the public would be unanimous in supporting the acceptance by the Government of the nurses' claims. That, in my view, is not enough. Although the Labour Government's record in this matter needs no great defence from me, I think that the Minister would agree that any advances made are bound to be eroded in direct proportion to our inability to control inflation.
I notice that some of my hon. Friends on the Left of my party are listening to the debate. I would tell them that the policies of free collective bargaining urged equally forcefully by the extreme Right and the extreme Left—by the 1922 Committee of the Tory Party and by the Tribunte group of the Labour Party—leave in the lurch the very people I am talking about. They are the nurses and others whose bargaining power, for one reason or another, is incomparably weaker than that of other sections of society. Even supposing that the Government accept the claims of the nurses, which I hope very much they will, there must be machinery devised for dealing with such deserving cases. That must happen very soon.
Mr. Dennis Skinner: I would not want my hon. Friend, who is making out a good case for the nurses, to mislead the House by coupling the Tribune group with the 1922 Committee of the Tory Party. I believe he will agree that, although most sections of the Tory Party posture about free collective bargaining, when it comes to the practical details—for instance, over cuts in public expenditure—they tend to become confused. If they really believed in free collective bargaining, they would have supported the lorry drivers when they demanded an increase and the public sector workers who are currently in dispute. They say that they believe in free collective bargaining. but they do not want to practise it, whereas some of us on these Benches—I agree,

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a minority—believe in collective bargaining, because nothing is free when negotiating for wages. We are prepared to see that carried through. I think my hon. Friend would agree that there is a considerable difference in our views.
Mr. Hamilton: My hon. Friend has made the most gentle interruption that I have heard him make since he became a Member of this House. I am gratified because I sense he is on the retreat. He does not like much to be associated with members of the Conservative Party in believing that the law of the jungle will get us out of the problems we face. It will not. He and his colleagues on the old-fashioned Left of our party believe it will. But it cannot be done. One has to intervene. The Left in our party many years ago accepted that if one wants a Socialist society one has to intervene and control in some degree wages, which are, in effect, the price of labour. If one is not prepared to accept that form of intervention, one cannot build the kind of society we want.
I should like the Minister to take this matter back to the Cabinet. Nothing will serve our purpose better, than to go to the country saying that we believe in social justice and in giving to the people who do the most important jobs the best rewards and that this will be achieved by deliberate Government intervention. Nothing will serve that purpose better than if the Minister tonight says "We will put this case to the Cabinet with the support of the whole of the Parliamentary Labour Party. There is not one hon. Member on the Opposition Benches. I hope that the Minister's resolve will be strengthened by this worthy case.
8.8 p.m.
Mr. William Molloy: Like my hon. Friend the Member for Fife, Central (Mr. Hamilton), I have a tremendous interest in the National Health Service. Both our families, our wives and daughters have been involved in the practical side of the National Health Service as nurses and State certified midwives. My hon. Friend, like myself, has probably been at the receiving end of some sharp and severe criticisms over the way in which this House has behaved in trying to make the National Health Service an even better service.
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The truth about the NHS was outlined and adumbrated by Aneurin Bevan. Everyone of any note in the medical profession, the economists in the City, the bankers and regrettably some members of the Labour Party in prominent positions remarked that it was a wild ideal. It could not be done, they said: it would take 10 or 15 years to achieve a full NHS covering everyone from the cradle to the grave. Thank goodness the Minister took little notice of well-educated people in Cambridge and Oxford.
That service was introduced within a couple of years of the most horrendous war in history. Today's problems are tiny compared with those faced by that Labour Government in introducing a great principle. Many men and women who had fought in the war were still overseas. There were massive housing problems. Europe was devastated and poverty-stricken. In passing, I would say that some members of the EEC should reflect that this country's generosity was enormous. Yet at that time we laid the foundations of the National Health Service. It is saddening that its progress in the subsequent 30 years has been so abysmal.
Central to this problem has been the treatment of the nurses. How can we tell young women "Don't be a mug. Don't become a nurse in the NHS. Take your clothes off instead and be pictured in some glossy magazine. You will earn more in a week than a nurse earns in five years."?
Perhaps the Archbishop of Canterbury would apply his mind to this problem now and again. What does he think of young women stripping off to be photographed in newspapers, exhibiting their breasts in fancy glossy magazines? Does his Lordship agree—if not, how strongly does he disagree—that a young woman engaged in that activity should receive a thousand times as much pay as a young girl working at night, emptying bed pans, dealing with someone in pain or in a geriatric ward, or, unpaid, comforting families who are visiting the sick? That is the sort of problem that Governments and clergymen should consider.
There is a lopsided situation in the NHS. One sees a disgraceful situation when one compares the fees of part-time

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consultants, important though they are, with the pay of nurses.
Mental nurses—in perhaps the most poignant profession, dealing with someone's loved one who has not a proper mind and might be dangerous—are not only ill paid but sometimes run legal risks which this House permits and of which we should be ashamed.
The Minister has received representations on behalf of all nurses, including mental nurses, from the Confederation of Health Service Employees, with which I am connected, as is my hon. Friend the Member for Fife, Central. If Ministers want to make this wonderful ideal a reality, they can do no better than act on the weekly advice that they get from that body.
I have raised many times in this House another matter that irritates and annoys our nurses. It has been a waste of time mentioning it to the Front Bench and certainly to the Opposition parties. With our Socialist ideals we do not believe that the only way that people receive medical treatment is if they have sufficient money to pay. This principle applies also to high-class schooling. It is never asked how this money to pay for privileges is obtained. It could be from running a brothel.
One assumes that private patients pay for their beds, but they do not. They cheat. There is a good hospital with a fancy name within a few miles of this House. It has a large number of pay beds where nurses, consultants and other doctors have to work outside the National Health Service. There are other hospitals like this. At the monthly meeting of the board of governors one of the main problems is who has done a bunk. Patients have had a month's treatment and vanished without paying the bill or cheques have bounced.
I had a devastating reply to a question that I asked in the House. It was said that the cheating was known and that the high-flown people who receive the treatment, preference and privilege vanish and do not pay. But little could be done. In the first place, the Government could move over and let my hon. Friend the Member for Fife, Central and myself take over for six months to set a level. I do not accept that in Great Britain private patients can keep another patient
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who cannot pay out of a hospital bed, that they can jump the queue with a promise to pay and then double-cross the system and not pay a halfpenny. It has been said that there is no way of checking. But a short circular could be sent to governing boards asking how many thieves have stolen national resources by promising to pay for a bed in a National Health Service hospital.
It is argued that the National Health Service and the nursing profession could not exist without people who jump the queue and pay large sums to get into hospital. That is disgraceful and phoney. It has had a deleterious effect on the National Health Service, and especially on the nurses. The senior nurses and experienced staff in the Confederation of Health Service Employees particularly have seen over the past 30 years an insufficient contribution to maintain the National Health Service to the spirit and ideal orginally conceived. During the years when "we never had it so good" the National Health Service was quietly allowed to run down and nurses' pay to slip behind.
As my hon. Friend the Member for Fife, Central has so often said, during those years not only was the Health Service quietly allowed to run down but the nurses actually had a pay cut. There was no great outcry because Governments took cruel advantage of the idealism of both mental health and ordinary nurses. All that has happened in this long period is that the very essence of the National Health Service has been sucked away by disguised vampire Governments who are not interested in the principle of the creation of an even better Health Service.
My hon. Friend the Member for Fife, Central mentioned the Halsbury report. I agree that it was a good report, but the brutal truth is that nurses have still missed out. They did not get anything like the police or the Armed Forces. What a contrast. Are not nurses just as important as Service men? Is it not vital that the British nation should be adequately defended against disease as much as against anything else? Yet we have failed to do that.
I sincerely believe that any form of preventable pain is a blot on any society. There are smudges still left on the

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National Health Service, and these smudges did not exist when it was created. We have allowed this tiny little cancer in the Service to grow—surreptitiously, but nevertheless to grow.
I wonder whether the Minister really understands the strain on nurses or the feeling of great achievement of young trainees. Does he understand the devotion and the agony of waiting for examination results? I have been through all that. I remember the day when I received a message on the House of Commons notice board from my daughter. I felt quite choked. It simply said "Dad, I have passed State." There was more pride in that than if she had said "Dad, I have landed a Hollywood contract." Somebody has to do this work, so why should we penalise men and women in the nursing profession when they have such pride and fine idealism in their work?
I hope that the Minister will look at some of the petty restrictions with which our nurses have to contend in some of our hospitals. I readily admit that nowadays there are very many enlightened matrons who are a great credit to the NHS. But here and there are the remains of old Victorian attitudes which do not match the requirements of professional nursing in a modern society. Along with that aspect is the aspect of frustration felt by many of our mental and psychiatric nurses. Unless something is done about these irritating features, and unless these nurses are properly remunerated for their important job, our Health Service will suffer even more.
The creation of the NHS was a great endeavour, and those of us who sit on the Labour Benches are proud to be connected with the party which created it. But we shall no longer be proud if the Labour Government try to cash in on the job satisfaction of the nurses and deliberately exploit their idealism. That would be a heinous crime, and I hope that we are not even approaching the possibility of committing such a crime.
We must match the pride of the nurses' contribution to society, reflecting the nation's appreciation by ensuring a proper remuneration for all our nurses. I am sure that the people of our country would endorse it. We very rarely arrive
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at the frontiers of understanding of the problems of the National Health Service until our own souls are smitten with grief. Then we realise what a great service it is, and right at the heart of that service is the nursing profession.
Let us have much closer liaison with the great trade unions within the National Health Service, particularly with the Confederation of Health Service Employees. Its devoted officers understand these problems and they want to improve the National Health Service. I have been present at meetings of COHSE at which we have talked for hours not about increases in pay and scales of remuneration but about the problems in our hospitals which have to be resolved. The officers of COHSE feel that their members can make a contribution here. But while they take a great deal of interest in the NHS outside their normal scope of their duty, it must be acknowledged that they are not given the sort of treatment to which they are entitled. If their members are treated shabbily, and if the nurses are treated shabbily, we shall have a shabby National Health Service.
I hope that the Government will not allow frustration and desperation within the nursing profession to continue to the point at which nurses might even contemplate all-out industrial action. The continuance of this frustration and desperation can be prevented only by action on the part of the Government. I do not mean simply action taken to avert a strike. I mean the sort of action that will increase the morale of the trade unions and their members, and of the nursing profession as a whole, so that the nurses will once more be proud to be members of a great profession. They will benefit from such action, and, more important still, the British people will benefit from it immensely.
8.28 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I am well aware that the subject of pay of nurses is one on which there is widespread and genuine interest among my hon. Friends, as is evidenced by their attendance here tonight.
My hon. Friend the Member for Fife, Central (Mr. Hamilton) and my hon. Friend the Member for Ealing, North

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(Mr. Molloy) have made their case very strongly. I welcome this opportunity to tell the House something about the background and to explain the present position. But before doing so I should like to respond to the last point made by my hon. Friend the Member for Ealing, North concerning the relationships with the Health Service trade unions. I can assure him and my other hon. Friends that our relationships with the National Health Service trade unions are extremely good. We meet them regularly in a series of meetings at which each side can put on the agenda whatever items it chooses. Indeed, in recent weeks we have been meeting extremely regularly. The weekend before last I spent 24 out of 48 hours with one of the Health Service unions over a hospital dispute. I can assure my hon. Friends that we take very seriously the task of maintaining good relationships with the unions which represent a great proportion of the workers in the Health Service.
I echo my hon. Friends' tributes to the nurses and express my own appreciation, and that of my right hon. and hon. Friends, of the valuable and dedicated work which they do in all parts of the National Health Service. Wherever there are sick or injured or seriously ill people, whether in hospitals of various kinds or in their own homes, skilled nursing care is a key element in their treatment.
The nurses and midwives who work in our mental and acute hospitals and in the community have established standards and traditions which are not bettered anywhere. I therefore gladly join my hon. Friends in paying tribute to the devotion and hard work of all our nurses. I wish to make clear at the outset that any disagreements or difficulties about the size of the increases in their pay which we can contemplate do not detract in any way from our appreciation of the valuable contribution which nurses make to the National Health Service.
I hope that my hon. Friends will forgive me if I do not follow them in their comments on comparisons of the pay of nurses with that of other perhaps less honourable but more glamorous professions. Many years ago I wrote that nurses were an invaluable part of our society, and while one can imagine a society without quite a number of the
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professions one could not possibly conceive of a society without nurses.
At the beginning of the present decade, in 1970, there was widespread concern about the level of nurses' pay, and the Secretary of State at the time—who was Richard Crossman—instituted an internal review which led ultimately to substantial increases of some 20 per cent. in nurses' pay levels. By 1974, there was again concern on this subject, and my right hon. Friend the Member for Blackburn (Mrs. Castle) appointed a committee of inquiry under the chairmanship of Lord Halsbury to look into this question. The Halsbury committee produced its report in September 1974 and it was accepted by the Government. The committee said it had been concerned not merely to update the pay levels established in 1970 but to provide the right sort of pay levels for nurses, taking account of increased responsibilities which they were undertaking and of the need to continue to recruit good quality entrants to the profession, which is a matter which must concern us all. The Halsbury award was a substantial one by any standards. Nurses received increases of 30 per cent. in their pay with effect from May 1974 in addition to the increases of some 7 per cent.—with associated improvements in conditions of service—which had been paid from April of the same year.
During 1974–75, nurses—like other groups of workers—received threshold increases, and their next main settlement was in April 1975, when they received increases of some 11 per cent., which resulted in pay levels of nearly 17 per cent. above the May 1974 position. Since then—in April 1976, 1977 and 1978—nurses and midwives received the amounts authorised under incomes policy. When they tabled their pay claim in March 1978, the staff side of the Nurses and Midwives Whitley Council claimed that nurses should be entitled to more than the 10 per cent. allowed under incomes policy because, they claimed, their pay had fallen behind since the Halsbury award of 1974 and they felt at a disadvantage in that they were not able to take advantage of self-financing productivity deals which were available to other groups of workers. They therefore argued that they

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should receive some form of "compensatory" payment in addition to the 10 per cent. pay increases.
In discussions with the staff side, my right hon. Friend the Secretary of State made it clear that there was no scope under the Government's incomes policy for a compensatory claim of the kind suggested. He told the staff side members that, if they felt they had a claim on more general grounds to be treated more favourably than was allowed for under incomes policy, it was for them to develop their case, which the Government would examine carefully. Such examination would be undertaken, however, in the light of all the relevant circumstances at the time.
My right hon. Friend wrote on 9 May 1978 to the chairmen of both sides of the Whitley Council to put on record the position which he took on this question. That letter was of some significance for a reason which I should explain. Pay agreements by the Whitley Council require the formal endorsement of my right hon. Friend—under the terms of the NHS Remuneration and Conditions of Service Regulations—before health authorities may introduce the higher levels of pay. The purpose of the letter of 9 May 1978 was to make quite clear what position the Secretary of State took on the claim for additional payments when he authorised the 10 per cent. settlement which had been negotiated within the current incomes policy.
After a number of exchanges on the Whitley Council during the summer last year, a detailed case, prepared by the staff side and arguing for specially favourable treatment for nurses, was submitted to my right hon. Friend on 6 October 1978. The case submitted by the staff side was supported in principle by the management side of the Whitley Council, but the management side was not committed to any precise quantification claimed by the staff side and it accepted that no additional money could be paid during the then current pay round. In short, the position of the management side was that it hoped that an advance commitment might be given to favourable treatment for nurses, but it accepted that no additional money could be available earlier than the 1979–80 pay round. The staff side, on the other hand, was press-
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ing for additional payments beyond the phase 3 10 per cent. during 1978.
On 16 October last, my right hon. Friend received a deputation from the Whitley Council when the two sides developed their arguments in support of their claim for specially favourable treatment for nurses. The staff side emphasised strongly its contention that nurses' pay had been eroded seriously since the Halsbury award. It maintained that an increase of some 18½ per cent. would be needed at April 1978 to restore nurses to the position established by Halsbury. My right hon. Friend reminded the deputation of his letter on 9 May, and in particular of the statement in that letter that any general case which might be presented would be considered in the light of all the relevant circumstances at the time.
The most relevant current circumstance was that the Government had issued their new White Paper "Winning the Battle Against Inflation", which set out the approach the Government were adopting to incomes policy. My right hon. Friend emphasised that the overriding concern must be to contain inflation, which was a major threat to the well-being of nurses as to the rest of the community. The White Paper had made clear that any claims to special treatment would have to be examined very critically as it would be self-defeating if more than a very few groups were accorded special treatment. The Government would consider the case which the nurses has developed—and I note my hon. Friends' contention that the nurses are a unique case—but my right hon. Friend told the deputation frankly that he could see no prospect of any additional payments for nurses in the current pay round.
It is important to emphasise at this point, because there has been a certain amount of misunderstanding, that the nurses received a pay settlement in April 1978 and their next settlement is due in April 1979. The arguments that have been taking place in recent months therefore have been not about a particular pay claim but about a case, submitted between annual settlements, which argues that nurses should be entitled to some additional awards over and above their annual settlements. In considering representations of this kind, the Government cannot take a simple isolated view relating to one particular group and ignore

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the wider implications of settlements for individual groups.
My hon. Friends will not need to be reminded that towards the end of 1978 there were several groups in the public service who were pressing their claims. All of them believed that theirs was a particularly good case. No doubt from their own standpoint they all are good cases, but the Government have made quite clear their determination to fight inflation—a fight in which they have met with much success in the last two to three years. That success has been hard earned, and we must not lightly surrender the successes we have achieved in the battle against inflation.
When hon. Members press the claims for high pay increases for any particular groups of public service employees, they must consider the implications of what they are proposing. Excessive pay settlements in the public services could mean ultimately that poorer services are provided. There is no bottomless purse available for funding excessive settlements. Recently the Government have announced their public expenditure plans for the next few years. These include a significant increase in resources available for the development of the National Health Service. But, as my right hon. Friend the Secretary of State has already warned the House, excessive demands will put the Government's plans for expanding the resources available to the NHS seriously at risk. We cannot ignore these issues when debating pay questions.
When the House debated the industrial situation on 16 January, my right hon. Friend the Prime Minister announced improvements in the underpinning arrangements in incomes policy for the
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low paid. He also indicated that the Government were willing to accept a greater role for comparability in determining pay for particular groups employed in non-trading parts of the public sector. He said that discussions were taking place on the scope for comparability investigations for local government manual workers, National Health Service ancillary employees and some others. The Prime Minister also said that the Government would be prepared to give sympathetic consideration to an approach for the comparability principle to be applied to nurses. He reminded the staff side of this when he received a deputation from it on 24 January.
My right hon. Friend the Secretary of State has urged the two sides of the Whitley Council to accept that the offer of a comparability study provides a constructive and positive way forward on nurses' pay. He has indicated that he is willing to enter into discussions at an early date about the way this could be done for nurses and midwives. The Whitley Council will be meeting again tomorrow, when I hope very much that it will consider seriously my right hon. Friend's proposals.
Discussion on the question of nurses' pay is now clearly at a very delicate stage. The negotiators have an important and responsible task. I am not in a position to make any dramatic announcement this evening on the eve of further negotiations, and I would not pretend to do so. However, I can assure my hon. Friends that in regard to nurses' pay the present is a time for constructive discussion, and I know that my hon. Friends and the profession outside will appreciate that fact.

LUCAS AEROSPACE
8.40 p.m.
Mr. Bob Cryer: I am grateful for the opportunity to raise what is one of the most important moral crusades that this country has seen in the twentieth century. I refer to the Lucas Aerospace combine shop stewards' committee, its corporate plan and the work it has done over the past three years. The shop stewards' imaginative method of tackling the question of providing jobs for peace and not for destruction is an important moral crusade of which the House and the nation must take note. I say that against the background of the Iranian contract for the production of means of extermination, a contract worth about £2 billion, which is grinding to a halt.
Time after time some of us on the Back Benches have raised these points. Indeed, only a short time ago I discovered from the Ministry of Defence that among the thousands of people that it employs there is not one person who devotes his or her time and energy to the possibility of substituting production for extermination with production for peace.
One of the difficulties faced by the Lucas Aerospace shop stewards is that, by and large, people do not wish this sort of question to be raised. They prefer to go for soft, easy contracts to sell 500 tanks to a reactionary regime in some distant land—the further away the better.
The Lucas Aerospace shop stewards have said that when they raised the question of the morality of the work being done by Lucas Aerospace, allied to their concern for jobs, they were told by the executive elite that runs Lucas Aerospace—as it runs all our big corporations—that the work carried out by Lucas was quite adequate for jobs.
In a recent press release the confederation trade union committee said:
"The 'Corporate Plan' initiative, launched in January 1976 was rejected by the management, who maintained that the Company's present product policy was the best guarantee of employment; the shop stewards point out that almost exactly two years later the Company announced the closure of its Liverpool, Bradford and Coventry sites."
So who was right? Was it the highly paid corporate executive elite or the lads on the shop floor, albeit rather sharp
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lads with penetrating minds? As a matter of fact, their minds seem sharper than those of the corporate elite when it comes to the actual experience people have had.
This is an important debate. I am pleased that my hon. Friend the Minister is here after our pressure on Thursday for a debate. Unfortunately, he was not able to meet our request then, but I am pleased that the debate is now taking place.
It is worth pointing out also, against the background of the Lucas Aerospace shop stewards' views and their corporate plan, that one of our greatest commercial rivals is Japan. We know that, because we see Japanese products such as motor cycles, televisions, sound centres, and motor cars everywhere. Indeed, people become very concerned about the level of importation of Japanese cars, and Members for areas where there is a motor industry are concerned about the number of commercial vehicles imported from Japan.
What is the position with regard to Japanese defence expenditure? In July 1976 in the Financial Times, the Far East editor, Charles Smith, talked about "A dilatory phoenix". He said:
"The first is that Japan's defence spending is never going to get very big (it is currently 0·87 per cent. of the GNP), and may indeed grow more slowly in the next few years than in the recent past because of the expected slow down of the growth of the Japanese economy."
The Japanese have been very sensible. They have taken a moral view very similar to that of the Lucas Aerospace shop stewards. Because of their experience as the only nation in the world to face the horror of a nuclear holocaust, they have kept their defence expenditure down.
We spend about 5 per cent. of our GNP on defence. The Japanese are putting their expertise and development into products that people actually want. That is why we see their products on the streets of this country and virtually every other developed nation as well as underdeveloped nations.
Therefore, the attitude of the Lucas Aerospace shop stewards is a vital matter that we must take notice of. It is a pity that because of the structure of our Government the nation sometimes seems able to accept such ideas only in a crisis. If the Iranian arms contract is not to be

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renewed or extended, as seems likely, there will be a crisis for many employees in the armaments industry.
It is true that over the past three years the shop stewards' committee has discovered a number of difficulties. Institutions, whether of Government or of the trade union movement, have not responded as rapidly as the shop stewards thought desirable and as the nature of their views demanded. We should change our institutions if they are incapable of meeting the sort of attitude expressed by the shop stewards' committee. We are talking about men and women who have got together in their spare time and thought up plans for alternative production.
When the idea was introduced, the committee circularised a number of academics to see what sort of response they would receive, and they got about half a dozen ideas. They circularised the shop stewards in the various factories throughout the Lucas group and received over 150 practical ideas on what production and resources could be put to. That is the basic, practical, down-to-earth background of the corporate plan, which the shop stewards titled
"A contingency strategy as a positive alternative to recession and redundancies."
It took the shop stewards three years to meet the management to discuss the corporate plan, because they were challenging the hierarchical nature of our society, which is that the bosses shall make the decisions and the workers shall accept them, and woe betide workers who question those decisions and perhaps even produce better ones. That sort of attitude challenges the whole nature and structure of our society. That is why they took three years to meet the management, and then it was only in a television studio because the plan had received such widespread publicity and sympathy.
The moral strength of the plan is clear and basic. People ask "Why on earth cannot the common sense of this plan be discussed?" It was not until that publicity and the pressure from outside organisations was realised that the Lucas management was driven into a television studio, after three years of pressure, to discuss the corporate plan. That is a serious indictment of the management, and to some degree of the Government
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for not putting more pressure on the management to get to grips with the matter and enter into discussions with the shop stewards.
What did the plan contain? I cannot go into it, because although we have, happily, a fair amount of time, it would take too long. It is a comprehensive, detailed and practical plan. The shop stewards were probably the first to coin the word "microprocessors". Now it is part of our language and people are talking about the microprocessor revolution. The Lucas shop stewards were discussing that very subject almost four years ago.
Perhaps I may give just one illustration of the sort of thing the shop stewards were advocating. They said on page 21:
"The increased speed of both road and rail vehicles and the larger payloads which they will carry, both of passengers and goods, will give rise to stringent braking regulations during the coming years. This tendency will be further increased by Britain's membership of the EEC. The EEC is now introducing a range of new braking regulations. These specify not only stopping distances, but calls for minimum standards of braking endurance over a continuous period. In addition, the regulations lay down conditions for 'braking balance' between axles in order to prevent a dangerous sequence of wheel locking."
They go on to say:
"In Britain public attention has been dramatically focused on the weaknesses of existing braking systems by the Yorkshire coach disaster which claimed 32 lives in May of this year. The Sunday Times of June 1st stated 'Last week's crash might have been avoided if the coach had been equipped with an extra braking device, such as an electromagnetic retarder which is being fitted to an increasing number of coaches in this country '."
That is the retarder which is advocated in the corporate plan.
They also say:
"This problem"—
that is, the loss of braking operation because of heat—
"can be greatly reduced, if not totally overcome, by using a retarder. A retarder is basically an electro magnetic dynanometer which is fitted usually to the prop shaft between the engine and the back axle."
They add:
"In fact it would appear that only 10 per cent. of Britain's 75,000 buses and coaches actually have retarders fitted to them."
If we examine the history of coaches between 1976 and today, we find that there have been a number, albeit a small

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number, of spectacular crashes, almost in every case due to braking failure. There was the crash of a police coach at Wakefield, with the loss of several lives, as a result of inadequate maintenance. Because of inadequate maintenance, there was no braking, and no reserve braking by means of the retarder advocated by the Lucas Aerospace shop stewards' committee in its corporate plan.
That is the kind of imaginative development that was put forward. As the days go by, we see examples where the application of their ideas would save lives and be a useful addition to our safety standards. That is the attitude which they had and which they put forward.
What does it mean in terms of jobs? The Lucas Aerospace shop stewards' committee set up a special working group, which reported. It has been reported on in The Guardian today. It means, for example, the proposed closure of the factory at Bradford. My hon. Friends will discuss the other proposed closures. The Bradford factory closure has been modified by the provision of a new factory to replace the old one. However, the report which has just been produced, and which I know the Department of Industry will discuss shortly with the group, says that the closure of the Bradford factory has a number of disadvantages.
It is said that the engineers are not willing to move to Hemel Hempstead. That was the proposal put forward. Insufficient engineers may move to Hemel Hempstead to ensure the continuity of the generating systems business. The engineers concerned at Bradford do not accept the necessity for the integration of design and production. They operated separate design facilities successfully for years on constant speed drives produced at Netherton. The company's intention on the engineers required at Hemel Hempstead is to deploy some of them in production engineering and quality control areas.
The Bradford labour force is prepared to accept a new actuator factory, but insists on the retention of all surplus labour in Bradford in the new site, the existing site or new rented premises.
Mr. James Blyth told Members of Parliament on 6 April 1978:
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"It could well be that in Bradford we shall absorb the entire work force, or what is left of it, with an amount of natural wastage, if we manage to get more business—for example, if the McDonnell Douglas work comes along."
The McDonnell Douglas work did come along, and so the report comments that presumably the company could retain the entire labour force.
The report picks out a number of points. A further one is that the relocation offers, especially house price differential repayments, will cause industrial relations problems at Hemel Hempstead. Bradford is designated as a grey area with few opportunities for those who lose jobs. That is very important. Bradford is an intermediate area. Over the past few months the trend of unemployment in Bradford has, against the national trend, been increasing. One of the reasons is that Thorne, another large profitable multinational, closed down a television factory last year, with the loss of 2,300 jobs. That is the sort of decision, made in the executive suite, which ordinary working people cannot possibly shape.
The emphasis of the report is that all the jobs at Lucas Aerospace in Bradford should be retained. The reasons why are set out very cogently. That is the sort of basis that is being argued: that jobs should be retained to ensure that there are opportunities for learning skills in the future, that an area is not depopulated and does not drift along an avenue in which the skills are taken away and only semi-skilled and unskilled job opportunities are available.
I want to mention the Government's position in this context. The view of the combine shop stewards' committee is that the Department of Industry has been too close to the management and not close enough to the shop stewards. The committee points out, for example, that, as in Bradford, a new factory is proposed, but it will lead to a net loss of jobs in current circumstances. The committee points out that the Victor works at Lucas is on a broken back of concrete and that the works requires extensive renovation and extensive expenditure, yet a new factory is to be provided by the Department of Industry.
The committee is very concerned—so am I—that a former permanent secretary at the Department of Industry, Sir Antony

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Part, instead of retiring to his garden in Sussex, or wherever, should go on to the board of Lucas Aerospace. There have been a number of moves by a permanent secretary, Sir Anthony Part, and deputy secretaries neatly out of the Department of Industry and into some rather cosy well-paid jobs on private enterprise boards.
The committee makes the claim, which I think can be substantiated, that this demonstrates a closeness between senior civil servants in the Department of Industry and the management of a company. The shop stewards point out, for instance, that discussions are going on between the Department of Industry and Lucas on planning agreements, but the unions have not been consulted. The basic purpose of planning agreements is to get an arrangement between the Government and the major important company with the trade unions being involved as well.
There is far too much of a tendency for the senior civil servants at the Department of Industry always to approach the management rather than to approach both sides of the shop floor in industry, the management and the trade unions. The shop stewards argue that in their case it is absolutely essential that they should be approached and should have discussions on every occasion. It is not good enough simply for senior civil servants to have an understanding and a continuous relationship with the management, because the management has been shown to he at least less than competent over the past two or three years and is now actively trying to reduce the number of the work force at Lucas.
I know that representatives of the Department of Industry will very shortly be meeting representatives of the combine shop stewards' committee. I very much hone that it will not be simply the Department of Industry that is represented at this meeting but that it is wider, because it involves very important considerations. One of them is employment. Energy is another Department which should be involved, because many aspects of the corporate plan are concerned with the better use of energy and energy saving. Therefore, it is important that such a Department should be involved.
It is important that the Department of Employment should also be involved.
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One of the arguments that is always put forward about expenditure by the Department of Industry is "There has to be a curtailment. There must be a minimum. Public expenditure is limited, and, therefore, expenditure should be cut." But in fact, if the Department of Industry does not spend money on saving jobs, for example, what happens is that people are put on the dole, they are then paid money by the Department of Employment, they get supplementary benefit from the Department of Health and Social Security, the local authority loses rate revenue and the Inland Revenue loses tax revenue, and instead of it simply being a saving on one Vote, it is a transfer from the Vote of the Department of Industry to the Vote of the Department of Employment. In those circumstances, it seems to me that the Department of Industry could usefully determine to be prepared to spend money in order to preserve jobs and to encourage the Lucas Aerospace shop stewards to move along their various ventures.
I recognise that this will not be very easy. The Lucas company is a very large corporation, and it is seeking to operate that corporation in the traditional way by a small group of directors making decisions which have to be accepted by the work force. It will be very difficult for the Department of Industry to break away from its traditional links with the management. I make no criticism or individuals in the Department. I am saying that it is traditional for the Department of Industry to see itself as an ally of management. Many senior civil servants would not easily conceive of being allies of the rank and file on the shop floor. There is not much machinery whereby the rank and file can see senior civil servants in the same way as management can call on their knowledge and expertise and even buy it permanently when they get hold of someone such as Antony Part.
There is not much opportunity for trade unionists to meet civil servants in the ordinary course of events. That is one of the differences between the Lucas combine shop stewards' committee and most ordinary trade unionists. Many trade unionists would not dream of asking a Labour Minister to attend their trades council or meet them as the combine shop stewards' committee. They would

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argue that Labour Ministers are very busy and that they are very important people carrying out important work on their behalf in Whitehall. They would not dream of intruding on them. Managements see it as a matter of right that Ministers should go to their functions and that they should have a constant consultative capacity with senior civil servants. That is the difference.
The Lucas combine shop stewards have taken this notion of their position in society and torn it apart. They have said that they have as much right as anyone to be consulted, that they have as much right as the management to enter into discussions about decisions which will affect their future, and that they will not simply accept a notice in their pay packets at the end of the week to the effect that that is the end of the day for them and that they are out on the streets looking for jobs. They are saying very clearly that they have to be consulted, that they have to be involved in decision making and that if that means going to the Department of Industry and becoming involved in consultations to the same degree as the Lucas management, that is what must happen.
I say that that is what must happen, because Labour Governments are not elected to uphold the traditions. A Labour Government may not be articulated by many millions of people. But we get a Labour Government against the trends because many working men and women see a Labour Government as being on their side. When we get into office, we have to recognise that, whatever the difficulties, these traditional patterns of negotiation have to be pushed to one side and that political initiatives must be taken sometimes. That may cause a little difficulty with the CSEU, although recently the CSEU has shown commendable initiative. But working men and women—organised trade unionists—have as much right as managements to that close consultation.
I hope that the meeting which is to take place very shortly between the combine committee and the Department of Industry—and, I hope, the Departments of Energy and Employment—will represent a new initiative. It will be difficult because of the traditional patterns, and
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I am sure that Ministers at the Department of Industry will be having a lot of advice fed to them that they must not make any promises or say anything which will give an indication of help to the combine shop stewards, that it is the management which is taking the initiative and that it is management decision making.
The combine shop stewards are turning that argument on its head. They say that that is not the case at Lucas. They say that decision making should be taken at least jointly. Of course, that will be resisted. Everyone says that it is a wonderful idea. People pour out sympathy and say that it is a splendid idea with great moral virtue—but nothing seems to get done.
The reason is that if the Lucas combine shop stewards' committee should open the door of the elite of the Civil Service talking to the elite of management and making decisions in concert, many more trade unionists will also want a say in decision making. They would be right. If the Lucas Aerospace plan is adopted, it will mean an alteration in our society, and the Iranian contract may cause that degree of crisis that produces a change in our society. It is reckoned that it takes about 10 years for an idea to be taken hold of and put into practice. It may be that the general economic difficulties and the crisis in the arms industry will produce a rather shorter period in this case.
I understand the difficulties of my hon. Friend the Under-Secretary in replying to a debate at relatively short notice, but we represent a movement which is headed towards change. It may not take place next week or the week after, but it is irresistible. Change will take place. That is the message which goes out from this House.
We have talked to the shop stewards involved. They have met setback after setback. They do not look on us as noble saviours from Parliament. They look on us with a certain amount of suspicion because we are in Parliament and we represent the sort of establishment that they have been fighting for the past three years. They are still dedicated because they have the right ideas, and people with the right ideas will win in the end, no matter how many times they are put off. That is the message that we put out. The

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shop stewards will win, and they will have us behind them all the way.
I hope that in the next few weeks we shall be able to stand proudly—as we have not always been able to do in the past—and say that the Departments of Industry, Energy and Employment are behind those shop stewards. Perhaps it may even be possible, though it seems unlikely, that the whole Government will give their backing to these sorts of ideas.
9.8 p.m.
Mr. Sydney Tierney: I join my hon. Friend the Member for Keighley (Mr. Cryer) in thanking my hon. Friend the Under-Secretary for giving us the opportunity of having this debate.
I have been involved with the Lucas corporate plan for about three and a half years. Like a number of other hon. Members, I have a Lucas Aerospace factory in my constituency. It is agreed on the Labour Benches that the Lucas Aerospace corporate plan is fully in line with Labour ideas about industrial strategy.
I wish to put on record what the corporate plan is all about. Essentially, it is a set of detailed proposals for the manufacture of 150 products covering six major areas of technological activity, including oceanics, transport systems, braking systems, alternative energy sources and medical equipment. The products include wind generators, gaseous hydrogen fuel cells, solar collecting equipment, all-purpose, multi-fuel power tanks, kidney machines, hobcarts for spina bifida patients, portable life support systems, robotic devices for mining, underwater work and so on, and road and rail vehicles. There were two objectives to the plan—to protect jobs and to ensure that the alternative work would be socially useful. That is a tribute to those who compiled it.
There is a long history of redundancies in Lucas Aerospace. I first came in contact with the problem when the workers drew up a diversification plan three and a half years ago with the object of saving jobs. But then this plan was devised which has been widely praised as a considerable theoretical achievement. I led a deputation to Ministers three and a half years ago and they, too, hailed it as such. Books and articles have been writ-
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ten about it, but there has been no practical Government involvement yet. I hope that this debate will encourage such involvement.
A first step, which we suggested three and a half years ago, might be a feasibility study of the products proposed. The workers understand about marketing and demand and that the products will have to be sold at a profit. They say that one or two of the 150 products could be commercially successful. The electronic chips with which they were dealing at that time were four inches long. They showed the Minister examples and talked to him about some of the products which might result.
In spite of the difficulties, we have tried to involve the management, the unions and the Government. This is a classic case for a compulsory planning agreement to get such an admirable venture off the ground.
The Government recently said that they met the company to discuss a planning agreement and that another was planned. Has a further meeting been put in motion? The Government will probably say that over four and a half years they have taken a great interest in redundancies and have given considerable help to Lucas Aerospace. But most of that time has been spent on procedural arguments with the unions about whether the shop stewards making the plans were the true union representatives. There have been serious problems with the Confederation of Shipbuilding and Engineering Unions. The Government have spent more time on procedure than on anything tangible.
I began by saying that the plan was a twofold issue—redundancies and new technology, new products, new exports and new jobs. I know that the Government will say that they have given considerable support to Lucas Aerospace to save jobs. Recently a grant of £8 million has been offered to build a new factory and to save jobs on Merseyside. This is important. What happens in a combine like Lucas Aerospace obviously affects the situation in other places. We take an interest in what is happening within the combine because it affects each unit in various parts of the country. Concern was expressed that work had not started on a new factory site at Huyton. I wonder

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whether the Minister could give more up-to-date information on that.
My hon. Friend the Member for Keighley mentioned that working parties have been established with the unions to discuss redundancy questions. There have been various complaints about procedure. Would the Minister make clear that the working parties have been dealing with other matters apart from redundancies? If they have been dealing explicitly with redundancies on the basis of what is happening in Huyton and other places where factories were to be built and where there were worries that factories would not be built, may we know whether the established working parties have got down to any details of the plan concerning new technology, new products and new jobs?
I should also like the Minister to bring us up to date on other questions. It has been established that the Government were prepared to hold a tripartite meeting once the working parties had reported. It was stated that this would possibly take place some time in February 1979. The working parties have been meeting and they have been discussing redundancy problems. Have the working parties been discussing ways and means of establishing some kind of feasibility study between the Government, the unions and the company to make practical arrangements for marketing some of the products I have mentioned in the long list?
If the working parties have not been discussing matters other than redundancies and have not been discussing in detail the practicable introduction of any of these products on a marketing basis, even in terms of a feasibility study, will the Minister promise that the Government will take the initiative in the tripartite meeting and introduce the subject of a feasibility study to see whether they, the company and the trade unions between them can tackle this problem in a more realistic way and implement in some form the Lucas corporate plan? There has been no argument on this side of the House about this being the right way to approach the question of industrial strategy.
9.20 p.m.
Mrs. Audrey Wise: People are quick to criticise
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workers when things go wrong in industry. Even when it needs the exercise of imagination, people seek to blame the industrial relations record of an industry for the decline, and there is a chorus of accusation in the press. In industries with a record of quiet industrial relations. where this accusation cannot be made, those who are so quick to criticise workers do not look to management to see where it has gone wrong but treat the decline as inevitable.
When a work force such as that at Lucas Aerospace constructively plans for expansion, one would think that management would welcome it. But that is not so. Management has been conspicuous in its lack of enthusiasm for the Lucas workers' initiative and their corporate plan. I greatly regret that but do not find it surprising. However, I would expect a Labour Government not just verbally to approve such an effort but to give all possible help to the work force to achieve their plan. There is at last to be a tripartite meeting on Wednesday to discuss the situation and the forthcoming closures and job losses. I hope that this portends a change of attitude and more practical support.
An additional interim report has carried the original corporate plan a stage further. It has considered the situation in the light of the redundancy and closures proposals currently put forward by management. The title of the report "Turning Industrial Decline into Expansion—a Trade Union Initiative" epitomises the attitude of the Lucas workers. They want to turn decline into expansion, and not just any old expansion but useful expansion—as is often said, expanding in the life industry instead of the death industry. I hope that the meeting on Wednesday will be the first of a series to ensure that this work is carried forward.
It is a pity that the working committee has had difficulties in producing the fresh report dealing with the current crisis. I regret that in the report the working committee had to complain that at some sites a direct instruction had been issued by the Management that all information should be withheld. That is extraordinary. It suggests a fear on the part of the management that information is a tool which can be dangerous in the hands

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of workers. I suggest that information in the hands of workers rather than in the hands of management is more likely to result in constructive proposals. I do not say that from a vague feeling of suspicion of management but because it is shown by the report that the Lucas management has decided to source more production abroad to the detriment of plants in this country.
The people who have a real interest in ensuring that plants in this country are able to do a good job and to expand are the workers in those plants. On the other hand, the management interest can be forwarded by production abroad. Management is interested in the maximisation of profit, which is not necessarily in the interests of the British people.
The working party makes direct statements about secret decisions by the company to source more production overseas in subsidiary and associated companies. The report notes that the hydro-mechanical fuel systems business is thriving, but, unfortunately, it is thriving in one of Lucas's associated companies in Germany. This is very important because this equipment is a product of the Victor works in Liverpool which is to be axed.
It has been put to us by management that the coming of electronics has made hydro-mechanical equipment less able to provide jobs. The workers' rejoinder to this is that, despite the electronic element in this equipment, the hydro-mechanical element remains the most important, and that since the market is expanding the work on this equipment must expand also. It is no use to the workers in Liverpool if this expansion is in Germany. As Lucas is a British-based multinational, it is scandalous that it should divert its production overseas in this way. It is the Government's job to ensure that something is done to prevent this.
The workers have put forward not only the list of product suggestions already outlined in this debate but eight specific product suggestions for the sites that are at present under threat of closure. The report proposes a Government-aided job maintenance programme. We hear a lot about the provision of jobs, and a lot of effort is put in by the Government on job creation schemes of various kinds. Here is a golden opportunity for a real job maintenance programme which will help
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to maintain an important sector of production. It will in no sense be pretend work or work created for its own sake. It will be very important production.
The working party challenges the company on its facts. It challenges the figure of £500,000 which the company claims is necessary for the Coventry foundry to be modernised. The working party claims that the cost of new equipment to modernise that foundry is £200,000, not £500,000. As a Coventry Member, I am obviously interested in this, even though the Coventry foundry is a small plant, because Coventry needs all the jobs it can get. I am therefore very pleased indeed that the working party's report recommends that, far from being closed, the Lucas Coventry foundry should be modernised and expanded to meet the requirements for non-ferrous castings which exist throughout the whole of Lucas Aerospace.
In seeking information for its report, the working party came across an extraordinary position. It found that most of the technical staff and others associated with the design of castings and the organisation of their production in Lucas Aerospace were not aware of the facilities available at Coventry. That is a fine way to run a company—to have a facility of which one's own design staff are not aware.
The working party points out that there is a general requirement throughout Lucas Aerospace for more non-ferrous castings facilities rather than less, and that the companies at present supplying nonferrous castings to Lucas show a marked reluctance to supply the short runs usually associated with the aerospace industry. Lucas Aerospace's own foundry would be completely geared to whatever kinds of runs were needed in the aerospace industry, whether long or short. Outside foundries cannot be expected to have the same determination to make aerospace needs a priority.
The working party also accuses the management of adopting an unrealistic accounting procedure in working out the hourly rates charged for the Coventry foundry, and, of course, accounting procedures can be extremely important.
There is a fascinating passage in the report which will, I hope, be probed deeply at the tripartite meeting on Wednesday. It is the passage in which the

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working party challenges the claim by the company about the figures which result from maximum utilisation of existing facilities. The company's figures show the extraordinary position that maximum utilisation apparently increases the overhead cost for each unit of output. The whole basis of telling workers that they can have wage increases if they increase productivity is the notion that overhead costs per unit of output go down if there is maximum utilisation of capacity and increased productivity.
Although I am very often suspicious of productivity agreements, there is a certain logic in that general statement. One would expect maximum utilisation of capacity to reduce the overhead costs per unit of output. There must be something very peculiar indeed about the organisation of Lucas Aerospace if it actually increases its overhead costs per unit of output when it has maximum utilisation. If that is so, there must be something very seriously wrong in the company, and it must be reflected in all sorts of ways.
There are other cricitcisms of the conduct of the company in Birmingham. It might be claimed that management has the right to manage, that Lucas Aerospace belongs to Lucas Aerospace, and who are we to poke our noses into the way that it is run. I start from the proposition that Lucas Aerospace does not simply belong to Lucas Aerospace. The build-up of wealth in the company, as in others, comes from the labour of the workers in it. If their labour is wantonly wasted by bad management practices, they have every right and duty to complain and to be heard. As an hon. Member who tries to represent the workers, I think that I have the right and duty to give voice to their criticisms.
There are serious faults in Birmingham. My hon. Friend the Member for Birmingham, Selly Oak (Mr. Litterick) may seek to discuss specifically the situation in Birmingham, and therefore I shall not pursue it unduly. However, it is most serious that young graduates have been allowed to leave Lucas Aerospace in Birmingham with the result that there are now insufficient designers to handle even the existing work load. That is bound to result in customer dissatisfaction, which will lead to a fall in orders and production. I leave my hon. Friend
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the Member for Selly Oak to pursue the matter in more detail.
There is often a lot of pious talk about industrial strategy, about the need to maintain production and to re-equip industry, and about the need for workers to co-operate in that process. Here we are discussing proposals which are enormous in their scope. They have been described tonight as a moral crusade. They express the desire of workers that their labour should be used constructively for the benefit of the workers in the company and of people generally.
So in one dimension the Lucas Aerospace corporate plan and the new interim report are enormous general structures. But they are also specific plans, and the point which concerns us here tonight, and which will arise for Ministers from the Department of Industry on Wednesday, is that this is not only about grand plans but also the need to maintain the jobs of specific workers in specific places.
I share the hope expressed by my hon. Friend the Member for Keighley (Mr. Cryer) that there will be the maximum ministerial involvement in the meeting on Wednesday. I was present at a meeting at which the Secretary of State for Employment met the Lucas combine committee. It was a good meeting, and it was appreciated by the shop stewards concerned. As employment is directly concerned in this matter, as the Department of Employment is expert at creating jobs and knows how to spend money on that to get a reasonable return, and bearing in mind that the Department is familiar with the general points of the Lucas workers' plan, it would be both courteous and efficient if the Department of Industry invited the Department of Employment to the meeting.
As my hon. Friend the Member for Keighley said, a similar consideration applies in relation to the Department of Energy, given the importance of energy conservation. I understand that at that Department one Minister is given the job of handling the subject of proper energy utilisation and conservation. The Department would surely be charmed to receive an invitation to Wednesday's meeting, and I am sure that it would be happy to co-operate. The shop stewards, who have undertaken their work in a most constructive way, feel that a fruitful meeting on Wednesday will show that

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the Government are at last taking their proposals seriously.
I am very much afraid that, if the meeting appears to be cursory and formal and does not go into matters in depth, there will be enormous disappointment on the part of the workers, which will have serious repercussions on morale in the factories. People can go on for so long making constructive suggestions, but they feel most frustrated if their suggestions meet with no response. Speaking as somebody who is very anxious to see the maintenance of the Coventry foundry, as is recommended in the interim report, and since I wish to see Lucas Aerospace expanded, I very much hope that Wednesday's meeting will be the first of many meetings to ensure that the job is properly carried out.
Close relationships exist between the company and the Department of Industry and the Treasury. Looking at Lucas Industries as a whole, I am fascinated to note that the amount of tax paid by Lucas Industries appears to be balanced almost exactly by the amount of money which that organisation has received in grant. If there is that kind of neat and tidy financial relationship between Lucas Industries and the Treasury to the good fortune of the company, it is particularly important that in relation to Lucas Aerospace workers and the Government there should be an equally close relationship which will be fruitful not only for the company but for the nation as a whole.
9.43 p.m.
Mr. Tom Litterick: We are speaking in this debate about the shop stewards' combine committee. Before I talk specifically about the Lucas Aerospace committee, I believe that it is worth while spending a few moments on the subject of shop stewards' combine committees. This is an institution which has developed in the last 30 years and has set an example to trade unionists in other countries—as indeed in earlier days we set an example to the working classes in other countries.
An interesting characteristic of the shop stewards' combine committee is that it is the response of the working man or woman to the real and hard problems that arise when a person works for a large organisation containing a large number of plants. Just as management dis-
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covered its need to co-ordinate the activities of different but simultaneously operating units, so, too, did the workers discover that if they did not co-operate their activities in the various plants in a multi-plant firm they could be picked off, one group at a time, by management. In other words, they discovered that by applying to a multi-plant firm the ancient and well-proven Labour movement principle that unity is strength they could confront the management with a different degree of strength, co-ordination and unity.
That attitude caused a number of problems in British industry, and not least in the British trade union movement. The trade union movement was not structured to encapsulate within it this new strange infant, the shop stewards' combine. For many years, official trade union organisations, with the collaboration of the employers, fought like tigers to suppress these committees.
Some of us remember the number of times that the Ford shop stewards' committee ceased to exist—crushed by a combination of management and official trade union force. But, being essentially a healthy infant, being an essential and logical outcome of the kind of industrial growth that we have had, having been created by British working men, it persisted, in spite of the trade union bureaucrats and in spite of the multinational managerial bureaucrats, and it thrives today. It is still looked upon with a great deal of scepticism in official trade union circles and with outright hostility by managers, because the one thing that managers hate and detest is that their workers might have cohesion and unity throughout what they regard as their organisation.
Mr. Cryer: Does my hon. Friend also accept that one of the interesting things about the combine shop stewards' committees is that, unlike what happened in previous days, the management cannot separate the work force and so bring about disunity between clerical workers, craft workers and unskilled workers? One of the real strengths of the combine shop stewards' committees is that they combine the blue collar and the white collar workers for a common purpose.
Mr. Litterick: I entirely agree, but my hon. Friend should remember that the

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first stage of that development was the formation of joint shop stewards' committees within one multi-union plant, and then they extended. They discovered, as their ancestors in trade union life had discovered, a new source of strength. It was a logical response to the situation in which they found themselves, which was that their employer had many tentacles, many factories, and if he wished he could play one group of workers off against another.
That was the employers' answer. Hence their violent, total hostility, which is as strong today as it was 20 years ago, to the idea of bargaining with their workers as workers in an entire multi-plant group. The employers do not mind bargaining with trade union officials, strangely enough. The game they play is to bargain with full-time officials of the trade unions, to play them off against the trade union members. Some manage to play that game quite skilfully.
This brings me to Lucas. What the Lucas Aerospace combine committee did was not only to carry out the now well-recognised function of co-ordinating the bargaining activities of workers over wages, conditions of work, and so on where there are a number of plants, but made a great leap forward into unknown territory by, in effect, claiming of management the right to discuss with it the products that they produced. That was a claim on what management regards as its prerogative, and that is what makes the Lucas Aerospace combine committee so interesting and encouraging.
We hear on all sides—I must say "on all sides", given the events of the past three or four weeks—not to mention pulpits, that shop stewards are the enemy of civilised life as we know it, that the fabric of Christian civilisation is about to crumble, because ordinary working men have discovered means of asserting power on their own behalf. You have heard, Mr. Speaker, some people on both sides of the House who should be ashamed of themselves deploring this fact.
What these men have done is to tell their historic, traditional lords and masters "We do not think that you are very good at the job of managing. We think that we should participate in that
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job of managing the work that we do". That is the question which the Lucas Aerospace combine committee posed to British management and the British State. In the context of this sad story, which has been dragging on for four years, the Labour Government have not played a creditable role. They have sided with conventional wisdom.
It is asked "Who are these people who claim the right to have a say in whatever their employers produce?" I know that my hon. Friends who are here tonight have had the experience of being involved with the consultations and attempts at bringing people together. They have seen the negative attitude of the State, to put it at its most charitable, to this positive and creative initiative by working men and women. The State does not know how to handle it. It is nonplussed because this challenges a traditional historic bastion of social, economic and political power. Its social democratic ideology furnishes it with nothing that enables it to make a positive response to these creative initiatives by working men and women.
This is a large company with a sophisticated technology which commands a high level of skills in our people. It has progressively run down its labour force from 18,000 to about 11,000. It denies that. It did so at great human cost, in the pursuit of maximised profit. That is all. That has nothing to do with the interests of our country. It has nothing to do with the interests of humanity. That firm is big in the armaments business. It is in the business of accumulating capital and maximising profit. It has done well out of it.
In the seven years up to 1977 it accumulated about £250 million of profit, but paid no tax. That is the meaning of what was said by my hon. Friend the Member for Coventry, South-West (Mrs. Wise). It paid no tax. It received as much in grants out of my constituents' money as it paid in tax. The rest has been—as the Chancellor has it—deferred taxation. That is a complicated euphemism for letting the corporate entities of capitalism off without paying their fair whack to the community. Meanwhile, this firm goes on exporting productive capacity abroad. It denies opportunities to my constituents and to those of my hon. Friends. It continues decimating the economies of

921
Liverpool, Bradford and Coventry at will. It does so because nobody within the State has the will to stop it. All that the State has managed so far is a pathetic effort to bribe it with my constituents' money not to do so.
Whatever else the Lucas Aerospace case study might be, it is a classic case study in how not to go about bribing capitalism to do something that is socially beneficial. Those people are apparently unbribable, no matter how much money we give them. All we succeed in doing is making life easier for them, so that they may do what is to their greatest advantage. It is to Lucas's greatest advantage to downgrade the Lucas organisation in Britain, to reduce its productive potental and to create or set up new productive potential elsewhere, at the expense of our people and our economy. It takes the money. But the bribes do not work. Nor indeed do the bribes work elsewhere.
However, the hostility towards the shop stewards continues unabated. I referred to the troubles over the past three weeks. All the latent hatreds erupted to the surface on both sides of the House. We heard what Members of Parliament think of the organised workers of Britain. You, Mr. Speaker, have heard it. You have read our newspapers, with their mendacity, malignancy and bigotry. They hate these people with a bitterness that is almost unbelievable.
What are these people doing? They are saying "All right. The traditional way of doing work is not something we can continue any longer. Our existing line of products will not serve us much longer. Therefore, we should work differently and have new products." They have said "Perhaps we should not make instruments of war." But they have also said "Perhaps there is an alternative to unemployment by making new things."
These are constructive suggestions. What is the response? Mendacity and hatred—echoed faithfully and resounded in our press, whose philistinism is equalled only by its bigotry when it comes to dealing with working people.
This has been the experience of these men and women. They have played the constructive role and the creative role. They have said "Here we have thought out creative, constructive proposals for
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the organisation with which we are intimately familiar and about which we know more than anyone else. But what happens? They will not even talk to us. The State will not co-operate with us. All sorts of difficulties are placed in our path." For four years they have trudged along that path to attempt to get someone with power and influence to listen to them. Only now does it seem that it is beginning to happen.
I do not say for a moment that Wednesday will be the beginning of anything. But it might be. However, until now virtually nothing has happened. The directors who have run Lucas have flatly refused to engage in any constructive conversations with these people. Indeed, they have gone out of their way to subvert these men and women. They have actually done that. But who are these people who defy their own workmates? Although managers do not think of workers as their workmates, they are so. They are fellow workers. Who are these people? They are people who will, for example, build a factory in France to make car components, rather than build a factory in Britain or use an existing factory here. They justify this by saying that that is the deal that the French company with which they are dealing has insisted upon. Never does one hear of the reverse taking place. Strangely, it is always that they have to make a deal which involves either creating new productive capacity abroad or closing down capacity in Britain, reducing employment, to the advantage of some other organisation abroad. They run down the strength of our economy.
In effect, the directors of Lucas have for more than a decade been steadily sabotaging the British economy and sabotaging the work prospects and career prospects of almost every conceivable grade of worker in the British economy. whether he is an unskilled labourer or a highly skilled scientist. The men who are directors of Lucas have undermined their lives and they say "That is business." But we say "That is capitalism." That is how capitalism works.
They ignore the other consequences of their behaviour. They always whine about the tax burden. They pay expensive public relations experts to whine in public for them, hoping that no one will notice

923
that they pay no taxes and that they are subverting the economy. When their bluff is called, when their own fellow workers say to them "All right. We have here a set of proposals", their only response is to run away and to deny their right to implement them.
I hope that my hon. Friend the Under-Secretary will take sides with us and with the workers of Lucas Aerospace and give us some reason to hope that the meeting on Wednesday will be not only the beginning of the road for the Lucas Aerospace combine but the beginning of an example which will set a new pattern not only for the British economy but throughout Europe.
9.59 p.m
The Under-Secretary of State for Industry (Mr. Les Huckfield): I must confess that when I came into the House this morning I did not expect that I should be replying to this debate. In view of the small amount of time that I have had to prepare for it, I hope that my hon. Friends will accept that if I try to reply to the matters which they have raised in as much detail as possible, they must not expect too much and that as regards other details on which they have sought information I shall let them have that later if I cannot furnish it tonight.
I want first to pay tribute to the work which has been done over the past four years by the Lucas shop stewards. There is no doubt that a tremendous amount of energy, effort and endeavour have been put into the preparation of the corporate plan.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr.Tinn]
Mr. Huckfield: I was paying tribute to the tremendous effort and endeavour which the shop stewards had made on behalf of their fellow workers, as I do to my hon. Friends for the way in which they have pleaded their cause assiduously and for the way in which they have put their case on behalf of their constituents and on behalf of all the workers in Lucas
924
Aerospace in various parts of the country.
It was my hon. Friend the Member for Birmingham, Yardley (Mr. Tierney) who first brought a deputation of Lucas combine shop stewards to see the then Under-Secretary, my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman), as long ago as December 1975, and I know that my hon. Friend the Member for Yardley and my other hon. Friends have been associated with a large number of meetings with Ministers in the Department of Industry and other Departments and involved in trade union meetings up and down the country, all concerned with and all designed to advance the aspirations and hopes stressed in the corporate plan.
I welcome the spirit in which my hon. Friends have put their points of view tonight because they, too, spoke well within the spirit, the hopes and the aspirations of the corporate plan.
It is worth putting on record that, though we are all looking forward to the tripartite meeting which is to take place in my Department on Wednesday, that offer, option or possibility of such a tripartite meeting has been in existence for nearly two years. It was in March 1977 that the possibility of such a tripartite meeting, if it was desired by the union side and the management side, with the Department was first mooted. I recall meeting the combine shop stewards myself, along with my right hon. Friend the Secretary of State for Employment, in April 1978 when the possibility of a tripartite meeting was mentioned.
My hon. Friend the Member for Keighley (Mr. Cryer) spoke about the Department of Industry being the traditional ally of management. I hope that that was no criticism of Ministers. I am sure that he will recognise that, although some of us are Ministers, we are nevertheless still members of our trade union branches and attend their meetings whenever we can. I hope he will also recognise that by having offered that tripartite meeting, and that since that meeting has been on offer for some considerable time, that in itself shows the desire and willingness on the part of my Department to meet the workers, their representatives and the unions involved and that there is a willingness to listen not simply to management but to the union side as well.

925
If my hon. Friends look at the catalogue of meetings surrounding the corporate plan which have taken place since 1974, they will see that just as many meetings with union representatives in various layers of the trade union movement have taken place as have meetings with representatives of management.
Mrs. Wise: I should be grateful if my hon. Friend would follow up that statement with a written account of the meetings to which he refers. I believe that he will find that the only meeting at which the combine shop stewards' committee has been able to meet Ministers is the meeting arranged by my hon. Friend the Member for Sowerby (Mr. Madden), who is chairman of the employment group of the PLP, with the Secretary of State for Employment. That is the one and only meeting facilitated by the Government.
Mr. Huckfield: I shall furnish my hon. Friend with a list of the meetings which have taken place. I think that she will see from it that rather more meetings with union representatives have taken place than she supposes. The latest was a meeting between the Lucas management and the unions only last Friday to take further certain discussions surrounding the report to which reference has been made There have been a large number of meetings, not just about the subjects raised in the corporate plan but in connection with the working parties and some of the proposals that my hon. Friends have put forward.
I hope that my hon. Friend the Member for Keighley will recognise that the combine structure which exists in, for example, Ford, Chrysler, Massey Ferguson, Vickers, British Leyland and British Aerospace is not a unique feature. Combines are now much more prepared to put forward the sort of alternatives that we have been discussing, but the existence of combines has been observed in the trade union movement for some time. Many of us recognise the contribution that they have to make, the hard work that they have done and the validity of many of the initiatives that they have taken.
I have been asked about planning agreements. My right hon. Friend wrote to the company management about a planning agreement in July. A preliminary meeting with the top management has taken place and there have been fur-
926
ther meetings planned at working level. The latest position is that there was to have been a discussion with officials last week but it had to be postponed because of one or two industrial disputes and the imminence of the tripartite meeting on Wednesday.
Mrs. Wise: A lockout.
Mr. Huckfield: Discussions about a possible planning agreement have been taking place but have not been concluded. I do not conceal from my hon. Friends, and we have never tried to conceal from the House, that we would like to conclude a planning agreement with Lucas.
The working party to which my hon Friend the Member for Yardley referred has been concerned with the reorganisation options and alternative proposals that might be possible on the sites under discussion—primarily Liverpool and Bradford, but including others as well. I do not think that I should go into more detail on the report which is to be discussed on Wednesday. My hon. Friend the Member for Coventry, South-West (Mrs. Wise) made clear that it goes into a great amount of detail on alternative proposals for some of the sites, and I believe that those details ought more properly to be the subject of Wednesday's discussions.
There is no question of our having been secretive about the financial assistance made available to Lucas Aerospace I gave a full reply to a question from my hon. Friend the Member for Coventry, South-West on 19 June when I said
"The projects announced by Lucas Aerospace on 12th June will create at least 500 jobs in Liverpool and at least 400 jobs in Bradford. The financial assistance for the Liverpool project is:

(a) selective financial assistance in the form of an interest relief grant of £2·2 million; and

(b) regional development grants estimated at £890,000.

In addition my Department is to build a factory at Huyton at a cost of up to £3 million. This factory will be leased to Lucas Aerospace on a full repairing and insuring lease. Lucas will be given a rent free period of five years and will then pay the full market value rental as assessed by the district valuer. For the Bradford project my Department has agreed in principle to build a factory at a cost of up to £2 million. The initial rent free period will be two years, but otherwise the conditions will be similar to the Huyton factory."— [Official Report, 19 June 1978; Vol. 952, c. 94.]

927
The cost per job—this applies only to the selective financial assistance to which I have referred—will amount to £2·2 million for at least 500 jobs, giving a cost per job in grant value of up to £4,400.
Mrs. Wise: Would my hon. Friend confirm that there will nevertheless be a net loss in jobs, despite the expenditure of this £8 million?
Mr. Huckfield: That has never been concealed from the House. It has been made unfortunately plain in the figures which I have given. I do not intend to conceal the fact that job losses are involved in these proposals.
Mr. Cryer: Will my hon. Friend confirm that these arrangements were made without any reference to the combine shop stewards' committee? Will he confirm that the arrangements in Bradford and elsewhere to which he has referred, which will produce a net loss of jobs, were carried out in consultation with the management and that no consultations were undertaken with the combine shop stewards' committee?
Mr. Huckfield: My hon. Friend will know from his experience that all these discussions are normally conducted on a confidential basis. If a particular company was willing to release the application to its employees, my Department would raise no objection.
Reference was made to the question of conversion work and the possibility that might exist within the Ministry of Defence. I hope it will be recognised that many jobs depend on defence-oriented business but that the United Kingdom is nevertheless participating in a United Nations study of the economic problems of disarmament in a proposal called the Nordic initiative. The Foreign and Commonwealth Office, under my right hon. Friend the Foreign and Commonwealth Secretary, is taking the lead. At present, my Department feels that the Industry Acts and the science and technology legislation give it all the powers it needs to assist in the conversion process.
I take note of what my hon. Friend the Member for Keighley said about the need to examine this matter further. The Government have taken certain steps, fal-
928
tering though they may be in his eyes, in the direction he has been advocating.
Reference was made about the role that could have been played in these discussions by Sir Antony Part, former permanent secretary in the Department of Industry. The section of the working party report entitled, I believe, "Close relations" comments adversely on the close relations between the Department of Industry and the management of Lucas which, the report claims, make a mockery of supposed Government impartiality between both sides of industry.
I cannot comment on the claim in relation to Sir Antony Part. My Department has received a copy of the working party's report. We are studying it before the tripartite meeting on Wednesday 14 February. I have seen Sir Antony's statement in The Observer. I have no doubt that my hon. Friends have also seen it. Sir Antony says that, in accordance with public procedure, he consulted the Prime Minister's advisory committee under the chairmanship of Lord Diamond, who approved both his appointment and its timing in relation to the date of his retirement from the Civil Service.
I know that there is a great deal of concern about this matter among my hon. Friends. It is not the first occasion on which it has been noted. I know that Sir Antony is able to speak for himself, as he has done in the quotation attributed to him in The Observer.
My hon. Friends have referred to the breakdown of work between civil and military projects within Lucas. The 1976 sales figures reveal that only about 50 per cent. of the work was military in some way. The other 50 per cent. was civil. The main customer was Rolls-Royce, which took about 45 per cent. of production. The share of the Ministry of Defence was about half that. If one examines the work in which Lucas has been involved, one finds that it is certainly not all military. My hon. Friends have not given that impression, but it is worth putting on record that a great deal of work in which Lucas has been involved is civilian work. With your permission, Mr. Speaker, I will refer to civilian projects a little later.
I pay tribute again to those who must have spent many an hour preparing the

929
corporate plan. It reads like a tour d'horizon through much of modern technology and research. It refers to such products as solar heating, windmills, braking systems, electric vehicles, heat pumps, oceanics, applications of microprocessors—perhaps a little before its time—kidney machines, aids for the blind and for spina bifida patients and powered undercarriages for aircraft.
As I have told my hon. Friends before, a great deal of work is already taking place either in my Department or in other Departments into many of these facets of new technology. I will not say that all this is a direct result of the corporate plan, but work is already proceeding in many of these areas. However, I recognise the plan's validity and the challenge and the social usefulness of many of its concepts.
My hon. Friends said that union difficulties had been encountered by the combine. It is only fair to say that the combine's activities have aroused comment at executive and general secretary level. Some of its activities led to a circular being sent out last year to divisional offices by the general secretary of TASS, which says:
"Contrary to statements widely circulated, the 'Corporate Plan' is not the official policy of TASS. It was submitted to the National Conference of the AUEW where it failed to receive support. Nevertheless, the TASS EC took the initiative to put the issue to the Confed. EC and it was raised with the Government as a result."
I have no wish to engage in a long debate about union structures. My hon. Friends are very involved in their union. My hon. Friend the Member for Keighley has strong union connections. They understand as well as I that there are levels of negotiation, participation and bargaining. I hope that they will recognise, however, that my Department is not in an enviable position when one level of a union tells us that an initiative is worth pursuing and another level, often domocratically elected and constituted, says that it would not be wise to proceed so deliberately with those proposals. The Department has received pressures from one level urging us in one direction and from a second level urging us in another. That is a difficult position for us, because we must try to retain, as I hope we do, good relationships with all levels of the trade union movement.
930
But I do not want to digress into a long discussion tonight. I only hope that my hon. Friends will recognise that some democratically elected executives and general secretaries have made this reference to us and that they will agree that my Department should pay attention to their proposals.
I should like to make it clear to my hon. Friends that for a long time I have paid tribute to the work done by the Lucas combine shop stewards. I was a member of the national executive committee that signed the motion put down by my hon. Friend the Member for Sowerby (Mr. Madden) that they should be proposed for the Nobel peace prize. That was a testimony of my support for their initiative. I produced a paper for the Labour Party entitled "The Industrial and Employment Implications of Changing from Defence to Civil Production". I submitted that as an addendum to that study which was produced by the national executive committee study group on defence expenditure.
I said on the diversification issue and with specific reference to the Lucas combine:
"In general, compensating employment has to be looked for by diversification into other industry. The diversification plans produced by the work force of Lucas Aerospace recognise this by seeking to utilise relevant skills in new ways."
I went on to say:
"This is a constructive approach and with a positive attitude from the workers, industrial restructuring on a large scale becomes a possibility …"
I made that submission with the full knowledge of my Department, and I went on to say:
"In conclusion, the Lucas Combine Corporate Plan is a worthy initiative, into which much constructive thought has been concentrated."
That has been my position for a long time. Similiarly, my right hon. Friends in the Department of Industry have paid tribute to the large amount of detailed work done by the combine shop stewards.
Mr. Tierney: I wonder whether my hon. Friend could give us a glimmer of hope that at Wednesday's meeting the Government might take some initiative to get the company involved in a feasibility study.
Mr. Huckfield: I seriously take on board what my hon. Friend has said. By the circumstances in which it was constituted, the working party has concentrated primarily on alternative restructuring options and proposals. It has been felt that it should also be seriously examining some of the proposals in the corporate plan. I shall certainly put this before my right hon. Friend. I shall be taking part in the discussions on Wednesday, and I shall endeavour to convey the feeling expressed by my hon. Friend.
As my hon. Friend the Member for Coventry, South-West said, the working party has completed its detailed examination of alternative restructuring proposals and has produced a comprehensive report. She quoted from it, exemplifying the large amount of detail. I do not want to comment further without having the opportunity to examine it in more detail. It was discussed on a preliminary basis between Lucas management and the unions last Friday, and there will be a further meeting on Wednesday.
Mrs. Wise: I am a little concerned at my hon. Friend saying that the committee has completed its work. I thought that it was an interim report and not final.
Mr. Huckfield: I said that the working party had completed its examination. I cannot tell at present to what extent it intends to go further. The further development of proposals in the report will be studied at the meeting on Wednesday. It would be premature for me to comment further until we have received a report from the management and unions on the progress that they made last Friday and in other discussions that they may have had.
932
I emphasise to my hon. Friends that I do not want to prejudice anything that they may want to say. I and my right hon. Friends want only to facilitate constructive discussions between the management and the unions on the future of the company.
There is no doubt that the new civil aircraft programmes that have been launched over the past six months—for example, the Boeing 757 and 767, the British Aerospace 146 and the Airbus 310, as well as the launch of the Rolls-Royce RB211–535—have significantly changed the immediate prospects for the equipment industry. When these prospects must be seized rapidly, companies like Lucas must be involved. If they do not secure business on some of the new programmes that I have mentioned, the longterm outlook for them must be bleak. The workers know this. It is a question of grasping as firmly as possible the opportunities in the aerospace and aero engine industries.
I thank my hon. Friends for raising this subject tonight. Because of the short notice, I have not been able to give my reply the kind of thought that my hon. Friends deserve. However, I have tried to answer all their points.
The tripartite meeting on Wednesday will discuss the comprehensive report. I look forward to that meeting, and I shall bear in mind the need for other Departments to be involved. Now that the meeting has been arranged, let us look forward to it, let us look forward to progress being made from it, and let us try to take forward the spirit of the initiative of the shop stewards' plan.
Question put and agreed to.
Adjourned accordingly at twenty-six minutes past Ten o'clock

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

NEWSPAPER WORKERS: TAX ON CASUAL EARNINGS
Lord GRIDLEY: 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 action they are taking to prevent tax evasion by those who receive payment made notionally to "employees" in the newspaper industry who are retired or deceased or have never existed.
Lord JACQUES: My Lords, in the summer of last year, the Inland Revenue began an intensive investigation into the tax arrangements for casual workers in Fleet Street. It is hoped within the next month to introduce new procedures which should eliminate the tax irregularities.
Lord GRIDLEY: My Lords, while I thank the noble Lord for that Answer, may I ask whether it goes deep enough; and may I ask two further specific questions? Has it not been firmly established in Fleet Street that payments to casual labour were the responsibility of the unions or of the chapels who lodged such claims? Secondly, is it not true that in a number of cases claims were lodged and payments made up in respect of a number of claimants who were non-existent? In the circumstances, have investigations been carried out in order to be certain whether offences under the law have been committed, or would seem likely to have been committed, in these instances?
Lord JACQUES: My Lords, it is not always practical to deduct PAYE from casual earnings but there is a statutory duty to provide the Inland Revenue with
970
the information that they need in order to follow up the matter. The key is the accuracy of the information; and that is what the new procedures take care of.
Lord PAGET of NORTHAMPTON: My Lords, can the noble Lord tell us in what capacity one taxes a non-existent taxpayer?
Lord JACQUES: My Lords, I have not mentioned non-existent taxpayers.
The Earl of LAUDERDALE: My Lords, can we take it from the noble Lord's reply that the Government admit that there is something going wrong here which they must investigate urgently?
Lord JACQUES: Yes, my Lords. There was perhaps an awareness that things were not quite right but there was nothing that could be said to amount to, say, a conspiracy.
Lord WYNNE-JONES: My Lords, will my noble friend confirm that maintaining by any devious method that others who were at one time on the establishment are kept there has always been a method used in any community to ensure that inadequate rations are brought up to the right level?
Lord JACQUES: My Lords, my experience has been that while methods are used, they are not devious methods. I would resist the use of devious methods if I were an employer.

HONG KONG: ARREST OF PETITIONERS
2.38 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make an inquiry into the arrest in Hong Kong of 76 persons, including 48 women and 10 children, while they were proceeding in two coaches to petition the Governor regarding the need for houses for boat dwellers at Yaumati.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, we have received a full report on the incident from the Governor of Hong Kong. After ignoring two requests by the police to disperse, the 76 people were arrested and charged with unlawful assembly. Their arrests had nothing to do with the fact that they were seeking to petition the Governor. No charges were made against the 10 juveniles, and the adults were released on bail pending trial.
Lord BROCKWAY: My Lords, is it not the case that the 76 persons walked or marched while they were on the mainland; that they entered coaches to pass through the tunnel to Hong Kong Island, and that they were actually arrested when they were in two coaches?—which, surely, is an extraordinary case of illegal assembly. Is the Minister also aware that they were granted bail in 200 dollars while the wage of the breadwinners is only 1½ dollars?
Lord GORONWY-ROBERTS: My Lords, residents of Hong Kong have a right to hold public meetings and processions, provided that they first obtain a police licence. Licences must be applied for seven days in advance and are issued by the Commissioner of Police, provided that he is satisfied that the proposed meeting or procession does not represent a threat to public order. Whether such a procession is on foot or in vehicles is considered in the light of the need in this very crowded, very restricted space—5 million people in a very constricted place—to maintain public order. From the reports I have received, I think that the police acted well within the ordinance and acted with considerable restraint after giving more than one warning.
Lord BROCKWAY: My Lords, these 76 persons were in two coaches and they included a Catholic priest, a doctor, and two social workers in addition to these women and children. Is it really suggested that they were a danger to security or were an illegal assembly when they were travelling in coaches to present this petition?
Lord GORONWY-ROBERTS: My Lords, there is absolutely no doubt about the basic right of any resident of Hong
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Kong to present a petition to the Governor. What is at issue is whether such a petition should be accompanied by an unauthorised demonstration or procession. This is for the Governor on the spot and his Government to decide, otherwise they would not have introduced the ordinance. This applies to everybody—priests as well as everybody else—and the vast majority of the population of Hong Kong observe the requirements of this ordinance which is very reasonable. One has to apply to the police seven days ahead for the right of procession or demonstration. This is usually granted. In this case that requirement was not observed and the fact that social workers and priests were involved does not mean that that ordinance should have been set aside for that reason.
Lord BOYD-CARPENTER: My Lords, is the noble Lord aware that those of us who know the present Governor of Hong Kong have every confidence in his ability to handle these situations with justice and firmness?
Lord GORONWY-ROBERTS: My Lords, I entirely agree. I am grateful to the noble Lord for mentioning this fact. It is not the easiest task in any part of the world to govern a densely populated colony of this size with incursions of up to 70,000, possibly 100,000 a year from outside. That creates a strain, both on social services and on the basic need to preserve essential law and order. The requirements are reasonable; most people in Hong Kong observe them. In this case they did not. I do not see that there was an argument for setting aside the requirements of an ordinance, which is recognised by everybody else, simply because on this occasion social workers and a priest were involved.
Lord BROCKWAY: My Lords, I give notice that I shall raise this matter again at the earliest opportunity as an Unstarred Question.

LONDON TAXICABS: INCREASED CHARGES
2.45 p.m.
Baroness PHILLIPS: 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 when the increase in London taxicab charges will be agreed.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of HEALTH and SOCIAL SECURITY (Lord Wells-Pestell): My Lords, representatives of the London taxi trade were informed by the Home Office on 3rd January that the Government were prepared to agree to an increase in London taxi fares which takes account of the recommendations of the Price Commission and is based on the increase in cab operating costs, with an allowance for increased earnings consistent with the Government's earnings guidelines. After consideration and further talks with the Home Office, the trade suggested modifications to the Government's proposals. These are now the subject of discussions between them and the Home Office.
Baroness PHILLIPS: My Lords, while thanking the Minister for that reply, may I ask him whether he is aware that there is a great sense of frustration, and indeed injustice, in this trade, which serves London remarkably well, because of the long delay in attempting to deal with their case? May I further ask whether he is aware that they are not able to avail themselves of the opportunity which other workers have to take their case to any independent arbitration, as they should like to do?
Lord WELLS-PESTELL: My Lords, we are not unmindful of the difficulties which are being experienced by the London taxi drivers at this particular stage. I would remind my noble friend that in December 1977 the Government agreed to an increase of 10 per cent. in accordance with guidelines at that time, and then decided to refer the question of taxi costs, prices and margins to the Price Commission. The Price Commission sat early in 1978, published its report as recently as last August and have a number of recommendations at which the Home Office have been looking and have discussed recently with the taxi drivers. We hope the matter will be resolved successfully in the not too distant future.
Baroness PHILLIPS: My Lords, I should like to ask the Minister whether
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he is aware that, unlike most cases of this kind, there cannot be retrospective action; in other words, the money that they have not received cannot be claimed? Therefore the long delay will really cause the workers a great sense of injustice, and I am afraid that for the customer the service will dry up. That we do not want to see.
Lord WELLS-PESTELL: My Lords, if I may say so, that is all the more reason for both sides, and particularly those representing the taxi drivers, to endeavour to come to some satisfatory conclusion of this matter at the earliest possible moment.

PETROLEUM REVENUE TAX
2.48 p.m.
The Earl of LAUDERDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have yet been able to prepare any concessions on petroleum revenue tax to give greater incentives for offshore oil exploration and investment.
Lord STRABOLGI: My Lords, discussions are continuing with the industry about the Government's proposed charges in petroleum revenue tax. I cannot prejudge the outcome of these discussions.
The Earl of LAUDERDALE: My Lords, in thanking the noble Lord for that not very informative reply, may I ask whether he would not agree that the events in Iran argue very strongly for the greatest possible incentives here for exploration and development of oil, since the Western world is now running short? Could he not say whether there is some gleam of light, some hope, that these impositions can be lightened?
Lord STRABOLGI: My Lords, my right honourable friend the Chief Secretary announced the Government's proposals last August specifically to allow

975
time for discussion with the companies before legislation is introduced in this year's Finance Bill.
The Earl of LAUDERDALE: My Lords, can the noble Lord give us this little bit of encouragement: Will he agree that it is now urgent and that it should be worth while to develop fields which have known reserves of less than 300 million barrels and which are at present quite unremunerative?
Lord STRABOLGI: My Lords, we have studied with interest the argument of the United Kingdom Offshore Operators' Association that the fiscal system should be changed to reduce the minimum size of a field which it is economic to develop. It should be stressed, I think, that the profitability of a North Sea development is only weakly linked to size. There are protections within the fiscal system for less profitable fields, whether this is due to small size or to some other reason.
Lord BALOGH: My Lords, does my noble friend not agree that the North Sea at the moment is politically and financially much the most attractive place, and that any further concessions would be to the detriment of our balance of payments?
Lord STRABOLGI: My Lords, the Government came to the conclusion that we could not allow a situation to continue in which large profits were being made from a national resource with an inadequate share being received by the community.
The Earl of LAUDERDALE: My Lords, does the noble Lord not agree that the time has come to take this matter out of the rather crude Party political arguments about profit? Is it not time to consider the national interest in the widest sense, including that of Western Europe generally, and not go harping on about profits as if there were something wicked about them? In fact, they are lovely things to have!
Lord STRABOLGI: My Lords, the Government believe, after careful study, that there is sufficient protection for the less profitable fields within the fiscal
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régime, even after the proposed changes. Perhaps I might remind the noble Earl that the most important provisions are that companies get full immediate relief on their capital expenditure for both PRT and uplift. The oil allowance, even at its reduced level, gives fields up to 5 million tonnes of production free of PRT. The safeguard provides protection for fields whose revenues are low in comparison to capital expenditure. The companies get immediate corporation tax relief for the cost of developing one field against the profits of another. This is quite different from the loose arrangements made by the previous Administration, when huge international conglomerates were allowed to offset losses in some sectors against profits in the North Sea. Lastly, the Government have discretionary powers to repay royalties in appropriate cases. If the companies wish to prove that these provisions are inadequate, then they must produce figures.
The Earl of LAUDERDALE: My Lords, without wishing to embarrass or bore the House, would not the noble Lord agree that if all these concessions are so wonderful and so effective it is very strange that exploration drilling has collapsed?
Lord STRABOLGI: My Lords, exploration drilling had collapsed long before my right honourable friend the Chief Secretary announced these PRT changes. As the noble Earl is well aware, there was a decline in drilling following the increased level of drilling following the relinquishment of the fourth round.
Lord WYNNE-JONES: My Lords, would my noble friend accept that very many of us agree wholeheartedly with the noble Earl, Lord Lauderdale, in saying that he supports the Government and does not wish to have this a political issue?
Lord STRABOLGI: Yes, my Lords; I agree with my noble friend and with the noble Earl, and I am sure that the oil companies will agree as well.

DARTMOOR COMMONS BILL [H.L.]
2.54 p.m.
Lord SANDFORD: My Lords, I beg to move that this Bill be now read a

977
second time. Before speaking to the Bill, I should perhaps mention that the speakers list for this Bill seems to have gone awry. After discussion with the Lord Chairman, the usual channels and the participants in this debate, I think that the following sequence would be more convenient: after myself, the noble Lord, Lord Sandys; the noble Viscount, Lord Amory; the noble Lord, Lord Gisborough, the Lord Chairman and then, to wind up, myself.
I have been asked to move the Second Reading of this Bill by the promoters, the Devon County Council. I have agreed very willingly to do so because I consider—and I think that your Lordships will agree—that it is of more than local significance. It is a model of the kind of scheme recommended by the Royal Commission for Commons in 1958. Furthermore, I think the Committee might benefit from some broad expressions of opinion from the House as a whole as the background to their work on the details of the Bill.
I turn now to the broad purpose of the Bill. It sets out to safeguard and enhance the beauty which lies at the heart of the Dartmoor National Park. Furthermore, it improves, or seeks to improve, the health of the largest single piece of stock-rearing land in the South of England. In addition to those two purposes, it sets out to help the 8 million or more people who visit Dartmoor every year to enjoy it without damaging what they set out to visit. This is, as I would put it, the finest large piece of land open to the public in the whole of the South of England. Thus it is a Private Bill of national significance, doubly significant and especially welcome because it is the first attempt to reconcile the conservation of the beauties of the countryside with productive livestock husbandry and massive public access. It does this in a single legal framework for the management of a single large tract of common land. I very much hope this will be a successful attempt and that it will be the forerunner of other similar Bills to deal with similar problems.
When I had the honour to chair a review of the national park some five or six years ago, we saw the need for this kind of thing to be done and caught a vision of how it might be done. The
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Second Reading of this Bill, the Dartmoor Commons Bill, is the first public occasion I have had to welcome our vision into reality; and I do it with great pleasure. I welcome the Bill in its own right, but also I welcome it and commend it to your Lordships because I think it can become a model for many others to follow. It is a model of what goodwill, patience and painstaking care and consultation can achieve. It is a model of how landscape conservation, agricultural production and public access to recreation can all three be reconciled and accommodated together on the same tract of land. It is also a model of the far greater benefits of a patient approach to multipurpose management as against control, compulsion and conflict.
The Bill concerns the 100,000 acres that form the heartland of Dartmoor, which is itself the heartland of Devon. There are involved in it some 50 owners of land in these commons. Half the area is owned by the Duchy of Cornwall and another quarter or a fifth is owned by various public bodies such as the Regional Water Authorities and the Forestry Commission, and the rest is held in smaller private lots. There are a thousand commoners. They occupy land and buildings on the commons; they have rights in grazing cattle on the commons. Both owners and commoners have access to the commons, and so in practice—because fences are not allowed on commons—do the public. As I say, 8 million visitors a year avail themselves of de facto access at present.
All this common land is at present virtually unmanaged: certainly it is not managed in any comprehensive way at all. The surprising thing is that matters have not got much worse much sooner, and it says a great deal for British tolerance and moderation that this should be so. That, of course, is the case because most commoners, most landowners and most visitors are reasonable and responsible people. But some few of each of those are not. Some areas are overstocked. Some areas are scarred by too many walkers, too many riders, too many cars and too many campers. The husbandry of the land is not all that it should be, and the behaviour of some of the public is thoughtless and selfish. They leave litter, they disturb the animals and they cut up and take away the turf.

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Anyway, five years ago, in 1974, the commoners recognised that the time had come on Dartmoor, as elsewhere, to import a fresh, more comprehensive and firmer agreed scheme of management for their commons to match the needs and the heavy pressures of the day. They approached and asked the National Park Authority to help them to provide this scheme of management; not, of course, just for the sake of restraint, but so that the moor can be more productive, carry more and healthier livestock, and so that people can get more pleasure from visiting, riding and walking on it.
I turn briefly to the structure of the Bill. The Bill provides this framework of management that I have been describing by building on the traditional patterns of the past for managing common land. Clause 3 establishes a council for the commoners. Clauses 4, 5, 6, 7 and 8 confer duties and powers on that council to manage the commons for rearing livestock. in ways consistent with conserving the beauty of the commons, and also with allowing the public to enjoy it; and reeves—a nice traditional term—are appointed for that purpose. Clauses 9 to 14 give the public statutory formal access to the commons, and confer duties and powers on the Dartmoor National Park Authority to regulate that access, consistent with conserving the beauty of the commons and with the needs of grazing; and wardens are empowered to see to that. I look forward to hearing the views of other noble Lords who are due to speak, and in winding-up the debate I shall say a little about the state of agreement with and disagreement to the Bill. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Sandford.)
3.2 p.m.
Lord SANDYS: My Lords, we are indeed fortunate in having my noble friend Lord Sandford, who is the former chairman of the review body on national parks, to introduce this Bill with such an economy of words and with such a totally lucid form of expression. My remarks will be relatively brief and addressed generally to the substance of the Bill. I read the Bill with interest. As my noble friend said, it is the first of
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what he hopes will be a series, and we have therefore looked at it with great interest. As a forerunner, it contains certain unusual features and my noble friend, in referring to the whole of the 100,000 acres contained within Dartmoor, stressed that it is an area of land which is not managed. This is an expression which is unusual, in the sense that it is certainly owned by groups or individuals, and falls within the care of certain bodies, as well as within the care of the county council at the present moment. But I entirely agree with my noble friend that, as it were, the area is not under a specific management agreement at the moment, and this is what the Dartmoor Commons Bill aims to set out. It is a management and access agreement on a very grand scale. It is a major piece of legislation in this field and it is to be welcomed, because the popularity of Dartmoor is such that it is one of the leading parks of this country and it attracts many millions of visitors.
I should like to refer specifically to a number of points in the Bill. My noble friend referred to the title of "reeve", which struck me at once as unusual, because it does not occur in the interpretation clause and it appears in Clause 6. Because I was a little uncertain, I had to go to the encyclopaedias to find out exactly what is a reeve, and I found that a reeve is:
"An English official who in earlier times was entrusted with the administration of a division of the country. He was the chief magistrate of a town or council, and is the ancestor of a sheriff or a shire reeve".
I think that I understand a little more of what the reeves are supposed to do in regard to enforcement. I am not clear whether they have magisterial powers—I imagine not—and they appear to fall very much within the same category as the verderers of the New Forest. Perhaps in his reply, my noble friend will be able suitably to comment.
The question of overstocking was raised. One of the principal points of the Bill relates to the commoners' rights in association with this matter. There are very specific numbers of animals mentioned. The commoners are entitled, indeed are obliged, to graze a minimum of 50 sheep, 10 cattle and 10 horses. I understand that the by-law-making powers of the county council, which are contained in Clause 10, are quite extensive, but

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Clause 11, in extending the powers of the national park wardens, appears to cut across the powers given to the reeves in Clause 6. I conclude my remarks by repeating how fortunate your Lordships have been to have such very expert advice on this whole subject, and I am sure that Devon County Council were particularly fortunate in getting the agreement of my noble friend Lord Sandford to introduce this Bill.
3.7p.m.
Viscount AMORY: My Lords, this is a sensible Bill which should be supported, as my noble friend Lord Sandford has recommended. Lord Sandford has a name which is honourably linked with our national parks. He knows a great deal about them and has performed great services to them. As a Devonian, I can assure your Lordships that, over many years, the Devon County Council has taken a very close interest in the welfare of Dartmoor, and has also taken a great deal of trouble with it. In the summer months, the public visit Dartmoor in enormous numbers and, quite clearly, derive great pleasure from doing so. I suppose that there will always be some minorities who are dissatisfied with decisions of the kind that have to be made by national parks; one cannot hope to satisfy everybody. But I am sure that the present vigorous Dartmoor Park Committee is running it on the right lines, and with quite exceptional energy and general approval. For instance, I understand that the great majority of the commoners are in favour of the proposals in this Bill.
There is one petition with which, I confess, I have some sympathy and that is the petition from the British Horse Society. I am sure that the promoters of the Bill are right that horsemen—or I suppose one should say horse persons, though it does not sound right; "riders" is perhaps a better term—cannot be regarded in precisely the same way as pedestrians. Horses, particularly in considerable numbers and collectively, such as in riding clubs and so on, can do temporary damage to the grass and the turf and can leave tracks and scars behind them. This makes it reasonable that there should be some restrictions which are not necessary in the case of pedestrians. On the other hand, Dartmoor is a delightful
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place for exercise on horseback. I have ridden over it with extreme pleasure, marred only on one occasion when I was temporarily engulfed in an unsuspected bog, of which I believe there are one or two on Dartmoor—a hazard which, of course, adds a spice of additional exhilaration to the operation.
I am sure that the promoters do not want unnecessarily to discourage access by riders. On the contrary, I think that they would wish to encourage such access. Reading through the Bill as it is now drafted, however, the absence of any welcome for riders seems to be a little discouraging. The British Horse Society feel that the Bill gives to the council the right, in an extreme case, to refuse access to the whole moor to riders, as and when they like. They could close the whole moor to riders without riders being able to object.
I understand that the provisions which the British Horse Society feel are not quite right are Clauses 9 and 12. For instance, they regard Clause 12 as giving a right to rescind the provision of an alternative route—which might close the moor altogether, as I have mentioned. I very much hope that in Committee there will be the introduction of some words which will make it plain that riders as such are welcome, subject only to restraints which are clearly needed to safeguard the moor against avoidable damage. I am sure that such an assurance can be provided by an appropriate Amendment. This would be very welcome both to the British Horse Society and also to many other riders, and it would be entirely in accord with the aims and the spirit of this well administered national park.
3.12 p.m.
Lord GISBOROUGH: My Lords, as a Northerner I rise with some trepidation to speak on the deep South. This is an important Bill for everybody in the country who is involved with national parks, because it is a blueprint for the future. It could well be used for the country as a whole so far as access to commons and so on is concerned.
May I make a few comments on one or two of the clauses. Clause 4 deals with tree planting. The Council may plant an area not exceeding one acre with trees. There is an altogether wrong national

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outlook on the planting of trees. The history of the northern moors—and for all I know this probably applies to Dartmoor—is that they were covered with forest. The trees were cut down so that people could farm on the hills, where they could not be got at by the Danes marauding from the sea, and also avoid the bog in the valleys. Gradually they cut down all the trees so that they could farm, and the result was that the whole area went to waste and became covered with peat and bog.
Had there been environmentalists in those days there would have been an outcry against the cutting down of those forests. Now that there are no forests and it is all bog, there would be an outcry if there were to be any planting of trees. If there is a forest and it is proposed to cut it down there is an outcry, and when one wants to plant trees there is an outcry. There should not necessarily be any limit on the planting of trees in the country. One does not want to see vast Forestry Commission types of forest, planted with one single variety. However, as with towns and their architecture, the countryside must have progress. To say that because an area looks like one thing at the moment it must stay like that for ever is, to my mind, totally wrong.
Turning to the question of access, it is probably right to say that the majority of people who use the countryside are careful. They read the country code and they take the greatest care. Nevertheless, there is a fairly high proportion of people who do not read the country code, who do not worry very much and who are careless. That is most unfortunate. But there is a small percentage of people—it may be 1 per cent., or 0·1 per cent. or 0.01 per cent.—who are actively destructive. This is the element which goes out either to shoot deer, or to poach, or to steal sheep. Hill sheep are now worth £20 to £30, and a cross-bred ewe is worth about £60. So sheep stealing is becoming more and more prevalent. It can drive, and it has driven, farmers out of business.
There is also the question of loose dogs. Again, most people are careful, but many people are not; and a very small percentage of people are trying to kill sheep. With free access, it is very
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difficult to catch these malevolent people. Such people exist, and it is no good denying it. If there is to be public access, it means that the public are able to go everywhere, and good luck to them. I am all for it. But where damage results from public access, then the public have to be prepared to pay compensation. Without compensation, it is going to be extremely difficult to control in particular malicious people. One must not think that such people do not exist.
Turning now to the question of notices, under Clause 9 the county council can put up notices to ban access for a period in certain areas where, for some reason or another, the public are not to go. It may be that they are not allowed to use certain areas for a period because of lambing. But there must also be a requirement that the council should put up notices at the end of an access area. Although it does not apply to this Bill, in the case of footpaths there is a tendency for councils to put up a footpath sign showing the public the way off the road, but once the public are off the road the council does not really mind where they go, or whether they stick to public footpaths or go on to private footpaths. In the case of large access areas, it is only right that at their end the council should be required to put up a notice showing the public that they have come to the end.
I support what was said by the noble Viscount, Lord Amory, regarding horses; therefore I will not go into that question. However, may I comment on Clause 14. This clause does not, I think, include motor cycles. In our part of the world—and I imagine that if the problem has not reached Dartmoor it soon will—we have a motor cycle problem. Many people are very keen on motor cycle scrambling. Very often they join motor cycling clubs, and they ought to be found places where they can carry on their sport.
But there is also a large number of "cowboys" who have no intention of joining motor cycle clubs. They go anywhere. In fact, they killed a horse near to my home by driving it over a ravine. They have also knocked many people off their horses while they have been riding. There is no reason why "cowboys" should put at danger people

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who are enjoying their own chosen sport. Very often these "cowboys" do not license their motor cycles, or carry number plates, and they are extremely difficult to stop. I think that an area should be found for motor cyclists where they can practise their sport and that elsewhere they should be banned, because they are downright dangerous in places where they are not expected.
Next there is the question of warden arrest, and also the question of other people helping wardens to arrest people who are disobeying the laws of the common—that is to say, the real "baddies". Miscreants who intend to steal sheep tend not to try when wardens are watching. If they are seen at all, it is more likely that they will be seen by one of the commoners, or by other people. Any powers of arrest which are given to a warden should also be given to commoners. We are speaking about a vast area. The reeves are highly unlikely to be able adequately to cover the whole area, even when there is just a small number of "baddies" about.
The Bill is an interesting experiment and I hope it succeeds. I am glad that this access area is being carried on in an experimental area like Dartmoor rather than over the whole country. I think it will produce a number of lessons which will be of great use when the Bill is extended elsewhere. It is important to foresee the problems now so that the experiment can be successful and it can be emulated elsewhere in the country.
3.20 p.m.
The CHAIRMAN of COMMITTEES (Lord Aberdare): My Lords, in view of what has been said, I doubt whether there is anything that I can add to this debate. I was not going to enter into the merits of the Bill and no one has suggested anything as extreme as not giving it a Second Reading. Therefore I think that any comments I might make would be superfluous. All I should like to say is that if your Lordships do give it a Second Reading, which will be the normal thing, it will then go to a Select Committee and surely that is the best forum in which the kinds of remarks and suggestions which have been made in this debate can be thrashed out. The
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promoters can put their case, the petitioners can put their case and they can be heard before the Select Committee. In this particular instance, there are no fewer than 14 petitions against the Bill, so that the views of those who have grievances towards the provisions of the Bill will certainly be heard. I will also ensure that the Members of the Select Committee will receive a copy of today's debate so that your Lordships' remarks are fully considered.
3.22 p.m.
Lord SANDFORD: My Lords, I am grateful to the noble Lords who have taken part in this debate and to the noble Lord the Lord Chairman for his explanation of what happens next. I hope the Select Committee will find this short debate useful. In answer to my noble friend about the reeve, for the last 879 years the reeve has been annually elected by the Manor Courts to enforce the decision of the court. The only change which we are making is that from this year onward, if the Bill is enacted, the reeve will be appointed by the Commoner's Council that is created by the Bill.
I am sure that the Select Committee will consider carefully and weigh up the need for the Bill, the aim of the Bill and the way the promoters have chosen to achieve that aim. I am sure they will also attend carefully to those 16 bodies and persons who, after this very thorough, patient and painstaking five-year process of discussion and consultation still have misconceptions, suspicions, fears and objections about the Bill. I am certain that all these, and not least those about the horse riders, will be fully considered, the misconceptions (if there are such) corrected, suspicions allayed and fears laid to rest and, if necessary, some objections may be met by amendments.
To put the matter in perspective, I can assure your Lordships that, although there are 16 petitioners on the one hand, this Private Bill has the support of the National Farmers Union, the Country Land-owners Association, the Association of County Councils, the Countryside Commission and the Council for the Protection of Rural England. Of the commoners who object there are 70 out of 1,000; of the parishes that object there are two out of 41. In these matters, I think it

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is right to be thoroughly painstaking in our consultations, but there comes a moment when a decision has to be taken to present a Bill to Parliament, and I think that moment has arrived. I hope that at the end of the day the Committee will recognise as paramount the great good to be gained by our people as a whole when private rights over land, the need for farm husbandry and the public right of access for recreation enjoyment can be positively reconciled in the countryside. I believe that they have been so reconciled under the agreed scheme that has been incorporated in this Bill, and for that reason I would commend the Bill warmly to your Lordships both in its own right and as a model for the future, which can be followed in other cases where the management of large tracts of common has to be undertaken.
On Question, Bill read 2a and committed to a Select Committee.

TAMAR BRIDGE BILL
3.25p.m.
Read 3a, with the Amendments.
Clause 13 [Tolls]:
Lord ABERDARE Lord ABERDARE moved Amendment No.1:
Page 6, line 16, leave out from ("the") to ("and") in line 19 and insert—
("Tamar Bridge and Torpoint Ferry Tolls (Revision of Charges) Order 1971, subject to any further orders made under section 6 of the Transport Charges, amp:c. (Miscellaneous Provisions) Act 1954,").
The noble Lord said: My Lords, I apologise to the House for having produced these two Amendments to this Bill at this late stage, but I do so at the request of the promoters and they seem to me to be thoroughly good Amendments to which I think your Lordships will agree. They are in fact the same Amendment which has to be made twice, once to the Bill itself and once to the reproduced parent Act—that is, the Tamar Bridge Act 1957—which is reprinted as a Schedule to this Bill as amended by the Bill, so that this Amendment will have to be made in that Schedule as well. The object is simply to clarify the wording of Clause 13 in two respects: by defining clearly the order
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of 1971 which fixes the maximum tolls and, secondly, by defining exactly the Act under which these maximum tolls may be increased by the Secretary of State. I beg to move.
On Question, Amendment agreed to.
In the Schedule:
Lord ABERDARE Lord ABERDARE moved Amendment No.2:
Page 27, line 2, leave out from ("the") to ("and") in line 4 and insert—
("Tamar Bridge and Torpoint Ferry Tolls (Revision of Charges) Order 1971, subject to any further orders made under section 6 of the Transport Charges, amp;c. (Miscellaneous Provisions) Act 1954,").
On Question, Amendment agreed to.
On Question, Bill passed, and returned to the Commons.

PUBLIC LENDING RIGHT BILL
3.28 p.m.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Lord Donaldson of Kingsbridge): My Lords, I beg to move that the Bill be read a second time. I must first declare an interest in that I am the husband of an authoress and certainly hope to stand to gain from the passing of this Bill.
That is not however my only reason for commending it. The principle which the Bill enshrines has been stated and restated many times. It is that the Government believe it to be an act of simple justice to provide some recompense out of public funds for those authors whose books are lent out under the public library service. We have an excellent public library service—without doubt the best and most intensively used in the world—but the authors are the fundamental part of it, and yet the only payment they get, however many times their books are borrowed, is the amount they receive from the original purchase of the book by the library. The Bill provides that authors should receive a payment out of public funds which is based on the number of times their books are actually lent out by local authority libraries.
Noble Lords will have had a sense of dejà vu when they saw that this Bill was

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to be considered yet again in your Lordships' House. We have been here before. But there are some subtle differences. On the first occasion, in 1976, as I well remember, I was plunged into the deep end by having to take on the Committee stage of the Bill within two or three days of being appointed Minister for the Arts. On the second occasion, in 1977, my noble friend Lord Willis reintroduced the Bill. On both occasions the Bill came to us before it had run the gauntlet of another place. On the first occasion, in 1976, it ran into exceptional difficulty in the other place when a small minority of opponents of the Bill insisted on very prolonged debate at all stages, which I regard as a faintly polite way of putting it. On the second occasion, in 1977, the Government simply could not find the time for the Bill in a very crowded legislative programme dominated by the Bills on devolution.
The Bill has indeed, as my right honourable friend the Secretary of State said in another place, been star-crossed. On this occasion, however, the Bill has already run the gauntlet of another place. It has been subjected to prolonged and exhaustive debate yet again. I should like to congratulate my honourable friend and colleague, the Minister of State, who handled the Bill in another place, for piloting it so skilfully there and bringing it to us in its present form. The Bill benefited there from the co-operation of the Opposition. Indeed, the Bill was welcomed by all parties represented in another place. I venture to suggest to your Lordships that with this spirit of goodwill towards the principle of the Bill, and the rigorous examination it has already undergone, little further scrutiny should be required from this House. We have, after all, put it through twice already. But I do not think I can skip my introduction, speaking too shortly, as not everyone will remember the details accurately. There are in any case some subtle changes in this Bill from the versions we have previously considered, and I will deal with these as I go through the text.
First, I think I must briefly recall to your Lordships' House how the scheme is intended to work. I will then go on to describe the detailed provisions in the Bill and deal with some of the points of controversy which have been raised by
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critics of the Bill. We propose that there should be a set sum in a kitty or central fund and that authors should be paid out of that fund pro rata according to the borrowing of their books from local authority libraries. Authors will have to register their books with a Registrar of Public Lending Right, and in particular they will have to advise him of the International Standard Book Numbers which apply to their books. These ISBNs are a set of unique reference numbers which identify each edition of each book published and enable the scheme to be computerised. A sample of about 72 local authority libraries throughout the United Kingdom will be drawn randomly but with reference to the need to cover different types and areas. These libraries will have inserted in the books in their stock a machine readable coded form of the ISBN. Each time a book is borrowed from the sample it will be recorded by the library, and periodically a return of the data of borrowings will be sent to the Registrar. At the end of a stipulated period, probably 12 months, the Registrar will run the tapes of lendings against the computer file of books registered by authors, and so he will be able to compute the entitlement of payment per author for the period in question.
Turning to the text of the Bill itself, Clause 1 establishes the public lending right as the right of authors to be paid out of a central fund in respect of certain books lent out of public libraries in the United Kingdom. The books in question are those which will have been registered with a Registrar who will be appointed by the Secretary of State to operate the scheme. He will help to prepare the scheme in detail and play a part in the consultation of those likely to be affected by the scheme. I repeat the undertaking given on previous occasions, that we shall publish a consultation document on the scheme.
Clause 2 establishes the central fund out of which payments will be made to authors in respect of the public lending right. This is where the first and most important difference arises between this and previous versions of the Bill.
Clause 2(2) places an upper limit of £2 million on the annual liabilities of the fund. The previous Bill had a limit of £1 million. We must have a ceiling on the

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fund to ensure that there is parliamentary control over the total resources devoted to the scheme. But there is provision in Clause 2(3) for my right honourable friend the Secretary of State, with the consent of the Treasury, to increase the limit by order, subject to an Affirmative Resolution in another place.
Clause 2(4) provides that the expenses of administering the scheme, including the expenses of the library authorities involved, will be a first charge on the central fund. In the Explanatory Memorandum these expenses are estimated at £100,000 in the first 12 months, rising to £400,000 in the second 12 months, of the planning period, which will precede the introduction of the scheme. When the scheme is introduced and in full operation the running costs will be higher than in the planning period, and the provisional estimate is that these costs could be about £600,000. All these estimates are based on the original work of the Technical Investigation Group, which was set up by my predecessor as Minister for the Arts. Costs have risen since that group completed its work in 1975, and the estimates include an adjustment for that to present-day prices. But there could be some offsetting savings, too, since 1975. In particular, since the group reported more public libraries have installed computer equipment of their own and if that is compatible with the requirements of the scheme there will be lower costs on libraries in the sample and so there will be less to be reimbursed to them out of the central fund. This will, of course, mean that there will be more for authors. As it stands, the estimated benefit to authors has improved from £600,000 out of a £1 million fund to £1·4 million out of a £2 million fund, a very considerable improvement.
Lord HAWKE: My Lords, if the noble Lord will allow me to intervene, could he at that stage tell us what the individual authors are expected to get? Presumably the very prolific author will get a large sum out of which he will pay a large amount of tax, but the poor struggling author will get a much smaller sum. Has the noble Lord any idea how much these people are going to get?
Lord DONALDSON of KINGS-BRIDGE: My Lords, I deal with both
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these points in the remarks I have prepared. I would like to let it run and if the noble Lord is not satisfied I will answer him afterwards. I think I shall deal with both points fairly fully.
Clauses 2(5) and 2(6) are standard financial and accounting provisions.
Clause 3 requires the Secretary of State to prepare a draft of a scheme for the administration of public lending right and to lay it before Parliament. This draft can be the subject of debate in each House and is subject to the Affirmative Resolution procedure. The scheme will reflect the consultations foreshadowed in Clause 1, and will deal, for example, with the selection of the sample of libraries, the reimbursement of the expenses of the libraries in the sample, and the classes of book eligible for the right. If there are to be maximum and minimum cut-off limits in the scale of payments—the point the noble Lord was asking about—these will also be dealt with in the scheme. The clause provides for the scheme to be altered from time to time but only after due consultation. I should also draw your Lordships' attention to Clause 3(8), which provides for an annual report to be laid before both Houses of Parliament. This was an Amendment accepted by the Government at Report stage in another place. In partial answer, therefore, to the noble Lord, the question of cut-offs will be discussed in the discussion paper, and then put into the scheme which will come before both Houses of Parliament in the ordinary way.
Clause 4 provides for the register, which will constitute evidence whether a particular book shall be entitled to the right and to whom any payment is due. The Registrar has the duty of establishing and maintaining the register in accordance with the scheme. The onus of proving a claim to the satisfication of the Registrar falls on the applicant. Clauses 4(7) and 4(8) contain standard provisions as to the making of false statements knowingly and recklessly in connection with the entry of any matter whatsoever in the register. The Library Association have been very much exercised by these provisions, and after our meeting I was left with the impression that they were content with the explanation they had been given, but I now understand that I was over-sanguine.

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I understand that they have now reaffirmed their opposition to these provisions, so at least the misunderstanding about their attitude has been removed. I ought, therefore, to remove any doubt as to the Government attitude. It is that a provision of this kind, which appears in many other statutes, is desirable in this case. It makes the law clearer and easier to apply. It is extremely unlikely that a librarian would ever commit the offence, but there seems no reason why librarians alone should be specially exempted from a provision which must apply generally to any individual member of the public or body corporate that deliberately attempts to mislead the Registrar as to a material fact relevant to the authorship of a book, or its ISBN, or the entitlement of anyone to the payment of sums due. If one states the case in this way, I find the librarians' objection difficult to understand.
Clause 5 contains interpretation provisions. It also provides for the Bill to be brought into force on an appointed day. The Government are not yet in a position to announce that they are assured of the resources for public lending right and until they are it would be premature to start the preliminary processes set out in the Bill.
The Schedule sets out in the usual form the provisions for the Registrar and his staff, who will not be civil servants. The provisions have been amended to make it clear that it is for the Registrar, as the employer, to set the pay and conditions of his staff, subject to the approval of the Secretary of State and the Minister for the Civil Service. It is estimated that the Registrar will need about a dozen staff at first during the preparatory stages, when the computer system is being designed, the Register is being compiled and arrangements are being made with the libraries in the sample; and when the scheme is in full operation he will need about 35 to 40 staff. The Schedule has also been amended to provide that the Registrar shall be a Corporation Sole; that will ensure that any legal business is executed by him in his capacity as office holder and not in a personal capacity, so there will be no hiatus whenever there is a change in the holder of the office.
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There are a number of technical points which noble Lords may wish to raise and I shall endeavour to answer a few of them at the end of this debate. Some may be so detailed or technical that I may have to suggest that they are left over to the Committee stage. However, there are some points which I think I should deal with now.
Let me start with an article in the County Council Gazette for December of last year. The article was entitled "Public Lending Wrong" and it contrasted the loan-based principle in the Bill unfavourably with the so-called sales-based scheme preferred by some local authorities. I ought to explain that under a sales-based scheme, the public lending right payments would be calculated on the basis of sales by book-sellers and publishers to libraries, and not on actual loans of books by libraries.
First of all, the article says:
"The interests of novelists and biographers are being promoted to the detriment of writers and editors of reference books".
The Government have publicly undertaken to give priority to bringing books in reference sections within the scheme when that is practicable. I repeat that undertaking now. The Government fully recognise the merits of reference books and acknowledge that the general principle on which the Bill is founded ought to apply to authors of reference books. But we must face the fact that it is not practicable, within the resources that are likely to be available, and without an unacceptable degree of disruption of reference libraries, to apply PLR to books in reference sections. I say "books in reference sections" rather than "reference books" incidentally, because the distinction is not between reference books and other books but between those books which are lent out and those which are not.
The same article in the County Council Gazette goes on to say
"A PLR of this kind"—
they mean the loan-based kind—
"cannot accommodate multiple authors".
It can accommodate them and in the fullness of time I hope that it will. But the objections to taking on multiple authors apply equally to a sales-based scheme. The problem lies not in the

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collection of the data, whether this is done in libraries under the loan-based scheme or in publishers' and booksellers' premises under a sales-based scheme; the problem lies in the Registrar's office when he has to decide how much to allocate to each fraction of the authorship of a multi-author book. I do not rule out the possibility that a solution to this problem will be found during the consultation phase before the scheme is introduced. If so, splendid.
The article then says:
"A sales-based scheme offers greater justice to all authors".
It does nothing of the sort. It takes no account of books already in library stocks and books which are out of print but still borrowed by library users. It ignores the fluctuations in the market shares of booksellers and the specialist publishers, which would make it very difficult, if not impossible, to devise a statistically acceptable sample. And since a sales-based scheme would be based on the single act of sale of the book, it would take no account of the different extent to which books are borrowed. Some are lent out by libraries 40 times or more before they are replaced or rebound.
Finally, the article comments on the proposal to have a cut-off limit—this is the point which the noble Lord, Lord Hawke raised—to prevent very popular authors scooping the pool. It says:
"Where now is the precious principle of rewarding by level of use?".
Well, my Lords, of course any limitation on actual payment by number of times lent is a technical breach of the principle. But it is not one for which I propose to apologise. You might as well object in principle to the tie-break at Wimbledon. With the exception of the writer of the article under discussion, this proposal has met with universal approval. In all the discussions that we have had, we have been asked, as the noble Lord asked, what plans we had for a cut-off. We have always said that we thought that there ought to be one, but that it must be settled in the consultation paper and eventually in the scheme, and would not be included in the Bill.
Most of these arguments also apply to the so-called purchase-based scheme,
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which was considered by the Technical Investigation Group which studied PLR in 1974–75. As that group found, a purchase-based scheme would have to take data on purchases of books from all public library authorities to produce a reasonable set of statistics; but it would then be still no cheaper than, and statistically not as satisfactory as, a loan-based scheme which used a small sample of 72 library points.
My honourable friend the Minister of State undertook in another place that we would examine the possibility of excluding some foreign authors from the scheme, though with reciprocity to those countries which offered a public lending right to British authors. He also said—and I would re-emphasise the point—that this bristles with difficulties. We have examined this and we are continuing to do so, since we acknowledge that there may be a case in equity. But leaving aside the question whether there is scope for something on those lines within the powers given to the scheme under the Bill, there is the major difficulty that the savings which might be achieved in reducing the number of applications to register and the number of paying out transactions, could very well be very much less than the cost of the work which the Registrar—and the authors concerned—might incur if we tried to operate an exclusion which was fair and just, properly controlled and consistent with our international obligations. Further, I undertake to the House that we shall keep this under review and see if it is possible to operate a defensible distinction under the scheme. But I cannot promise at this stage that we shall be able to do so.
Some noble Lords were very keen on a previous occasion to extend the scope of the Bill beyond "books" to "works". But I am afraid that this would be quite impracticable. First of all, there is no standard unique numbering system for other articles lent out by libraries, such as records, cassettes, paintings and so forth, that would correspond to the International Standard Book Number for books. Without such a unique reference number it would be impossible to apply a computer to the calculation of the entitlement to the right. Secondly, the pattern of lending of articles other than books varies tremendously from library

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to library. This is another instance where it would not be possible to devise a sample that was statistically acceptable. So we should have to devise and apply a unique number system to these objects just for PLR and we should have to record all loans by all libraries, because a sample was impossible.
In addition to that, we should have the multi-author problem. Virtually all cassettes and records contain more than one performer. And then, over and above all those technical problems, there is the point that, while there is substantial lending of these items by libraries, it is nothing like the scale of lending of books which is, I think, something like 600 million a year. The case, however strong in principle, is numerically much weaker than it is with books and authors. This Bill is not framed to cope with lending of articles other than books and the state of technology is such that it will be some time before we could hope to devise a scheme that could cope with them.
There are two other fundamental issues of principle which I know worry some people about this Bill. The first is the suspicion that some people have that sooner or later libraries will be asked to bear some of the costs of the scheme. I think that that is really behind almost all the serious opposition to this scheme which comes largely from the librarians. Perhaps they will not get back their full administrative costs; perhaps they will be asked to impose a charge on borrowers; perhaps money will be allocated to the central fund which might otherwise have been allocated to the libraries to purchase books or help with their running costs. Categorical assurances have been given by the Government on all these points, both by me and by my right honourable friends in another place, and I gladly reaffirm those assurances. There is no question of a net final burden of this scheme being shifted on to libraries, either directly through inadequate compensation or indirectly through the diversion of resources which they would otherwise have had. In Clause 3(6) the Bill contains a specific provision as to reimbursement of libraries.
The second objection of principle is advanced by those who question whether this is a cost-effective way of helping authors. Is it really worth it to provide a
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payment which on average—and here, again, I give some answer to the question of the noble Lord, Lord Hawke—will amount to about £14 a year, ranging from a minimal sum for many to quite a useful maximum for others? Quite apart from the probability that a number of authors at the lower end will not bother to register—so the average sum may be higher than that, and there is the prospect that in the fullness of time the total sum available for distribution may indeed be increased—no one has ever claimed that this scheme will provide a new source of substantial income for authors. Very few authors expect to make a living from their books anyway. This Bill sets out to remedy an injustice as a matter of principle. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Donaldson of Kingsbridge.)
3.52 p.m.
The Earl of GOWRIE: My Lords, Members participating in this discussion on this Bill in another place were enjoined fairly severely by the Chair to declare their interests, as it seems that another place is swarming with authors who might benefit under the present Bill. I am afraid that in declaring my interest I must confess that I have to borrow a phrase which the noble Lord used towards the end of his speech and describe myself as an author "at the lower end", because I do not think that any great augmentation of my income will ensue from the passage of this Bill. However, I am the author of one book and the co-author of two other works.
As the Minister for the Arts told us, the Bill has had a star-crossed career. It has been in your Lordships' House twice before, and I think that that alone provides me with an excuse for being brief about it: we have been over the ground before. The noble Lord reminded us that on the two occasions when the Bill came to us, it came to us before it had to run the gauntlet of another place—we introduced it. It came to grief the first time because opponents of the Bill in another place insisted on prolonged debate at all stages; and the second time because the Government were in considerable difficulties, due to what is to my mind another costly and irrelevant measure, the legislation on devolution.

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The noble Lord might have added that substantially the same Bill secured Cabinet agreement under the last Conservative Government, thanks to the efforts of my honourable friend Mr. St. John-Stevas.
We may at least start, therefore, with the assumption that there is a measure of bipartisan agreement that the Bill should reach the Statute Book. However, as is so often the case where there is a measure of bipartisan agreement, individuals on both sides take exception to many of the provisions contained in the Bill. It is no secret that the most informed and formidable opposition to the Bill in another place was mounted by my honourable friends, Messrs. Sproat, Moate and Ridley. Incidentally, I must pay tribute to the command of English of my honourable friend Mr. Ridley. I thoroughly recommend noble Lords to read his objections to the Bill during the Commons Committee stage, for their style and wit. Your Lordships may guess from my own tone that I share some of the misgivings expressed.
The official Opposition welcomes the Bill and believes that it is time it reached the Statute Book. Yet many of us— myelf not least—find it highly unsatisfactory in many respects. Being in this ambiguous position, I am consoled a little, in that I detected that the noble Lord himself found it a less than perfect Bill in every way.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I did not wish to give any such impression.
The Earl of GOWRIE: My Lords, I am sure that the noble Lord did not wish to, but these psychological intuitions have ways of making themselves felt. Perhaps the principal objection to the Bill is that its stated aim—that of providing recompense to authors whose books are borrowed by the public—could have been achieved by simpler and less costly ways. Nor is this a simple disagreement about methods of administration; such have been taken up by various interested bodies including the librarians' associations and the like.
As we know so well in this country, the best laid plans of mice and men are filed away in a cabinet somewhere, and the high
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costs of administration of the scheme are surely in direct proportion to the low benefits which will accrue to the authors whom it is designed to benefit. The noble Lord the Minister mentioned the figure of £14. When we last debated this Bill, it was thought that it would be £12 per author.
A noble Lord: My Lords, inflation!
The Earl of GOWRIE: My Lords, exactly. It should be rather more than £14 if inflation is being allowed for. Let me elaborate these objections just a little. As the noble Lord told us, the present Bill determines payment to authors on samples of loans of books collected from approximately 70 public libraries. This information would be collected from computerised records in the same sample libraries—and I understand that that is a technology which has only recently become available—the cost of which would be reimbursed from the PLR fund. The scheme, including payments to authors, would be entirely financed from central Government funds, channelled through this new body—if you like, this new Quango—to the Registrar.
There are serious misgivings here. Participation by local authorities in the scheme would surely be patchy, and the results could therefore be so unrepresentative as to provide a rather unreliable basis for the distribution of payments to authors. Everyone admits that the comparatively small amount of money which the Government would be able to allocate to the scheme in the foreseeable future—and the noble Lord was very honest with us as to what was possible at any given time—would have to be used to a very considerable degree upon administration. The amount, therefore, remaining for distribution to most authors would be derisory.
The intention to base the whole scheme upon public libraries is unfair and unrepresentative. Millions of books are issued each year from school and university libraries, Government libraries, even a Library in your Lordships' House, industrial libraries and other institutions. If the principle of an author's right is to exist, why should it be restricted to public libraries? To base payments upon issue figures is unlikely—and this point has been made many times—to reward the

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authors who are most in need of payment. Even with a ceiling placed upon the amount any given author can receive—and I understand that that has not yet been agreed—the highest payments will be made to the best known and most popular authors. Although this might be regarded as justified, there is surely a stronger case for using public funds to supplement the income of newer or more experimental writers, or those who base their books upon long and expensive research.
We should also remember that there are many creators of thoroughly worthy books which are extremely infrequently borrowed from libraries, and it is obvious that such authors—perhaps even the majority of authors—would reap greater benefits from the principle, for example, that they should be rewarded to the extent to which libraries stock their books. Certain types of book—for example, those of a highly specialised nature—are purchased predominately by non-public libraries, by specialist institutions. Authors of such books would benefit under an alternative proposal, but under the present Government's proposals they benefit not at all. Again, the authors and compilers of reference books would receive no benefit under the proposals to date and many believe that this is thoroughly inequitable and unfair.
I follow the Minister entirely in saying that we cannot always make perfect provisions for every interested group, but the noble Lord did say that the main point of this Bill was to establish a principle of equity. So one of our objections is that the principle itself is not very fully drawn up within the Bill.
To these practical and detailed objections we can, and I personally believe we should, add a philosophical objection, though I think it is philosophical only in the sense of commanding us to think something through with precision, not in the sense of being impractical or airy-fairy.
The logic of current events, and I think the trend of informed comment upon them, is that you cannot run a welfare or service economy without high taxation, high productivity, a high degree of centralised planning and control over prices and incomes, and a high level of political consent. You could, of course,
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obtain the latter by force. Now in Britain none of these forces is working in a smooth, propulsive way—pushing our ship of state through choppy seas, as it were. We have high taxation, low productivity, high centralised planning, and low control over prices and incomes: a thoroughly combustible mixture; an explosion indeed of incompatible forces; and the spark is provided by our adversary party political system, and a very low degree of political consent.
So we can either go in the direction of greater centralised control over the whole economy, which must include the standard of life and to some extent the cultural habits and choices of people, or we must severely restrict the role of Government in the economy and cease to enjoy the damaging fallacy that the interests of the State and the interests of the people are the same. At present we suffer the worst of both worlds and the effects are everywhere apparent.
I make no apology for making the rather philosophical point because the present Bill is a perfect example of the worst of both worlds. Authors by universal agreement will benefit very little, and such benefit as they do receive could be augmented by direct reimbursement of the Government at much less administrative cost than the present scheme. The chief beneficiaries will be authors who are already very rich, or foreign, or both. The public will not benefit. The Treasury will not benefit. A new Quango will benefit. However impeccably administered, however responsible are its tetrahedrons, if these are the limbs that Quangos have, the Quango will benefit.
In sum, the Bill is a perfect mish-mash of muddled good intentions; a perfect little microcosm of the muddied and muddled compromises which characterise our mixed economy. The Government are committed to it because they have alread lost it twice and they are anxious not to look too foolish in the eyes of authors and intellectuals who are often assumed, I do not quite know why, to be vocal supporters of Labour. The Opposition are committed to it because we too wanted to cut a dash in authors' eyes when we were last in Government and because, to be fair, we do not wish now to renege on an earlier commitment.

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When the authors themselves have experienced the practical effects of this legislation, they will, I am sure, feel cheated and aggrieved. The position is therefore deeply unsatisfactory, and having to commend something to your Lordships in which I have so little confidence is one of the less pleasant tasks that I have had since working in Parliament. I am, however, consoled in the task by two considerations. One is that the Government, the promoters, after all, of the Bill, share at least some of my misgivings. In Standing Committee in another place the Minister of State said—and I think our rules allow me to quote a Minister—
"What the Government are saying on this Public Lending Right Bill is that we have to learn to crawl before we walk. This is a crawling attempt to do justice to a section of the community which has provided a great deal of interest and entertainment and has received no money for its pains in the past. It is not perfect. There are inequitable matters in the scheme. There is no doubt about that".
My Lords, it is my intention—I cannot of course speak for my noble friends behind me—not to make Amendments at Committee stage. As the noble Lord the Minister said, we have in substance been over this ground before. The Opposition believes that the Bill should reach the Statute Book this Session, and because this Session is, thank goodness, constitutionally limited in duration the best thing would be for us to hurry it through fairly quickly. The best thing would be to let the Bill operate for sufficient time for the principle of equitable treatment of authors to be accepted—and that principle I endorse—in order that the inequities in practice which I have mentioned can be thoroughly shown up.
Lord DAVIES of LEEK: My Lords, will the noble Earl allow me to intervene? It has been an interesting macrocosmic analysis of a microcosmic problem. I am grateful that at the end he admitted that it is a pragmatic thing, and, after we pass it, time and trial will find an answer from both sides of the House. Why take so long over it?
The Earl of GOWRIE: My Lords, I am not taking very long over it. I have been 12 minutes, and I would have been finished by now if the noble Lord had not inter-rupted me. The difficulty that both sides find themselves in here is that they have
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accepted a principle of equity which in my contention is inequitable in practice. I have mentioned one consolation. The other consolation is that under the provisions of the Bill the practical workings-out fall within the scheme. In my view this scheme will not work very effectively, but we will at least, on another day, and no doubt under another Government, be able to come back and modify it.
4.6 p.m.
Lord McNAIR: My Lords, it is a pleasure to thank the Minister for shepherding us through the complexities of this matter, which I thought he did with tremendous clarity. I must repeat the declaration of interest which I made on an earlier occasion, although the more time passes the smaller my interest seems to become. It is nice to see one or two new names on the speakers' list, but most of us have indeed been here before. What is quite new, and what I shall chiefly concentrate on for a few minutes, is the different tactical context of the changed parliamentary situation. This time it has passed through all its stages in the other place. It slipped through that other place as smoothly as an overgrown camel negotiating the eye of a rusty needle, but it did get through and I pay my tribute to those who saw it through. They had to display a degree of patience which even in this House would have been remarkable.
If my understanding of the legislative process is correct this means that we only have to pass it through this House unamended to be certain of its enactment. "Unamended" is the key word, and perhaps the only thing in the speech of the noble Earl which I really liked was his statement that he was not going to move any Amendments; perhaps not the only thing—that is unfair—but the thing I liked best. If the Bill were perfect, this desirability of passing it unamended would present no problems, but of course it is not perfect. It is extremely unsatisfactory, for example, that all the more interesting and debatable issues remain to be settled in the scheme which the Secretary of State will prepare and which, as I understand it, we will have no chance to alter. Is that correct?
Lord DONALDSON of KINGS-BRIDGE: My Lords, with respect, not quite. The scheme will be set out in the

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form of a consultative document, which will have no powers in it, for discussion. Anybody who wishes can discuss this wherever they want, and that includes your Lordships' House. If you like to discuss the consultative document before it becomes a scheme, we have the right to do so through the usual channels. Once it has become a scheme, it then has to be either agreed or rejected in the ordinary course of Statutory Instruments.
Lord McNAIR: My Lords, I am grateful, and I apologise for my misunderstanding. These matters are the most interesting things: reference books; multiple authorships; translations; posthumous registration; and the cut-off point above which the most borrowed authors will get no more.
The Earl of GOWRIE: My Lords, just before the noble Lord leaves that point, may I say that I do not think that the Minister answered him quite correctly. Is it not the case that the scheme can be dealt with only by the House of Commons and not by your Lordships' House?
Lord DONALDSON of KINGS-BRIDGE: Absolutely not, my Lords.
The Earl of GOWRIE: It says so in the Bill, my Lords, I refer the Minister to page 3.
Lord McNAIR: Perhaps I had better get on, my Lords. I was talking about the cut-off points—the maximum which the most-borrowed authors will be able to take and the minimum below which payment would be considered uneconomic—in other words, those who will bang their heads on the lintel and those who will stub their toes on the threshold. All those and other arguable points I hope we shall have a chance to discuss in this House, otherwise there will be nothing for it for authors but to trust their chosen, elected representatives, and that, as a member of the Society of Authors, I certainly do. I would make one suggestion, namely that it might be no bad thing if the Society and other bodies concerned were to circulate a questionnaire covering a few of the problems which are a matter of principle rather than of technicalities to discover the views of their members.
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I say once more that we have only to pass the Bill, such as it is, unamended, and we shall have it; to parody the language of the more depraved journalists, we face a half-a-loaf-is-better-than-no-bread situation. If any of our opponents—I think there are one or two—try to frighten your Lordships with the argument that this is just the thin end of a wedge, my answer would be, yes, it is a very thin end of a wedge, but a wedge which we intend to drive home with all the strength which our knowledge of the justice of our cause gives us. Let us get this enacted now, and then, when we have the scheme, we can settle down to a long campaign to persuade future Secretaries of State, perhaps yet unborn, to vary it and to vary it for the better.
Lord DONALDSON of KINGS-BRIDGE: My Lords, perhaps I may clarify the answer which I gave the noble Lord, Lord NcNair, indirectly. I have now found the place in the Bill; it is under Clause 3(1), where it is made quite clear that the scheme must receive the Affirmative Resolution of both Houses.
4.12p.m.
Lord SNOW: My Lords, I must apologise for not being in my place at the beginning of the debate. That was not entirely my fault; it was a failure in communication which I shall not retail. I came here feeling rather more cheerful than I normally do, since I thought that just for once a tiny piece of useful work was going to be done, admittedly imperfectly, on a problem which is not going to affect much of the nation but which, nevertheless, will give some mild satisfaction and relief to a few not particularly harmful citizens.
However, when I came in in the middle of the speech of the noble Earl, Lord Gowrie, I found that that was very far from the case, and I must say that my spirits became about the same colour as the sky outside. In fact, I would remind the noble Earl of Bleak House, because I felt he would have made an admirable participant in the proceedings of Jarndyce v Jarndyce. If he were the only villain in this piece I should feel inclined to weary him with a long speech—a speech about the same length as the proceedings in Jarndyce v Jarndyce—just to show him

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how ingenious men can be in avoiding any kind of conclusion to any kind of activity. But that would be unfair, he is only one among so many, and let us leave it at that. I shall have some words with him privately.
I wish to be much more brutal and businesslike and for once I want to talk to your Lordships like someone with some experience of what literary life is like. The economics of literary life are very curious; as the Americans say, it is either feast or famine. A certain number of people in modern conditions make enormous incomes, incomes larger than major industrialists. The majority of writers, however, including good writers, make rather less than a dustman. That is the position. I cannot grumble; I make more than a dustman. Some writers, some good and some very good, make incomes of enormous size, and obviously they do not need help. The whole purpose, I take it, of an imperfect Bill with all kinds of unsatisfactory features is simply to do a little for the people, worthy professional people, often talented, for whom we cannot provide in any other way.
The reason for this accentuation of the difference between the extremely prosperous and the unprosperous is due to various technical developments of the last 40 or 50 years. These are not really technological, although that comes into it, but relate more to the skills in organisation and marketing which make it possible to distribute millions of books if one can find a market for them. That is where some people obtain a great public and a great income.
Whatever one does, for a certain number of writers all that apparatus is absolutely useless. In my life I have met, I think, four people who were all of really high talent. about my own age, plus or minus three or four years either way, and who never made more than £400 or £500 a year—and remember that income has not altered much with inflation. It is rather like the income of high ecclesiastics; almost the only income which has not to some extent been compensated for to meet inflation. Unsuccessful writers are therefore still getting about the same number of pounds they would have got 30 or 40
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years ago. That is one reason why a number of us are really deeply concerned, if it is remotely possible, to do something to give them a faint chance of standing themselves an occasional drink.
All methods of distributing money to writers are totally unsatisfactory. This has been gone into time and again. They can be given grants, but that is highly subjective and is nearly always very unsuccessful in cost-effective terms, and it is subject to all kinds of personal animosities and so on. They can be given prizes and they can be given advances; publishers often do that and they have lost a lot of money in the process.
We are considering the only way, to the best of my knowledge, that anyone has been able to discover which is reasonably objective, which is not subject to any of the difficulties of personality and which has some faint relationship to common sense. Noble Lords need not worry about the statistical arguments; we should know by now that we are very good at sampling, something which has improved immensely over the last 20 or 30 years.
Hence, I recommend the Bill to your Lordships with some violence, as noble Lords can see from my unaccustomed tone. I think it will do a little good. It will certainly not do any harm. It will give a little cheer to people who, unless one thinks writers should be exterminated, deserve what cheer we can give them. As for the Jarndyce v.Jarndyce arguments, I confess they do not seem to be worthy of the occasion. This matter has been going on for more than 30 years, which is a fairly long time even for a Chancery case in the 19th century. Good and generous men tried to represent the case, patiently arguing with everyone they could find. The father of one of the persons who has been most actively concerned in the contemporary campaign was a leading figure 30 years ago; A. P. Herbert was another leading figure. Many people have given the matter time and thought—not for their own ends because it did not matter much to them but it mattered quite a lot to the people whom they were trying, in vain, to help. As I say, it has been going on for 30 years. Thirty years is a long time, my Lords, and it is time that we did something now and put a stop to the present situation.
4.21 p.m.
Viscount ECCLES: My Lords, I have a small interest to declare. The royalties from my books kept me in tea and coffee— nothing more—and if the Bill is passed, I might receive an extra pound or two. As noble Lords have already said, we are back again discussing how we can put authors in the way of earning a better reward for their labours, and I quite agree with the noble Lord, Lord Snow, that this is a very old and important problem. We need good books as much as we need the best work of all artists and craftsmen, and the present poverty of many good writers hurts. It hurts because it is relative, and it hurts because it is real. It is high time to do something about it, but, as my noble friend hinted, the Bill does not provide a respectable solution—far from it! It is an unfair, humiliating and ridiculously expensive mouse.
Why did the other place send us such a bad Bill? First, it was because honourable and right honourable Members are tired of looking for a respectable solution; and, secondly, as there is a General Election in the offing, they were anxious to keep authors quiet. It is easier for us in this House to protest against the bad features of a temporary political Bill, and I intend to do so and to offer your Lordships one or two suggestions as to how we might get the authors a better deal at less expense to the taxpayer.
No one really knows whether authors were ever adequately paid. What we do know is that English literature is the richest and most profound in the world, and we want to keep it that way. In the great days, standards were high and far fewer books were published, but it is very different now. There are many more authors and many more books. One reason for this is that universities used to be geared to teaching and the dons produced a few books by way of a hobby. But it is the other way round now: producing books is their main business, and teaching suffers—how much I do not know, but probably quite a good deal. Before the war, about 10,000 titles were published a year, and the statistics show what has happened since. In 1978 (last year), 38,700 titles were published—2,500 more than in the previous year, which was itself a record. Sales are
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equally buoyant. In 1977, total book sales at £450 million were 18per cent. above 1976, and sales in the first half of 1978 were 10 per cent. above the first half of 1977. Paperbacks, as your Lordships know, have triumphantly broken through the £1 barrier.
Yet, despite this real boom and bearing in mind the handful of exceptions to which the noble Lord, Lord Snow, referred, most authors' royalties are said not to amount to £1,000 a year; and you cannot live on £1,000 a year. On the other hand, this is not a new situation. In the past, very few authors whose works we still read lived only on the proceeds of writing. They had another bread and butter job, or a rich spouse, or private means, and some of them still do today. But since the expansion of higher education there are far more authors who wish to live only by writing, and their relative poverty is a hard, inescapable fact. They have lost out in the financial scramble. In three months a lorry driver earns as much as many of the best known non-fiction writers earn in a year or more, and these self-employed authors have no Transport and General Workers' Union to bully the publishers or blackmail the public. Their legitimate hope seemed to lie in a public lending right calculated on the borrowings of their books from libraries. But, when a method of implementing this right is brought to Parliament, let us remember that authors want money as well as justice; and the Bill does not give them a fair measure of either.
The right now proposed is a mutilated right. It is one which is not going to be fairly assessed, as I shall show in a moment; nor is it capable of producing for the average author annual payments sufficient to buy his family one good Sunday lunch. This is thin justice indeed. The right does not extend to all mono-graphs, reference books, articles, et cetera; nor does it cover all the libraries from which books can be borrowed. A genuine public lending right, paid for by the taxpayer, would be unacceptably expensive. We all know that. But are the costs of even this truncated right acceptable to your Lordships? As the Minister has already said, when the Secretary of State introduced the Bill, she increased the estimate for the Quango when it is

1011
in full blast to £600,000 a year. What will the figure be when the scheme is operating, when we have this Quango with its large staff and with its obligation to repay the local authorities all expenses that they can properly attribute to the scheme? I think that if we put the figure at three-quarters of a million pounds we shall not be far wrong—in which case the average payment works out at between £10 and £12 a year subject to tax. My Lords, it is—
Lord DONALDSON of KINGS-BRIDGE: If the noble Viscount is to speak in opposition to our statement, which has been extremely carefully worked out, that we think the cost will be about £600,000, I think that he ought to say more than that it had better be put at £150,000 higher.
Viscount ECCLES: I should be delighted to do that, my Lords; I am simply taking the existing claims of local authority staff and workpeople, and am bearing in mind that the cost of everything that everyone uses—paper, telephones, and everything else—is going up. Does the Minister not think that in two years—which will be the period from when the figure of £600,000 was calculated—we shall have a figure of £750,000? If he prefers £700,000, I really do not mind; but there is bound to be a very large increase on the Secretary of State's estimate. It is shameful to put on the Statute Book a scheme under which half the beneficiaries will receive less than the cost of assessing and paying their benefits; and that is what your Lordships are asked to do.
I must say a few words about the method of assessment, because here I do not agree with the noble Lord, Lord Snow. In the public library system in the United Kingdom, books can be borrowed from 13,500 points of issue, and the fair way to translate into cash for the authors all the loans from that enormous network is to charge the borrower 1p, 2p or 3p every time he or she takes out a book. That was Miss Brophy's first idea—and a very good idea, too—but it could never be a starter so long as all the political Parties were dead against charges for borrowing. So a scheme based on a different principle had to be hatched; and the Government now
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propose to sample 72 points of issue out of the 13,500—roughly one in 200. Yet, my Lords, we all know that libraries are different: their stocks are different; some keep one author's books, some keep another author's books, and in different quantities; and their readers' tastes differ according to the special interest of the region in which they live and the quality of the library service in that particular region.
The Government, knowing full well, whatever the Minister may say, how inaccurate this sample is going to be, tell us that they will frequently change the composition of the sample. Very well; your Lordships will observe that it will take 200 years to include once only every point of issue in a sample of 72, and we may suppose that in half that time most authors and their copyrights will be dead. Be that as it may, this hit-or-miss performance must favour the most popular fiction writers, whose novels are widely distributed, but they may not be the people who are really in need of money. Many serious and local authors will either be missed out altogether in the first dozen samples, let us say, or the number of their borrowings will be seriously under-estimated. Justice is sacrificed to expediency in a manner which I hope does not commend itself to your Lordships.
Now I have to say a word about the libraries. The libraries are not looking forward to this sampling procedure. They can see the trouble coming from authors who have been badly treated because they are not included in the first dozen samples—that is 12 years. They also want one or two Amendments made, but I am not sure we should try to amend this Bill. However, I ask your Lordships to understand the feelings of librarians and local authorities. Our public libraries are easily the best in the world. Their buildings, their stocks and, above all, their staff can stand comparison anywhere; and the librarians have every right to be proud of the service which they give to the public and, in consequence, to the writers of books whose works are on their shelves. But we have to act realising that their great success is both an advantage and a disadvantage to authors.
The number of copies of a new book which libraries will buy has become

1013
predictable. Publishers have a good idea when institutional buying will cover the costs of a hard-back edition, which is one big reason why publishers have been able recently to raise the price of hard-back books so much. Given this predictable market, publishers have accepted and are accepting many manuscripts which would otherwise never see the light of day. Library purchases have therefore been of incalculable value to a growing number of authors.
Then comes the disadvantage, however. Once the book is the property of the library, it can be borrowed free of charge. The author has no right to tell the library what to do with its own property, but the author feels that in justice he should be paid something when it is borrowed—and we here agree with that view of the author. That is our problem, because it is a fact that the system of publication, book-selling and book-borrowing, taken as a whole, results in very low rewards for authors of undoubted merit. Looking at their situation in perspective, we see that authors are a section of the self-employed, who in recent years have fared so badly alongside professional and industrial groups. Authors, I think, are usually in that stratum of society which has been pulverised by inflation, by socialist taxation and by organised labour. Our society is not going to remain healthy and creative unless we deliberately discriminate in favour of the self-employed.
Some countries are doing this already, by means of tax reliefs. For authors, we also have the choice of several other methods. First, and by far the simplest thing to do, borrowers could be charged when they take out a book.
Lord DAVIES of LEEK: My Lords, may I interrupt for one second? I find this very hard, remembering my student days and other people in the same situation. The librarians were sometimes so kind to us when, being in the sixth form, we wanted to borrow advanced textbooks, and things like that. If students are to be expected to pay, it will be against all the educational aims of both sides of the House, I should think.
Viscount ECCLES: My Lords, I have had something to do with education, and
1014
I have always supported no charges for borrowing; but if you take that view you are in great difficulty in finding a satisfactory way to help authors. If it were not so, we should have had this Bill or another Bill years ago.
The second thing, which has already been mentioned, is that authors could be paid a bonus on the purchases by libraries of their books. That has the benefit that the booksellers and the publishers could keep the accounts, and that would save the taxpayer a lot of money, That is, as a matter of fact, what the Association of Metropolitan Authorities are now asking us to do. Thirdly, the Government could provide a fund out of which an independent body could make grants to authors.
Lord PAGET of NORTHAMPTON: My Lords, perhaps the noble Viscount would permit me to interrupt him, because I feel it is of interest. If an author does not want a library to lend his book, he does not have to sell it to the library. Equally, he can sell it with conditions. I have a book here with this condition of sale:
"This book is sold subject to the condition it shall not by way of trade or otherwise be lent".
Why should you reward an author for entering into a perfectly free bargain when the person to whom he sells it uses it for the purpose for which it was sold?
Viscount ECCLES: My Lords, I must tell the noble Lord that I have not met many authors who do not want their books to be read, and borrowing means reading. If he has met some, then he has had more experience than I have had.
I was just saying that, in relation to a fund of this kind the public interest is not to have more books—we really have a mass of titles published today—but to have good books. It is quite possible that a fund which helped young authors, and authors whose research takes a very long time, would do a considerable amount of good. Any of those three methods, either singly or in combination, would in my opinion be a lot better than that proposed in this spendthrift Bill. If the Government care about public expenditure—and in present circumstances they must care about public expenditure—they ought

1015
to take this Bill away and bring in another based on a sounder principle, but I fear they are too apprehensive about the coming Election; and I do not suppose that any noble Lord will divide the House on Second Reading. If he did, I would support him in the Lobby.
I do not think the Bill is very easy to amend because we have not got in the Bill those details which the noble Lord, Lord McNair, and other noble Lords spoke about, which are precisely the things which one would want to amend. If, as seems quite possible, the scheme should come back to your Lordships' House in a form in which we must say "Yes" or "No", and if the form of that scheme is as we must envisage it today, then I think your Lordships should throw it out.
Lord KILMARNOCK: My Lords, I made my maiden speech on the Second Reading of Lord Willis' Public Lending Rights Bill almost exactly two years ago, on 15th February, 1977. That, of course, in itself is not a good reason for making another Second Reading speech on the same subject, but during those two years I have joined the "Short Speeches Club" and shall not be detaining your Lordships for very long. My position on the principle of the Bill is quite clear. I am grateful to the Government for taking it back under their wing and for finding time for it. I hope that it will receive a Second Reading this afternoon and pass rapidly through its remaining stages. The Bill, as the noble Lord, Lord Donaldson, has told us, will when it becomes an Act be only the precursor of the scheme which the Secretary of State is enjoined to lay before Parliament under Clause 3(1). Without the scheme, the Act will be a mere husk. The noble Lord, Lord Donaldson, has been good enough to promise us a consultative document and this is the last chance, as I understand it, that we shall have for influencing the draft scheme—which we shall then simply either have to accept or reject.
On these grounds, I do not think it is inappropriate this afternoon to refer briefly to the scheme. The Department of Education and Science commissioned an investigation of the technical and cost aspects which was published in 1975.
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In Appendix D of their report, the technical investigation group described a pilot survey for the loan-based scheme. Using a broad sample of authors, this yielded a top payment per £1 million available for distribution of £1,261. This sum would have gone to an author coming under the heading "Adult fiction, Popular, Current". The highest score under books for children stood at £385 and, under "Adult, non-fiction", at £113. These figures might have given some of the answers that the noble Lord, Lord Hawke, was seeking; but I see he is not in his place.
In its final report in paragraph 16 the technical investigation group summed up as follows:
"A small proportion of authors would be entitled to relatively large payments and a relatively large share of the amount available for distribution, a large proportion of authors would receive modest payments and another large proportion would have small or zero entitlements".
A good deal of play was made in another place with the absurdity of paying out over £1,000 to authors who did not need it and a derisory £2 or £3 to others to whom such minute sums would make no difference at all. But there are remedies for this.
The report tells us in paragraph 63 that there is no technical difficulty in limiting the maximum entitlement; and the prescribed maximum entitlement could be altered at will. If a best-selling author gets £1,000 he will pay United Kingdom tax on it at a very high rate—so that, to this extent, the scheme would be partly self-financing—or he will export it to a tax haven. Surely it cannot be the Government's intention to use the fund for either of these purposes! We are also told in paragraph 64:
"The cost of making very small payments could exceed the costs of the payment itself".
This, I think, was one of the points touched on by the noble Viscount, Lord Eccles.
I said that there were remedies. The first type is voluntary. In the Second Reading debate in another place on 10th November last year, Mr. Clement Freud suggested that those—like himself—who wrote books that sold might consider returning their PLR entitlement to the fund for the encouragement of new authors. I would reciprocate from the

1017
other end of the scale. If I became entitled to £2 or £3 for the couple of books of mine that are in print, I would prefer to plough back my entitlement into the fund so that somebody else might get enough to buy a much-needed reference book or even a new typewriter or a camera. Authors need tools for their trade.
But, my Lords, there is an even better remedy which is that this principle should be embodied in the scheme. I, therefore, feel that there should be a lower limit below which the Registrar would not be required to make payments. It could be £5, it could be £10. I think it should be somewhere in that region. It is partly a question of administrative convenience. And I do not think that he should be required to carry such sums forward; they should be ploughed back. Also it is my firm conviction that there should be an upper limit. So long as the whole fund is limited to £2 million—from which at least £600,000 (and the noble Viscount, Lord Eccles, has made a higher calculation) must, it seems, be deducted for operational costs—I believe that £500 is the correct figure for the upper limit. Of course, it can be argued that inflation is likely to make serious inroads into such a sum by the time it becomes payable. But I am still convinced that the aim must be to benefit the hard-working author in the middle rank, so far as earnings go, and not to fritter away money where it is surplus to need or where the sums are too small to be worth distributing. The upper limits can always be increased if experience shows this to be desirable and the fund allows. It will be much more difficult to reduce the maximum once it has been set.
With a fund of the size that we are talking about, entitlement should be contained within a lower limit of £5 or £10 and an upper limit of £500. I urge the Government to take these considerations very seriously into account when drafting their scheme. I conclude by stressing that nothing I have said is at variance with the Bill as drafted and I hope that your Lordships will give it a Second Reading this afternoon.
4.48 p.m.
Lord HUTCHINSON of LULLING-TON: My Lords, I think I am the first
1018
noble Lord to take part in this debate who cannot find an interest to declare. In my humble opinion, this is an historic day not only for authors, not only for literature, but also for the noble Lord, the Minister. Eight previous Bills have foundered in the rough seas of hostility or the calm eddies of calculated in-difference. Somehow my noble friend the Minister for the Arts has launched this Bill, has kept it afloat; and now it is for noble Lords to see it safely into harbour. As an old sailor, I appreciate the special, sensitive skill with which the Minister has carried out this operation. Some of his predecessors revealed certain obtuse "land-lubbernesses" in conducting previous attempts to get this Bill on to the Statute Book—and perhaps that was the cause of some of them going on the rocks. But to enshrine the principle of public lending rights in legislation is, in my opinion, to erect a milestone on the road to Society's recognition of the role of the writer in its midst. It is (is it not?) an extraordinary fact that for over 100 years local authorities have recognised and accepted the obligation to provide literature free to the ratepayers. The free library service has provided an outlet for thousands of books of every kind and the free library service is, indeed, the manifestation of that part of the chartered duty of the Arts Council of Great Britain to increase the accessibility of the arts to the public.
Yet, in the second part of that duty, to develop the understanding and the practice of the arts, there the support of local authorities, with a very few notable exceptions, is still so weak as to be blocking the explosion in the arts which could now happen any day and which could provide the ordinary ratepayer with the excitement and the pleasures that the arts can provide. Perhaps the passage of this Bill will go some way to convincing local authorities that if it was not for the genius and talents of the author—talents and genius unique to him or her—there would be no volumes on the shelves of the libraries which they administer.
The noble Lord, Lord Redcliffe-Maud, in his report in 1976, pointed out that the sum spent on the free library service exceeded the total central Government support for the arts. Yet it has taken a

1019
quarter of a century of unremitting effort for central Government to recognise and acknowledge the simple justice of the author's right to a modest financial reward for his own creation on which the whole of the service depends. The opposition to this Bill has come hitherto mostly from the libraries and from the AMA at their behest.
Speaking for myself, what was said this afternoon in opposition by the noble Earl, Lord Gowrie, and the noble Viscount, Lord Eccles, seemed to me—if I may use the phrase—somewhat jaundiced and ungenerous. Surely, here is at last an attempt, as has already been pointed out, to begin to give some recognition to the author. The £2 million of course in the future can always be increased. Does it really matter that the rewards will be reasonably low, that no doubt the greater rewards will go to the more successful writers? What does it matter if the principle can be established? Surely one will acquit the Minister and the Government of having brought this Bill in at this moment because of their fear that the authors might not be on their side at a General Election. If that is really so, then indeed it is a compliment to the power of the written word, the power and position that authors now hold in society—and I must say that it has given me a great deal of pleasure to see those views coming from the other side of this House.
The importance of this Bill is not only as an act of justice to authors, but public recognition of the fact that in the patronage of the arts, whether it is the great national companies or whether it is the arts centres, orchestras, theatres or galleries, that it is ultimately the artist who underpins the whole operation. In welcoming this Bill, I should like to pay tribute to those who have led this battle over the past 25 years: John Brophy, Alan Herbert—who has already been mentioned—Brigid Brophy, Maureen Duffy, my noble friend Lord Willis, the noble Lord, Lord Goodman, and, in another place, Mr. Norman St. John Stevas and also, in a modest way, to the Arts Council of Great Britain. It is a great day, as I said when I opened these few words that I wish to contribute to this debate, for literature, and it is a great day, in my submission, for the
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Minister who is the first Minister, we all hope, successfully to bring a Public Lending Right Bill on to the Statute Book.
4.55 p.m.
Lord DIGBY: My Lords, I speak with some slight knowledge of libraries as I was a chairman of a county councillibraries committee for some years, and I am now a member of the committee of the Association of County Councils which deals with libraries. They are the people who will have to operate this scheme. I must tell you, my Lords, the Association of County Councils and the librarians do, as you have heard already, have some reservations about the scheme, particularly about the manpower requirement and the costs. I know that we are assured that the Exchequer will reimburse all costs, but the country are still paying these and we want to get good value for money.
This must be the fourth Public Lending Right Bill to be presented to Parliament. I must congratulate the sponsors on their tenacity. They have obviously learnt the lesson: "If at first you don't succeed try, try again." That is a principle we forget too much in our modern, compassionate world; so concerned are we with the under-privileged that we often forget to teach them how to help themselves. The authors have certainly fought. It is lucky for the authors that the present minority Government, being incapable of passing major legislation, has time for many less controversial Bills, but this is the luck that rewards determination. However, we must look at the reasons why this measure has had such a difficult passage when a large majority of both Houses are agreed that it is desirable.
Of course the reason is that this Bill provides so little for authors for so much cost. In the last Bill the taxpayers were finding £1 million and the authors getting £600,000. This Bill doubles the cost to the taxpayer and the authors will get £1,400,000. That is better for the authors but is not so good for the taxpayers. But the total expenses are 30 per cent.—
Lord DONALDSON of KINGS-BRIDGE: My Lords, just for accuracy, it did not double the cost to the taxpayers, it put it up by 50 per cent., from £400,000 to £600,000.
Lord DIGBY: My Lords, that is the cost of the administration. The total cost to the taxpayer is £2 million rather than £1 million. That is what I meant and I think is what the Chancellor of the Exchequer will understand. What I was going to say was that if I had to subscribe to a charity where 30 per cent. was going on expenses, I would think very hard and I am wondering whether the taxpayers feel the same. Cost-effectiveness must be the key to considering this Bill. The ACC in the past had advocated a purchase-based scheme rather than a loan-based one. This idea was demolished by the working party which assured us that it would cost just as much.
Therefore the Association have dropped this plan but we have been investigating a sales-based scheme. We are suggesting a scheme based on the records of the small number of firms which sell books mainly to public libraries. By concentrating data collection from those few points of sale which account for the major sales to the library market, this scheme would be the fairest method yet devised of rewarding authors and the most economic in administrative costs. It would also bring in the multiple use of reference works. It could easily be done in this way. The firms concerned are very large and in the main computerised. Therefore the information required could be obtained very cheaply. The noble Lord, Lord Donaldson of Kingsbridge, suggested that a sales-based scheme would not help authors of existing books. If books are lent a lot they have to be replaced and therefore existing authors would benefit that way. Records are there and there is no reason why these matters should not be backdated to the date of the passing of the Bill rather than the date of the scheme to bring in books that have been published recently. I gather from the tone of the House that they are hoping there will not be Amendments at Committee stage, but I hope to table Amendments on these lines in order to elaborate what could be done in the hope that, even at this late hour, we could get a rather cheaper way of administering this scheme.
Of course, the present scheme is not intended to deal with reference books: that is because of expediency and due to the difficulty of obtaining data. It is
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hardly fair, but when this Bill reaches the Statute Book I am sure there will be pressures to include reference libraries. It will be very difficult to resist them and the case made would be fair: but if they were included it would of course, further increase the costs and dilute the rewards.
I should like to turn now to another aspect of the Bill. In another place there was much discussion about payment of PLR to authors who reside abroad in order to escape our penal taxation, or perhaps even to get away from the sort of winter we are having at the moment. The Government indicated they would give further thought to this, and I note that the noble Lord, Lord Donaldson, is still thinking. I must confess I am in two minds over this. It would be very unfair to discriminate, but it is quite likely that large amounts will go to authors whose incomes are already so large that they have great reasons to go to some sunny tax haven. I note that the noble Lord, Lord Snow, has resisted that temptation, but I think his reward is in the privilege of living in this country, which despite all our problems is still the most civilised in the world, rather than in any gain from this Bill. Certainly if I am sensible I shall in future swell the incomes of authors by borrowing more books from libraries rather than reading all the stuff provided for us by the Printed Paper Office.
5.3 p.m.
Baroness LEE of ASHERIDGE: My Lords, this is a ridiculous Bill, and from the general tenor of the debate in this House I think that the great majority of Members on all sides agree with me that it is a ridiculous Bill. Nevertheless, I shall vote for it and I was glad to hear that Her Majesty's Opposition will not move Amendments; so we can look forward to a poor little mouse of a Bill going back to the other place unamended because, small though it is, it is a flag in the wind—such a very small flag—and it does mean that we are beginning to establish certain very essential principles.
It is 15 years after the first occasion on which I had to look at the possibility of authors' rights. At that time, or shortly afterwards, the noble Lord, Lord Goodman, was chairman of the Arts Council and I was Minister for the Arts. In the teeth of total opposition from the

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senior staff in the Ministry of Education and Science, we worked out a scheme and we took that scheme to our Ministers, particularly to the Treasury Ministers. But it began with asking the Government to contribute £5 million—not £1 million or £2 million—and, bearing in mind all those changing money values, if it is assumed that for administration purposes the present scheme will cost £600,000, then I think I can safely say that about 15 years ago the administrative cost would have been about a quarter of a million. That would have been one-twentieth of the money; so the whole thing would have begun to be accepted. But, alas! we failed to convince the Chancellor of the Exchequer at the time that it was really worth while finding that £5 million, although he himself was an author—and I may say I get a useful little cheque now and again through the post, but nobody knew very much about that.
There it is. After all those years we are bringing in a scheme which we know will do practically nothing for the great majority of authors and yet, in spite of that, it is worth bringing it in so that Governments of the future will have something to amend and something to build upon. I cannot understand anyone who imagines that those of us who are in favour of royalties for authors are in any way hostile to libraries. Ultimately, if I thought that by passing this Bill, or future amended Bills which would be more substantial, I would be in any way injuring libraries, I would be against it. Our wonderful libraries not only supply books free of charge but, in my experience, when you are trying to build up an interest in the arts locally, your best friend in most constituencies—and certainly in my old constituency—would be the libraries. They were willing to take on amateur painting shows, concerts and photographic shows. When we had nowhere else to go we had friendship from our libraries and the librarians in furthering the broader work of the arts.
I would just say this, if I may, to the noble Viscount, Lord Eccles. I hope he will be as unsuccessful in the future in pressing for charges for books borrowed from libraries as he has been in the past in pressing for charges to museums and galleries. We have a lot of problems in this country and lot of anxieties, but we
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have also a great deal to be proud of. One thing we can be immensely proud of is that people can go into our great museums and galleries free of charge and that they can go into our great libraries free of charge. If we are concerned to see some justice done to others—and I am not going into all this business of cutting off at the top end and building up at the bottom end, because there will be many more occasions when those matters will be discussed—and if we are concerned about the quality of life in this country, let us please hold on to those good things that we have done and, however trivial this Bill may be, for God's sake! let it pass.
5.8 p.m.
Lord KILBRACKEN: My Lords, in rising to give the Bill a welcome which is about as warm as that of my noble friend who has just sat down, I wish, like so many other noble Lords, to declare an interest in having published several books which are all out of print. I shall be publishing another in September: I will not name it or the publisher. I certainly hope that I may benefit to the munificent extent of the average of £12 a year, less 10 per cent. for my literary agent, for the rest of my life, unless the scheme to be announced excludes those who are domiciled outside the United Kingdom—in which case I shall have no interest to declare.
My main objection to the Bill is that which has already been hinted at, both by the noble Viscount, Lord Eccles, and by the noble Lord, Lord McNair—that so many of the interesting details that we should like to know about are not included in the Bill. It was just the same when my noble friend Lord Donaldson was at Stormont, and was introducing Bills giving wide powers to the Secretary of State which we knew nothing about, but we had to vote on the Bills just the same. It is the same here today, because we have a scheme that is to be prepared by the Secretary of State and is to come before this House and another place, and, although we can say whether or not we like it, we cannot amend it and we cannot go into detail on it. What happens if we do not like it? We can chuck it out.
Lord DONALDSON of KINGS-BRIDGE: My Lords, may I make the position clear? I have said repeatedly that there will be a consultation document which will not be a scheme; it will be a document on which a scheme is to be based. The consultation document can be altered in any way that anybody likes, providing that the Government can be convinced that it is correct. The final scheme cannot be altered when it comes to Parliament—it can be only accepted or rejected—but the chance to deal with the consultation document is an absolutely real one.
Lord KILBRACKEN: My Lords, I am grateful to my noble friend for that intervention. I was, of course, going by Clause 3(2) which states:
"If the draft scheme is approved by a resolution of each House, the Secretary of State shall bring the scheme into force … by means of an order in a statutory instrument".
I am merely saying that it will be very difficult for us to bring about any changes, as we could by amending a Bill in Committee, if there are certain features of the scheme or the draft that we do not like.
For example, under Clause 1(2), the scheme has to determine the classes, descriptions and categories of books in respect of which public lending right is to subsist. We know that, unfortunately, reference books cannot be included, because such books are not normally taken out. But I, for one, cannot see what other books that are borrowed are likely to be excluded under this Bill. It seems to me that any book that is borrowed from a lending library ought to qualify for the right.
Then, right through the debates in another place, it was stated as more or less an accepted fact that there is to be a cut-out point at about £1,000 and that no author will receive more than that amount. That is something that is to be in the scheme, but I agree with the noble Lord, Lord Kilmarnock, that a lower ceiling than that would be preferable, because what matters is to help a struggling author who needs some addition to his income. I worked it out that an author will get one-quarter of a penny each time one of his books is taken out from a public library. But anybody who, on that basis, earns £1,000 or more from the public lending right is already a very rich author;
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85 per cent. of what he gets will go in tax anyway, and he does not need it. I should therefore like to see a much lower ceiling, so that more of the £1.4 million is available to authors who are not already extremely well-off.
There is only one other point that I want to make, and that is about the provision that the money from the public lending right should continue to be paid to the heirs and assigns of dead authors for a period of 50 years after their death. This will not have any effect at present, because authors who are already dead cannot go on the register. This is very unfortunate for a recently dead author, because if he had lived for another year he would have been able to get on to the register and there would have been some benefit from that for the next 50 years.
However, it will, of course, increasingly affect the amount of money that is due to living authors, and in another place in Committee the Government seemed at one point to give the impression that they were prepared to cut this period to 20 years, but, in the event, the Amendment in question never saw the light of day. So long as it remains at 50 years, this will surely mean that in 30 or 40 years' time a very sizeable percentage of whatever sum the £2 million has grown to by then will be going to sons or grandsons of deceased authors, who will have done nothing to earn that money. So I think that it is very much preferable that deceased authors should be cut out altogether, in order that poor, young, living authors can benefit to the greatest possible extent.
5.16 p.m.
Lord HALE: My Lords, I did not understand the observation of the noble Earl, Lord Gowrie, whose speech I heard with respect and regard, when he said that the best laid schemes of mice and men were locked up in the Cabinet Office, because surely the reason for that is the simple one that they do not go out to play. However, I think that I understood clearly his next observation, which I believe was to the effect that this Bill is here in its hollow shape, without any filling. Many conferences have taken place over the years, and I was concerned with some of the earlier ones when I could afford to pay my subscription to literary societies and others.

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For years now, I have not been to a place of entertainment; but I still have books, and so long as I have books life is worth living. I would therefore say that it appears to me that the best help I can give to those who worked so long on this Bill is to keep my mouth shut, and not voice some of the apprehensions which I have. That I propose to do. It may be, if this Bill get through, that some further questions on museums, books and libraries will occupy the Minister's attention, if he is still there, in the earliest practicable future.
5.18 p.m.
Viscount AMORY: My Lords, I have never written a book and I have no intention of ever writing one. Therefore, I feel that I have no beneficial interest to declare. Indeed, when I visit bookshops, which I frequently do in search of improving literature, the volume of what I would judge to be second or third-rate current products there exposed for sale makes me sometimes conclude that there may be a production surplus of books today, rather like the mountains of butter and milk in the EEC.
I am intervening for only a moment in a debate which is not quite up my street, because I understand that the two associations representing the counties, the Association of County Councils and the Association of Metropolitan Authorities, which have had the responsibility of administering by far the greater proportion of lending libraries in the country, are not happy with the present Bill, and I think that their views should be on record. I am sure that they do not dispute the aim of ensuring a fairer remuneration for authors whose works are read and used by the public. It is the method which has been chosen about which they have serious doubts. Two of their objections, to which I wish to refer very briefly, are, first, their belief that the administration of the loan scheme contained in this Bill will prove needlessly expensive to public funds. Too high a proportion of the funds allotted are likely to be consumed in administration. I think my noble friend Lord Eccles dealt with that point. Of course, the noble Lord, Lord Donaldson of Kingsbridge, gave us some estimates. My recollection, however, is that estimates which are made at the time that Bills are
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introduced are always too low, as a result of inflation or the growth of administration. I believe that one must take those figures with a pinch of salt.
The Association believe that the alternative of a sales tax scheme, which they have put to the Minister, is much to be preferred. There is no doubt, from what the noble Lord, Lord Donaldson of Kingsbridge, has said, that he does not agree. He referred to one drawback, which I acknowledge must be a drawback of such a scheme: it cannot deal with existing stocks of books in libraries. I am told that the turnover of books in public libraries is much faster than I had thought. Although this would be a temporary drawback, it would soon be cleared by the effluxion of time.
Secondly, the Association believe that the proposal to exclude reference books—as the noble Lord, Lord Donaldson of Kingsbridge, made clear, that means books which are not lent but which are much used by the public—is entirely unfair to authors and should be corrected. They hold that a sales based scheme would deal with both of these objections and would, as I have said, be considerably cheaper to administer. They believe that it would be fairer to authors because it would include much-used books in reference libraries.
Your Lordships will agree, I think, that the considered views of these authorities who have the main responsibility for running public libraries should carry weight and that they merit the fullest consideration. The reception of this Bill seems to me to be marked by an astonishing lack of enthusiasm. The general attitude seems to be one of fatigue with the issue and a feeling that the present Bill had better be accepted, for the very little that it is worth. If that is the general attitude, I suggest that it does not augur well for the future success of the Bill. My Lords, if I continue any longer, I may develop an interest in this subject which, in the course of time, may lead me to write a book. This is an eventuality which I know your Lordships would unite unanimously in deploring.
5.23 p.m.
Lady KINLOSS: My Lords, yet once again I welcome a Public Lending Right Bill, but hope that this time it may have a

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speedy passage through your Lordships' House and receive the Royal Assent as soon as possible. We have so frequently traversed the matter of a Public Lending Right Bill that there really is very little that one can usefully say. It is cheering to know that it has the blessing not only of the Government but also of the Opposition.
I notice with interest that Clause 3(4)(b) says:
"includes any such collection (of books) which is taken about from place to place".
I take it that the reference is to the admirable county mobile libraries, of which one stops 200 yards from my house every week. Perhaps the Minister could explain how it is proposed to keep an account of the loans, because the computer counting system that one finds in ordinary public libraries is not easily portable and there is only limited space in the mobile vans. Again, these mobile libraries have shelves for reference books, from which I have been given to understand the public are able to borrow. So we reach the curious anomaly that a reference book may be loaned out of a mobile library, whereas it cannot be borrowed, shall I say, from a static one. Thus, under the proposed Bill the reference authors—and I must declare an interest, that my husband is one—may benefit from loans from mobile libraries but not from the ordinary public lending libraries.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I wonder whether I may be allowed to make it clear that the definition which I gave of a reference book is "a book which is not lent out".
Lady KINLOSS: My Lords, could the Minister say what is the position regarding a reference book that is lent out from a mobile library?
Lord DONALDSON of KINGS-BRIDGE: My Lords, if it is lent out it is not a reference book.
Lady KINLOSS: My Lords, all right. I accept that it is not a reference book.
Lord DONALDSON of KINGS-BRIDGE: My Lords, that was my definition, and I stick to it.
Lady KINLOSS: My Lords, I shall accept it, but I do not think that it is practical to include encyclopaedias or books of multiple authorship beyond perhaps two authors. However, a great many reference books are by single authors, and I hope that efforts will continue to be made to find some way around the present difficulties. Would it not be possible, when a reference book is purchased by a public library, to make a single, once-and-for-all payment to the author? Alternatively, presumably a lesser sum could be paid annually for a limited period of, say, 10 years. Clause 3(1) says that:
"As soon as may be after this Act comes into force, the Secretary of State shall prepare the draft of a scheme for its purposes…".
Can the Minister who is to reply give any indication of how soon "soon" may be? Is it to be like the plumstones one counted as a child: This year, next year, some time—but I shall avoid saying "never" by taking an extra plum! I can only hope that this Bill will be brought into effect with as little delay as possible.
5.27 p.m.
Lord WILLIS: My Lords, I, too, like the noble Lord, Lord Snow, felt a certain glow as I came along this afternoon for the Second Reading debate on this long-running saga. However, having listened to some of the speeches which have been made I must say that I feel rather like the gentleman who went out to dinner. When he came home his friend asked him what it was like and he said, "Well, if the soup had been as warm as the white wine, and the white wine had been as old as the chicken, and the chicken had been as tender as the waitress, and the waitress had been as willing as my hostess, I should have had a good time". Having listened to the speeches, I feel rather like that! A little of the enthusiasm that I felt for what, I agree with my noble friend Lord Hutchinson, is a great occasion has evaporated. Indeed, going back over the many years of this debate—not in this House particularly but in other places outside Parliament—and having listened to some of the speeches which have been made against the Bill and against the proposal of a public lending right, some of the people who have spoken seem to me to bear about the same relationship to British literature as the

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Boston Strangler does to door-to-door salesmanship.
It seems to me that many of the points of opposition to this Bill centre around one thing. Therefore, I want to anchor my argument on that one thing, and that one thing alone. First, I must declare an interest as an author of books in libraries. The anchor of my argument is that authors are not asking for handouts. Authors are not asking for charity. The noble Lord, Lord Snow, spoke about prizes and grants as an alternative. I know that these suggestions have come up from time to time from various directions, but we are not looking for those. If some great publising or newspaper firm wants to put up a prize for authorship in a certain area, yes, we would welcome it, but that has got nothing to do with the principle of this Bill.
We are simply saying that a public library consists of a building, that it consists of the people who operate that public library, that it consists of shelves of books and that at present we pay everybody, except the people who supply the shelves of books. That is the basic anchor of the argument. It does not matter, therefore, whether an author is rich or poor, whether he is part-time or full-time, whether he is much borrowed or whether he is little borrowed. So long as the country wants a free public library system it must pay for it, and it must pay everybody for it. It must therefore pay the authors. We are not asking for help. We are asking, indeed, simply for justice.
The Bill as at present phrased will of course benefit those authors who are more successful than others. We hope that in the scheme there will be an upper limit and indeed I believe there should be one—but even that does not matter. If an author's book is only borrowed two or three times and he only gets a fiver or £1 out of this scheme, that is not the point and it should not worry Parliament. The point is that he is being paid for the use of his book and if another author's book is borrowed 500 times and therefore he gets a great deal more, that is perfectly equitable and just. Nobody should worry about it and that is the central point. If your Lordships and the country can grasp that, then most of the
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arguments of opposition fall by the wayside.
It may be that in future years the amount may have to be increased to account for inflation. It may be that in future years various other points may have to be altered. Certainly, I hope that we shall come back to the subject of reference books and do something about them and it may be that in relation to reference books it will be necessary, as the noble Lady, Lady Kinloss, said, to have a slightly different kind of scheme—a purchase scheme for reference books. I do not know, but certainly modern technology may help us to solve the problems with which we are confronted at the moment in dealing with reference books. But because we cannot deal with reference books and because we cannot deal with certain other things like gramophone records and cassettes, it does not mean that we should hold back in giving justice in an area where we can solve the problem. Modern technology tells us that we can solve the problem in relation to books that are borrowed and therefore I think we should seize the opportunity with both hands.
The arguments seem to me to be so transparently simple that I really cannot see the line of the opposition. If you were to apply it to cars rather than to books you would of course have the manufacturers of motor cars up in arms, but for 100 years or more the authors of this country have subsidised the free public library system and all the talk about giving the poor authors assistance has nothing to do with it. We do not ask for that. If an author's books do not sell he will not make any money. That is the law of life and that is the law of literature and I am afraid that is how it works. We are not in the market for handouts and grants and I hope I have said enough to put that over to your Lordships.
The other argument that has been raised quite frequently is the argument that libraries actually help authors. There is a great deal in this as I have said in previous debates. It is true that the purchase by libraries of certain books enables publishers to publish those books and there is a certain gain to authors in that area. But let us not exaggerate it. The existence of a first-class free

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public lending library system in this country has meant that fewer people buy books than would normally be the case. Take, for instance, the example of West Germany where it is undoubtedly true that they have a much smaller public library system than we have in this country and they have many times more bookshops than we have. It is true that you can go for vast distances in this country without finding a bookshop. Bookshops find it difficult to exist because of the very perfection of our free lending library system. This must have an effect on sales.
No one has done any active work on this but one little sample came to us last week from Sheffield where, quite off his own bat, a professor went out and questioned 46 people coming out of the public library. The figures were rather like this: out of those 46 people, not one single person ever bought a hard-backed book—not one—but they borrowed them frequently and, of the 46 people, 21 bought up to—but not more than—five paperbacks every year. I am not pretending to your Lordships that that is any kind of authoritative figure but it is a sample of the way the wind blows. I am quite sure that there are thousands of people in this country who read hardbacks five, six or 10 times a year but who never buy one. That is a loss to authors and we have to make it up somehow in the measures which are being introduced in this Bill.
Again, the rather hoary argument has been raised that the loan system suggested in this Bill is too expensive to administer. We will admit that it is expensive to administer but it is only expensive in relation to the total amount—£600,000 out of £2 million. If in fact the figure were £10 million the expenses of administration would be little less than £600,000. It is a question of the relationship between the total amount of money that is made available by central Government. There would not be a substantial increase in administration costs if the total amount went up. But we are not asking for the total amount to go up at this moment; we are simply pointing out that the estimate of £600,000 is in a sense a relative figure. Certainly, it is true that the Ministry set up a technical investigation group and other investigations were made and it was quite clear that the
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loan sampling scheme that we suggested and which has been incorporated in this Bill is as cheap, if not cheaper than any other comparable method of paying authors.
That is all I really want to say. I have said it all on previous occasions in various debates and I do not want to repeat myself. I join with those noble Lords who have said, "Let us get it through without amendment" so that this time at least we can say that the long saga has ended.
5.37 p.m.
Lord PAGET of NORTHAMPTON: My Lords, it has always appeared to me that this Bill is based on a misconception—an idea about a public lending right which does not exist and never has existed; the idea that by passing this Bill we provide authors with a new right that they did not have before. We do nothing of the sort; in fact we limit their existing rights. The right of an author is a property right conveyed upon him by the copyright Acts. He is protected in his property; he is protected from reproduction and he can put such terms as he wishes upon his licence to reproduce his work. I have here a book published by Fontana, The Life of Engels. The author has put this condition on the book; it is printed on the flyleaf:
"Conditions of sale. This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent without the publishers' prior consent".
Anybody who does not want his books to be lent can put on that condition. If he sells to libraries he sells because he wants his book to be lent and he thinks that it will pay him if his book is lent. Therefore, why should public funds be introduced to finance a contract which he is free to make or not to make, and which he deems to be to his advantage or he does not make it at all?
The second aspect which is put forward is (maybe unkindly) described as the charitable one: "If it is not right, well the author is a poor, hard-done-by chap who does not get a living wage and we ought to do something for him." I wholly disagree with that. I cannot see where the right to a living wage comes in for an artist. I would venture to say that probably most of the great books have not been written by full-time writers and have

1035
been written with little idea of reward. The same goes for painting. The vast majority of paintings are produced by amateurs who are delighted if their pictures get selected for an exhibition and who certainly do not feel they have a secrecy right and that payment should be made to them by everybody who goes to the exhibition.
I believe that exactly the same applies to writing. The vast majority of books are produced by part-time writers who get great pleasure from what they do. May I declare an interest? I have written a couple of books on which I occasionally get a royalty. I have got another one coming out next month. I have experienced the joy of getting a book accepted and seeing it in print. That is the pleasure one gets. It probably would not be accepted and probably would not be in print but for the lending libraries. The lending libraries give a certain prospect of sale which the publisher can rely on that enables him to publish far more books than he would otherwise, and that enables us very much lesser writers to have the joy of seeing our work in print. Really, to go into all this nonsense in order to make life more difficult for libraries—which all the libraries tell me it certainly will—does not seem to me to make sense.
If we want to help authors, I think there is a very good case for having a fund which can provide money to enable authors with a really worthwhile idea to carry out a research programme. If we have £2 million which we are trying to throw about, £2 million available which we want to get rid of in a charitable way, I think that could be a very useful way to use it. But to have it divided up almost entirely among the authors who require it least in a form in which the great majority of it will probably come back in taxation, at an administrative cost of £600,000, seems to me quite ludicrous. I believe this Bill has resulted from a meandering obsession based on a quite non-realistic view of rights which has been held for far too long. I would like to see it stopped, and if anybody does divide against this Second Reading I will certainly be in their Lobby.
5.43 p.m.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I think I must
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begin by saying that a great friend of mine, Sir George Solti, who is a Hungarian, once said to me, "If you have a Hungarian friend you require no enemies". I must say the support from the Front Bench opposite was very Hungarian this afternoon. I hope and think that the right honourable gentleman Mr. St. John-Stevas, who spoke so ably, and incidentally extremely wittily, in favour of this Bill at Second Reading, will be shocked by what the noble Earl, Lord Gowrie, had to say. It was the most grudging support I have ever received on anything I have ever been connected with; but it was support, and for that I am grateful. I hope very much that this rather curmudgeonly lead will not be followed by the noble Earl's colleagues. However, there is no ill-feeling in this.
There is one point which was made very well by my noble friend Lord Willis, which he wants to be specifically corrected, which is the suggestion that you can help people more in other ways. We would like to repeat that the objective of this Bill is not to ask for charity; this is why we call it a right. The noble Lords, Lord McNair and Lord Snow, spoke so agree-ably for me and I agreed so much with what they had to say that I will not comment on it. I suppose I got the greatest pleasure from the support of my noble friend Lady Lee of Asheridge, who, with the noble Lord, Lord Goodman, did the first run here and on terms which were both to me and to most of us more acceptable. We have failed to bring them into this Bill; the terms are less good. But it was a great help to me to feel that she and her colleague, who came here for a few minutes, were still behind us even in the form of this Bill, which we know not to be entirely satisfactory. My noble friend Lord Hutchinson said it will be a great day for us in the Department. The noble Lord, Lord Kilmarnock, said much the same, and made a suggestion about the top cut-out price, which was followed by my noble friend Lord Kilbracken. So much for my supporters.
There have only been three critics of importance, I think. One was the noble Viscount. Lord Eccles, who is always interesting but sometimes wrong. The second was the noble Lord, Lord Paget, who is sometimes interesting, and I was going to say always wrong; but I will not

1037
go so far as to say that, but certainly he is hopelessly wrong in this case. Then there were the local authority critics, the noble Viscount, Lord Amory, and the noble Lord, Lord Digby, who I will deal with in a minute.
First of all, I put a point for the noble Viscount, Lord Eccles. He seemed to think that our statistics were unsound. I do not know where he got this idea from; it is not true at all, It has been the most careful scheme. It has a technical name which is a "random stratified sample". The chairman of the group was a professional statistician and the margins of error in the sample are discussed in detail in the report which he put in. I have not got it with me, so I cannot quote it, but if the noble Viscount is interested I can let him have it. It is a perfectly respectable statistical sample which any agency anywhere would be perfectly content to use.
The noble Lord, Lord Paget, takes a point of view which has been taken all through history by a number of people interested in the arts. It has always been, I think, absurdly wrong. But the idea is that money has nothing to do with this, that people who are any good will be any good whether you pay them or not. And there is some truth in this. You cannot stop great talent by not rewarding it. But you can create in-justice, and that is what we are trying to avoid. I do not think you would have had anything like so many volumes from Proust if there had never been any question of money. I do not think either Beethoven or Mozart would have written as much music if they had not had the stimulus of wanting the cash; and in Beethoven's case wanting it very badly and in rather a hurry. To me the whole conception is so completely wide of the facts of life that I shall not go on with the discussion. The noble Lord will forgive me for disagreeing, which we have often done before and look forward to doing again.
The local authority argument is, of course, a more difficult one to deal with. The local authorities, prompted by their librarians—and not by 100 per cent. of their librarians by a long chalk; there are a certain number of librarians who do not take this view—have been convinced that
1038
this thing is going to be a nuisance to them and they have been looking at simpler ways to do it. They have come up with a way that has a certain plausibility. I looked at this scheme very carefully when they first told me about it; I put my staff on to it and discussed it with a lot of different people. We came to the conclusion that the sales-based scheme was not as good as the scheme we are putting forward. They both have a number of inconsistencies, but, we thought that, on the whole, ours was the better.
There was an additional reason why ours was the better; namely, that that was what the authors were demanding. The whole of this movement has come from the authors themselves. Since A. P. Herbert—to whom the noble Lord, Lord Snow, referred—they have been saying all the time that they want to be paid each time their book is used. The Government felt that if a scheme which would do that could be produced, a scheme which was at least as good as any other, we should try to give it to them. If the noble Lord wants me to go into further detail I shall but, in fact, I have written about this again and again to local authorities and, sooner or later, somebody must make up their mind. I have made up mine as regards this particular matter: I think that our scheme is better. If the noble Lord wants a long letter explaining exactly why I take that view I shall give it to him, but I shall not go through it here this evening.
We have had a very useful debate. The noble Lady, Lady Kinloss, raised a matter to which I had already referred in my opening remarks. We have always said that if we could find a way which was not too expensive, of honouring the writers of reference books, and indeed joint authors, with the funds which we thought we were going to have to distribute, we would do so. That offer still stands. I think that there are approximately a couple of years in which we can look at the matter before there is any very serious chance of this beginning to roll.
I am full of hope that the majority of your Lordships who have supported me so fully will carry the day in Committee, and if that happens then we shall have the Bill. Let us hope that after all this time we get it.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

COUNTRYSIDE (AMENDMENT) (SCOTLAND) BILL [H.L.]
5.53 p.m.
Lord HUGHES: My Lords, I beg to move that this Bill be now read a second time. The Bill is short. I believe that it is uncontroversial and it makes modest improvements to the Countryside (Scotland) Act which has remained virtually unamended since its enactment 12 years ago. That gives me a certain amount of pleasure because I had the responsibility of taking the original Act through your Lordships' House in 1967. The Bill does not make all the changes to the Countryside (Scotland) Act that might be desirable at present. As befits a measure introduced as a Private Member's Bill, it is confined to those provisions which are known to enjoy general support north of the Border. There may well be others which should be introduced, but I do not know whether they would be equally uncontroversial and, in any case, there has not been consultation about them in Scotland.
The contents of this Bill can, I think, be welcomed by all interests and will make a worthwhile contribution to the preservation and enjoyment of the Scottish countryside. Your Lordships will notice that the Bill is largely taken up with public paths and public rights of way. Those have an increasing significance not only in enabling citizens to get from one point to another in an unobstructed fashion, but also for wider leisure and recreation purposes.
The legal concepts are a little tricky, but a public path established by statutory process under the 1967 Act, is a physical entity, whereas a right of way is what it purports to be—a right of passage. Rights of way can be established if certain conditions are satisfied and they may also go out of use. There is a history of celebrated court cases in which the rights of the citizen became gradually clarified and there is now little doubt as to the nature of the facts which must be established before a right of way is recognised.
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The Scottish public owes a debt to the Scottish Rights of Way Society Limited which has been active in this area for many years. However, it does not follow that, because the concept of the right of way is clearly established, nothing more needs to be done to promote its enjoyment by the public. In Scotland, unlike England and Wales, statutory lists of maps of rights of way are not maintained by local authorities. This is a matter of deliberate policy because it is thought that, in Scottish circumstances, by maintaining such lists one might cast doubt on the efficacy of a right of way which was not listed. However, that does have the effect that, where no case has been brought before a court, a right of way can be disputed by a landowner, and there needs to be someone to assert the public's rights. Equally, even if a right of way is undisputed, it may be physically obstructed or impassable and therefore of no practical use.
Parliament has therefore placed upon local authorities certain statutory functions relating to rights of way. They are required, in the first place, to
"assert, protect and keep open and free from obstruction or encroachment"
any public right of way in their area, including taking legal proceedings or any other steps that they may consider necessary. Authorities also have been given powers to repair and maintain public rights of way. They have a function too in relation to authorising erection of guideposts, direction notices, stiles, gates and so on. Unfortunately, those functions were not laid clearly on one particular type of local authority and, following the reorganisation of Scottish local government in 1975, the responsibility was even further diffused. A working party on walks and footpaths for recreation, formed by the Convention of Scottish Local Authorities—and that includes all types of authority in Scotland— and the Countryside Commission for Scotland, heard evidence from all the interests and concluded that the various duties and powers concerned with rights of way were not being discharged as well as they might because of the divided responsibility. They therefore recommended that functions connected with rights of way should be the responsibility of a single authority in each area. That is what Clause 1 seeks to achieve.

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The other main purpose of the Bill is to enable local authorities to make by-laws to control the conduct of the public on footpaths, long distance routes and public rights of way and so to enable wardens to operate on such paths. A warden's job is, of course, mainly one of giving advice and information to the public. But, it is valuable if he has some backing in law for his presence if members of the public are misusing the facility or challenging his right to advise them. The presence of a duly appointed warden with a duty to enforce by-laws is likely to be an encouragement to landowners to conclude new footpath agreements with local authorities in the knowledge that there will be provision against abuse of their property by the public.
Finally, the Bill changes the title of "warden" to "ranger". That has become the preferred term in Scotland although I understand that on this side of the Border the term "warden" remains acceptable. This is obviously a very limited Bill, but I trust that your Lordships will agree that it is a useful one. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Hughes.)
5.59 p.m.
Lord CAMPBELL of CROY: My Lords, I should like to congratulate the noble Lord, Lord Hughes, for sponsoring the Bill, and to thank him for having so clearly explained its purposes to your Lordships. The changes before us which he described as modest are generally welcome in Scotland. They do not seek to transform the 1967 Act, but they would adjust it appropriately to present-day circumstances.
I simply have two particular points which I should like to raise. The first is on the future progress of the Bill, because, in welcoming it, I hope that it will reach the Statute Book. When it reaches the Commons, given that there is enough time and that this Session is not interrupted by a General Election, I presume that the noble Lord is relying on the special Scottish Committee on Scottish Private Members' Bills. If the Bill does not go to that committee, it would seem that it would join the end of a considerable queue of Private Members' United Kingdom Bills, for which there
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really is no chance of a passage through Parliament this Session, because they have to wait their turn for the United Kingdom Committee and the only alternative is for them to be passed in another place without any debate at all at any stage.
If that assumption is correct, of course, there would be the opportunity of a debate on the Bill—at least at the Committee Stage—in another place, and one would hope that the other stages would then go through on the nod, as they say. At least there would have been a debate. But it requires that the Bill can be certified by Mr. Speaker as applying to Scotland only. Therefore, that is a very important point and I hope that the noble Lord, Lord Hughes, will be able to tell us quite definitely that the Bill applies only to Scotland and, therefore, can be certified for the special Scottish Private Members' Bills Committee. For myself, I hope that the way will be clear at all stages for the Bill to pass through both Houses.
My second point concerns fire risk. This arises because under Section 19 of the 1967 parent Act the Secretary of State for Scotland is given powers to suspend public access to the countryside areas which are dealt with in that Act at times of danger of fire; Section 19 actually speaks of weather conditions being such as to cause "danger of fire". I do not think that I need remind noble Lords who come from Scotland that Scotland's forestry industry goes through very anxious times when there are droughts or when the woods are very dry; and during those periods visitors can throw cigarette ash or pieces of glass about and cause very serious forest fires simply because they themselves are not familiar with the countryside or the dangers in certain conditions.
This Bill extends the powers of local authorities to cover public paths, long-distance routes and rights of way. Therefore, one would hope that the fire precaution power would be extended also to cover these to the extent that they cover the areas concerned which are already in the 1967 Act. I understand that both the Countryside Commission for Scotland and the Scottish Landowners' Federation consider that this is an important point, but that no one has been able to find a way of satisfactorily amending this Bill to this

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effect. Therefore, I am drawing attention to this matter now because the best solution which those two bodies have suggested is that provision for suspension of access—probably by the Secretary of State again, as in Section 19—in times of high fire risk should be incorporated in the agreements between the local authorities and the landowners. These agreements are to be found in the original Act and, of course, would not be extended to these public paths and long-distance routes. I hope that the local authorities in particular will recognise this requirements and will be prepared to include it in their proposed agreements.
I should like to raise a general point before closing. I have presumed that the structure and format of this Bill are in the best form for making the suggested alterations. The form of the Bill is to make specific changes and additions in pages and line numbers in the 1967 Act. I assume that the noble Lord, Lord Hughes, has had some expert advice on parliamentary drafting here and I therefore accept the form in which the Bill is presented to us. But, again, it is important that at a later stage we should not have eminent parliamentary counsel finding some objection to the way in which the Bill is being presented to Parliament. I wish the Bill well and hope that it will survive the uncertainties of the coming months.
6.6 p.m.
Lord STRABOLGI: My Lords, it gives me great pleasure to welcome this Bill on behalf of the Government. The Government have given assistance with its preparation, and I am grateful to my noble friend Lord Hughes, who is a former Minister, for introducing it. My noble friend has made the point that this Bill is uncontroversial and useful. I am glad that it has also found favour with the noble Lord, Lord Campbell of Croy, a former Secretary of State. With them I agree, and I hope that your Lordships will also agree.
Long-distance routes and various kinds of footpaths for the public's enjoyment are a much more important part of the scene both North and South of the Border than they were when the Countryside Bills were enacted over 10 years ago. It is right that we should want to ensure
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that there are more of these footpaths, that they are readily accessible and that they are well-maintained and supervised. In the belief that my noble friend's Bill will make a distinct contribution to these ends, I venture to predict that the Bill will prove more significant than its modest size might lead one to expect.
Perhaps your Lordships may be wondering why, with a Countyside Bill for England and Wales proceeding in another place, the opportunity could not have been taken to bring in more substantial countryside legislation for Scotland. Perhaps I might dwell for a moment on that point. Few here will need reminding, however, that the requirements North and South of the Border rarely march in step with one another. There are undoubtedly new countryside issues arising in Scotland which demand attention, and the Government are looking at these in conjunction with the Countryside Commission for Scotland, whose concern for the well-being of the countryside over the years we should all applaud. But they are not always the same issues as occur in the South, and still less is it appropriate always to tackle them in an identical fashion in both countries. To take a relevant example, the law and practice relating to rights of way is different in Scotland from that in England and Wales, and though there is a recognition that wardens or rangers are needed to operate on rights of way and footpaths throughout the country, the method of achieving this in my noble friend's Bill is not the same as that which is in mind for England and Wales.
If I may, I should like to draw your Lordships' attention to a point in the Explanatory and Financial Memorandum on the Bill. In describing the financial effects of the Bill, the Memorandum mentions that:
"expenditure will count as relevant for the purposes of rate support grant".
but it fails to state that expenditure will be eligible also for direct grant under the Countryside (Scotland) Act 1967. It was the Scottish Office which provided this particular piece of wording and so on its behalf I express apologies to the House for the omission. As the Memorandum says:
"Any increase in expenditure arising from the Bill is expected to be very small".

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As your Lordships know, the Explanatory and Financial Memorandum has no statutory authority and is merely put in for the convenience of the House, but I do apologise for that omission.
The noble Lord, Lord Campbell of Croy, in his speech, I was glad to see, welcomed the Bill, and he raised two points. First of all he asked, very rightly, about the future progress of the Bill in another place. I hope that another place will look on the Bill with equal favour to that of your Lordships, but I will certainly draw what the noble Lord has said to the attention of the usual channels and my right honourable friend the Chief Whip. I can say that the intention would be to have the Bill considered by the Special Scottish Committee on Private Members' Bills.
The noble Lord also raised the question of fire risk, and the need to be able to restrict access to public paths in exceptional circumstances. I may say that I have great sympathy with the point made by the noble Lord. I can assure him, however, that it will be possible to impose suitable conditions regarding access through the by-laws which, under the Bill, can be made by local authorities applying to public paths, and the presence of wardens on paths will be another safeguard in exceptional fire-risk conditions. I shall, however, bring what the noble Lord has said, and his suggestion, to the notice of my right honourable friend the Secretary of State with a view to his recommending to local authorities that specific provisions should be made in the by-laws. In conclusion, it gives me great pleasure to commend the Bill to the House.
6.11 p.m.
Lord STRATHCLYDE: My Lords, I hope I may be forgiven for intruding very shortly in this debate. I listened with great care to what my noble friend who introduced the Bill had to say. I only wish that I had the same facility for finding my way about a Bill that he obviously has, and which I know from past experience with him. But I had not got him at hand when I spotted this Bill and I wondered what it was all about, and so I read the Explanatory and Financial Memorandum. I saw that it mentioned a couple of previous Acts of Parliament, and that led me to go further
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and look at the Bill itself. There I found, at the beginning of Clause 1, "In section 46 of the Act of 1967". So I got the Act of 1967 and I looked at Section 46. I did not get much further on that, but I found in a later line that it spoke of the Act of 1973. So I got that one too. That Act referred to an Act of 1972, and so it goes on. I waded through these various Acts. It is an impossible thing to do, The noble Lord, of course, is a wizard at this kind of game, but it took me hours to find out what this Bill was all about.
I ask any of your Lordships who wish to know more about it just to turn to Section 54 of the Act of 1967 to start with. It runs to 14 lines, and it begins,
"A local authority may…"
et cetera, and it goes on. Then if you look at a simple little amendment here dealing with Section 54 of the 1967 Act, it says:
"for subsection (1) there shall be substituted …"
Of course this is quite simple, is it not? Then you get down to the bottom of the page, 44 lines on, and turn over the page and you find that there are 58 lines to be digested before you discover anything about it.
That is only one example. The Act teems with examples of that kind. The other Act referred to is just as bad. You go on turning page after page, and you are given in one place a reference to Part IX of the Act of 1967—I think that is right, but it may be the other one for all I remember. It is a terrible business to find out what that means. You go on turning over page after page. It is high time that draftsmen were able to do something better than this. It is a perfect farce. There are about five different Acts of Parliament mentioned in connection with this little Bill. If you want to find out about it you have to wade through the whole lot of them, and it will take an hour or two to do so.
My plea to Her Majesty's Government is to get the people who write these things to produce something a little simpler. When you read the thing, at first you say: "This is easy". But it does not mean just what one gathers from the Explanatory Memorandum, it means a lot more; and the amendments you have to deal with are legion. I say these words in protest, because it is ridiculous that we in this House who are fairly busy have to wade

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through this kind of thing in a simple little Bill of this nature.
6.15 p.m.
Lord HUGHES: My Lords, I have noticed before that sometimes the debate on one Bill seems, to a certain extent, to carry on the proceedings of the previous one. My noble friend Lord Donaldson quoted a friend of his as saying, "If you have a Hungarian for a friend you don't need an enemy", and I noticed that the noble Lord, Lord Strathclyde, started his remarks in his usual way, by referring to me as his noble friend. I hope that I shall not be here long enough to reach the day when he decides that he really wants to attack me. But I think he rather over-stated the case, because what he has omitted in all his researches, which appear to have been extensive, was that the Section 54 in the 1967 Act to which he referred is in fact removed by these amendments. If we had not amended in this particular way, if the draftsmen had not done a thorough job of looking at all the Acts affected, we would not be accomplishing the purpose of this simple Bill.
The trouble was that when the previous Government amended local government, of necessity the Act made references to previous legislation, which included the 1967 Act. I am quite sure, however justified Lord Strathclyde is in his criticisms of the way the draftsmen have to go about their job, he would have used—not necessarily in your Lordships' House, but certainly along in the Library—the sort of naval language of which he is a master if, by omission, they had made a mess of the job; and if they had omitted all these references, that is what they would have done. They could have made a total mess of the job in one paragraph. It has taken all these lines to do the job properly.
One of the advantages of introducing a Bill of this kind, as the noble Lord, Lord Campbell of Croy, suspected, is that I did have technical assistance in drafting it; and I must admit to the noble Lord, Lord Strathclyde, that I could not. by my own skill, have accomplished all these things to which he has objected. In fact, I would add that very little in this Bill is due to any skill on my part at all.
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble Lord for giving way. He has in fact replied to me as I had hoped. My noble friend Lord Strathclyde raised some of the difficulties about the way in which the Bill is drafted but, as I said, I prefer that it should be drafted in an expert way. Perhaps the noble Lord would agree, that what really matters is how soon the consolidations can be carried out, because then it will be much easier to find one's way round the legislation.
Lord HUGHES: My Lords, all I can say is that it will not be consolidated in this Session, but given the continued co-operation of my noble friend Lord Strabolgi in the next Parliament, he can look after the consolidation. It has been a pleasure to have had the Bill welcomed so much by the noble Lord, Lord Campbell of Croy, and I confirm what he has asked, and as my noble friend Lord Strabolgi has said, that it applies only to Scotland. I am grateful to the noble Lord for describing the procedure that can be followed in another place. Perhaps he and I, with my noble friend Lord Strabolgi, can exercise a certain coalition in these matters to ensure that we get the right procedure in another place. I never had the misfortune to be a Member of the other place, so I was not aware of those procedures.
I need not say more on the fine point. It was a great advantage to find that the Government were approving the Bill, so the tricky work of replying to difficult points was undertaken by my noble friend Lord Strabolgi. I am in total agreement with him and I am grateful to him for having removed that task from my shoulders. Like Lord Campbell, I hope that the Bill may achieve speedy passage through the House. I could not possibly argue that the Bill is an argument against having a General Election, but if we do not have one for sufficiently long a time to enable the Bill to go through, that will be one modest gain from its continuation.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

CARAVAN SITES BILL [H.L.]
6.21 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Stedman): My Lords, I beg to move that the Caravan Sites Bill be now read a second time. I have had the pleasure of being involved in debate in this House on many aspects of our urban and rural environment, but today I rise to discuss a problem entailed in providing accommodation for gipsies. These are problems at the margins of our society, but they make a very obvious impact on both rural and urban environments. The Bill now before us seeks to make alterations and amendments to the existing legislative framework for dealing with this problem.
A decade ago, the noble Lord, Lord Avebury, when in another place, introduced a Private Member's Bill which became the Caravan Sites Act 1968. I take this somewhat belated and tardy opportunity to compliment him on having thrown the lifeline to gipsies that Part II of that Act represents. Previously, under the Act of 1960, local authorities had the power to provide camping sites for gipsies; now, in the 1968 Act, which came into operation in April 1970, a duty was placed on local authorities in England and Wales to make adequate provision for accommodation for gipsies in or resorting to their areas. For the first time, gipsies were given a right to expect that some provision would be made for them where efforts of self-help failed, an expectation which has been held by house-dwellers for a considerable period. In Scotland, the numbers are small and therefore it has always been appropriate to adopt a general policy of persuasion rather than place statutory duties upon local authorities.
It is perhaps difficult to imagine the euphoria that this Act caused among gipsies. Our house-dwelling society inevitably fails to appreciate the immense effect on gipsies of rapid post-war economic changes and the massive increase of planning and licensing controls which have become an essential part of life on this crowded island in recent decades. Traditional seasonal sources of income, such as agriculture, forestry and horse-dealing,
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brought their own pattern of travel and camping, but in many areas mechanisation has forced new generations of the same gipsy stock to rely on the recovery of scrap-metal, laying of tarmacadam, carpet and furniture dealing and the sale of second-hand cars, with a consequently closer relationship to urban areas.
As traditional stopping places have disappeared and urban areas have been visited more frequently, life has become a perpetual search for any form of unoccupied land for the vast majority of gipsies. But a rational analysis of cause and effect is of no use to the gipsy. He only sees the harsh effect of such changes and must spend his energies in coping with these pressures in a struggle for survival. He has adapted to new work, but for camping sites he can only hope that eviction from muddy roadside verges will not become too frequent. Mistrustful, even violent, attitudes towards house-dwellers are hardly surprising and such behaviour brings similar responses from house-dwellers themselves.
I am not seeking to condone or excuse anti-social behaviour or to ignore the rights of house-dwellers and landowners to have their property and amenity properly protected. But we must understand two things very clearly. The first is that the majority of gipsies do not want to be anything other than gipsies, living in caravans and free to stay or to move on as they wish. They do not want, in the main, to be absorbed into the house-dwelling community, although it is difficult to know if this comes from an innate desire for the nomadic way of life or a simple fear of the unknown, which they might overcome in time. The second is that the gipsy families who sort scrap metal by the roadside really are the same families that in pre-war years lived tucked away in the countryside and sold clothes pegs and paper flowers.
The enactment of Part II of the 1968 Act has always been seen as a sensible move to resolve the animosity between gipsies and house-dwellers through adequate provision of permanent sites. Many also saw it as the basis for eventual transition for gipsies from life on the road to a conventional pattern of house-dwelling. I believe current thinking is now more divided about the nature of social bridges

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wanted or needed by gipsies, but all remain convinced of the absolute need for an adequate spread of sites to provide stability but also to permit gipsies to continue a nomadic way of life if they wish.
Sadly, the elation and great expectations arising from the 1968 Act have been deflated. The pressures on the gipsy way of life have continued and even increased in intensity, but local government has been extremely slow in fulfilling its statutory duties under the 1968 Act, and there are obvious reasons for this. Most house-dwellers are prepared to accept a need for such sites but do not want to see them in their particular locality. The competing demands for expenditure land and that face local authorities have further induced them to give a very low level of priority to gipsy sites. At present, it is generally estimated that there are authorised sites in England, Scotland and Wales for little over 2,500 families, but the gipsy population is estimated at some 9,000 families, thus leaving 6,500 families with no option but to camp illegally. With no services and no management, these encampments rapidly become squalid and unsightly, miserable for the gipsies themselves and a constant source of worry and annoyance for nearby house-dwellers.
Efforts to remedy this situation by the provision of sites are thwarted by local opposition, and county councils are therefore faced with difficult decisions if they are to use limited funds for gipsies in preference to more popular projects. But this local opposition is based mainly on experience of the appalling conditions on the illegal sites that can be eradicated only by the establishment of well-managed authorised sites. Evidence has shown that opposition then dies down. Clearly, there is urgent need for proper sites in the interests of house-dwellers and as a basic human right—in the words of the Cripps Report, "the right of legal abode.'
The situation has given successive Governments cause for concern and in February 1976 this Administration asked Sir John Cripps to carry out a study to consider the effectiveness of the arrangements to secure adequate accommodation for gipsies, as required by Part II of the 1968 Act. In April 1977 his report,
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entitled Accommodation for Gypsies, was published and I must add my own commendation to those of many others on the close anaylsis and precise recommendations for future action presented by Sir John.
After very full consultations with all those interested in the contents of the report, the Government announced their response to the report's recommendations on 19th July 1978. The majority of the recommendations in the Cripps Report were accepted, but some of these required legislation and it was promised to introduce this as soon as possible.
Sir John Cripps stressed the urgency of the need to accelerate the rate of site provision if the present distress and misery were not to persist, or even increase as the conflict between house-holders and gipsies heightened. He drew attention to the very small size of the problem in relation to the trouble and expense which it caused, and which he felt arose, in part at least, from the mistaken policies of local authorities. However, he rejected the idea that gipsy site provision should be carried out by a Government Department or a national agency; the proper provision of sites required local knowledge. But he recommended a more active role for central Government.
Perhaps the most significant recommendations contained in his report was for 100 per cent. Government grants to be paid to local authorities to cover the capital costs of site provision for a 5-year period. He saw a need for quotas for site provision to be allocated to counties and to the Greater London area administratively after discussion with county councils and the London Boroughs Association, and for agreed time-related programmes for the implementation. Sir John perceived the need for flexibility in attitudes towards standards and a movement away from total concentration on high-standard long-stay sites. As a basis for further discussion of such quotas, he also recommended the removal of the limitation of the duty of metropolitan county councils and London borough councils to the accommodation of 15 caravans in each district and borough.
He also suggested the removal of the power to grant exemption from the duty to provide sites and cancellation of all

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existing exemptions. Originally Section 6 of the 1968 Act empowered exemption of county boroughs or London boroughs if there was no suitable land, or of a county borough if it had had no significant gipsy population from 1963 to 1968. Twenty-six county boroughs were exempted on the second basis. After local government reorganisation and consequent amendments to the 1968 Act, there is now the anomalous position that only metropolitan district or London borough areas may be exempted, and then only if there is no suitable land; but eight metropolitan district areas enjoy exemption on other grounds as previous county boroughs. Furthermore, the areas of 18 previous county boroughs retain exemption, but are in the main only part of their relevant district areas. The intention seems to have been to restrict as undesirable the influx of gipsies to urban areas but, of course, this is now proving unrealistic. In order to assist in imparting a fresh impetus to the provision of sites, Sir John Cripps also recommended the appointment of a national advisory body, including gipsy representatives.
Sir John made a number of recommendations about the future of designation. Under Section 12 of the 1968 Act as it now stands, once the Secretary of State is satisfied that a county council or London borough has made adequate site provision in its area, he may designate that council under the Act, thereby bringing into operation Sections 10 and 11 of the Act, which give the council additional powers for removing gipsies from unauthorised encampments. Much is made by local government of designation as the reward for the extensive expenditure of time and effort often entailed in providing official sites. Sir John rejected the idea that designation should be granted on anything other than a county basis, but he considered that it ought to be with-held or withdrawn from any council unwilling to accept a quota and agree a programme of site provision. He also recommended that limitations ought to be imposed on the circumstances in which the powers conferred by designation might be used. As a further general point in designation, he felt that suggestions for strengthening the consequent enforcement powers of Sections 10 and 11 might be considered.
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Sir John's report dealt separately with the special problems of London. He recommended that designation be granted to any Inner London borough where provision had been made for 15 caravans, or where it appeared to the Secretary of State that provision of a site was unnecessary or inexpedient. In dealing with the Outer London boroughs, he recommended that previous designations ought to be withdrawn unless, or until, any such borough could show that adequate provision had been made.
My Lords, many of the recommendations in the Cripps Report could be implemented administratively, and that work has started as a direct result of the report. The Department of the Environment and the Welsh Office have already begun discussions with local authorities about site quotas to fulfil their statutory obligation under the 1968 Act. In Scotland, the Secretary of State's Advisory Committee will continue to encourage action by local government, but the numbers involved do not require a quota system, which would in any case be inconsistent with the Scottish policy of persuasion. A number of other administrative measures, such as improved collection of information, consideration of possible research needs, and improved arrangements for discussion and consultation with all interested parties, are already in progress. So the Bill before us is only a part of the steps that we are now taking to supply the necessary impetus.
I turn now to the Bill itself. It differs in certain respects from the recommendations contained in the Cripps Report, and I shall explain the reasons for this as I go through the Bill. Clause 1 provides for Government grant to local authorities in respect of the capital costs of providing caravan sites for gipsies under Section 24 of the Caravan Sites and Control of Development Act 1960. Sir John Cripps was convinced that satisfactory progress would not be made with site provision, unless it was recognised that the problem was a national one requiring provision of a substantial specific Government grant at the rate of 100 per cent. to cover the capital cost of site provision. We have accepted this recommendation. The procedures for claiming and paying grant have now been worked out with the Treasury

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and with local authority associations, and details will be published in a Departmental circular soon. Meanwhile, to ensure the quickest possible progress, the Appropriation Act will be used as a basis for making grant payments in this financial year. Proposals for new sites and upgrading works initiated since 19th July 1978 will qualify for the grant. The grant provisions will also cover Scotland. Grants have been available since 1971 for local authorities in Scotland, but at a 75 per cent. rate, and the increased rate will, we hope, provide greater impetus.
Clause 2 of the Bill provides for grant aid to voluntary organisations working in the interests of gipsies, and such grants will be on terms and conditions specified by the Secretary of State. As part of the Department's small grants programme, an annual grant has been made to the National Gipsy Council over recent years, but with no commitment to future years. We seek a specific basis for such grants, as there is a continuing need for this expenditure, together with further possible small grants to other organisations working in the interests of gipsies. However, I can assure your Lordships that the sums involved will always be modest, and that the Department will always take care to avoid duplication of effort and will require suitable evidence of financial responsibility. This clause will also apply to Scotland.
In Clause 3 it is proposed to repeal the present limit on the duty of metropolitan county councils and London boroughs to provide for only 15 caravans in each district or borough, and to repeal the Secretary of State's power to grant exemptions from the duty to provide any sites on the grounds of lack of suitable land. It is also proposed to repeal the exemptions that were granted to 26 previous county borough areas because they had no gipsy population, but to delay that repeal for a further 12 months so that quota discussions with local authorities, to determine the level of adequate provision, can take place without the immediate assumption that sites must be found in such areas. Sir John Cripps recommended that no Inner London borough should be asked to make provision for more than 15 gipsy caravans, or to provide a transit site or stopping place, but that the 15-pitch limitation should be removed for Outer London.
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We have agreed generally with his recommendations, but we have chosen not to differentiate on the face of the Bill between inner and outer London boroughs. We think it preferable to have no statutory limitations. So we have provided simply for an outright repeal of the 15-pitch limit, but we have expressed our intention to work on that basis administratively in Inner London. We recognise that the Inner London authorities have very many serious social and other problems, although we do not think it right to ban gipsies entirely from Inner London. We are therefore asking these boroughs to make a small contribution to the overall need for sites by each providing a site for up to 15 pitches. This will not solve the problem of provision in London as a whole, and that in turn interacts with the position in the surrounding counties. We have therefore sought the joint view of the London Boroughs Association and the Standing Conference on South-East Regional Planning.
Clause 4 provides for the designation under Section 12 of the 1968 Act of a district or group of districts. As I explained earlier, when they have provided enough sites, county councils and London boroughs may seek designation under Section 12, and so secure the additional powers of eviction contained in Sections 10 and 11. The Cripps Report recommended that designation should continue to be granted only on a county basis. However, local authorities are virtually unanimous in wanting designation on a district basis. In consultation on the Cripps Report, they argued that district councils are deterred from co-operating in programmes of site provision: no district council wants to have a site ahead of its neighbours because it fears the magnet effect of such provision will attract yet more gipsies into its district. In the view of these authorities, the prospect of "partial designation" could restore the immediate incentive to these councils.
The Government have argued that the magnet effect would tend to diminish as a significant factor as there was an increasing spread of adequate site provision, but we have been impressed by the strength of feeling in this matter, and we have decided to deviate from the Cripps Report in this respect. However, I must make it clear that future applications for designation

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will not be considered lightly; they must follow the implementation of a programme of adequate site provision agreed with the Departments, and, once given, will have to be kept under continuing review. Clearly, there will be a need for further guidance about this, probably by departmental circular and also in discussion of county quotas.
I turn now to the two clauses in the Bill in which we seek to rationalise the procedures involved in the provision of sites by county councils. In Clause 5, we seek to enable a county council to provide a site on its own land without having to seek a licence from the district council. Originally, we proposed to follow the recommendation in the Cripps Report and amend the Caravan Sites and Control of Development Act 1960 to enable county councils to grant themselves site licences for sites under their own occupation. At present, the county council has to apply to the district council, which may use this stage to frustrate provision by the imposition of unreasonable conditions. However, we now prefer the simpler approach of exempting the county council from site licence requirements, which is consistent with the exemption already given in paragraph 11 of the First Schedule to the Caravan Sites and Control of Development Act 1960 to district councils which occupy land in their own area for use as a caravan site.
Clause 6 seeks to revoke Section 8 of the 1968 Act, which requires that a proposal for a gipsy caravan site which is opposed by the district council must be referred to the Secretary of State. He may then direct that the proposal should be abandoned, or that the county council should go ahead with it under normal statutory proceedings, or that planning application should be made to him. It is the Departments' experience over a very long period that this section in effect duplicates planning procedures and causes delay without adding any useful powers. The issues raised in sustaining such objections are invariably planning issues, and, in any event, the Secretary of State's ultimate recourse, if he should consider any objection might have validity, will be to call in the application under planning law. This recourse is open to him without going through the hoops set out in Section 8 of the 1968 Act.
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Your Lordships will be interested to note, I am sure, that Clause 7 provides for the devolution of these matters to the Scottish and Welsh Assemblies. I should like to crave your Lordships' indulgence for a little longer to quickly refer to several issues which are not covered by the Bill, although they were referred to in the Cripps Report.
Your Lordships may recall my earlier reference to Sir John Cripps' recommendation that consideration might be given to the strengthening of the powers contained in Sections 10 and 11 of the 1968 Act, which themselves flow from designation under Section 12 of that Act. We remain in consultation with the interested parties on this aspect, but we are not yet able to formulate proposals to bring before this House. Indeed, it is not clear at this stage exactly what form, if any, additional provisions might take.
Another item absent from the Bill is an amendment to Section 127 of the Highways Act 1959 in order to remove the words "or a gipsy" and thus to leave it as an offence for a hawker or street-trader to set up a stall or encamp on the highway. This specific reference to a gipsy has been much criticised as being discriminatory in comparison with other caravan-users. We have agreed to seek an opportunity to remove the phrase, but we require further time to consider the practical implications for police powers in general.
I referred earlier to the recommendation by Sir John Cripps that a national advisory body should be appointed. In response to that suggestion, we accepted the need to improve arrangements for exchanging views and for discussing proposals and ideas, but we felt that the recommendation itself required further consideration. The relevant Departments are concentrating on improved arrangements for discussion and consultation, and it is likely that this is all that will be needed.
The gipsy problem has many facets. Some of these require national consideration, but many are local problems requiring careful and considerate attention to the interests of gipsies and house-dwellers by local government. The proposals in this Bill are designed to provide a better basis for the adequate provision of sites, which we see as the cornerstone of local policies. The highest possible priority

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needs to be given to such provision, and consequently we seek to provide local government with the necessary financial support and suitable consultative machinery. The rest is then up to them if ever they are to resolve communal conflict between gipsies and house-dwellers, which brings with it local distress and misery. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Baroness Stedman.)
6.48 p.m.
Baroness YOUNG: My Lords, I should like to begin by thanking the noble Baroness, Lady Stedman, for introducing this Bill to us this evening and for explaining its contents so clearly and so very fully. We shall all study what she has said with great interest, because although it is a short Bill it is no doubt an important one. As I understand it, the Bill follows the report of Sir John Cripps, which in its turn was a report on the working of the Caravan Sites Act 1968. I have no doubt that in the course of the passage of this Bill, much will be said about the problems of gipsies, and it seems to me that if we were to put the problem into a nutshell it would be that it is always difficult for a non-conforming minority to find its place in a fundamentally conforming society. The aims and needs of each community are diametrically opposed. I well remember one of the last meetings I attended when I was in local government, which was one with local residents over a proposed gipsy caravan site under the 1968 Act. I would only say to the House that this is not an experience that I would care to repeat.
I sympathise greatly with the problem, of local authorities in trying to find sites, and this no doubt explains the low growth in the number of sites provided since the passage of the 1968 Act. This said, I fully accept that a policy of ignoring the difficulties of gipsies, or, indeed, the right of people to be non-conformers, will not make the problem go away, and that something more needs to be done. This becomes particularly important when one considers the growth of the gipsy population.
I read with interest the report of Sir John Cripps and I must say that I should
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like to add my congratulations on it because it sets out the workings of the Act and the whole problem of the gipsies so clearly. As he states, the Census of 1965 disclosed a population of 3,400 families, or approximately 15,000 persons. This is now thought to be a great under-estimate, because it is now thought that there are, as the noble Baroness indicated, some 9,000 families, or probably 40,000 persons. So we are talking about a population of a small town. So far, 133 sites have been provided, whereas it is estimated that over 300 are needed.
The problem is made more difficult as most of the families are in the South-East, including East Anglia, and the problem is further compounded by the fact that, whereas gipsies were largely agricultural workers, they are now scrap metal dealers and move from the country into the towns. They remain largely around the towns in the South-East. This is where the problem has been concentrated. It would be helpful if at some stage in the course of our deliberations the Government were to give more accurate figures or an indication of how we might find out more accurate figures, because I think that one of the ways in which the public is disquieted is to feel that there is no limit to the problem because we do not know quite about whom we are speaking. I can appreciate that the Bill before the House is an attempt to answer these problems but, like all the local authority associations, I and my colleagues on this side of the House can give it only a qualified welcome. There will be a number of matters to which we will have to return in detail when we reach the Committee stage of the Bill.
Clause 1, I think, must be welcomed. Local authorities will be glad to know that they will be fully reimbursed for the capital cost of establishing a caravan site. No one can doubt that the amount of money proposed—£30 million—even when spread over six years, is generous. I make this point—and it is an unusual one to make at the start of any Bill—because so many other aspects of public expenditure, particularly local government expenditure, are starved of funds. Although it is no part of this debate, it has been very noticeable, having debated the International Year of the Child only last week, that the number of instances of legislation

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that has not been fully implemented although it has been on the Statute Book for some time is quite striking; and the reason why so much legislation has not been fully implemented is that local authorities have been starved of funds. We must recognise that the Government are making a priority of giving this help to settle the gipsy problem and that this, in their opinion, is more important than many other aspects of local authorities' work. However, although local authorities will be encouraged to know that they will be reimbursed for the capital costs of gipsy sites, this money will come from proposed housing expenditure so that it is a transfer of funds. I believe that the noble Baroness's right honourable friend in another place has indicated that it will make a difference of one house in a thousand. In effect, the money means that we are transferring resources from, as it were, the conforming part of the population to the non-conforming. Perhaps that is what the Government wish at this time.
Clause 2 provides grants to voluntary organisations dealing with gipsies. I listened with care to what the noble Baroness said on this clause. I wonder whether it would not be better to channel all this money through the National Gipsy Council. This is an organisation which, I believe, is well known both to the Baroness's own Department and to local government. It would reassure those who would be responsible at local authority level for managing the sites and for funding the revenue costs to know that when grants are given they are being given through a recognised authority that speaks on behalf of the gipsies.
Where, I think, local authorities are rightly concerned is over the whole matter of enforcement. As I understand it, the 1968 Act is really based on an agreement between local authorities and the gipsies in the sense that the local authorities under-took to provide sites but, at the same time, they were given a guarantee that they would have the powers to remove unauthorised caravan users. The fact of the matter is that those provisions of the 1968 Act (particularly those of Clauses 10 and 11) have proved to be very difficult to enforce. The local authorities feel that, having made a great effort—and it was a great effort—to provide sites, they have never been given adequate powers to
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enforce the illegal parking of caravans by others within their area. Therefore, they seek stonger enforcement powers and would hope that these were to be forth-coming in the Bill. It is disappointing to hear the noble Baroness say that, although the Government are considering this matter, they have been unable to include relevant provisions in the Bill. This is something to which we shall certainly return at Committee stage. I believe it would be a great encouragement to local authorities to provide more sites were the enforcement powers stronger,
The second point I should like to make is that, under this Bill, the powers and duties of counties and districts are particularly set out in Clauses 5 and 6. I wonder whether the Government have quite got the balance right. Clause 6, in particular, repeals Section 8 of the Caravan Sites Act 1968, requiring county councils to consult district councils before adopting proposals to acquire or appropriate land for gipsy caravan sites. This, combined with the proposal in Clause 5 removing the need for a county council to seek a site licence and that under Clause 3(2)(b) (the exemptions from site provisions currently extended to a number of former county boroughs) does give rise to a great deal of concern from the Association of District Councils. This is a very detailed matter to explore at Second Reading, but it is certainly something we shall want to look at at the Committee stage.
I have no doubt we shall have a great deal of discussion about gipsies and their way of life and I should like to offer, in conclusion, what I hope will be thought to be a constructive suggestion. As I have already indicated, there is a very real problem in the relationship between gipsies and residents. I wonder if it would not be worth while looking at sites on the edge of industrial estates. Most towns now have such estates on their outskirts. As many gipsies are, in any event, scrap metal dealers, it seems that it would be more sensible to find a place for them where they could work. If it were possible to find a place for them to work, it might be easier to find a place for them to live. Looking at it from that point of view might be a more profitable exercise than some of the difficult negotiations which local authorities have had to go into when they have tried

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to find a site for gipsies very near or adjacent to residential accommodation.
To conclude, my Lords, we on this side of the House give a qualified welcome to this Bill. We recognise the very real problems and the attempts to put them right. I would only say that there are many points of detail to which we shall wish to return at the Committee stage, and we shall seek assurances particularly on the point I have raised about enforcement.
6.59 p.m.
Lord AVEBURY: My Lords, I should like to join the noble Baroness, Lady Young, in welcoming the way in which the Minister has so thoroughly explained the provisions of this Bill. I should like also to welcome the moderate tones in which the noble Baroness herself replied to the opening speech and the encouraging words she has given of general approval of the provisions of the Bill, although there may be some details which the Opposition may wish to amend in Committee stage. As the noble Baroness, Lady Stedman, reminded me, it is nearly 11 years since I introduced the Caravan Sites Bill in 1968 and it is almost nine years since it was brought into operation some two years later in 1970.
I think it is a good opportunity now for us to examine what lessons there are to be learned from the experience over these years and how we can be certain that this Bill, which is based, as both noble Baronesses have said, on the excellent recommendations in the report of Sir John Cripps, will be more successful than was the previous legislation. The 1968 Act was an attempt at a comprehensive solution to the so-called gipsy problem, based, as the noble Baroness, Lady Young, said, on a compromise between the interests of local authorities and those of the gipsy community. What we were attempting to do was to ensure that the authorities provided a network of sites on a scale large enough to accommodate the whole of the gipsy population and, in return, the gipsies were prepared to accept stricter control of the unauthorised encampments which, as the noble Baroness said, are the bane of suburban residents and parish councils.
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Unfortunately, the local authorities failed dismally to carry out their side of the bargain. The Minister herself said that they have been extremely slow. I must say that endless difficulties have been discovered or manufactured with the result that according to my calculations, about three out of five gipsy families are still living on unauthorised sites. That is according to the figures collected in the census of last July. There seems to be some discrepancy between those figures and the ones that the noble Baroness gave us this evening. She said there were 2,500 families on authorised sites out of a total of 9,000. If my calculations are correct, the 1978 survey shows that there were 3,500 caravans on authorised sites out of a total of 8,540. Admittedly, you cannot exactly correlate caravans with families, the survey only referred to England and the noble Baroness may have been giving us England and Wales. But there seems to be a need, as the noble Baroness, Lady Young, remarked, for greater accuracy in the figures. The Department will be the first to admit that the first census had some defects and that these can be remedied in later attempts. The true picture is almost certainly worse than was shown by the survey, because there were some local authorities which refused to take part altogether, and those are likely to be the culprits who have not provided any sites; but some who took part gave inflated totals of the number of caravans that they had on authorised sites.
The 1968 Act gave the Minister the power to step in and direct the local authority to provide sites on a scale that he would determine, and to enforce that direction with a writ of mandamus, where necessary. The Government have never invoked these powers but have continued to rely on persuasion. It may be that with the benefit of hindsight it is possible to see many effects in the 1968 Act. I believe the main reasons why it has not been more effective have been, first, the skilful evasion by local authorities of the obligations which of course they assume are voluntary; and, secondly, the inexplicable reluctance of successive Ministers to use that weapon of direction. I am not going to try and claim that comprehensive provision of sites all over the country would have been achieved by now had there been greater determination,

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because obviously other factors have been at work over the past decade and, in particular, there have been restraints on local government spending. But those restraints in some cases provided an additional excuse for what the local authorities intended to do anyway, which was to shelve schemes for gipsy sites which their councillors might think would be unpopular with the voters.
At the same time, local authorities have been spending enormous sums on housing gipsies and preventing them from occupying vacant land or the verges of highways. For example, Mr. Tim Jones in The Times of 24th October last mentioned Swansea, which has spent over £27,000 in blocking off vacant land so that gipsies cannot camp on it. Mr. Bill Forrester of the Minority Rights Group was quoted in Labour Weekly of 21st July last as saying that in Rotherham £35,000 was spent on anti-gipsy activities in 1977 alone—and I think this was for labour and materials only. Mr. Forrester estimated that throughout the country as a whole as much as £4 million a year was being wasted in this way.
One example with which I am familiar is in the London borough of Bromley. I drive along the A.21 road most days and see an enormous concrete and steel fence—a most unsightly fence—which has been erected there along the A.21 and also along part of Court Road which runs parallel to it, the cost of which I understand has been £35,000. Presumably, in the end this "Maginot line" will run all the way along to the edges of the borough so that the gipsies will be driven back into the county of Kent, where, needless to say, there are no sites where they can legally stop. I was not at all surprised that the London Boroughs Association reacted negatively when the Bill was published and they saw that the 15-pitch limit was to be removed in accordance with the recommendation of Sir John Cripps.
Mr. Bowness, chairman of the London Boroughs Association, said on 15th January:
"There must be a realistic appraisal of what London can provide, which must be linked with new, speedy and effective enforcement provisions".
The July 1978 survey figures appeared to show that many of the London boroughs
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had already done more than was required of them, but these figures must be treated with great caution, as I know the Department itself recognises. For instance, the London Borough of Bromley is listed as having 51 pitches on authorised sites, when the actual number—and I believe this has been corrected in the most recent survey undertaken in January—is 21. I think it is going to be very difficult for the Government to arrive at any agreement with the LBA on increased provision in Greater London, so the removal of limits which the noble Baroness mentioned is going to make very little difference in practice.
With regard to the cancellation of exemptions in the former county boroughs, again the effect may be marginal. We have had exemptions in 26 of the county boroughs, all on the grounds that there were no gipsies residing in their areas in the five years up to 1st April 1968. If all those areas did provide one 15-pitch site each, there would be another 390 pitches in total, and that represents less than 8 per cent. of the need. But even that assumes that the quota discussions which the noble Baroness mentioned, and which are now proceeding with the local authorities will be uniformly successful and that all the district councils concerned have gipsies resorting to their areas so as to make a site in those areas necessary. On this latter point, the effect of Clause 3(2)(b) is delayed for 12 months so that discussions on quotas may proceed without any immediate presumption that sites ought to be found in these areas.
On the wider question of agreement on quotas and a timetable, as recommended in paragraph 4.40 of the Cripps Report, I have to say that, potentially, this is more important than anything that is actually contained in the Bill, yet there are signs that some local authorities will do their best to sabotage any agreement made between the Government and the Associations that are meant to be representing them. I say this because of remarks made by some councillors, many of them chairmen of committees, on the question of accommodation for gipsies. Councillor Ron Watkiss, leader of the Cardiff City Council, has told officers to keep on harassing the gipsies until they realise that they are not wanted in the city. The South Wales Echo of 18th October

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1978 said in its leading article that Mr. Watkiss was right. Save the Children, in a report to the DHSS by Ms. Anne Bagehot, their national gipsy liaison officer, referred to "massive evictions" in Cardiff, and she went on to say that, with opposition so strong, it would be a long time before adequate space was provided in Cardiff.
In Wiltshire, at a meeting between the county and districts held on 11th May last, it was resolved to take "strong action" against people who stationed caravans on the Droves, Salisbury, on the grounds that they were neither gipsies nor the district council's responsibility. If they were really not gipsies they would still be the responsibility of the local authority under the Housing (Homeless Persons) Act 1977. In Sheffield, Councillor George Wilson, leader of the council, said on BBC Radio Sheffield on 14th December last year:
"I wish you'd stop calling them gipsies… they're cannibals, they're parasites on society".
Councillor Reg Glinn of the Plymouth City Council was quoted in Labour Weekly—my favourite reading—of 10th June 1977 as saying of gipsies:
"These people should be shot, first in the leg, and if necessary killed".
Councillor Paddy Cane of Sutton has suggested bringing in tanks to remove gipsies. In the London Borough of Hillingdon there were plans for another site, but after the elections of 1978, the new council made a policy decision not to continue with the scheme. There have been evictions in the Borough of Hillingdon since then, and it has even been alleged that some gipsies have been forced across the boundary of the borough into the neighbouring county immediately before the 1978 count, with the obvious intention of reducing the borough's liability when the 15-pitch limit is removed.
At Cardiff, similarly, families were evicted from the Trowbridge site on the actual morning of the second count, on 17th January this year. It would be interesting to know whether they were included in the total. In Oxfordshire, a leading article in the Oxford Times, which was kindly sent to me by my noble friend Lord Stanley of Alderley, suggested that local authorities should not be obliged to provide sites for itinerants.
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So with these attitudes as widespread as this, what chance have we of getting enough accommodation by voluntary agreement? If it was as easy as all that, we should have solved this problem in the last 10 years. The only inducement the Government have to offer is designation. Under the Bill they will be able to hold out the possibility of extending those powers to districts or groups of districts instead of to whole counties. I can sell understand that local authorities were vociferous in demanding this weakening of the 1968 Act; but in giving way to that pressure I think that the Government have reneged on a commitment which was given to me by the late Arthur Skeffington and subsequently embodied in Circular 49 of 1968, where Ministers said that they intended:
"to exercise their powers to designate in such a way as to avoid creating a patchwork of relatively small areas where it could be an offence for a gipsy to camp. Such a pattern would create a difficult position for the councils of adjoining areas and a confused one for the gipsies themselves".
That is precisely what could happen with a partial designation being included under this Bill.
The argument is, as the noble Baroness explained, that no district council wants to have a site ahead of its neighbours for fear of the "magnet effect", as she put it. That may well be so, but if the Department and the local authorities really mean business, then voluntary quotas can be agreed and the timetable decided, so that the work proceeds throughout the whole of the county in a co-ordinated manner and completion can be synchronised roughly as between the districts. To accept the need for partial designation implies a lack of confidence in our ability to formulate and manage such a programme. It also relies on the argument we have heard this afternoon, that designation in one area is an incentive to neighbouring authorities to get on with the job.
I say we can now see that this proposition is manifestly false, as I predicted when your Lordships discussed the first designation order as long ago as 14th November 1972. I pointed out then that the gipsies who could not get on to the site at St. Helens, where there were 12 pitches—St. Helens being one of the three county boroughs then designated—would

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simply be decanted into the surrounding county of Lancashire, which had already scaled down what they were prepared to do from 100 pitches to 75 since the 1968 circular. I said then that even that "miserably inadequate target", as I called it, seemed likely to be reduced still further. According to the July 1978 survey, there were at that time only 57 pitches on official sites in Lancashire, compared with 162 on unauthorised sites. The county therefore has done even less than the national average to meet its own requirements.
The noble Lord, Lord Sandford, who was the Minister replying to that debate, said that he expected designation to stimulate the provision of more sites. I ventured to remark that that was nothing but a pious hope and that it would never happen. We are in a position to judge which of us was right, and I say that if one looks at the experience of Lancashire and the other authorities which were designated at that time, experience shows that it was a mistake to designate those county boroughs in the expectation that it would encourage the neighbours to do more. Therefore, I say that partial designation is the wrong policy.
Before leaving this question of designation, perhaps I should mention the case of Dorset, which I believe to be still the only county to have been granted designation. There were two planning applications by gipsies pending at the time of designation. I understand that one of those was subsequently turned down and the other was accepted. It obviously creates serious difficulty for the gipsies who were in the process of making a planning application at the time of designation, because if they lose that application then they are going to have to move out of the county altogether. I think that this point perhaps ought to be considered in Committee.
Similarly, I say that the strengthening of enforcement powers such as the noble Baroness, Lady Young, suggested we ought to look at, would be counter-productive. The Cripps Report suggested that Sections 10 and 11 of the 1968 Act should be confined to unoccupied land, and then only when the land was required immediately for some other purpose. Sir John did concede that the various suggestions made for strengthening Section 11 ought to be examined, but he
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said they should be acted upon only if the previously mentioned proposal were implemented first. Since that condition is not to be fulfilled, I think it is a pity that the Government have nevertheless agreed to re-examine Section 11. But as they have done so, it is not altogether satisfactory for the Minister to say this evening that she could not give us any information about the progress of those consultations.
My own view is that it is for the local authorities to show first that they can deliver the goods, and after that to ask Parliament for the new powers. If there is agreement on quotas and the time-tables, there must also be penalties for non-achievement. The Government say it is very unlikely that any local authority would be unwilling to accept its quota and to agree a programme, but that they might consider the use of default powers appropriate in those exceptional circumstances. I think it would be much better for all concerned if Parliament laid down clearly when directions should be given by the Secretary of State, and that this should happen not only if a local authority declined to accept its quota by the end of, say, 1979, but also if, having accepted the quota, it fails to meet an agreed timetable.
It has become fashionable to criticise the 1968 Act, and no doubt it had the limitations which are inseparable from the need to satisfy as many conflicting interests as possible; but, when I come to examine this Bill, all it is proposed to do in terms of legislation is to give the councils a bit more money, to remove exemptions from a handful of authorities, to abolish the 15-pitch limit, which has been exceeded voluntarily anyway by many authorities, and to make it slightly easier for counties to obtain a site licence.
What really matters is whether there will be a new spirit of determination by the local authorities and national Government in dealing with this tiny problem—and it is a tiny problem, as Sir John Cripps said, and as the noble Baroness has re-emphasised this evening. When you think that 800 families could be accommodated in comparative luxury for the same amount of money that one London borough is thinking of spending on its town hall, and when you consider that the whole of the money required to complete the national site network—£30 million,

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which is going to be provided under this Bill—is the equivalent of less than four of those town halls, you can only wonder that it has taken us so long. But the gipsies are not themselves a powerful lobby and their cause is thought to be a loser for anyone taking it up. When New Society examined a list of unpopular causes in its issue of 6th July 1978, it included alcoholics, ex-prisoners, tramps and drug users: gipsies were at the bottom of the list.
I think it still has not dawned on the public, because the so-called leaders of opinion do not often say so, that officially-run sites, kept tidy and properly supervised, are infinitely preferable to the squalor and filth which is inseparable from unauthorised encampments. Nor is it realised that by continuing to harry the gipsies from pillar to post and thus preventing their children from attending school, we have stored up trouble for yet another generation. However belatedly, I hope your Lordships can join with Ministers, councillors and friends of the gipsy community in spelling out these truths.
7.20 p.m.
Lord MOTTISTONE: My Lords, it gives me great pleasure, also, to congratulate the noble Baroness, Lady Stedman, on introducing this Bill so very ably. I am pleased to contribute briefly to this debate, because the 1968 Act of the noble Lord, Lord Avebury, was the very first Bill which I ever took part in debating in your Lordships' House, though I admit that at that time I concentrated rather more on Parts I and III than on Part II of the Bill.
It seems to me that we are facing a tougher problem than the rather dictatorial approach, which the noble Lord, Lord Avebury, has suggested, can cope with. If one looks at the statistics, it appears that it was thought in 1965 that there were 3,400 families, and it is now believed that there are 9,000. As my noble friend Lady Young said, we must get the figures more accurate, because if there were 3,400 families then 2,500 sites would be a much better achievement than it now appears to be. It is very important to quote—and it requires quotation—one paragraph from the excellent report of Sir John Cripps, which, though we may
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not entirely agree with what he recommended, I think we all feel is very thorough and is as good a chance of getting the facts right as one would believe possible. He says in paragraph 3.19:
"A councillor who fails to oppose a site in his ward immediately feels that his seat is in jeopardy. Courageous men and women have, none the less, tried conscientiously to support their council's officers in the selection of sites, and some have retained the confidence of the electors for doing so. It is not possible, however, to overstate the intensity of feeling, bordering on the frenetic, aroused by the proposal to establish a site for gipsies in almost any reasonable location".
That is a fact of life. I only touched upon it when living in Cheshire, not that anybody sought to put a site close to where I was living, but a not too far distant neighbour of mine, about two miles away, found some gipsies outside his main entrance and the rows that developed from that were something that staggered me. There is a fundamental feeling here, and I wonder whether it is not so much the genuine gipsies, the Romany folk, who are under criticism, but the people who go under the banner of the gipsies and who are not really gipsies. Sir John Cripps talked about tinkers, but there are many other kinds of groups.
If it is true that there are now 9,000 families and 14 years ago we thought there were only 3,400, is it the case that by providing the sites we have encouraged to be nomads people who are not naturally so? Is there room to tighten up the definition, to talk about people whose tradition was nomadic, rather than follow the precise wording of the 1968 Act? I know that it is very difficult to get a definition which stands up in law, but I suggest to the noble Baroness that this might be worth looking at, because we must think of realities.
It is all very well telling councils that they must do this, that or the other and they will be penalised if they do not do precisely what central Government think is right, or, at least, what the noble Lord, Lord Avebury, thinks is right, which might not be quite the same. You cannot do that against the background of this almost gut feeling—if I may use such an unparliamentary term—in the populace.
I should now like to turn to the question of whether it is right to encourage people to come near towns, because they have turned into scrap dealers from being

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people who helped on the farms. That might be a good thing, particularly if the suggestion of my noble friend Lady Young was followed up of putting sites close to industrial areas. But in the Cripps Report one reads that one cannot altogether trust some of these people who come under the heading of gipsies. I remember that at an industrial estate in Manchester, where I had a computer housed, we kept on getting raided by small boys, particularly over weekends, because the industrial estate was relatively remote and there was no one there. So you get that kind of problem. The idea is a good one and it needs studying, but it has those snags which must be watched.
I should have thought that a genuine nomadic person would not be very contented with living in a town, or around the edge of a town. I should have thought it was better to encourage such people to be in the wider country, rather than in the towns. Therefore, I wonder whether it is right, in Clause 3(1) of the Bill, to cut out the limitation of numbers in the London boroughs at this stage. It is true to say that the London boroughs have been quicker than the Home Counties around them to meet the reasonable quota, which they have been asked to do. That may, in its turn, have acted as a magnet to attract people to London, when they ought to be near the slightly smaller—but really very large—towns in the periphery in the Home Counties. Therefore, I wonder whether this is the right time to encourage London to become more of a magnet than it already is. I suspect that the same rules might apply to any other very large city and that, on the whole, we do not want to encourage that. Those are the points that I would throw out for consideration, some of which may be worthy of an Amendment to be discussed in Committee.
It will be most interesting to see what the Government have in the way of Amendments. The noble Baroness did not mention any, but I understand that the Government have told organisations which are interested that they are considering some Amendments. I, for one, will watch carefully to see what they do, and I hope that we may tighten up this Bill in some respects and get it into a shape which can take us through the next decade, so that the very good staff
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work of the noble Lord, Lord Avebury, can be improved still further into the 1980s.
7.27 p.m.
Lord GISBOROUGH: My Lords, as we know, the county councils can determine the sites of gipsy encampments and the district councils have to administer them. Under the designation system, the Secretary of State virtually says to a county council, "You provide alternative sites for gipsies and have the powers for removing them from unauthorised sites, or use the law of trespass"—which has proved inadequate. Some counties have provided sites but very few have done so—certainly, mine has not. As a result, the county is not designated. My own district, which I am sure is typical, has a great problem, one which we have already heard about, of caravans, with scrap metal dealers, old cars being broken up and tyres being burned near people's houses, which has led to a lot of angry residents who have obviously objected enormously.
These families go where there are pickings. They do not like going out into the countryside, because they have no affinity with the rural scene. I do not think that they are gipsies at all. I believe that most of them are simply scrap dealers who take to the road, perhaps only at certain times of the year. When they have been ejected, they have simply gone to another spot in the same county or district. My own district has taken out injunctions against named itinerants, but has failed at the court to get them moved from its land because those people had nowhere else to go.
The district would prefer—and no doubt the district is not alone—to be able to provide the site itself rather than rely on the county council, and also to arrange the designation of its own borough. The Secretary of State has accepted this principle of the district area being designated. As I understand it, that is in Clause 4, but it still leaves the county providing the site for the gipsies. Surely, however, designation is closely linked with site provision. It is not much good being able to have designation if you do not have the sites with which you can get your designation. Thus, the districts will be able to designate but they will have few powers as to where the sites will go.

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Yet the county council—and this county council is not alone—continues to delay, even after four years, producing sites.
Therefore, the point is that the provision of sites should become a concurrent function with the county council so that both the county council and the district are able to acquire land, provide the sites and obtain the 100 per cent. grant. Speaking for my own district, I understand that they would be prepared to grasp the nettle, even in the face of the unpopularity that would come to them, and provide a site.
Turning to Clause 6, whereas in the past county councils had to consult the districts with regard to the provision of sites, under this clause they will no longer have to consult the districts. This will make the position worse. I realise that there are arguments against concurrency. One of them is that it would create strife between districts and county councils, but I believe that concurrency would certainly cause no more strife, and possibly less. The fact that there will be no consultation will certainly contribute towards causing strife. Furthermore, if the districts were able to provide sites, many of them would perhaps do so.
7.31 p.m.
The Earl of CAITHNESS: My Lords, we are grateful to the noble Baroness and Her Majesty's Government for presenting the Bill which we are now discussing. When the noble Lord, Lord Hughes, opened the debate on the Countryside (Amendment) (Scotland) Bill, he said that it was short and uncontroversial. This is also a short Bill but it is highly controversial.
The problems of gipsies, whether maligned or not, the desirability, location and nature of sites, the responsibility for and management of the same, are matters which we could discuss for a prolonged period of time. We have heard about some of the results of people's attitudes, in particular from the noble Lord, Lord Avebury. He did not, however, put forward any solution to ease the problem. As I believe that this Bill, or something similar to it, will reach the Statute Book, I shall confine most of my remarks to what I consider to be a major omission from the Bill, which is only a partial solution.
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Turning first to the Bill itself, I am concerned about Clause 6 but will say no more about it at the moment as two noble Lords have already spoken on the subject. I turn, therefore, to my main point. Although persons in my profession do come into contact with gipsies, I have never encountered them in a professional capacity. My suggestions are not therefore put forward as the result of a personal grievance but in an endeavour to seek a workable solution to a very tricky problem. The main omission is that a local resident, as yet, cannot obtain compensation from local authorities for injurious affection or damage to his or her property as a result of the siting of a gipsy caravan site or the action of the inhabitants. As I understand it, under the present law there are two courses of action available to an aggrieved party. One is to sue a gipsy, or gipsies, on the same basis as one can sue a third party, but due to their very nature this action would not reach a satisfactory conclusion. The second is to sue the local authority which manages the site, but this would be expensive, time-consuming and unlikely to succeed to an extent that would be beneficial.
The present laws are therefore inadequate to protect any local resident where damage occurs due to gipsies or a gipsy site. The moral obligation has already been accepted in similar circumstances where land is taken or used for public works. There are precedents in the Land Compensation Acts, in particular in the 1973 Act. It is therefore disappointing that Sir John Cripps did not comment upon this in his report.
One of the practical effects of a gipsy site is damage to land and property, and there are two forms of compensation which can help to resolve this problem. One is injurious affection to a persons premises, but this is difficult to ascertain in many circumstances, and it takes a long time to prove it and then agree a settlement. In my experience, it would not be satisfactory in these circumstances. A better form, and the one that I would recommend to your Lordships, is one where an aggrieved local resident can receive a monetary sum in compensation where damage can be proved to have been caused to his or her property by gipsies.
In order to pay such monies, I believe that a local authority should be required to enter into a bond from which it could

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draw sums to compensate for such damage, and, if necessary, such monies would be 100 per cent. grant-aided by central Government. In essence, it would be a type of insurance policy. The idea of a bond is not a new one. Indeed, the County Council of Tyne and Wear, and others, seek a similar type of bond in Clause 5 of the Tyne and Wear Bill which your Lordships will be discussing in the near future.
Let us therefore consider an example of the problem. Imagine that a gipsy site has been established for, say, three years and has not given rise to any claims for damage by local residents. Unfortunately, there is internal strife on the site which results in part of a nearby farmer's fence being destroyed, part of the field he has shut off for hay being made unworkable and the garden of an adjacent house-occupier being damaged. Both parties can prove that the damage was done by the gipsies but, under present legislation, there is, in effect, nothing they can do about it. Under my proposal, an independent aribtrator would be appointed, the damage assessed, and the amount of compensation calculated and then paid out of the appropriate managing authority's bond. All affected parties are then put back as close as can be to the situation that existed prior to the damage being done. Incidents such as this are not unknown and in many cases can be directly attributed to gipsies. Their frequency, and the extent of the damage, will, of course, vary. It may be an unpalatable fact in this day and age, but we must face it and try to make it as inconvenient as possible for all parties concerned.
Here, a word may be appropriate on the appointment of an arbitrator. I feel the easiest and most satisfactory system is that which is already well used in agriculture. It is efficient and quick. The method is for a single arbitrator to be appointed by both parties, but, failing that, either by the president of the Central Association of Agricultural Valuers or by the President of the Royal Institution of Chartered Surveyors. The arbitrator should then be required to decide his award within a set period of time and the council should be required to pay the award within four weeks of the arbitrator's decision. The matter would then be disposed of and settled in a minimum period.
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The advantages of my proposals are numerous, but are mainly these. First, we fulfil the moral obligation to compensate a person whose land is injuriously affected or damaged by a third party. Second, local residents near gipsy sites will not be, as it were, out of pocket where such damage occurs. Third, if compensation is payable, then some of the barriers which exist against gipsies will be removed, though I would not venture to suggest that it could altogether dispel what Sir John Cripps calls "the widespread fear of gipsies among house dwellers." Fourth, the appropriate authorities will find it easier to acquire and appropriate land for gipsy caravan sites. Fifth, there will be an incentive for local authorities to manage their sites properly to minimise any damage claim, as they are accountable for their expenditure. Also, they would not have to pay for any damage, unless it occurs and unless it is substantiated. Last but not least, gipsies and local residents would get on better together and become more compatible neighbours.
To take up the point which was made by the noble Baroness, Lady Stedman, I could not agree more that we should let gipsies be gipsies, but I would qualify that by saying: let true gipsies be true gipsies. I am sure that everybody would want that.
With regard to disadvantages, there appear to be only two. The Government will find it very difficult to assess the overall cost of finance. However, the sums involved will be small in comparison with the advantages to be gained. When better relationships have been established, funds could be saved by reducing the grants available to voluntary organisations. What exactly these organisations are, and what they have to do to receive a grant from central Government, we are not told in detail. Surely my proposals will mean that at least some money is better spent on compensation rather than giving it to some organisations which can, as Sir John Cripps states, "command intermediate and variable followings".
A further disadvantage from a local authority viewpoint is that the compensation scheme as proposed might be considered to be too widely drawn. This, I think, is a matter for further discussion at a later stage. At this stage I hope the noble Baroness will accept the principle involved. If further powers and financial

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aid are to be given to local authorities, without solving a major practical problem, so that the number of sites can be increased by approximately an additional 230 per cent. then I fear that the attitudes of many people, and particularly those of local residents, will not change but will even harden.
7.40 p.m.
Lord STANLEY of ALDERLEY: My Lords, I fear that I cannot agree with the noble Baroness, Lady Stedman, or the noble Lord, Lord Avebury, that gipsies are a tiny problem. I fear that they are a very difficult problem and I am thankful that the noble Baroness will have to solve that problem and not me. I have to declare an interest in that the Oxford-shire County Council are discussing a proposal tomorrow to move a non-Romany gipsy site from Oxford City to my farm. Perhaps I might preface my remarks by saying how much I agree with my noble friend Lord Mottistone on what is a gipsy, and I should like to say that, despite the fact that the Cripps Report groups them all together, I believe there is a very big difference between Romany gipsies and what I would call tinkers. The site in question was originally sited away from housing, but due to development the site now adjoins a residential area and the residents have complained of the behaviour of the tinkers to such an extent that the council have been asked to move them. It is reported that approximately £70,000 worth of damage and vandalism has been done to the site over the past few years, apart from considerable nuisance to neighbours.
I need hardly add that I am not particularly anxious to have the site on my farm. I would have to give up sheep and potato growing and I know not whether I should be entitled to compensation, although I am particularly interested in the remarks made by my noble friend Lord Caithness as to the possibility. But of much more importance is the fact that the residents nearby—and I am not one—are up in arms over the tinker site. Indeed, it has caused, and is causing, an unholy village protest, the like of which, I suggest, your Lordships know only too well. I should add that there are three other possible sites proposed by the county council, and in each case the
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distaste expressed by the residents nearby is equal to, if not worse than, ours. Not a Christian characteristic, maybe, but human—and not, I suggest, a good environment for legislation.
I raise this incident as a perfect example of what is likely to happen should this Bill become law and county councils are forced to provide approximately three times the number of sites that they have already. In the particular case I have just mentioned, Mr. Hugh Farrant, the leader of Oxfordshire County Council, has received well over 400 letters protesting against the site; and the mention of gipsy sites to any Oxfordshire county councillors today makes them scurry away like frightened deer.
It may be that your Lordships will say that my story is disgracefully selfish and unmindful of the tinkers, but my impression is that not enough thought is given to the residents who will be near the proposed sites. There are, according to the Cripps Report, 8,000 odd tinker families and gipsy families that, maybe, are asking for help—and I am just wondering whether the word should be "maybe". But there are many more millions of ordinary citizens also asking for help and I wonder if we are not once again kowtowing (if I may use that word) to a minority. The picture of the provision of tinker sites as portrayed by the noble Baroness, Lady Stedman, in the comfort of your Lordships' House, is seen in a very different light by those members of the public who will be near those proposed sites. I think my noble friend Lady Young has a valid and interesting point that perhaps they should be sited near industrial estates.
Despite a search of D of E directives and also the Cripps Report, I can find no mention of how the existing sites are working, although one can see how they are not working from pages 11, 12 and 13 of the Cripps Report, which say some pretty disturbing and distressing things. I regret to introduce a note of bitterness, but I have come to the conclusion that a great deal of recent legislation has been based on the principle of "let's find a failure and try to help it, and let's find a success"—such as, I suggest, my own industry—"and try to ruin it". Before I beat my sword into a ploughshare I was taught something about reinforcing success and I greatly fear that this Bill may be

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doing exactly the opposite; namely, reinforcing failure.
So I ask the noble Baroness two questions. Can she convince me, as a run of the mill farmer and not, I fear, a high-minded noble Lord like my noble kinsman Lord Avebury, that the existing sites are working as satisfactorily as envisaged by the 1968 Act and that future sites as suggested in this Bill will be managed in such a way as to allay the fears I have expressed in my example? Secondly, can the Government convince me that the expenditure of £30 million, which no doubt will turn out to be £60 million, and asking the county councils to employ extra people, is in keeping with today's economic situation and not throwing good money after bad? Finally, my Lords, should you accuse me of being destructive—which no doubt I am—and ask me what I would do, faced with the tinker problem, I would repeat that fortunately it is the Government's job to make plans, but I would not reinforce failure, as I think this Bill may do. I would consider some means of compensation to residents near tinker sites, and if this cannot be given today because of the economic situation then I would do nothing at all.
7.47 p.m.
Baroness STEDMAN: My Lords, I am most grateful to all the noble Lords who have taken part in the debate and for the constructive criticism—if I may put it that way—that they have made, which we shall obviously have to face at the Committee stage and later stages.
The noble Baroness, Lady Young, queried, as did the noble Lord, Lord Avebury, our figures. We have now introduced six-monthly counts since January—they will now be held in January and July of each year—and we hope that that will bring some sort of uniformity with the counts which the local authorities are carrying out. Of course, with the movement of population and the fluidity in the situation of the gipsy encampments, the figures will never be completely accurate; but we think it will be a great advance on the past uncertainties and we shall have a much more realistic figure of the number of families with which we are coping.
The noble Baroness referred to the fact that the grant which we were giving
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we were really taking from the housing money. She said it was equivalent to one house in a thousand. Perhaps it is better expressed as 0·1 per cent. of the housing allocation; it comes to the same thing, but I think it puts it a little more in perspective. Also, of course, the present housing allocation is underspent by something like 8 per cent., so the grant is hardly likely to affect the housing programme of the local authorities while it is being given for this purpose.
The noble Baroness also raised the point that the grant ought perhaps only to be given to the National Gipsy Council. There are other voluntary organisations which are doing a lot of work on behalf of gipsies. The National Gipsy Council is certainly a commendable, efficient and reputable body, but there are other organisations which have a special expertise. It is certainly something that we will look at, but I think we would want to feel free to give help to some of the other, minor organisations which are helping, as well as to the National Gipsy Council.
On the question of the enforcement powers, we are investigating possible changes that might be introduced in this Bill so that we can get the best use of our official sites, including the need to guard against intruders who might put at risk those travellers for whom the sites have been provided. That is something which happens. We are looking at the position and, if possible, we will introduce the necessary Amendments, either in this House or in the other place when the Bill gets there, and when we have finished consultations with the other Departments.
The noble Baroness referred to the fact that it might be sensible to try to direct the provision of sites on to the edge of industrial areas. I am sure that the local authorities will bear that in mind. I can only speak from experience in my own city. There we have got our gipsy encampment, the permanent one, on the edge of our industrial area. I might also say that after a few teething troubles at the start it is now working reasonably satisfactorily.
The noble Lord, Lord Avebury, again queried the accuracy of the figures. I hope I have helped to put this mind at rest in saying that we are having a slightly better census done at the moment. He

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referred to the waste of resources on the anti-gipsy activities. I agree with the noble Lord that it is a pointless waste of resources, and that it would be better to employ these in a proper determination of the need and in the provision of properly equipped sites in compliance with the statutory requirements on the authorities. On the quota discussions, these are under way at the moment in all parts of the country.
The noble Lord queried the patchwork effect of the partial designation. Designation, whether for part or whole of the county, will only be granted once agreement has been reached over the county programme as a whole, and we are satisfied that the implementation of partial designation, where one district or group of districts has completed its provision, would not have any detrimental effect by forcing other gipsies on to further illegal sites. In regard to Dorset, there the designation was granted on the basis of adequate but flexible proposals. This is almost always going to be the case, because we are dealing with travelling people and the numbers fluctuate.
Lord AVEBURY: My Lords, I am sorry to interrupt the noble Baroness. My point was that if planning applications by gipsies were under consideration at the time of designation by the county and they were subsequently unsuccessful, it would mean that the gipsy who lost his appeal, to the council or the Minister as the case may be, would have to move wholly outside the county. I was thinking that perhaps there should be some co-ordination between the planning machinery and the designation.
Baroness STEDMAN: My Lords, I take the noble Lord's point. I will have a look at it and write to him. On the question of the powers of direction, we think that these powers should be used only in exceptional circumstances. We hope there is going to be a much greater rate of progress without any formal coercion on behalf of the Secretary of State.
The noble Lord, Lord Mottistone, and others, raised the question of the definition of "gipsies". This is a difficult one. John Cripps tried it and could not come up with anything else which stood the test of time and was able to describe them
1084
better. I think we have to recognise that the 1965 count of the so-called gipsy families was probably a substantial under-count, and although the gipsy population is expanding by natural increase this is unlikely to be at the rate apparent from the quoted figures. There has been a lot of discussion about definition. We have not got a satisfactory alternative yet. If noble Lords in their wisdom can come up with a better one please let us have it; we will look at it and see whether it meets the criteria and makes more sense to everyone in their dealings with gipsies. The noble Lord also raised the question of the London boroughs not being deprived of their 15 pitch limit. We appreciate the contribution that the London boroughs have made in providing sites and we well recognise the special problems of the inner London boroughs because we are working administratively even now on keeping the 15 site limit in inner London.
The noble Lord, Lord Gisborough, referred to the county councils and district councils having concurrent powers in this. It is the duty of site provision that rests on the county councils, but the districts also have all the powers to provide sites, and either council under the Bill will be able to claim the grant on capital works. They are not quite concurrent powers, as the noble Lord was thinking, but if the districts are willing to go ahead and if there is agreement between the two authorities, then either the district or the county can claim the 100 per cent. grant on this.
The noble Earl, Lord Caithness, was good enough to give me notice of his point about compensation. It was something we had not looked at in the Bill and we had not covered. I have taken advice and I am told that local authorities would not normally seek special insurance arrangements beyond their normal insurance cover or take out any special bonds of surety in poviding gipsy caravan sites. I think we have to accept that there are good and bad gipsies, as there are good and bad in any walk of life, and no special measures are needed for gipsies alone. Experience has shown us that the majority of gipsies welcome the availability of an official site and they do their utmost to preserve their good name in the locality. I think the noble Earl is judging a possible situation at the authorised sites from experience of conditions at unauthorised sites and the illegal ones, which are bound

1085
to be squalid and unsightly, bound to have a spread of litter and rubbish and even encroachment of further caravans on to the land. Most problems of this nature arise because we have not at this point of time got enough official sites. I am advised that the Department are prepared to look further at the problems which he has raised tonight in claiming and assessing any compensation for damage. I hope to be able to get in touch with the noble Earl before the Committee stage.
Baroness YOUNG: My Lords, I am sorry to interrupt the noble Baroness, but I think my noble friend has raised a very interesting point. Could she let us know—not necessarily this evening but in the course of the proceedings—those sites which, in her opinion and that of her advisers, are model sites that anyone could go and have a look at? This might be reassuring to some people who have so far failed to find one that meets this qualification. It might be interesting to see what is regarded as a model site.
Baroness STEDMAN: My Lords, I hope to meet the noble Baroness's request and let her have a list of sites which she could go and see; I will undertake to make it possible for her to see them, if necessary.
The noble Lord, Lord Stanley of Alderley, also raised the question about the existing sites; he wanted to know whether they were working satisfactorily, and said in effect, "Convince me that they are". I always hope I might convince the noble Lord; I have not always been successful. Generally the sites do work reasonably satisfactorily, and of course they are very much better than any of the illegal encampments that spring up on the roadside around the country. As I said, there are good and bad gipsies just as there are good and bad of other groups, such as those on housing estates, where we have good and bad tenants. We are certain that as the authorities provide an increasing number of sites and have experience in management the conditions are going to improve further. I am sure that the future sites will be well managed. I am satisfied that the expense is justified, because we had this duty laid on the local authorities way back 10 years ago and nothing has been done about it. We are now making it financially possible for them to build and equip proper caravan sites to provide for the gipsies.
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The noble Lord said that he was glad that the buck did not stop with him but that it stopped with me. I am happy to accept that buck because we want to make this a workable proposition. We want to make the provision that we are supposed to have been doing for the last 10 years. We want to make it become something of a reality for the many hundreds and thousands of families who want that sort of a home. I am grateful to noble Lords for their contributions. I am sure we are going to have a most interesting Committee stage, and I look forward to it.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NURSES, MIDWIVES AND HEALTH VISITORS BILL
Brought from the Commons, read 1a, and to be printed.

ROYAL ASSENT
7.58 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Price Commission (Amendment) Act, Tyne and Wear Passenger Transport Act.

SHEFFIELD GENERAL CEMETERY BILL
Re-committed to the Committee on Unopposed Bills.
  "GUSATHION" AND REGULATIONS ON ORGANIC PHOSPHATE COMPOUNDS
  "GUSATHION" AND REGULATIONS ON ORGANIC PHOSPHATE COMPOUNDS
  RABIES: RESEARCH AND PREVENTION
  RABIES: RESEARCH AND PREVENTION
  STATFJORD OIL AND GAS FIELD
  STATFJORD OIL AND GAS FIELD
  ENGLISH CHANNEL SAFETY SCHEME
  ENGLISH CHANNEL SAFETY SCHEME
  DOVER STRAIT: FUTURE MOVEMENT OF HAZARDOUS CARGOES
  DOVER STRAIT: FUTURE MOVEMENT OF HAZARDOUS CARGOES
  ASEAN: GOVERNMENT DEVELOPMENT AID
  ASEAN: GOVERNMENT DEVELOPMENT AID
  HEATHROW: AIR TRANSPORT MOVEMENTS
  HEATHROW: AIR TRANSPORT MOVEMENTS
  NORTHERN IRELAND POLICE COMPLAINTS BOARD
  NORTHERN IRELAND POLICE COMPLAINTS BOARD
  DEPARTMENTAL DOCUMENTS: RELEASE POLICY
  DEPARTMENTAL DOCUMENTS: RELEASE POLICY
  TRANSIT OF ANIMALS (ROAD AND RAIL) ORDER 1975
  TRANSIT OF ANIMALS (ROAD AND RAIL) ORDER 1975