Sitting of 16 July 1979

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  FELIXSTOWE DOCK AND RAILWAY BILL
  Order for Third reading read.
  Queen's consent, on behalf of the Crown, signified.
  Read the Third time and passed.

GREATER LONDON COUNCIL (MONEY) BILL

  GREATER LONDON COUNCIL (GENERAL POWERS) BILL
  Orders for consideration, read.
  To be considered tomorrow.

  Ross AND CROMARTY (COASTAL WATERS POLLUTION) ORDER CONFIRMATION BILL
  Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  WALES

    European Regional Development Fund
    Mr. Knoxasked the Secretary of State for Wales what is the value of the grants allocated to Wales from the European regional development fund since 1975.
    The Secretary of State for Wales (Mr. Nicholas Edwards): The sum of £44·8 million.
    Mr. Knox: Does my right hon. Friend agree that these grants have brought great benefit to the people of Wales that they might not otherwise have had? Does that not confirm how advantageous membership of the Community is to Wales?
    Mr. Edwards: I agree with my hon. Friend, and took the opportunity to say so in the presence of the President of the Commission at a dinner in Cardiff on Thursday night. The total of grants and loans now received in Wales is about £500 million.
    Mr. Wigley: Does the Secretary of State not agree that these grants would have been of much greater benefit to Wales if all the money that came from the EEC went to Wales and was not taken up by the Treasury setting off these against existing grants? Does he agree that these grants will be even more important in the future in view of the impending chop of regional development programmes by the Government?
    Mr. Edwards: These grants assist in lessening the interest burden of local authorities and contribute to the financial resources available to the Government for regional development policy. However, one must also take account of the need to control public expenditure in this area.

    Unemployed Persons (Retraining)
    Mr. Bestasked the Secretary of State for Wales what retraining facilities presently exist in Wales for persons unemployed or who need to be redeployed; and if he will ensure that greater emphasis is given to retraining in the future.
    Mr. Nicholas Edwards: Training is primarily the responsibility of industry; but the training opportunities scheme, which is operated by the Manpower Services Commission, also provides for training of young people and adults in skill-centres, colleges and firms throughout Wales. Much of this assistance goes to retraining persons who have lost their jobs.
    Mr. Best: Is my right hon. Friend aware that in my constituency of Anglesey about half the unemployed are unskilled? Is he aware that the nearest Training Services Agency skillcentre is at Wrexham? Is he also aware that the Manpower Services Commission proposed bringing a mini-skillcentre to Bangor, which would have been of direct benefit to my constituents, and will he do everything in his power to see that that proposal is safeguarded?
    Mr. Edwards: I am aware of the importance that is attached to the project for the Gwynedd technical college which is currently under review by the Commission. I am seeing the chairman of the Commission tomorrow and intend to draw to his attention the importance that is attached to this project.
    Mr. Alan Williams: Will the Secretary of State bear in mind that, as a result of a decision by the Department of Industry, 6,000 workers in the Shotton area will find that their skills will be of no use to them? What programme does he have in mind for crash retraining of these workers?
    Mr. Edwards: That is another of the questions that I intend to discuss tomorrow with the chairman of the Manpower Services Commission. I share the concern of the right hon. Gentleman about the problems that will arise at Shotton, and I am aware of the need to provide adequate training facilities.
    Mr. D. E. Thomas: Can the Secretary of State give a categorical assurance to the House that none of the training programmes at present in hand by the Manpower Services Commission in Wales, including those funded and located in further education colleges, will be reduced under his regime?
    Mr. Edwards: How it operates is the responsibility of the Manpower Services Commission. However, any cuts that
    1000
    have been made have been in very low occupancy and duplicated courses. The training of technicians in skills which are in short supply has been safeguarded, and the Commission expects to train more people this year than it did last year.

    Seat Belts
    Mr. Jesselasked the Secretary of State for Wales what could be the cost saving to the National Health Service in Wales if the wearing of seat belts were made compulsory.
    The Under-Secretary of State for Wales (Mr. Michael Roberts): Separate Welsh data are not available, but on the basis of 1975 data for Great Britain a broad assessment has been made that if all drivers and front seat passengers wore seat belts the saving to the NHS in Wales might be of the order of £350,000 a year at November 1978 prices.
    Mr. Jessel: If enactment of the Road Traffic (Seat Belts) Bill led to a wearing rate of about 90 per cent., as in Australia, which is close to the 100 per cent. figure assumed by my hon. Friend, can he estimate the number of lives that would be saved, the number of serious injuries that would be prevented annually, and the effect on hospital waiting lists in Wales?
    Mr. Michael Roberts: If 85 per cent. of drivers and front seat passengers wore seat belts, the data suggest that in Wales about 40 lives a year might be saved and 400 serious injuries avoided. This would have a relatively small effect on the very long waiting lists for specialities previously affected by road accidents.
    Mr. Deakins: Is it not the case that, if the number of accident victims in NHS hospitals were reduced, there would be more scope for treating people from the ordinary waiting lists, more beds and resources would be available and, therefore, by definition, those waiting lists would be shorter?
    Mr. Michael Roberts: There can be no question but that the waiting lists would be shorter. If one takes the estimated 400 serious injuries that would be avoided and sets those against the general surgery waiting list of 10,200, one gets some idea of how much difference there would be.
    Sir Raymond Gower: In assessing these figures, is account taken of the fact that some drivers, fortified by wearing a seat belt, drive differently—perhaps at greater speed? Is any assessment made of cases such as those that have aroused the comment of one or two coroners in the Cardiff and Newport areas, where there has been some evidence of serious accidents as a consequence of wearing seat belts and where there might not have been loss of life had there been no seat belt?
    Mr. Michael Roberts: I do not think that any such calculation has been made. The efficacy of seat belts in reducing death or serious injury to drivers and front seat passengers is considered about 50 per cent.—that is, that half the fatalities not wearing belts might have survived with serious injuries and half the seriously injured might have been only slightly injured.
    Mr. Alan Williams: In view of the agonies through which the NHS will go to meet the financial limitations imposed on it by the Government, how on earth can the Government ignore the savings that are available to them through this measure?
    Mr. Michael Roberts: I have illustrated the effect on shortening the lists in the hospitals, and one can gauge the savings. This is a matter for my right hon. Friend the Minister of Transport. Of course, the Government advise passengers and drivers to wear seat belts.

    Welsh Language
    Mr. Hoosonasked the Secretary of State for Wales whether he plans to meet parents to discuss the future of Welsh language nursery schools.
    Mr. Michael Roberts: My right hon. Friend has no present plans to hold such a meeting, but I hope shortly to meet a number of hon. Members with an interest in Welsh nursery schools.
    Mr. Hooson: Will my hon. Friend ensure that in the reviews of educational budgets that are carried out by the local authorities special regard will be paid to the interests of the Mudiad Ysgolion Meithrin because of the great importance of promoting bilingual education in Wales?
    Mr. Michael Roberts: My hon. Friend's interest in Mudiad Ysgolion Meithrin is well known to us. I can assure him that the Welsh Office regards the work of this organisation as extremely important. We give a small grant in aid, and we hope that this will continue.
    Mr. Geraint Howells: Does not the Minister agree that the Government's present policy towards Welsh language nursery education is not acceptable to the majority of parents in Wales? Since many Opposition Members and Welsh parents are not satisfied, what must we do to change the Government's policy?
    Mr. Michael Roberts: I do not accept what the hon. Gentleman has said. Of course, it is for the local authorities to decide. Our commitment to the Welsh language will find expression in the second of our education Bills, in which we will be seeking power to pay a specific grant towards the cost of bilingual education in Wales.
    Mr. Ioan Evans: While it is for the local authorities to decide, must not the local authorities have the money in order to provide the nursery schools? Is it not a fact that under this Government nursery school education in Wales will suffer a great deal, and that already one authority in Clwyd is talking of stopping nursery school education?
    Mr. Michael Roberts: It is because we want to ensure bilingual education that we are making a specific grant. I want to make it perfectly clear that it is the role of the local authorities to decide, and if hon. Members are not satisfied with the way in which their local authorities make decisions about the 3 per cent. rate support grant cut it is their job to make representations to their local authorities. I will be interested to see what constructive suggestions they make.
    Mr. D. E. Thomas: I welcome the belated statement by the Minister that the Government are proposing to revive the specific grant. However, can he explain to the House what use this specific grant will be if general education expenditure is cut back by the Government's edict to county councils in Wales?
    Mr. Michael Roberts: It is for the local authorities to decide what cuts they will make. No doubt they will make

    1003
    ample use of the bilingual grant. I cannot accept for a moment that this is a belated announcement.
    Mr. Alec Jones: Can the hon. Gentleman say whether these specific grants will be aimed at nursery schools, be they Welsh speaking or English speaking?
    Mr. Michael Roberts: I can give the House no specific information as to whether the bilingual grants will be given only to nursery schools.
    Mr. Wigleyasked the Secretary of State for Wales how many schools in Wales will lose the facility to teach the Welsh language as a result of the Government's public expenditure cutbacks.
    Mr. Michael Roberts: There need be no such loss, but it is for local authorities to decide how to achieve the expenditure savings called for by the Government.
    Mr. Wigley: Is the hon. Gentleman aware that he is acting like a Pontius Pilate in this matter, by washing his hands of the whole question of the impact of Government cuts on education in Wales? Is he aware that in Clwyd alone 52 out of 56 nursery schools are being chopped as a result of the Government's policy, which means that nursery education which is critical to the teaching of the Welsh language in non-Welsh speaking areas is virtually being axed? Is he also aware that the other major area of cutbacks is peripatetic teachers, which are a major factor in the teaching of the Welsh language in many schools? Will he contact education authorities in all parts of Wales and tell them to go easy on these cuts which result from the Government's policy?
    Mr. Michael Roberts: The local authorities are responsible bodies. It is their role to decide where the cuts will be made. The hon. Gentleman is not accurate when he says that nursery schools have been chopped. The truth is that a proposal has been made, and this will be considered by the authority later. In view of that, I hope that those who regard the question as so damaging and serious for nursery children and for the Welsh language will make representations to the local authorities and suggest other cuts.

    Hospital Buildings and Facilities
    Sir Raymond Gowerasked the Secretary of State for Wales if he will seek to ensure the maximum use by the National Health Service of existing hospital buildings and facilities in Wales; and if he will make a statement.
    The Under-Secretary of State for Wales (Mr. Wyn Roberts): National Health Service hospital buildings and other facilities in Wales are managed by the area health authorities. It is their responsibility to ensure that the best use is made of the assets available to them.
    Sir R. Gower: In view of the expensive nature of new hospital building, is it not rather strange that at the present time there are rumours of plans which may involve the closure of the Prince of Wales hospital near Cardiff. that the splendid hospital building at Sully in my constituency is not being properly used and that the purpose-built Glossop maternity hospital in Cardiff has not been used for several years? Is not this an absurdity at a time when the building of new hospitals is beyond the financial resources of most health authorities?
    Mr. Wyn Roberts: I agree completely with my hon. Friend that the best possible use should be made of the many excellent local hospitals that already exist, but the relative advantages of continuing to use old premises or providing new buildings will have to be weighed in each case. This is the job of the area health authorities, but I think that there should be acceptance of the need to close some old hospitals even though they may be dear to local communities. New hospitals, which are being built at great cost, are specifically designed to replace the old.
    Mr. Alec Jones: The hon. Gentleman says that the best possible use should be made of these hospitals, such as the Prince of Wales hospital. Will he explain how it is possible for AHAs to make the best use of them? When they are now facing wage increases and a near doubling of VAT by the present Government, how can they possibly do it? Surely these rising costs are more likely to effect a reduction in the use of facilities and a reduction in health standards of patients.
    Mr. Wyn Roberts: The right hon. Gentleman knows very well that we have not cut the NHS budget in Wales. My right hon. Friend has allocated all the resources that had been set aside by the previous Government.
    Mr. Geraint Howells: Will the Under-Secretary give an assurance to the Welsh people that none of the small cottage hospitals and our small hospitals will be closed during the next five years?
    Mr. Wyn Roberts: I have already said—I repeat it—that hon. Members must not forget that new hospitals are being built, and we have a substantial programme of new hospital buildings. Those new hospitals are intended to replace—and must, indeed, replace—the old hospitals in many cases.

    Education (Expenditure Cuts)
    Sir Anthony Meyerasked the Secretary of State for Wales what representations he has received from local education authorities in Wales regarding the impact of cuts in the rate support grant on educational provision.
    Mr. Michael Roberts: The Welsh Joint Education Committee has asked my right hon. Friend to receive a deputation and arrangements for a meeting are being made.
    Sir A. Meyer: Does my hon. Friend agree that. if cuts must be made, they should preferably be made in such a way as not permanently to damage nursery education and, still more, remedial education? Is he aware, however, that of the preferable cuts, such as reducing the swollen administrative bureaucracy, or charging more for school meals, or imposing a charge for nursery education, or reviewing the school leaving age, these are all excluded by the law as it now stands? Will my hon. Friend initiate urgent discussions with local authorities to seek a way out?
    Mr. Michael Roberts: I do not believe that in the present situation it would be helpful for me to initiate discussions with individual authorities about their priorities, although, as I have said, arrangements are being made for a meeting with the Welsh Joint Education Committee. I can understand my hon. Friend's concern to protect crucial areas of the education
    1006
    service. I would expect authorities, in approaching this exercise, to have very much in mind their statutory duties as well as the special needs of particular groups of pupils.
    Mr. Barry Jones: Is it not typical, however, of a crafty Tory Party that in a general election campaign it offers us the prospect of tax cuts, but afterwards it sets about attacking nursery education, remedial education and Welsh language teaching?
    Mr. Michael Roberts: Admittedly, the election campaign is two months behind us, but I should have thought that the hon. Member would have remembered that part of our policy was cuts in public expenditure. The cuts in public expenditure have been placed as a responsibility on the local authorities. It is for the hon. Member to tell his people in Clwyd what he thinks they should do with the 3 per cent. cut. I look forward to seeing his views in the Liverpool Daily Post.
    Mr. D. E. Thomas: Did I understand the Minister aright as having told the House that he had no interest in the priorities in education policy laid down by local authorities in Wales?
    Mr. Michael Roberts: No, I certainly did not say that.
    Mr. Barry Jones: The hon. Gentleman did.
    Mr. Michael Roberts: I think that the hon. Member will have to look in Hansard tomorrow to resolve this dispute.
    Mr. Alan Williams: Does not the hon. Gentleman realise, however, that it is an act of political cowardice by the Government to impose these cuts and then to say that where they fall must be decided by the local authorities and that the Government will accept no responsibility for them? Is he aware that at a headmasters' conference last week these cuts were denounced as the most vicious of the post-war period? In West Glamorgan, the equivalent of 100 jobs may go, and teachers in Wales have indicated that the cuts are so massive that they may mean changes in the character of our education.
    Mr. Michael Roberts: The right hon. Member was not talking about the cuts that have been imposed, nor were the

    1007
    headmasters. They were talking about the options which are now being discussed between the local authorities and the Government.
    Mr. Alec Jonesasked the Secretary of State for Wales which part of the education service is to be cut in Wales to achieve the 3 per cent. reduction in the volume of local authorities current expenditure in the current year.
    Mr. Michael Roberts: It is for local authorities to determine how to achieve the necessary savings in their current expenditure.
    Mr. Jones: Does not the hon. Gentleman agree that he has some responsibility to the people of Wales who, at this moment, are alarmed at the stories from North, South, East and West Wales of the likely effect of cuts in the education service? It is really nonsense for the Government to seek to impose a 3 per cent. cut and to say " You cut, and we shall just walk away from it."
    The Under-Secretary of State, the hon. Member for Conway (Mr. Wyn Roberts), suggested that local authorities were responsible bodies. I agree with him. If they are responsible, may we have an assurance that the Government will allow them to choose not only where the cuts shall fall but whether they shall raise their rates to pay for the services?
    Mr. Michael Roberts: It is a perfectly reasonable proposition for the Government to say, as we have said, that we are cutting the rate support grant by 3 per cent., and then to turn to those authorities which have the best ability to assess the needs of their areas—the local authorities—and ask them to make the decision. The right hon. Gentleman is right when he says that there is alarm and despondency. However, I should like to point out that not one firm decision has yet been made by any county local education authority on education. Therefore, it is alarm and despondency before final decisions have been made.
    Dr. Roger Thomas: Does not the Minister agree that a considerable part of the basis of the present Administration's cuts is based on falling school rolls? Would the Minister care to suggest to areas such as Dyfed, where the projected
    1008
    populations are static for the next few years, how they will be able to cope with these cuts in expenditure, which are little short of Draconian, causing the closure of establishments and the discontinuance of essential services and provisions? Perhaps I may quote one example. [HON. MEMBERS: " No."]. The youth services in Dyfed—
    Mr. Speaker: Order. The hon. Gentleman must be fair to other hon. Members.
    Mr. Michael Roberts: The decision on the 3 per cent. cut in the RSG is not based on the falling rolls in our schools, because it is not specifically designed for schools. If authorities direct all the saving into the schools, that is their decision. I appreciate the point that the hon. Member makes about his own constituency.
    Mr. Wigley: The Minister cannot get away with that. Surely he is aware that two-thirds of local government expenditure is on education. Therefore, inevitably, cuts such as these are bound to land on education. Is he aware that, although final decisions have not yet been rubber-stamped, the county of Gwynedd has announced an £800,000 cutback on education and West Glamorgan announced a £1·6 million cut only last week?
    Mr. Michael Roberts: I appreciate that education takes about 52 per cent. of the expenditure on rate fund services. Therefore, an element of the cut inevitably must fall on the education service. Obviously, in education authorities which have a falling roll, that will be taken into consideration. But it is for local authorities to decide how best they can administer a 3 per cent. cut with the minimum of damage to their services.
    Mr. Best: Does not my hon. Friend welcome the shift away from central Government involvement in local government finance by the cut in the RSG, and does not this indicate a transference back to local authorities of greater autonomy, for which Opposition Members have been clamouring for ages?
    Mr. Michael Roberts: It is certainly the role of the local authority to deal with this matter. I think that local authorities are the bodies best suited to make these judgments.
    Mr. Alec Jones: Will the hon. Gentleman now answer the second part of my question—will the Government give a guarantee that they will not introduce legislation to prevent local authorities acting responsibly and so levying rates instead of accepting the cuts?
    Mr. Michael Roberts: I can give no such guarantee.

    Industrial Plants (Closure)
    Mr. Barry Jonesasked the Secretary of State for Wales what studies he has made of the effect of the closure of major industrial plants on towns in Wales where the local economy, emloyment prospects and local services of which depend on such industries.
    Mr. Nicholas Edwards: No formal studies have been made but there is experience based on closures in the time of the previous Government in steel making areas in Wales.
    Mr. Jones: Will not the right hon. Gentleman need an economic miracle to find over three or four years the 7,000 jobs required to replace the proposed loss of Shotton steelworks? Will he not agree that his right hon. Friend the Secretary of State for Industry is exacting a pitiless, brutal and somewhat savage price from the steel men at Shotton in an attempt to obtain steel solvency? How hard has the Secretary of State pressed his right hon. Friend with regard to the weakest link in the case against Shotton? It is folly to try to support year in and year out the movement of over 1½ million tons of sheet steel each year from Scotland to Shotton. Will he assure me that he is fighting that battle?
    Mr. Edwards: On the hon. Gentleman's last point, it is a management decision primarily for the British Steel Corporation whether it is practical to shift steel. I do not underestimate the scale of the problem that will result in the locality. My noble Friend Lord Trenchard has said that we are examining ways of tackling the problem and the upgrading of the Shotton travel-to-work area to special development area status is being considered. We shall be considering plans for factory building in the area and will do everything in our power to deal with the problems that arise.
    1010
    I do not accept for a moment the intemperate words that the hon. Gentleman uttered about my right hon. Friend. The plant is estimated to make a loss next year of some £40 million. We have to consider the impact on the steel industry as a whole and on jobs elsewhere in industry that will be destroyed if we allow nationalised industries to continue to make losses on that scale.
    Sir Anthony Meyer: Is my right hon. Friend aware that it is generally accepted in North Wales that nationalisation has allowed Shotton to reach the state where it is facing these problems today? Is he further aware that the intensity and concentrated nature of the unemployment that will occur as a result of the closure requires urgent and specific measures in North-East Wales?
    Mr. Edwards: I note that no substantial investment in the steel making end of Shotton was authorised by the previous Government. Without that investment, the tears that Labour Members are weeping are a little suspect. I entirely agree about the scale of the action that is called for, and we are considering that urgently.
    Mr. Anderson: Does the right hon. Gentleman accept that in politics it is not an honourable posture to seek to put at the door of other authorities, be they local authorities in education or the British Steel Corporation in the industrial sector, responsibility for policies that are properly the responsibility of the Government? Is he not sacrificing the steel men in Shotton and educational provision throughout Wales for the tax cuts that the Government have made for the more prosperous members of our society?
    Mr. Edwards: The hon. Gentleman should understand that the steel industry is international. Our industry must compete with other countries and there is an urgent need to improve its competitiveness and efficiency. It would be quite wrong for the Government to stand in the way of the British Steel Corporation taking action to that end. If Llanwern and Port Talbot in South Wales are to play their part, they must also look to increased efficiency and competitiveness.
    Mr. Alec Jones: Will the Secretary of State explain why, if nationalisation is

    1011
    part of the problem in Shotton, that is not so in many parts of the European steel industry which are also suffering? If his noble Friend Lord Trenchard is considering action, would it not be more sensible and fairer to those concerned to delay closing Shotton until the Government have at least produced plans to create new jobs and full employment in that area?
    Mr. Edwards: Whatever may have happened had the steel industry not been nationalised, the previous Government were forced to authorise similar closures in Ebbw Vale and East Moors. They allowed those closures to go ahead while urgent consideration was being given to alleviating unemployment, and that is what we are doing.

    Expenditure Cuts
    Mr. Ioan Evansasked the Secretary of State for Wales what representations he has received from local authorities in Wales on the Government cut of capital spending and the proposed 3 per cent. reduction in the amount of spending projected for 1979–80.
    Mr. Wyn Roberts: One, from Clwyd county council.
    Mr. Evans: Has not the hon. Gentleman had correspondence from the Cynon Valley borough council? That council is disturbed about the effect of the cuts and the fact that it will not be able to take on apprentices and train them for future jobs. On Friday I met representatives of the Mid-Glamorgan authority, which intends to write to the Government deploring the cuts that will have a severe effect on the services to the people of Mid-Glamorgan.
    Mr. Wyn Roberts: I am grateful for the information about the Cynon Valley council, but so far I have not received such representations.
    Mr. Wigley: Has not the hon. Gentleman misread the question, which includes district and county councils? Is he aware of the letter from Dwyfor council that was sent to the Welsh Office several weeks ago on that matter? Does he intend that Gwynedd county council should increase rates to make up for the massive loss of resources for the county and district?
    Mr. Wyn Roberts: We hope that all councils will make real savings, and it is important that they should. If the hon. Gentleman is encouraging local authorities to raise rates, I am sure that the ratepayers will be interested to know that.
    Mr. Ioan Evans: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I shall seek to raise the matter on the Adjournment.

    Nursery Education
    Mr. D. E. Thomasasked the Secretary of State for Wales how many pupils aged three to five years attend local education authority nursery classes in Wales.
    Mr. Michael Roberts: About 20,000.
    Mr. Thomas: Would the Minister care to project how many pupils there will be in such classes in two years?
    Mr. Michael Roberts: That is impossible until I hear what the local authorities intend to do. In addition to those 20,000, there are 20,000 pupils under the age of five attending primary schools and about 18,500 in playgroups.

    Regional Policy
    Mr. Alan Williamsasked the Secretary of State for Wales if he will make a statement on the implications for Wales of the current review of regional policy.
    Mr. Nicholas Edwards: Regional policy is the responsibility of my right hon. Friend the Secretary of State for Industry, who will be making a statement in the House tomorrow afternoon.
    Mr. Williams: How does the right hon. Gentleman reconcile the pledge that he made on television prior to the election that there would be no cuts in regional support for Wales with the fact that there has already been a cutback in the Welsh Development Agency finances, and an announcement about the abandonment of the office development permit and that tomorrow we shall hear of further cuts in regional policy? The right hon. Gentleman will not be answering questions again until November. Will he therefore consider changing Wednesday's Welsh Grand Committee debate from a discussion on the highly important issues of the Welsh water authority to one on

    1013
    the repercussions of tomorrow's announcement on regional policy for Wales?
    Mr. Edwards: I have never given a pledge that there will be no cuts in regional policy and the right hon. Gentleman is wrong to suggest that I have. It is likely that there will be an opportunity to debate these issues on the Floor of the House next week, which would be the appropriate time.
    Mr. Best: Will my right hon. Friend have discussions with his right hon. Friend the Secretary of State for Industry to try to ensure that special development areas such as my constituency of Anglesey will receive favourable treatment?
    Mr. Edwards: I do not propose to anticipate the statement that will be made tomorrow by my right hon. Friend.
    Mr. Wigley: In view of the announcement about Shotton and other serious employment problems in Wales, has the right hon. Gentleman made any representations to the Secretary of State for Industry concerning cuts in regional help for Wales?
    Mr. Edwards: I have drawn to the attention of my right hon. Friend the particular problems facing Wales and we have announced that special consideration is being given to upgrading the Shotton area.

    Oil Shortages (Structure Plans)
    Mr. Andersonasked the Secretary of State for Wales whether he will issue a circular to local authorities in Wales about the need to revise structure plans in the light of oil shortages.
    Mr. Michael Roberts: My right hon. Friend has no plans to do so.
    Mr. Anderson: Has the hon. Gentleman seen the recent memorandum of the Transport Users Consultative Committee for Wales about the implications for county structure plans of the oil crisis? Does he accept its conclusions that availability of public transport should be increased at a reasonable cost, that in any future oil crisis major significance should be given to electrification of rail passenger services and that the provision of rail connected industrial sites should be a major priority?
    Mr. Michael Roberts: The planning authorities which submit the structure plans to the Welsh Office are aware of the need to plan with a view to achieving fuel economy. If there is a change—as there has been because of the oil shortage—there are procedures by which they can modify the plans submitted, and alter those that have been accepted.
    Mr. Alan Williams: On a point of order, Mr. Speaker. Can you give guidance to Welsh Members—
    Mr. Speaker: Order. Would the right hon. Gentleman wait until the end of questions before raising a point of order?
    Later—
    Mr. Alan Williams: On a point of order. Mr. Speaker. In answer to question No. 13, the Secretary of State for Wales said, understandably, that he could not give a substantive answer about the impact of the regional review of Wales because there is to be a statement tomorrow afternoon. We accept that priority. Nevertheless, Welsh Members now face the predicament that there will be no opportunity to question the Secretary of State for more than four months. The Welsh Grand Committee meeting on Wednesday was due to be devoted to the work of the Welsh water authority. However, as the Leader of the House is present, I wonder whether it would be appropriate to ask him to change the subject—
    Mr. Speaker: Order. Question Time is over.

    ARTS (LONDON)
    Mr. Jesselasked the Chancellor of the Duchy of Lancaster what is the total financial support to be provided from Government sources for opera, ballet, concerts and theatre in London in the current financial year.
    The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): Arts Council support for these activities will amount to about £14 million.
    Mr. Jessel: As London is the musical and theatrical capital of the world, and our live arts attract a great many foreign visitors, thus bringing in foreign currency,

    1015
    will the Government encourage industrial and commercial sponsorship of the arts?
    Mr. St. John-Stevas: I certainly accept the remarks with which my hon. Friend prefaced his question. It is the policy of the Government to encourage private sponsorship of the arts and steps have already been taken in the Budget which should be conducive to that end.
    Mr. Buchan: What steps in the Budget are conducive to this end? Do the Government intend to leave the sponsorship of the arts to Pepsi-Cola, Coca-Cola and the beer barons? Does not the right hon. Gentleman realise that the Cabinet should rescind immediately the monstrous and philistine VAT at 15 per cent, which will clobber every theatre in London and elsewhere in Britain?
    Mr. St. John-Stevas: My reference was to the general reduction in income tax which will enable private individuals to devote more of their resources to sponsorship of the arts. It is immaterial to me where the money comes from, as long as extra money is provided for the arts. It is our policy to maintain a balance between public and private support.
    Mr. David Price: Will my right hon. Friend bear in mind that we have a very strong provincial tradition both in music and the theatre in this country? In this we differ very strongly from France. Will he do everything he can to encourage support for the provincial theatre and provincial music, as well as for arts in the capital?
    Mr. St. John-Stevas: I agree that we have a very strong tradition of regional arts in this country and the Arts Council has now devoted a major part of its efforts to supporting those arts.
    Mr. Faulds: Since 8 per cent. VAT on the arts was attacked by both the right hon. Gentleman and myself when the Labour Government were in power, how is it that suddenly 15 per cent, is acceptable to the right hon. Gentleman now?
    Mr. St. John-Stevas: It is a question of balance. The increase in the rate of indirect taxation is what has enabled the rate of direct taxation to be reduced.

    INDUSTRIAL ARCHAEOLOGY
    Mr. Adleyasked the Chancellor of the Duchy of Lancaster, pursuant to the question from the hon. Member for Christchurch and Lymington of 18 June concerning export of preserved steam railway engines, what steps he has now taken to implement the extension of export control.
    Mr. Dalyellasked the Chancellor of the Duchy of Lancaster when he hopes to complete his review, promised on Monday 18 June, during parliamentary questions, into matters of industrial archaeology; and if he will make a statement.
    Mr. St. John-Stevas: As I promised on 18 June, I have looked into the matter further. I find that the case of the Pendennis Castle, then referred to by my hon. Friend, the Member for Christchurch and Lymington (Mr. Adley) would be covered by the rules as they now stand, and I do not think that any further extension would be justified.
    Mr. Adley: Is my hon. Friend aware that this is an unsatisfactory answer? Many of the preserved steam engines which could be exported are less than 50 years old. What on earth is the objection to taking, this step in these wholly exceptional circumstances where our industrial heritage is threatened?
    Mr. St. John-Stevas: I have looked into the matter but I have not found any examples, other than the one to which my hon. Friend referred. That occurred before the revision of the rules took place. We must guard against making an unlimited number of special categories which could undermine the whole system.
    Mr. Dalyell: Will the Chancellor of the Duchy now answer question No. 24 and tell us when this review will take place?
    Mr. St. John-Stevas: I have never promised a review as such. The hon. Gentleman was kind enough to elevate my " looking into the matter " to a review. I have looked into the matter, and I am satisfied that the system is working well.
    Mr. Dalyell: So there is no review of industrial archaeology?
    Mr. Cryer: I declare an interest in that I have five £10 shares in the Keighley and Worth Valley Light Railway Company which is a co-operative enterprise. Has the Chancellor of the Duchy investigated the possibility of lowering the lower limit of £8,000 because there are many items of industrial archaeology, not just steam locomotives, but more mundane items such as carriages, which could be exported as they become more and more scarce as time goes by?
    Mr. St. John-Stevas: I am aware of the hon. Member's detached interest in this matter. As the lower limit has just been lowered, it would be premature to change it again unless there is some evidence that it is not working satisfactorily. I will keep the matter under continuous review. I congratulate the hon. Member on at last reconciling the capitalist and co-operative systems.

    NERVE GASES (AVAILABILITY OF SPECIFICATIONS)
    Mr. Douglas-Mannasked the Chancellor of the Duchy of Lancaster what steps he is taking to restrict the availability to members of the public of specifications for nerve gases and other toxic substances in patent libraries under his control.
    Mr. St. John-Stevas: In previous years the libraries which hold patent collections have withdrawn certain specifications from their open shelves. The hon. Member has written to me asking for further action and I am considering the matter with my right hon. Friends the Secretaries of State for the Home Department, Defence and Trade.
    Mr. Douglas-Mann: While acknowledging that the right hon. Gentleman has not had long to deal with this matter, may I remind him that I have provided his Department with disturbing information about accessibility to these patents some months ago? May we have an assurance that anyone who goes to the libraries seeking such information will attract the kind of attention from the security services that is likely to be a deterrent to so doing?
    Mr. St. John-Stevas: I would be the last person to encourage security services
    1018
    to pounce on people who may be making innocent inquiries in the cause of research. The difficulty here is one of censorship. Another point is the disadvantage to science and industry which may result from any interference with the free flow of information on these matters.
    Mr. Faulds: Will the right hon. Gentleman give an absolute assurance that, contrary to suggestions that have been made by the joint consultative council, there will be no charges for loans from public libraries? Also, will he assure us that there will be no postponement of the public lending right? Will he not funk the question?
    Mr. St. John-Stevas: The hon. Member for Warley, East (Mr. Faulds) is his usual vigorous self, but he is being frightened by bogies. I have no plans to introduce library charges, and I trust that we shall make better progress with the introduction of PLR than the Labour Government did.

    ARTS COUNCIL EXPENDITURE (YOUNG PEOPLE)
    Mr. Christopher Priceasked the Chancellor of the Duchy of Lancaster what proportion of the Arts Council's expenditure is devoted to the artistic activities of young people.
    Mr. St. John-Stevas: Separate statistics are not available. Arts Council support is given on the basis of artistic merit, irrespective of the age of those involved, and many young people benefit from attending or participating in the activities made possible by Arts Council support.
    Mr. Price: Does the right hon. Gentleman agree that there is a danger that some activities supported by the Arts Council are overused by tourists from abroad and are not so much available, because of their high cost, to young people without much money? Will he at least ask the Arts Council to try to ensure that the grants paid to community arts, if they must be cut, are cut no more than those to Covent Garden or the Royal Ballet?
    Mr. St. John-Stevas: I do not understand the relevance of the hon. Gentleman's reference to the tourist trade. Tourists are young as well as old. I

    1019
    agree that the community arts movement should have its fair share of support, but that is a matter for the Arts Council and not for me.
    Mr. Adley: Is my right hon. Friend aware that many young people are interested in industrial archaeology? In the light of his previous answer, will he agree to meet a deputation of people who might be able to persuade him to change his mind on the answer he gave to question No. 16?
    Mr. St. John-Stevas: I am always willing to listen to the voice of youth, in however unlikely a guise it appears. I should be delighted to see a delegation from my hon. Friend and his associates.
    Mr. D. E. Thomas: Had the Minister been able to take time off from his onerous duties to attend the recent public forum on drama held by the Arts Council, he would have heard the interesting statistic that over 50 per cent. of young people throughout the countries of Britain have no access to any form of live theatre. Will he ensure that in the course of the savage reduction in public expenditure on the arts community theatre and access theatre are not reduced by the Arts Council?
    Mr. St. John-Stevas: I would not presume to dictate to the Arts Council what it should do. Furthermore, I do not agree that the recent cuts in the arts budget could be fairly described as " savage ". The arts grant for this year has not been substantially reduced. I am aware of the need for new theatre, and I shall do what I can to encourage it.
    Mr. Faulds: May I ask the Minister whether he realises that in addition to the damage caused by Arts Council cuts, the Government's cuts in public expenditure are likely to lead, according to the secondary heads' association, to the dropping of music and art from school curricula—Is he proud of that philistine achievement?
    Mr. St. John-Stevas: I think that the hon. Gentleman is seeing more bogies. A declaration by secondary heads of what they fear might happen is not evidence of what is happening. I have seen no evidence of the unfortunate results which the hon. Gentleman seems to be adumbrating with some relish.

    ARTS (VALUE ADDED TAX)
    Mr. Tilleyasked the Chancellor of the Duchy of Lancaster whether he will make a statement on the effect of increased value added tax on the arts.
    Mr. St. John-Stevas: The effect cannot be predicted because it cannot be separated from the effect of the Government's reduction in general taxation and depends on people's personal choice. This change in the balance of taxation could be beneficial to the arts.
    Mr. Tilley: Is the right hon. Gentleman aware that his answer will be regarded as complacent and inadequate, particularly by arts and theatre administrators who have already made calculations and realise that the effect of increased VAT on ticket prices and accessibility will be very great? This will affect not only commercial theatres but companies such as the Royal Shakespeare, at the Old Vic in Lambeth, and many community theatres. How can he speak of balance in the Budget when arts enterprises have to face, on the one hand, the certainty of cuts which are substantial and savage and, on the other hand, the certainty of the increased cost of VAT? Does he not appreciate that such enterprises are having to balance those factors against the possibility that people who may have more money in their pockets as a result of the tax changes give some towards the arts?
    Mr. St. John-Stevas: The hon. Gentleman must wait and see the effects of the Budget before passing a premature judgment.
    Mr. Latham: Is it not the case that it Parliament takes a decision, as it rightly did, to move the balance from direct to indirect taxation, theatre tickets have to take their place in the priorities?
    Mr. St. John-Stevas: I appreciate that point. I regard the increase in VAT as, at the most, a necessary evil.

    PERFORMING ARTS (CASH LIMITS)
    Mrs. Renee Shortasked the Chancellor of the Duchy of Lancaster what effect he expects the introduction of cash limits will have on the perfoming arts.
    Mr. St. John-Stevas: Cash limits have been applied to arts expenditure since 1976–77. The effect of those set for 1979–80 for expenditure on the performing arts will depend on how pay and prices affect these arts during this year.
    Mrs. Short: Does the right hon. Gentleman appreciate that, under the Labour Government, Arts Council support generally was increased? Does he recall that when he was appointed to his office he said that under the Tory Administration more money would be spent on the arts? Is he not concerned about going back on that promise? As for waiting and seeing, may I ask him whether he is aware that shows are closing down because of the increased cost of VAT and the rising cost involved in buying all the materials needed for a production? What does he intend to do to keep the promise made when he was appointed?
    Mr. St. John-Stevas: I did not make any promise when I was appointed that more public money would be spent on the arts.
    Mrs. Short: The right hon. Gentleman did.
    Mr. St. John-Stevas: In fact, at the Royal Academy banquet I made a quite different prognostication. I hope that the amount of private sponsorship for the arts and the amount of private money coming into it will be substantially increased. As for the matter of cash limits, if the hon. Lady examines the arts Estimates block, she will find that the amount has increased from £68 million to £70 million.

    DUCHY OF LANCASTER
    Mr. James Hamiltonasked the Chancellor of the Duchy of Lancaster when he expects to pay a visit to the Duchy of Lancaster.
    Mr. St. John-Stevas: I have already visited the Duchy Office and the Queen's Chapel of the Savoy, both of which are " in the Duchy ". I shall be visiting the North-West in the parliamentary recess.
    Mr. Hamilton: When the right hon. Gentleman visits the North-West, will he ascertain where the much-admired painting of Cardinal Newman, which was on the wall of the Committee Floor, has
    1022
    been moved to? When he has discovered the answer to that question, will he have the painting transferred to its original position, where it was once much admired by many hon. Members and visitors?
    Mr. St. John-Stevas: I do not see how that matter arises from the original question. However, since the hon. Gentleman has raised the point, I would point out that the portrait of Cardinal Newman belongs to the National Portrait Gallery and not to this House. It is at present hanging in my room, where it appears to be very happy. I should welcome the hon. Gentleman and any other hon. Member who wishes to pay a pilgrimage to see it.
    Mr. Fletcher-Cooke: Before my right hon. Friend goes to the North-West, will he discover and let us know what are the boundaries of his jurisdiction between the county of Lancaster and the Duchy of Lancaster and as between the county of Lancaster and the counties of Merseyside and Greater Manchester? Does that jurisdiction extend over the whole of those three counties in such matters, for example, as the appointment of justices of the peace?
    Mr. St. John-Stevas: The Duchy of Lancaster is more a metaphysical than a geographical concept. It is not confined to any one single area. I shall continue my researches into the topic which my hon. and learned Friend has raised and will communicate with him.
    Mr. James Lamond: With regard to the appointment of justices of the peace in the North-West, for which I understand the right hon. Gentleman is responsible, will he examine the recently published list for the Oldham metropolitan borough, which is causing great dissatisfaction because it appears to be completely unbalanced geographically, politically and socially?
    Mr. St. John-Stevas: I have examined the list within the last few days. I recognise that there is interest in the House in these appointments, and indeed I am seeing an hon. Member on the subject later today. I act on the advice of the advisory committees which are appointed, but naturally I try to see that the various balances to which the hon. Gentleman referred are kept.

    QUANGOS
    Mr. Canavanasked the Chancellor of the Duchy of Lancaster for which public appointments to quasi-autonomous non-governmental organisations within the Duchy he is responsible.
    Mr. St. John-Stevas: None, Sir.
    Mr. Canavan: In view of the Prime Minister's declared intention to abolish all unnecessary public appointments, why not start with the Chancellorship of the Duchy of Lancaster and other Cabinet sinecures? Why not scrap the entire Cabinet? Most of the lackeys in it seem to be dispensable and irrelevant to the Prime Minister's new style of autocratic government.
    Mr. St. John-Stevas: Naturally, I defer to the hon. Gentleman's intimate knowledge of what goes on inside the Cabinet. No doubt he has culled that knowledge from the Sunday Telegraph. I assure him that the Chancellorship of the Duchy of Lancaster is not a sinecure. It is a post that has onerous duties, which I spend a considerable amount of my time discharging. I should be happy to give the hon. Gentleman a list of those duties if he needs further convincing.

    QUESTIONS TO MINISTERS
    Mr. George Robertson: On a point of order, Mr. Speaker. I should like to raise a matter relating to the submission of priority written questions. I tabled four priority written questions on 5 July to the Secretary of State for Scotland, all of which were latterly transferred to the Secretary of State for Industry. They were for answer on Monday 9 July, but on that date I received a holding answer that the Secretary of State would reply as soon as possible. On Thursday 12 July I telephoned the private office of the Secretary of State and asked why I had not received answers to the priority written questions and I was told that inquiries would be made. After a long interval, an explanation was given to the effect that I would be supplied with an answer on Friday 13 July. I have now received replies to the questions. The questions related to the cost and impact of the deferment of regional development grants to Scotland and Wales. In view of the
    1024
    fact that there has been widespread publicity in the press over the weekend about a statement that we hear is to be made tomorrow by the Secretary of State for Industry, I wonder why there was such a delay in the answers to four priority written questions. Clearly, the matter had been under constant review by the Minister. Is it right and in order that a Secretary of State should take so long to answer priority questions?
    Mr. Speaker: The hon. Gentleman was kind enough to give me notice of this point of order. His dispute is with the Minister, and it is not a point of order for me. How and when Ministers answer questions is their concern, and I advise the hon. Gentleman to contact the Minister.

PARLIAMENTARY PAPERS
Mr. Cryer: On a point of order, Mr. Speaker. You will recall that I raised a point of order last Friday in the presence of the Leader of the House about the lack of parliamentary papers. At that time, you said that you had received no requests. Clearly, my point of order in the presence of the Leader of the House must have brought the matter to his attention. In view of the fact that the dispute has been running for several weeks, which is an illustration of the crass way in which the Tory Government are handling industrial relations, I wonder whether a statement could be made today on the matter. Some of us are beginning to feel that the dispute is being allowed to run because the absence of Hansard in its proper form is a form of cover-up for the probing questions asked by the Opposition. Those questions and answers normally receive fairly wide publicity but they cannot now because of the absence of Hansard. I hope that you, Mr. Speaker, can assist in the matter.
Mr. Speaker: I am obliged to the hon. Gentleman. The whole House faces the difficulty to which he has referred. However, I have received no requests for a statement today.
Mr. Ioan Evans: On a point of order, Mr. Speaker. It is widely reported in the newspapers today that there is to be a statement on regional development in the form of a written answer. I understand that there has been some

1025
rearrangement of matters but if that statement is to be in the form of a written answer it woud be difficult for hon. Members to read it because Hansard is not being published. As the press has been informed of the change, the House should now be informed about the matter.
Mr. Speaker: Order. The hon. Member was here during Welsh questions and a statement was made in reply to a question. It is not for me to defend either Front Bench, but I heard the Secretary of State for Wales say that there would be a statement tomorrow.
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): Further to that point of order, Mr. Speaker. I confirm that there will be an oral statement tomorrow. It is not the policy of the Government to make major policy statements by means of a written answer, whatever the press may say.
Mr. Foot: Further to that point of order. Mr. Speaker. I am gratified to hear the right hon. Gentleman's comments on the matter. However, before making a statement in those terms he should have examined the intention of the Government this morning.
Mr. St. John-Stevas: Further to that point of order, Mr. Speaker. I examined carefully the intention of the Government in the light of what I read in the press. I am glad to say that the report in the press has not been borne out.
Mr. Cryer: On a point of order, Mr. Speaker. My point of order relates to the previous one about the absence of Hansard. In the ordinary course of events, statements can be read in Hansard on the following day. Therefore, I wonder whether the Leader of the House could arrange for tomorrow's statement to be available in the Vote Office at 3.30 p.m. for all Back Benchers to read—not just Front Benchers and selected leaders of selected parties. I find it offensive that the press hacks in the Lobby receive copies of statements before they are distributed in the House.
Mr. Speaker: The House is deeply indebted to those who go to great lengths to ensure that we get the photostat copy
1026
that is made available for Members. That entails much extra work for certain staff who serve the House. We shall do our best to ensure that the copy for which the hon. Gentleman asks is available on the following day.
Mr. St. John-Stevas: Further to that point of order, Mr. Speaker. My hon. Friend the Minister of State, Civil Service Department is pursuing the matter. Some progress has been made and the arbitration procedures are open. It is not only hon. Members' questions that one regrets not reading; one cannot read easily the answers of the Government, and that is a much greater loss.
Dr. J. Dickson Mahon: On a point of order, Mr. Speaker. Despite what the Chancellor has said, is it not true that because of the deficiency referred to by my hon. Friend the Member for Keighley (Mr. Cryer) the change in the farming-out arrangements regarding the British National Oil Corporation was in the form of a written answer, which has still not been read? Will the Leader of the House assure us that there will be a statement on BNOC in the next 10 days and tell us when that statement will be made?
Mr. Speaker: This is not the time for business questions. I am taking points of order.
Mr. William Hamilton: On a point of order, Mr. Speaker. May I pursue the original question raised by my hon. Friend the Member for Keighley (Mr. Cryer) relating to parliamentary papers? The Leader of the House will be aware that we had an important debate on Friday on the Abortion (Amendment) Bill. When I made inquiries at the Vote Office I found that there were no copies of the Lane report available either from the Vote Office or from Her Majesty's Stationery Office. Nor were copies available of the reports of the two Select Committees on the same subject.
Will the Leader of the House give an assurance that all those documents will be freely available to members of the Committee dealing with the Bill before we reach the Committee stage?
Mr. St. John-Stevas: Further to that point of order, Mr. Speaker. I will do all that I can to facilitate the provision of those documents.
Mr. David Price: On a point of order, Mr. Speaker. Following the questions raised about the absence of parliamentary papers, may I ask my right hon. Friend the Leader of the House whether he thinks that it might be appropriate for a Select Committee to look into the problem?
If we are to have free industrial negotiations and the right to strike, it is inevitable that the House will suffer from time to time. At the same time, the House suffers from the lack of parliamentary papers.
There is a dichotomy here. Will my right hon. Friend consider whether we ought to have a Select Committee to look into the methods of dealing with these matters? We are extremely grateful for the work put into producing temporary papers, but they are inadequate.

SHOTTON STEELWORKS
Mr. Barry Jones: 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 proposed closure of steel making at the BSC Shotton works, in my constituency."
Last week's announcement stated that 6,300 job losses could be expected out of the existing 10,800 jobs at Shotton, but I am informed that the redundancies may top 7,000 and that the 6,300 total is only a basement figure.
In the Secretary of State for Industry's reluctant statement last week he did not answer the crucial question, namely, how the Corporation can guarantee the regular delivery, over hundreds of miles, of 1½ million tons per year of sheet steel to the Shotton steelworks from Scotland and other works in the United Kingdom. The failure to resolve that issue puts a big question mark over the remaining 4,000 jobs.
In addition, the statement did not adequately deal with the anxiety about the social consequences of the closure. Many steel workers face a life on the dole if the proposals go forward.
I wish to ask the Secretary of State for Industry how the Government will
1028
create up to 9,000 new jobs in the short time span of the proposed rundown of steel making. At home, there is a widespread feeling of resentment at the way in which the closure was announced. We believe that the Government are acting in a brutal, pitiless and savage manner, and that they are sacrificing Shotton on the alter of free market economics.
What the Government propose is not only unwise but unjust. Like the Levite, the Government are passing by on the other side while Shotton steelworks bleeds.
Mr. Speaker: The hon. Member gave me notice before 12 o'clock 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 proposed closure of steel making at the BSC Shotton works, in his constituency."
The hon. Gentleman made a similar application last Thursday, when he anticipated that an announcement might be made. I listened with care to what he had to say. I am satisfied that the matter raised by the hon. Member is proper to be discussed under Standing Order No. 9. Does the hon. Gentleman have the leave of the House?
The leave of the House having been given—
Mr. Speaker: The debate stands over until tomorrow.

STATUTORY INSTRUMENTS &c.
Motion made, and Question put,
That the draft European Communities (Iron and Steel Employees Re-adaption Benefits Scheme) Regulations 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Cope.]
Whereupon not less than twenty Members having risen in their places and signified their objection thereto, Mr. SPEAKER declared that the Noes had it, pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)
Mr. Skinner: The revolution has started.
Mr. Speaker: If that is all it is, we can bear it.

EUROPEAN COMMUNITY (BUDGET)
3.45 p.m.
The Financial Secretary to the Treasury (Mr. Nigel Lawson): I beg to move,
That this House takes note of Volume 7 of Commission Document No. 7633/79 relating to the Preliminary Draft General Budget of the European Communities for the financial year 1980, together with Volumes 1, 2, 4, 5 and 6 and Documents Nos. 5528/79 and 6405/79.
Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
Mr. Lawson: The preliminary draft budget for 1980 will be considered by the EEC Budget Council on 23 July, which I hope to attend. The Government therefore felt that the House should have the opportunity to debate the Commission's proposals even though the Scrutiny Committee had not made a recommendation for debate by the time this was announced. As a result of today's debate I shall be able to take into account at the Council meeting next Monday the views that hon. Members express.
The various documents relating to the preliminary draft budget for 1980 are characteristically voluminous. They lie on the table beside me. The Treasury's explanatory memoranda, dated 27 June and 11 July, will, I hope, guide hon. Members through the thickest. Volume 7, in two parts, plus an annex containing triennial estimates, is the most important. It contains the Commission's general introduction and detailed analysis. Of the other volumes, No. 3, containing the preliminary draft of the Council, is not yet available. I regret that. Document 5528/79 contains a global appraisal by the Commission of the budgetary problems of the Community. That was considered at the Joint Foreign and Finance Council on 2 April. Document 6405/79 relates to the maximum rate applicable to non-compulsory expenditure under the 1980 budget. That will be taken into account in the usual way by the Budget Council. Explanatory memoranda have been provided on both documents.
Monday's Budget Council will, as usual, consider and establish the draft budget by qualified majority voting. The draft budget will then be forwarded to the European Parliament. The Council
1030
will no doubt also have the triennial forecasts before it, but is unlikely to take specific decisions on them.
The Treasury's explanatory memoranda contain much information on the way in which the Commission has prepared the preliminary draft budget, on the task of the Budget Council, and on individual parts of the budget likely to be of most interest to the House. As our time today is limited, I do not propose to make many detailed comments at this stage, but I will, of course, be happy to respond to specific points put to me by hon. Members when, with the leave of the House, I wind up the debate.
The United Kingdom contributes to the Community budget under the own resources system, which, following the completion of the transitional arrangements of the Treaty of Accession, will be applied in full from 1980. As is explained in the memoranda, the actual United Kingdom gross contribution will depend on the volume of own resources actually established. However, on the basis of the original proposal the gross United Kingdom contribution would amount to about £2,079 million. That does not mean that that will be the figure at the end of the day. [An HON. MEMBER: " It never is."] As the hon. Gentleman says, it never is.
The Commission has since prepared a rectifying letter which, if adopted as it stands, could increase the total budget by about a further 8¾ per cent. and add £155 million to the gross United Kingdom contribution, bringing it up to some £2,235 million. The budget is bound to be significantly amended as a result of consideration initially by the Budget Council on 23 July and subsequently by the Council and the European Parliament, which together constitute the budgetary authority under the rather complicated constitutional arrangements of the Community.
The final total of the budget will therefore not be known until the end of the year, although I hope and expect a lower figure to emerge.
Mr. Douglas Jay: Why?
Mr. Lawson: That is the view of the majority of the member countries of the Community. However, what concerns Her Majesty's Government chiefly is not

1031
the size of the gross United Kingdom contribution but the scale of our net contribution to the Community budget after taking into account receipts. At this stage it is impossible to put a precise figure on what that will be, but it is clear that on the basis of existing policies the United Kingdom net contribution to the 1980 Community budget will be in excess of £1,000 million. That is, quite frankly, intolerable.
Immediately on taking office, the Government made clear their grave concern about the size of the United Kingdom's present and prospective net contribution to the Community budget. As my right hon. and learned Friend the Chancellor of the Exchequer explained in his Budget speech, we consider it quite unjust, and out of keeping with the spirit and intention of the Community, that Community policies should, through budgetary transfers to which they give rise, be hindering the United Kingdom's efforts to help itself and to restore its economy to health.
Mrs. Elaine Kellett-Bowman: May we take it that, having made those interesting observations, my hon. Friend and his colleagues will press for a substantial increase of the regional fund, from which the United Kingdom benefits to the tune of nearly 28 per cent? Does he regard it as somewhat misleading that in the preliminary draft budget there appear not the original figures agreed in the draft budget for last year but those in the draft supplementary budget, which altered the orginal figures?
Mr. Lawson: I do not think that it is of great help to go over the 1979 budget history. That would take far too long. As for whether we should be seeking more from the regional fund and a beefing-up of the regional budget, I shall turn to those matters in due course. I ask my hon. Friend to be patient and bear with me.
As I was saying, the Government consider the United Kingdom's present and prospective net contribution to the Community budget to be unjust and out of keeping with the spirit and intention of the Community.
It may well be undesirable that any EEC member State should suffer a budgetary loss on this scale. It is certainly wrong that the United Kingdom, which
1032
regrettably is one of the poorer members of the Community, should be doing so.
As hon. Members will be aware, the Government have been campaigning hard within the Community to correct the present unacceptable situation. At the European Council in Strasbourg on 21 and 22 June, my right hon. Friend the Prime Minister secured an agreement among her colleagues that the EEC Commission should study the effect of present budgetary transfers and bring forward proposals for solving the problem. As my right hon. Friend reported to the House on her return, this means that at last we have agreement to tackle our inequitably high net contribution to the Community budget. That is far more than the previous Prime Minister and previous Administration, for all their bluster, ever achieved.
Mr. Jack Straw: Will the Minister make it quite clear exactly what was achieved at Strasbourg? Is it not a fact that nothing was agreed in terms of a decision to tackle the problem? It was merely agreed that the Commission should produce a reference paper describing the financial consequences of applying the budgetary system in 1979 and 1980—a great deal less than an agreement to tackle the problem.
Mr. Lawson: It is the first stage in tackling the problem. It is a stage that the previous Government never achieved through all their sabre-rattling and bluster. I suggest that the first step is the hardest to achieve.
Mr. Tony Marlow: As the next stage of tackling the problem, will my hon. Friend take the opportunity to tell our friends in Europe that if something substantial is not done very soon there is a real risk that the British people will feel that they want to withdraw from the European Community?
Mr. Lawson: The British people made clear in the referendum that they do not wish to withdraw. That does not in any way derogate from the seriousness of the situation, and, indeed, it is becoming increasingly serious. That which my right hon. Friend achieved in Strasbourg is an indication that the Government's new and positive approach to the Community is bearing fruit.

1033
The Government will continue to take every opportunity to impress on our Community partners the seriousness of the problem and the need for substantial, rapid and lasting relief. In particular, we shall be drawing attention to the deficiencies of the existing financial mechanism, as a result of which it is quite incapable in its present form of meeting our needs.
The financial mechanism in its present form, which the House knows dates from 1975, was the jewel in the crown of the previous Administration's celebrated renegotiation of the United Kingdom's terms of entry into the Community. It has proved an abysmal failure. That is chiefly because it was designed to correct only an excessive gross contribution to the EEC budget, whereas the trouble lies with our net contribution, which in turn is largely attributable to the low level of the United Kingdom receipts from the budget. For example, Community budget expenditure in the United Kingdom amounts to about £10 per head against an EEC average of between £25 and £30 per head. Moreover, the mechanism had carefully built into it a number of restrictions whose overall effect is further to limit the size of any refund that the United Kingdom is likely to obtain.
A clear measure of the mechanism's inadequacy in relation to our needs is that even on the most favourable assumptions we would qualify for a net refund, in respect of the 1980 budget that we are discussing, of only one-quarter of our net contribution of £1,000 million or so—and that is assuming that the United Kingdom meets one vital condition, that it should be in aggregate balance of payments deficit on current account over the three preceding years ending in 1979. If this condition were not met—and it is touch and go at present whether it will be met—the net refund would diminish to a mere £30 million, which is ludicrously inadequate in the context of the sums at stake.
Hon. Members who read the draft budget will note that there appears in the 1980 preliminary draft budget, for the first time, provision for a refund to the United Kingdom under the financial mechanism of the order of £40 million.
By removing some of the present restrictions on its operation, but without
1034
altering the underlying concept, it would, I believe, be possible to ensure that the financial mechanism yielded a substantial and reliable refund to the United Kingdom. However, so long as the mechanism remains concerned only with the correction of an excessive gross contribution, not to mention the absurdity of having it keyed to balance of payments, it cannot provide relief on the scale that the United Kingdom now urgently requires.
We shall at the same time reiterate our support for a better balanced United Kingdom EEC budget in place of one overwhelmingly biased in favour of agricultural spending. But helpful though a better balance could be, I must make clear that there is no realistic solution to the United Kingdom's budgetary problem along this route. This answers, to some extent, the point made by my hon. Friend the Member for Northampton, North (Mr. Marlow), although I will go into detail later. Many member States will fiercely resist any attempt to cut back drastically expenditure on the common agricultural policy. Yet without such a drastic reduction in agricultural expenditure, we cannot hope to achieve a pattern of expenditure, and therefore of net contributions, which is acceptable to the United Kingdom within existing Community revenues. I am glad to have the support of right hon. Gentlemen on the Opposition Front Bench.
This Government, like many others in the Community, for we are not alone, will need a great deal of persuading that these revenues should be increased. Moreover, even if they were, there is no guarantee that the United Kingdom would benefit significantly from any such increase, certainly not once enlargement has taken place.
We shall be actively seeking a more effective arrangement than the financial mechanism in its present form. Dealing only with the gross contribution will not be good enough. It is the net position which matters. I am convinced that we and our partners will find it necessary to discuss in detail what arrangements would bring about a quick and lasting solution to the British problem on the budget.
I have already referred in general terms to the well-known preponderance of the common agricultural policy in the Community budget. For 1980, agriculture

1035
once again absorbs about 70 per cent. of the budget. I should tell the House that the credits in the 1980 preliminary draft budget were based on the Commission's proposals for a price freeze in the 1979 agricultural price fixing. This was a breach of the convention that the preliminary draft budget should not anticipate Council decisions. Moreover, the Commission also assumed the implementation of an unrealistically large co-responsibility levy on milk. The House has already expressed its opposition to the discrimination against the United Kingdom embodied in the proposed co-responsibility levy.
In the event, the Council of Agriculture Ministers, on 18–21 June, did not settle on the Commission's proposals but allowed a small price increase, the lowest average common price increase since the United Kingdom's accession to the European Community, but at the same time imposed a freeze on milk prices. The co-responsibility levy was left at the 1978–79 level of 0·5 per cent., with no change in the distribution of its impact on farmers.
The preliminary draft budget before the House has already been overtaken, to some extent, by events. The Commission, as I mentioned earlier, has hastily prepared a rectifying letter which will be before the Budget Council on 23 July, next Monday, and which will shortly be deposited with the House.
Mr. Frank Hooley: Would the hon. Gentleman agree that the recent settlement has added another £860 million to the calculations of the budget?
Mr. Lawson: I would not agree with the hon. Gentleman's figure. I would like to continue my speech because this is a brief debate.
That is not the end of the change that has occurred to the preliminary draft budget. The main elements of the guarantee section expenditure are production and consumption, world commodity prices, on which the hon. Member for Sheffield, Heeley (Mr. Hooley) is a great authority, and exchange rates. These are difficult to predict, especially as long in advance as the budget timetable requires. Consequently there is the real prospect that the Commission may have to bring
1036
fo ward yet another rectifying letter this autumn. This would adjust the current forecast provision in the light of the latest information then available. Even so, it would be prudent to recognise that the expenditure is subject to further change, for example as a result of the 1980 round of price fixing.
I would like to comment briefly on two other aspects of the agricultural expenditure which dominate the budget. It is still far too high, and it continues to be dominated by milk. Before allowing for the recent price-fixing changes, the preliminary draft budget allocated nearly 40 per cent. of guarantee section expenditure to milk on the Commission's own presentation of the figures. That is at least one-quarter of the total preliminary draft budget. The rectifying letter will no doubt mean that these figures increase by about 5 per centage points. At least, however, for the first time since our accession, the price of a product in surplus was frozen. We need to press ahead on this path to bring the wasteful and expensive production of agricultural surpluses under control.
On the rest of the budget, the Government's position, both in the Budget Council itself and in the discussions that have already taken place at official level, is much influenced not only by acute concern at the overall level of the United Kingdom net contribution to the budget but by the overriding need at the present time to curb public expenditure in general. We have therefore adopted, and will continue to adopt, a highly critical approach to the Commission's proposals for additional expenditure. We are not alone among member States in so doing.
Mr. Tam Dalyell: If we are talking about a highly critical approach, what are the Government doing to enhance the powers of the Court of Auditors? Have the Government any proposals to look at alleged and possible misuse of funds? I will not use the word " scandal ". I will restrict myself to saying " misuse of funds " at the present time. What is the position on the Court of Auditors?
Mr. Lawson: Needless to say, we are wholly opposed to any misuse of funds. I will try to give the hon. Gentleman a full answer on his specific point about the Court of Auditors if, with the leave

1037
of the House, I have the opportunity to wind up the debate.
I do not wish today, for obvious reasons, to anticipate the outcome of discussions and voting in the Budget Council on Monday on particular items. I should perhaps mention the particular question, raised by my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman), on our potential attitude to Commission proposals for the regional and social funds from which we have drawn, in the past, some modest benefit. The Commission has proposed significant increases in budgetary provision in 1980 for these two funds. The attitude that we adopt has to take account both of the potential net benefit to the United Kingdom of expenditure under these two headings and of the Government's plans to reduce public spending which must, of necessity, limit the claims that we make on these funds.
It is important to draw the attention of hon. Members to the fact that the expansion of the regional and social funds can, in any event, make only a modest contributon to remedying the gross imbalance between United Kingdom receipts from, and contributions to, the Community budget. There can be no question of any adequate solution to our problems being achieved through budgetary expansion. Even though the system of national quotas guarantees the United Kingdom a modest extra benefit from expansion, our position on the proposals for any expansion of the regional fund is somewhat luke-warm.
On the social fund, where there are no national quotas, we must be rather more cautious at the Budget Council. We shall obviously react more favourably if it turns out that the Commission plans to use the extra funds in a way that will clearly benefit the United Kingdom.
I have concentrated my comments on the proposals within the Commission section of the budget. The provision for the other institutions is predominantly for administration, including provision for staff. Again, we have adopted a severely critical approach. The proposals for budgetary provision in 1980 for the European Parliament were drawn up by the previous Parliament and took account of provision made in a supplementary budget for the needs of the new directly elected Assembly in the second half of 1979. The
1038
proposals for 1980 project this forward on a full-year basis but the newly elected Parliament may well have further views on this provision which would be made known, along with its modifications and amendments to the Commission proposals, in the autumn, for further consideration by the Budget Council in November.
I turn finally to the amendment tabled in the name of the right hon. Gentleman the Leader of the Opposition and his right hon. and hon. Friends. I have already made clear that the Government consider that the present situation, so far as our net contribution to the Community budget is concerned, has become manifestly and massively inequitable. This does not mean—I underline these words—that we hold to the concept of the so-called juste retour—the doctrine that each member of the EEC should get out of the Community precisely as much as each puts in—to the last penny. But it does mean that the present situation cannot be allowed to continue. It is in that spirit that I invite the House to accept the Opposition's amendment.
4.10 p.m.
Mr. Denzil Davies: I beg to move, to leave out from " House " to the end of the Question, and to add instead thereof:
" urges Her Majesty's Government, in view of the United Kingdom's massive and ever increasing net contribution to the Community Budget, to press for a fundamental reform of the Budgetary arrangements so that Britain's contribution to the Budget is at least not greater than the receipts."
The Financial Secretary has set out briefly the effect, as he sees it now, of this preliminary draft budget. The Opposition accept entirely that it is a preliminary budget and that the figures that he has given must to some extent be imprecise, since no doubt they will be changed. On the other hand, in view of the fact that the budget does not cover large areas of expenditure we can be reasonably confident about the way in which the figures will come out at the end of the day.
The Financial Secretary said that the net contribution was likely to be about £1 billion in the calendar year 1980. It might even be higher. It might be about £1·2 billion. So at one level at least this debate is about public expenditure of £1 billion, and possibly even more next year, made by the United Kingdom.

1039
From that point of view, it is a fairly simple matter. But apparently there the simplicity ends, because this item of public expenditure is very different from the other items of public expenditure that we debate in the House. Not a penny of this £1 billion will be returned to the people who sent us to this House. The British people who pay the taxes to produce this £1 billion or more will not receive it back in any shape or form. It will not be used to build hospitals, at least in this country. It will not be used to help pensioners or the disabled, or to build schools. This money goes across the exchanges to the other countries of the European Community and, of course, those countries are in direct competition with us in many economic activities. So we are discussing a unique proposal for public expenditure. The money goes directly to our competitors, and it is bound to damage us.
This public expenditure is not subject to cash limits. The Financial Secretary was a great advocate of cash limits when he was in opposition, and I have no doubt that he adheres to the same view in government, but there is no question of applying cash limits to the £1 billion or more of public expenditure that we are discussing today.
Apparently the Secretary of State for Industry is to come to the House tomorrow, possibly to knock £150 million or £200 million off the Industry budget. The Secretary of State for Industry, however, has no control over this item of public expenditure. The Chief Secretary to the Treasury, who deals with public expenditure, is not in the Chamber for this debate. I do not criticise him for that. The reason is that he recognises his impotence in this matter. That is why he has delegated responsibility to his subordinate, the Financial Secretary. But the hon. Gentleman will be going to Brussels or Luxembourg on Monday, and he will be shuttling back and forth over the next few months between those two places and London. With him will go that great bundle of documents, but he will be arguing about only the minutiae and the footnotes of those documents, because most of the expenditure is outside the budgetary mechanism.
The brutal fact is that the problem that we are discussing today can be resolved legally only by those countries
1040
which are receiving the £1 billion from us agreeing to give up their right to receive that money and to let us keep some of it ourselves. That is the irony of the situation that we face. The problem is that those countries which are the recipients of our bounty will be asked, apparently, to join together in deciding not to accept the money after all but to let us keep it.
In this House, therefore, all that we can really do—though no doubt the matter will develop as time goes by—is to table an amendment to express our concern at this inequitable state of affairs.
The Financial Secretary said that he accepted the spirit of the amendment but did not accept the principle of keeping the budgetary contributions in balance—in other words, that the country should not have to pay more into the budget than it received out of it. I do not see why he should object to that principle; it is a perfectly fair one. There is nothing anti-Community about it. Why should we pay more into the Community than we receive from it? Why should not we balance our contributions between gross payments and receipts? I do not understand the hon. Gentleman's acceptance of the spirit of the amendment, because it is quite clear about that. It is also clear in seeking a fundamental reform of the budgetary mechanism.
The hon. Gentleman told us that he was concerned about the financial mechanism—the way in which it could be balanced, but the amendment is concerned with more than that. It is concerned with a fundamental reform of the budgetary mechanism.
The amendment also states that we are now making a massive net contribution to the EEC, and we have been told that it could be more than £1 billion next year. That contribution, if it is £1 billion next year, is probably about 1 per cent. of our gross national product. In other words, we are contributing about 1 per cent. of our GNP to the other countries of the EEC. Perhaps the size of that contribution can be made more vivid and more dramatic-looking if we consider that this year and next year we are paying over to the Community almost the equivalent of the benefit to the balance of payments that we are getting and shall be getting from North Sea oil. If this contribution

1041
increases over the years we may find that most of the balance of payments benefit of North Sea oil will be eaten up by our budgetary contributions to the EEC.
We are not debating a budget in the accepted sense of that word. Although the documents are described as " the draft budget ", they are not really a budget at all. They are estimates of expenditure. The real budgetary decisions, if they can be so described, have been taken elsewhere. The Ministers of Finance in the Community do not take much part in the budgetary process as we understand it. The decisions on expenditure are not taken by the Ministers of Finance; they are taken by other Ministers deciding expenditure, and then the Ministers of Finance or their deputies look at the estimates, as will be done when the Financial Secretary goes to Brussels on Monday.
This was borne out clearly by what happened recently as a result of the Luxembourg farm price agreement. The Minister of Agriculture, Fisheries and Food came back from Luxembourg when, after great difficulty, we managed to extract from him—not from the Treasury—the information that the budgetary cost of that agreement for us would be £50 million. If the Financial Secretary is concerned about the budget, he should start re-asserting the authority of the Treasury in Whitehall in terms of our contribution to the Community budget.
I tabled two questions to the Chancellor of the Exchequer about our contribution to the budget. They were replied to by the Minister of Agriculture, Fisheries and Food. I suggest that the Financial Secretary should start here in his own Department, and reassert some control over the budgetary mechanism. The agreement in Luxembourg put an additional £50 million of public expenditure on the budget. I am not concerned with the other payments coming back. If this Government are to reduce public expenditure over the next year, that means that £50 million will have to be knocked off some domestic expenditure—money that we can ill afford to lose.
Mr. Hugh Dykes: The right hon. Gentleman is injecting a spendid amount of Welsh indignation into his remarks in criticising these budget problems, which have risen to substantial proportions. But why did his own Gov-
1042
ernment start getting worried about these matters only as late as last October or November? Very little was said before then. It was perfectly easy to anticipate the development of these problems in the last few years, especially with the results coming from the North Sea. Why did not the right hon. Gentleman's Government say more a good deal earlier?
Mr. Davies: That is not true. I believe that I took part in the last debate on the EEC, and I made it quite clear then what our contributions would be. I said then that they would probably be £1 billion in the coming year. I know that the hon. Gentleman is making a party point, but this is not a party matter. It has taken a considerable amount of time. It was only when the figures started to crystalise that the other countries could be persuaded even to listen to us about this matter. It has taken some time. I accept that. I hope that the hon. Member will not try to make a party point on this issue, because that is not my purpose. I was merely criticising one aspect by which questions were transferred from the Chancellor of the Exchequer to the Minister of Agriculture when they should not have been.
Quite apart from the lack of control of Finance Ministers over the budget, there is a more fundamental point to which we have tried to refer in the amendment—the need for fundamental reform of the budgetary mechanism. Both the revenue and expenditure sides of the budget are harmful and unfair to this country. They are also out of date and irrelevant to the problems that face Britain and the other EEC States.
The Commission obtains its revenue in three ways. First, there is a VAT-based charge with a ceiling of 1 per cent. There is also a tax on food imports and a tax on other imported goods.
The VAT charge is unfair, especially to this country, because it takes no account of a country's ability to pay. It is regressive. The Financial Secretary did not say much about this, but I hope that when he winds up the debate he will give us the Government's view on the VAT charge and the need to introduce some element of progression into the contribution. Will he also tell us the Government's view—a Commission

1043
paper on the subject was discussed at the last joint meeting to which he referred—about the Commission's tentative proposal to increase the VAT contribution ceiling from 1 per cent.?
I hope that the Financial Secretary will make it quite clear this evening, as we did in Government when this matter was discussed, that his Government will not agree to any increase in that 1 per cent. VAT ceiling unless and until our budgetary contributions are satisfactorily and equitably resolved. The last Government made that clear in Brussels, and I hope that the present Government will do the same.
I come next to the tax on food imports. The revenue side of the budget needs to be fundamentally altered because the tax on food imports is applied to North American wheat and on other food coming into this country. Much of the money thus raised goes towards providing butter mountains in Europe. No one in his right senses could argue that there was any sense in that kind of system. The problem must be resolved in the first instance on the revenue side. It is no good saying that we can put it right by tinkering with the mechanism.
There is then the tax on imported goods, which makes no sense as a means of raising revenue. There may be an argument for taxing imports on grounds of general trade policy, but as a revenue raising mechanism the system is quite ridiculous. It is regressive and nonsensical.
Mrs. Kellett-Bowman: Does the right hon. Gentleman agree that if, over the years, the last Government had negotiated an energy policy similar to the CAP we should have balanced our books very handsomely in terms of our EEC contributions?
Mr. Davies: No, I do not agree with that.
We then must look at the expenditure side of the budget, because that, too, is completely out of date and irrelevant, and is harmful to this country. The Financial Secretary said that at least 70 per cent.—the figure is probably closer to 75 per cent.—of all the revenue goes on agriculture. However, the Financial Secretary can do nothing about the level of agricultural spending when he goes to
1044
Brussels and Luxembourg on Monday because it is a charge on the Community budget. Short of changing the Treaty of Rome, nothing can be done to alter that arrangement. When he goes to Europe, therefore, he will be arguing about 25 per cent., or even less, of the budgetary expenditure. Most of that expenditure is outside his consideration, and he can do nothing about it by way of qualified voting, the veto or anything else.
Whatever importance one attaches to agriculture in Western Europe, one could not argue that 75 per cent. of the Commission's expenditure should go in farm support. It is not as though the poorer agricultural areas were getting most of the money. Apart from Ireland, most of the CAP spending on agriculture goes to the richer farmers of Western Europe—to the farmers of France, Denmark, Holland and Germany.
A regional development fund was set up in an attempt to try to redress the balance, but the curious anomaly is that less than 10 per cent. of the budget will probably go to poorer areas under the regional fund while the other regional development fund—the CAP—will provide 70 per cent. of the money for the wealthier areas.
I urge the Financial Secretary and his colleagues to press for a dismantling of the CAP and the establishment of a proper regional fund which will help the poorer agricultural areas and help those industrial areas that badly need change. The arrangements for paying out expenditure under the budget are hopelessly inequitable and out of date. They may have made sense 20 years ago, but in spite of the massive change that has occurred in the economies of Western Europe since the war, they have remained unchanged.
I therefore ask the Financial Secretary to press for a fundamental change. The case for it is very good. It could be accepted in many other European countries. It is that the Treaty of Rome has been overtaken by events, and it is now time for all the countries of the EEC to redraw many of the provisions of the treaty to make them relevant to the needs of the 1980s.
No amount of tinkering with the financial mechanism will remedy the problem.

1045
It is no good the Financial Secretary saying that this is all a matter of net payments and that the gross payments do not matter. It is no good pretending that it will be solved by some general spirit of good will. Too much money is involved for that. The countries that will receive the money will not agree to a change out of a spirit of general good will. Far more will be needed than the occasional cup of tea at the Elysée Palace, and the occasional pilgrimage to a French nuclear power station will not solve the problem. It will be solved only by hard negotiation. I believe that the day will come sooner than the Financial Secretary thinks when he and his colleagues will be faced with the decision to act unilaterally on the problem. When that day comes, the British Government, of whichever party, will have to decide to act unilaterally. I hope that if it is the Conservatives they show courage in doing so, because we on the Labour Benches would certainly support them.
Mr. Dykes: What suggestion does the right hon. Gentleman have of the unilateral action which should be taken?
Mr. Davies: I did not want to go into that matter, but many suggestions have been made and they have been fairly drastic. One is that over a period we should put the Community on notice that we intend gradually to reduce our contributions. There have been other suggestions. There will come a time when the British people will not fork out £1 billion and more every year for the Community without getting any appreciable benefit from it. The unilateral action will have to be taken to reduce our contribution if no agreement is forthcoming fairly soon from the other member States.
In the meantime, although we are glad that the Financial Secretary has accepted the spirit of our amendment, I think that his acceptance does not meet the point of the amendment. I hope that when he goes to Brussels and when he and his ministerial colleagues attend the meetings they will stand up for British interests, because this situation will not be allowed to continue for much longer.
4.30 p.m.
Mr. Michael Shaw: As I listened with interest to the right hon. Member for Llanelli (Mr. Davies), my
1046
thoughts moved towards what was said by my hon. Friend the Member for Harrow, East (Mr. Dykes). One tends to encounter difficulties when one has led from the Dispatch Box in government and then takes a few short paces to lead for the Opposition. Without expressing ill will, I must tell the right hon. Gentleman that the tenor of his speech today was different from the tenor of the speech that he made last year.
I accept that there are problems and the right hon. Gentleman emphasised the need to tackle them. That was his message today. However, I do not know how the right hon. Gentleman can talk about the need for re-examining the regional fund after what happened last year when, because of the vote by the right hon. Member for Heywood and Royton (Mr. Barnett) in Europe, the amendments were not cancelled. Trouble ensued because the Labour Government refused to back the decision. That was not an act of leadership, nor was it decisive. The issue was clear at the time. Had the Labour Government held fast, the result would have been different.
Last year play was made of the size of the documents that we are discussing. It is a pity that we cannot use the original documents instead of cyclostyled documents which are more bulky. However, the documents are helpful to those who take an interest in budgetary discussions because they contain full explanations of expenditure—whether one likes that expenditure or not.
We are discussing the 1980 budget. It is the first budget after direct elections. That means that its details will be examined by a number of new committees composed of new Members who are anxious to make it clear that they are seriously interested in the work of those committees.
I imagine that the draft budget will be scrutinised closely by the committees and in debates in Parliament. I agree with my hon. Friend the Financial Secretary that we must at all costs resist any suggestion that there should be spending for spending's sake. That is a danger when new committees are appointed. At the same time, because the members of the committees will feel important and feel that they have a purpose, they will seek ways to turn formerly national policies into

1047
Community policies. As a result the debates will be more closely reasoned than in the past.
During discussions on the 1978 budget I felt the need to press on the European committees the need for them to take a greater interest in the various items in the European budget. The interest that was aroused then and which was continued last year will be present in greater measure this year.
The Financial Secretary has expressed even more clearly the general view of the Government. They will take that view with them to Europe together with views expressed by the House today. There is a large increase in the preliminary draft of the social fund budget. That issue will exercise the mind of the Financial Secretary. I shall not deal with the generality of the social fund but I refer to chapter 54 which refers to provision of 100 million European units of account to the European Coal and Steel Community and deals with social measures in connection with the restructuring of the steel industry. In view of the difficult decision on Shotton, about which there is to be a debate in the House, hon. Members will wish to know how that new provision in the European budget will affect such a dire situation. Will we be able to make use of that provision?
I fully understand the Financial Secretary's view about the need for overall economy and that small increases in the regional fund would not provide the balance that Britain needs. My hon. Friend is right. None the less, there is a place for a regional fund in the European budget.
One must remember the possibility of our entering the European monetary system later in the year. My view is that if we are to pursue such a common system in the Community, and if values of money are to be harmonised, other conditions in the Community, such as climate and geographic position, must be taken into account when support and encouragement is given. There must be other regulatory measures if we are to make the EMS work. Some form of regional fund assistance must be one of our weapons.
Chapter 57 deals with interest rate subsidies. I wonder whether we shall insist that if any progress is to be made on
1048
our entry into the EMS we must benefit from that chapter and the 200 million EUAs. We are entitled to a proportion of them.
The right hon. Member for Llanelli mentioned the common agricultural policy. I am glad to hear that a rectifying letter will be issued next Monday. The budget takes on a more realistic character with that letter. I am sorry that we do not have the benefit of it today. Having had a rectifying letter so early, we must have another rectifying letter when we know the state of the harvest and world markets. World markets may change very rapidly in the next few months if all that we hear about the Russian crops is anything to go by. Therefore, I echo the words of the right hon. Member for Llanelli that, whatever changes there are in the first rectifying letter, and the second that I assume will be received in September, they will be upwards.
Our contribution to the common agricultural policy is rising all the time. How can we change that? I listened to the words of my hon. Friend the Financial Secretary with a certain amount of gloom, but I agreed with what he said. It will be difficult to make sizeable reductions in the methods and policies of other members of the Community. Yet I believe that we must aim for that. We must also aim for other changes so that we can be seen to be highlighting other shortcomings in the budget, which arise largely from the fact that the policy that was laid down for the Six is not workable or suitable for the Nine. We know full well that when it comes to a membership of 13 or 12 the policy will be even more inappropriate.
Therefore, there must be changes. I hope we succeed. Our arguments will have more strength when the ceiling of 1 per cent. in VAT is introduced. I stress that, although the CAP is the first of the Community policies—many say that it is the only real Community policy—we have not handed over the whole of the support of our agricultural industry to the CAP; no country has done so. Although such a large sum goes through the European budget, large sums also go through national budgets.
We must get back to the original concept of the CAP and make sure that it

1049
supports an efficient Community agricultural policy. Where we find pockets of the CAP that are not efficient we must examine them and decide whether it is due to social reasons or to some tradition in the country concerned—for example, the part-time farming in Bavaria. I believe that a strong case can be made that if that is the way the Bavarians want to farm the Germans themselves should pay for it. That would cut a substantial sum from the CAP budget. Alternatively, we could decide that support was not necessary in those areas. That is another aspect which we should look at seriously.
We must go into this matter with two things in mind. First, I entirely disagree with my hon. Friend the Member for Northampton, North (Mr. Marlow), who said that if we cannot get what we want we should threaten to come out of the Community. I believe that that is a disastrous way of negotiating. We should make it quite clear that we are in the Community to stay and that we mean to argue our case so well that we shall achieve justice for everybody. Justice is on our side. If we are prepared to argue and press our case, we shall win through. That is the only way to do it. We must show our good will and determination, and we shall win through.
I do not think it is sufficiently considered at times but the budgetary authority consists of the Council and of Parliament. Council and Parliament have to agree, but Parliament has the final word. On certain matters, which I agree are the more important, the Council has the last word. In other areas, Parliament has the last word. But at the end of the day it is Parliament that has to announce that the budget has been adopted.
Mr. David Stoddart: Will the hon. Gentleman make it clear that, in this context, when he talks about Parliament, he is talking about the European Assembly? This House is Parliament the other body is the Assembly. It will cause a great deal of confusion unless we get the wording right.
Mr. Shaw: I am grateful to the hon. Member for Swindon (Mr. Stoddart). Things are improving, though. By the time I have been on my feet for two minutes I usually get that sort of interjection. I hesitate to say how long I
1050
have lasted this time. None the less, I thought that at long last everybody had accepted the fact—as indeed has the European Assembly—that it is called Parliament. All the friends of the European Assembly call it Parliament. The quickest way of proving whether a questioner is sympathetic to the concept of Europe is whether he calls the European Assembly an Assembly or Parliament—unless, of course, he is reading from the Treaty.
The maximum rate is always exceeded and therefore there must be agreement on that rate. But, apart from that, the terms of the Treaty are so ambiguous in some respects that it would need a decision of the court on many of them. I believe that that would be not only a waste of time but against the interests of the Community. I reiterate that the two sides must get together in the end.
I hope that my hon. Friend the Financial Secretary will find that the spirit of conciliation, which I truly believe was beginning to emerge under the old European Parliament and the Council, will come to the fore even more rapidly so that agreement can be reached on this budget and on all suceeding budgets.
I wish my hon. Friend every success in his first meeting on Monday in conciliation with the Parliament and in the further negotiations.
4.48 pm
Mr. Douglas Jay: As these documents and much else show that the economic cost to this country of membership of the EEC has now reached crippling proportions and, indeed, is still mounting month by month. The dynamic, long-term consequences are proving even more damaging than the immediate impact during the first few years.
The budget contribution which we are discussing today is only one part of the crippling burden, but it is certainly bad enough. It is worse now, as the figures we have been given today show, than the first confirmed pessimists ever predicted. We now have everyone, including the Prime Minister, the Chancellor of the Exchequer, the Financial Secretary and Lord Cockfield in the House of Lords, condemning the consequences of this budget to this country. We are all anti-Marketeers now, or so it would appear

1051
from this debate. They all agree that these budget arrangements are completely unfair.
It is very much less clear to me what the Government really intend to do about it. As I understand the Financial Secretary, they are not even putting forward their own precise proposals for remedying the present budget situation. According to The Economist of 23 June, our net contribution in 1978 was already £830 million. According to its estimate, it will be at least £1 billion this year and £1·2 billion in 1980, which is 25 per cent. or 30 per cent. more than our fair GNP share would involve.
I wish that the Financial Secretary would tell us more clearly than he did earlier whether even this £1·2 million net for 1980 is correct. We know from his valuable explanatory memorandum of 27 June that, at any rate about a fortnight ago, the United Kingdom's gross contribution in 1980 was estimated at the astonishing figure of £2,079 million. But, as I understood the Financial Secretary today, already—within two or three weeks—that has proved to be an understatement. I think that he said that it is now to be rectified—if that is the right word—to over £2,200 million. Have we any firm grounds for believing that the reverse payments—the payments back to this country—will bring that huge figure of £2,200 million down to even £1·2 billion net? We seem to hear nothing but a vague expression of opinion today.
Even if there was a reduction in that figure of £1·2 billion net, they are outrageous figures. I wholly agree with the Financial Secretary's epithet in describing them as " intolerable ". I hope that he meant " intolerable ", since that should mean something that we are simply not prepared to put up with. They are intolerable burdens both on the United Kingdom balance of payments and on the budget. After all, we get nothing for them in exchange. Almost everything else that the EEC does, from fisheries to dearer food, does further damage to this country.
In any case, before the debate concludes, may we have a fairly precise estimate from the Government of what the net budget burden will be in 1980, after allowing for the new food price agree-
1052
ment of a fortnight ago, when the Minister of Agriculture, Fisheries and Food failed to get a general price freeze? Presumably the Commission's estimate would for that reason have to be re-estimated upwards because of the alteration in the food price figures.
Apart from the United Kingdom's contribution, the EEC budget is growing at an ever more alarming rate. According to the relevant document today, the general budget, which was only 4·64 billion EUAs in 1973, had risen to 13·7 billion in 1979 and is estimated to reach 16·6 billion in 1980—which is about £10,000 billion—of which we are expected to find 20 per cent. These are enormous figures. As we all know, 70 per cent, is spent on agriculture, in effect for the purpose of doubling the price of food. We are being asked to pay between £1,000 million and £2,000 million into this budget for the benefit of paying about double for our food from overseas compared with what we would pay if we were not members.
These figures and what we have heard today are a pretty shattering condemnation of the original terms in the 1972 Treaty of Accession on which we were asked to join the EEC, and only a slightly lesser condemnation of the renegotiated terms of 1975, which I opposed and condemned at the time. What will happen in two years' time when, according to the Commission itself, the EEC budget exceeds the present sources of revenue?
I believe that we must not accept the specious argument that in order to lower the proportion of the total budget spent on agriculture other portions of the budget must be increased. I have already seen that argument peeking out in the Commission's documents. The only effect of that would be to increase the total when what we ought to do is to reduce it. Here I support what my right hon. Friend the Member for Llanelli (Mr. Davies) has said.
The Government have a God sent chance to say now that they will not agree to any new sources of revenue until the CAP and the budget share have been drastically reformed. If they will say that emphatically today, at least we will have made a little progress. But so far they have not said so. Indeed, in spite of the Financial Secretary's words—I almost said " boasts "—all they have done about

1053
the budget so far is to invite the Commission
" to examine the matter and make proposals".
Apparently our Government are not making any proposals at all, but are simply inviting the Commission to have a look at the whole thing and to make some proposals, but we do not know what. I do not believe that that will frighten the French or get us anywhere at all. Why do not the Government do what the French would do in these circumstances—make precise proposals and set a time limit before which they have to be accepted? If they did that, a little progress could be made.
Meanwhile, the Minister of Agriculture, Fisheries and Food's surrender over the food price freeze is bound to increase budget expenditure still further. I quote from the more recent edition of The Economist of 30 June. In an article on the meeting of Agriculture Ministers under the heading " From Bad to Worse" it is said that the Ministers'
" package will push up the farm price support budget about $1 billion above what it would have risen to anyway—an 18 per cent. increase on the 1979 figure."
Is that a correct interpretation of what the Agriculture Ministers did? The Econonist adds that, allowing for the green pound devaluations, average EEC food prices will rise about 6½ per cent., and that no measures were agreed to tackle the Community's monstrous 20 per cent. milk surplus. The Economist also calculates that the latest food price agreement alone will inflict a further loss on EEC consumers of nearly $6 billion and hand to farmers throughout the Community a windfall of over $5 billion. That is another example of how the CAP is working.
In examining the budget and the CAP, we must always remember that neither of them represents the total balance of payments loss which EEC membership is now inflicting on us. In addition, we are burdened with a huge trade deficit with the Six, mainly in manufactured goods. The Department of Trade has just given me the figures in a written answer, and, like the budget figures, they get worse and worse. In 1970, before we entered the EEC, United Kingdom trade in manufactures with the Six showed a small surplus of £160 million. In 1978, it had turned into a deficit of £2,550 million. In
1054
the first quarter of 1979 this deficit was running at over £900 million, or an annual rate of about £3,600 million.
There were possible distortions in the figures for the first three months of this year, but even if one writes down the annual rate to £3 billion, which is what it would appear to be, it shows that the dynamic losses inflicted on us by EEC membership are far greater than anyone ever estimated. If one adds even half of that trade deficit to the balance of payments loss caused by the budget and the common agricultural policy, one finds that the total balance of payments loss must now be about £3 billion a year, which is surely far greater than our earnings from North Sea oil in balance of payments terms.
If the Financial Secretary can give us the Treasury's latest estimate of what our North Sea oil earnings are running at in balance of payments terms, I should be glad to hear it; but I suspect that it is well below £3 billion a year. It is this huge balance of payments burden which is holding back our whole economy at present and is a crushing burden which this country cannot be expected to sustain any longer.
In these circumstances, what do the Government do? They have taken one positive step in this field in the last four weeks. They have deposited £3½ billion of the United Kingdom's gold and dollar reserve with the European monetary co-operation fund—without, incidentally, any authority from Parliament, and without clearly telling Parliament that they had done so. On this point, the Prime Minister, when I inquired what was happening at Question Time, did not even know whether or not this deposit had been made. But I have since learnt, from a letter from the Prime Minister, that the deposit was made on 6 July this year.
However, when a similar transfer was made by the Labour Government after the war, to the International Monetary Fund, in December 1945, full legislation was passed by this House in order to authorise the transfer of part of our gold and dollar reserve to an overseas authority. I understand that it is argued that this is not necessary because this transfer is classed as a swap and it is alleged that we get a security in return. The Government should really explain a

1055
little more clearly what this argument amounts to. What is the security that we get in return?
I would argue that, whether or not legislation is necessary, certainly the Government should have some authority from Parliament to transfer 20 per cent. of the United Kingdom's currency reserve to an authority overseas. So far, they have not acquired that.
However, the most pressing question of all, and one to which no one has given a clear answer this afternoon, is how we are to free ourselves from the total economic burden of EEC membership, as it is now falling on us, which threatens our whole economic prospect over the years ahead. All experience of the EEC shows that this will be done only when we make clear that unless fundamental changes are made, we cannot remain members for much longer. If that is what the Financial Secretary meant by " intolerable ", I would most strongly support him.
Another recent issue of The Economist, dated 23 June, showed that France and Germany are both now making huge financial and economic gains out of this country. For instance, if we left the EEC, not merely would France and Germany lose large markets for manufactured exports, but they would have to spend over £800 million on subsidising food overseas in order to be able to get rid of the food that they are now selling to us at high prices. The fact of the matter is that if we left we should gain very substantially and other major members of the EEC would economically lose.
Surely that is a fact to be taken into account in any bargaining that we conduct in the future. The argument of saying " We shall stay in whatever you do. Now, please, will you hand back some of this money? ", will simply not get us anywhere. If the Minister believes that it will, I think that he has failed to read the whole story of our membership of the EEC.
Mr. Robert Maclennan: I am sorry to interrupt my right hon. Friend, particularly as I did not hear his opening remarks. However, with regard to his assertion that the British market has been inundated with French
1056
and German goods and that if we were not members of the EEC this would not be so, and our market would not be open to these goods, will he say why that is so? Is it because he would expect high tariff barriers to be erected against German and French goods? Is he suggesting that we would be part of the siege economy?
Mr. Jay: No, of course I am not suggesting that. I wish that we did not have a siege economy on food, either. All I am saying is that anyone who understood the situation knew that this trade deficit would arise, and therefore it was extremely foolish to plunge ourselves into that situation. However, I must not be led too far from the argument.
Finally, when will the Government recognise these hard facts, whether or not they like them, and what measures will they take to remove these crushing burdens on our economy?
5.6 p.m.
Mr. K. Harvey Proctor: It is a privilege to make my maiden speech in this debate. It is a particular pleasure for me to speak after the right hon. Member for Battersea, North (Mr. Jay) and my hon. Friend the Member for Scarborough (Mr. Shaw), the views of both of whom I respect very much indeed. It was in the Young Conservatives in Scarborough that I first cut my political teeth.
I have the honour and privilege to represent in this House the electors of Basildon. It is a large constituency—the second largest in England and Wales—with over 103,000 voters. It is a very varied constituency. It has a new town, Basildon, with its associated residential areas of Laindon to the west and Pitsea to the east, and two more traditional towns well known in this House, Billericay and Wick ford, to the north. There are several charming villages and farms in between which must not be forgotten.
The election result in Basildon on 3 May was notable. It was one of the best in the country for the Conservative Party, with a swing of a little over 11 per cent. My grateful thanks are due to a hard-working agent, Mrs. Peggy Marshall, and a happy and enthusiastic band of Conservative Party workers.
Many former Labour supporters voted Tory for the first time. They did so for numerous reasons. Of course, many

1057
wished to buy their own corporation or council homes. Many are already doing so, thanks to a Conservative Administration. Many wanted improvements in the commuter service into London, on both the Liverpool Street line and the Fen-church Street line. Many skilled workers were dismayed at the depressing of their differentials as a result of pay curbs and controls.
Many people, having fled from the problems created in inner London by New Commonwealth immigration in the 1950s, 1960s, and 1970s, voted Tory because they did not want that self-same problem to follow them into the new town.
At this juncture, I pay a warm tribute to my predecessor, Mr. Eric Moonman. He had been a Member of the House on two occasions—from 1966 to 1970 for the seat of Billericay, and from February 1974 until this year for the Basildon constituency. He was well known in this House for his work for many causes, particularly that of mental health. In the constituency he had the reputation as a good constituency Member of Parliament, and I hope to follow in his footsteps.
I also hope to follow in the footsteps of my hon. Friends who have represented part of my constituency—the hon Member for Essex, South-East (Sir B. Braine), the hon. and learned Member for South Fylde (Mr. Gardner), the hon. Member for Holland with Boston (Mr. Body) and the hon. Member for Brentwood and Ongar (Mr. McCrindle).
There are three points that I wish to make, two of which I believe will command almost universal support and the first which may not. First, the gross Community budget is too large and should be reduced. It should not be used as an engine to drive us into economic and monetary union, as set out in the documents before the House. I agree with the right hon. Member for Battersea, North that we should not be seeking further sources of finance for the EEC until we have sorted out the CAP position.
Secondly, the Community budget contains a grevious imbalance—and I refer of course to the common agricultural policy, which my hon. Friend the Financial Secretary mentioned as absorbing 70 per cent. of the budget. The Conservative Party is committed to radically re-
1058
forming the CAP—and the sooner the better for the British taxpayer, consumer and farmer. I share the views of right hon. and hon. Members who have spoken in the debate that our share of the net contribution to the EEC budget is too large. The financial mechanism of 1975 that was intended to reduce our contribution has been calculated in the preliminary draft budget, volume 7A pages 513 to 517, at 68 million units of account or some £44 million as against the deficit of over £1,000 million. That is peanuts. It is not good enough. It is a Conservative manifesto pledge that we shall reduce the burden that the Community budget places on the public sector borrowing requirement and the British taxpayer. If unilateral action is required and nothing else, then unilateral action it must be.
I quote from an observation in paragraph 96 of the White Paper of 1971:
" Thus in the Government's view neither our contribution to nor our recepits from the Community budget in the 1980s are susceptible of valid estimation at this stage."
That was rather an understatement. It went on:
" And it is for this reason that the Community declared to us during the course of the negotiations that if unacceptable situations should arise ' the very survival of the Community would demand that the institutions find equitable solutions '."
So they must.
In all these areas where change is required I believe that the Government will have the full support of the House and the country. Whether Ministers wear a velvet glove in preference to a mailed fist is of purely academic interest. At certain times both will be required. What our people seek are results.
If it is not trying the patience of the House too much, I shall close with some general observations on the current position of the EEC. Three options are open. There is federalism and economic and monetary union, leading to a single currency, common economic policies, common taxation and common external policies. That will lead inevitably to a supra-national State—a United States of Europe.
Secondly, there is a continuation of what we have now—the break-up and breakdown of the EEC in disagreement, mutual distrust and recrimination. Unless

1059
the EEC can get to grips with the large food surpluses, the CAP will collapse and with it the whole edifice of the bureaucratic structure of the EEC Commission. Some right hon. and hon. Gentlemen may think that that time should not be long away.
Thirdly, a more positive view is that we should seek to establish a partnership of nation States, each sovereign and supreme. That would require the EEC to change its rules and role, its format and outlook, to reject the Treaty of Rome as outdated and old hat and establish a free trade area in Western Europe—as wide and diverse as possible. That is the sound and sensible approach—the middle way.
Some have supported federalism honorably because they believe that the nation State has has had its day. I believe that they are out of keeping with the spirit of the age. The renaissance of the sovereign State and this our independent Parliament is at hand.
5.16 p.m.
Mr. Russell Johnston: It is a pleasure to follow the maiden speech of the hon. Member for Basildon (Mr. Proctor). It is a civilised tradition of this House that an hon. Member is congratulated by an hon. Member from another party who may not necessarily agree with him. I suspect that had the honour fallen not on me but on the right hon. Member for Battersea, North (Mr. Jay) the area of agreement would have been considerable. Nevertheless, I greatly enjoyed listening to the hon. Member for Basildon, and I am sure that the House will in future benefit from his contributions. He referred to Mr. Eric Moonman, who was well respected here. I judge from his clear, assertive but not aggressive manner that the hon. Gentleman will earn our respect in the same way.
As the right hon. Member for Llanelli (Mr. Davies) rightly observed, this is not a budget but an accumulation of expenditures. It does not have any social or political objective unless it is in agriculture to retain stability of production and supply—and at present I shall leave aside the arguments on cost. However, before moving to these questions, may I ask the Minister a specific question? There are moves afoot in the Community to fulfil a specific role in the problem of the Viet-
1060
namese refugees. There will be proposals this week in the European Parliament to that effect, and approaches have already been made to M. Cheysson, the member of the Commission responsible. Does the Minister believe it is a function of the Community to help with problems of that kind or is it more properly a function of individual sovereign States acting independently rather than in co-operation? The Vietnamese situation has appalled many of us. The need to do something about it is urgent.
It is clear from what the Financial Secretary said that the Government do not intend to seek the solution by making the budget more interventionist—in fact, the contrary is true. Let us look at the two areas in which intervention is possible. The first is the regional fund. Everyone agrees that at present, even taking account of the projected increase, this fund is too small to affect appreciably the unemployment problems of the Community or the depressed regions. But effective resource transfers which will have some impact can be achieved only by the regional fund.
When talking about our budgetary contribution, the Financial Secretary said that it was clearly wrong for any Community country to suffer a budgetary deficiency on the scale that we are suffering it, given our economic situation. I accept that it is contrary to the whole spirit of the Community that weak economies like ours should have to bear such a burden, and if there are to be transfers that will have an impact these must be sizeable ones from the richer countries to the poorer countries.
But the Minister appears to be arguing that the concept of the regional fund as a resource to help weaker members is one that he would reject. I point out that this was always the concept that the Commission held as long ago as the early 1960s. After all, a greatly enhanced regional fund was always seen as the other side of the coin of economic and monetary union. Is the Minister saying that he no longer sees it in that sense? If so, that represents a considerable change. What limit would he place on the size of the regional fund?
It is doubtful whether we can get out of the situation by increasing the overall size of the budget, and in real political

1061
terms it is difficult to see any marked decrease in the amount spent on the common agricultural policy. Certain things can be improved and it can be decreased to some extent, but not dramatically. Therefore, surely we must look—if we are interested in the Community as such—at both the regional fund and the social fund, certainly if we view the Community as developing along its present lines rather than as the hon. Member for Basildon saw it.
My second point is that there is considerable scope for redistribution in the social fund. How does the Minister see its future? Reference has been made to the steel industry's problems, but there is a much wider consideration.
In his contribution the Financial Secretary played down the role of the regional and social funds, but these should be central if the Community is to advance. He referred to the fact that the Government hoped to cut down public expenditure, and increased regional expenditure is public expenditure. But it is public expenditure with a specific employment objective, which I hope that the Minister will not rule out of hand. He referred in approbatory terms to the fact that the regional fund had fixed quotas and, by golly, we should get our share. Does he believe that the Community, if it went along with an increase in the regional fund, would also like to see larger quotas for each section, as a price for increasing the total? I share the general concern about the balance of the budget, but I would very much regret solutions being seen in exclusively nationalistic terms.
I agree with the criticisms made about the right hon. Member for Llanelli. It seems to be a characteristic of all British Ministers that as soon as anything goes wrong they threaten to leave the Community. I do not agree with that approach because it is neither constructive nor beneficial.
Mr. Denzil Davies: I never said that.
Mr. Johnston: The right hon. Member never went that far, but he was talking about timetables and targets and giving the Community notice. Obviously he had some concept of himself as sheriff, putting a notice on the fellow's door and warning him.
1062
The Minister went out of his way to reject the juste retour but at the same time he seemed to take a step nearer to it. To do that at a time when we need all the help and support we can get from our Community partners is not a step in the right direction.
5.27 p.m.
Mr. Ronald Bell: It gives me great pleasure to speak after my hon. Friend the Member for Basildon (Mr. Proctor). I admired his maiden speech greatly and agreed with it. I admire his confidence and the forthright way in which he expresses his opinions. The House looks forward to the day when he is no longer inhibited by the convention of not being controversial. It gives me special pleasure to congratulate him because for so long I have agreed with the views that he has expressed outside the House. I had always hoped that one day he would have the opportunity to express them inside.
Everyone has agreed today that something must be done, because the present situation is intolerable. But having listened to the debate I still wonder what will be done. My hon. Friend the Financial Secretary said that the gross contribution was excessive, but that what really mattered was the net contribution. That is not a proposition with which I agree. I invite my hon. Friend to consider how that works out. Our gross contribution is enormous—it is more than £2,000 million a year and probably getting bigger.
For those of us who do not want to see the Common Market becoming a super-State, that is a menace in itself. But there are those—and one hears more of them every month—who want to remedy the situation by increasing the expenditure of the Common Market in other ways. They take the view that if food accounts for 75 per cent. of the budget the problem can be solved by increasing the size of the budget so that the expenditure on food, while remaining substantially the same, becames a much smaller proportion of a much larger budget. That argument has no attraction for me.
I listened with interest, as I always do, to the hon. Member for Inverness (Mr. Johnston), who talked favourably of the social fund. Indeed, my hon. Friend the Member for Scarborough (Mr. Shaw) also

1063
dealt with this subject. I am always pleased to speak after hon. Friend, because I never agree with what he says. An expression such as "social fund" has a virtuous ring. It is something everybody should be in favour of. The fact that it is "social" and also a "fund" means that it must be a good thing, and the bigger the better. The bigger the social fund, the more money can be spent on deserving causes. But what it all comes to is that we are then put in the role of going to Brussels with a begging bowl for our own money.
Where does the money come from? There is a diversity of sources, but the main source by far is the agricultural levy. What one is doing under that system is putting up the price of one's food by paying a heavy levy—let us say, for the sake of simplicity, £2,000 million, although that is a slight overstatement—and getting some, or even all, back by way of a great number of little grants, loans, and goodness knows what, for all kinds of industries and enterprises—all decided, of course, by the Commission in Brussels. Therefore, one greatly increases the price of one's imported food. On that argument, the country concerned would be reasonably content if it got most of its money back in grants to particular sections of its enterprises decided upon by the bureaucrats in Brussels. Again, such an argument has no attraction for me.
The right hon. Member for Battersea, North (Mr. Jay) was asked whether he was suggesting that the imbalance in our trading account might be rectified by restrictive policies. I should not be too worried about the restoration of tariffs. After all, when we entered the Common Market we reduced protective tariffs on motor cars, tariffs which were much higher than those of the European countries we were joining. Lord Stokes paid for a very expensive advertisement dealing with this subject.
Mr. Straw: Lord Stokes's shareholders paid for it.
Mr. Bell: I accept the correction. The advertisement said that entering the Common Market was good for British Leyland. I do not think Lord Stokes held that view for more than about 15 months. I imagine that nobody holds that view now. If in a somewhat weak period in
1064
a nation's economic life—and we would all agree that this is a somewhat weak period for us—one dismantles relatively high tariffs when entering a partnership with people who are dismantling relatively low ones, one is not exactly helping one's stumbling and faltering industries. However, the relevant point about the budget is that if we had not gone into the EEC, or if in some way we restored the situation which existed before we went in, we should be better placed competitively because we should not have lost our main competitive advantage—namely, cheap food.
We had many disadvantages. I suppose that every country has its pluses and minuses. The two big pluses we had were cheap food and the 50 per cent. de-rating of industry, which, since it was pre-GATT, could not be attacked. We threw away both pluses. At the same time we dismantled high tariffs in return for the dismantling of low tariffs. Then we wonder why things have not turned out well.
I animadverted to these considerations at the relevant time, as did others. However, that is historical, and the question now is what are we to do about it? I must point out to my hon. Friend the Financial Secretary that it is not much use describing the difficulties and asking for assessments and the like. We may get something, but we shall not get much, and it will hardly be relevant.
The fact is that the Community was constructed from the beginning on the basis that food importers paid for the Community. It made sense as long as there were six members. It did not make sense on that basis for the biggest food importer of the world to join it. That is the real trouble, and we know it. It was pointed out at the time, as were the other considerations. My hon. Friend the Financial Secretary says that we must not talk about pulling out, because the British public voted to stay in. That is true, but they did so on certain basic representations. If those representations can be made good, I, too, shall favour our staying in.
What were those representations? The first was that, as the result of our joining the Community, the price of food in this country would be raised by about 1 per cent. I am sure that the Minister remembers the frequent references to that figure

1065
in those days. The second representation was that the cost in food, and in the loss of competitive position, flowing from the difference in tariff levels, would be not just offset but swamped by the dynamic reaction of our entering the Common Market.
Very often the seat from which I rose to speak is occupied by my right hon. Friend the Member for Sidcup (Mr. Heath). He and my noble Friend Lord Barber were the prime exponents of the swamping doctrine—the flood which it was said would make the cost of going in negligible in a mere matter of two or three years. It was calculated what the increase in the gross domestic product would be as a result of the dynamic effect of going in. It was said that the effect would be relatively enormous.
Mr. Jay Mr. Jay rose—
Mr. Bell: I see that I have stimulated the right hon. Member for Battersea, North to intervene.
Mr. Jay: The hon. and learned Gentleman stimulates me to remind the House that the right hon. Member for Sidcup (Mr. Heath) said in his White Paper that the Government were confident that our trade balance with the Six, if we joined, would be "positive" and "substantial". Those were the words used, and I remind the House that we now have a deficit of about £3 billion a year.
Mr. Bell: I accept that form of words, but it was the underlying argument that concerned me. It was accepted that if one did the arithmetic statically, one would obtain a disadvantage. We were always accused of overlooking the dynamic aspects—namely, the stimulus obtained from going in. It was sometimes compared to jumping into a cold bath, and that is a good comparison.
The third element of the assurances that we were given is to be found in the White Paper to which my hon. Friend the Member for Basildon referred in his excellent speech, namely, that there would be no erosion of essential national sovereignty. If, by any readjustments, negotiations or agreements, the price of food can become 1 per cent. higher by reason of our membership of the Community, the dynamic reaction can be seen and possibly quantified and if there is no erosion of our national sovereignty, I
1066
see no objection to our continuing as a member of the Community.
However, I am not optimistic of achieving that aim, at any rate in the next few months. I wish that others would bear in mind constantly the broadcast to the French people made by President Pompidou after his conversations at the Elysée, sometimes in the Elysée garden, with my right hon. Friend the Member for Sidcup. It was a broadcast of the utmost interest, because, in his capacity as head of State, the French President said that he had talked with the British Prime Minister and that they had agreed that for France the common agricultural policy was vital. They had agreed that France could not agree to a tariff-free area unless the other nations of the Common Market shared among them the burden of French agriculture. He said that the British Prime Minister had promised that if Britain were allowed into the Community, she would not seek to destroy the common agricultural policy.
Unless the French President was misleading the French people, and doing so within 24 hours of the conversations with my right hon. Friend the Member for Sidcup, and in a way that was published to the world, we accepted that as the condition of the gate to our membership being opened by France. I have never read a démenti of that. How do we now set about making a fundamental change in the common agricultural policy? That fundamental change is the crucial condition of any advance towards the conditions that I have set out.
I have attempted to describe the difficulties as I see them. I have not provided a solution to them. I cannot say where we should go from here, but I am entitled to say, like the yokel, "If I were going there, I would not start from here."
5.43 p.m.
Mr. Ron Leighton: It is a great pleasure to follow the sagacious speech of the hon. and learned Member for Beaconsfield (Mr. Bell). I too, should like to offer my congratulations to the hon. Member for Basildon (Mr. Proctor). His constituency is a part of the country that I know well and I enjoyed his lucid speech. I hope that we hear more from him in the future months.

1067
What I have to say may well follow upon his comments.
Over the years there has been a long debate about the balance of costs and advantages which might accrue from this country joining the Common Market. The argument on what benefits we should obtain from membership is now over. The question which remains is how great is the damage that is being done to us by that membership. In almost every quantifiable field our membership is highly disadvantageous to us.
We always knew that there would be costs attached to the farm policy and we always knew that the budget would be tilted against us. However, we were told that there would be great gains on trade which would compensate for that. As has been explained, the opposite has taken place and we have a huge trade deficit. We urgently need will minimise the damage that has been done to Britain by our membership of the Common Market and that will get a better deal for Britain.
We are considering specifically the subject which is monstrously unfair to Britain—our contribution to the budget. The Financial Secretary has said that it is an intolerable burden for Britain. Why? It is because it is financed by three taxes, the so-called own resources. First, there are the customs duties on manufactured goods which no longer come to the Treasury but go to Brussels. We still conduct most of our trade outside the Common Market and, therefore, we pay in more than most of the other countries. Secondly, there is a levy on agricultural imports. We import more food than any other country, whereas most of the other Common Market countries are self-sufficient. Therefore, we contribute more in that respect. Thirdly, there is a notional rate of VAT.
All that bears heavily on Britain. As the hon. and learned Member for Beaconsfield has pointed out, it was a system that was devised by the French civil service—not the French nation, its peasants and its workers. The French civil service is trained to work in what it sees as the French national interest and it laid down the finance regulations as a condition of our joining. In that sense, it is anti-British.
1068
The accession abatement arrangements are now ending and the full horror of that condition is becoming apparent. On the front page of The Guardian this morning figures are quoted not of £800 million or £1 billion, but of £1½ billion as our contribution. If we examine what the money is spent on, we discover that at least three-quarters of it is spent on agricultural surpluses. Yet in this country we do not have agricultural surpluses because we import food. Therefore, we lose out in both ways—we pay in more but we get out less. Already, according to the article in The Guardian, we are by far the largest contributor to the budget. We pay three times as much as the richest country in the Community—West Germany. Already we are the paymaster and yet we are the third poorest country.
Therefore, a chronic inequity has been built into the arrangements and it is becoming worse. It is getting worse because of the actions of the present Government. The last meeting of the Agriculture Ministers saw the 1½ per cent. increase in food prices. The food mountains will increase, even in respect of dairy products where there was a price freeze. The Commission has told us that, despite that freeze, there will be a 5 per cent. increase in dairy surpluses. I understand that the Commission will soon come forward with a supplementary budget. Therefore, more money on top of that which has been extorted from us already will be needed.
The temporary arrangements which have cushioned us so far are ending and our contributions are spiralling out of control. Yet we in this Parliament have no control over what we are spending. That is amazing. Our people are being taxed, we are contributing to the budget and yet we have no control over those contributions.
In the Treasury answer to the hon. Member for Northampton, North (Mr. Marlow) the Financial Secretary said:
"The latest available estimates of the costs per head of the United Kingdom's net contribution to the Community budget are £11.20 in 1978 and £14·80 in 1979. These figures take account of refunds under article 131 of the Treaty of Accession."—[Official Report, 2 July 1979; Vol. 969, c. 450.]
That was an enormous increase in one year, and I remind the House that such figures are always underestimated. The

1069
average British family will soon be subsidising the richer nations of Western Europe by at least £100 a year—the equivalent of 3p or 4p reduction in the standard rate of income tax. I know of no instance in history of any nation agreeing to pay an annual ransom of that sort to other countries, except perhaps when countries have been defeated in war and have agreed to pay reparations.
The whole process is highly inflationary. It puts up food prices. It increases public expenditure—something which Conservative Members often complain about. It increases our public sector borrowing requirement, which leads to either higher interest rates or higher taxes. It is a luxury that we cannot afford.
The subsidies paid in Europe mean that each cow in the Common Market is subsidised by as much as £100 a year. British taxpayers are subsidising the richer nations of Western Europe by twice the amount that we give in aid to impoverished Third world countries. The Government are worried about public expenditure and have lopped off £50 million of the aid that we give to such countries. Yet, without any parliamentary control, hundreds of millions of pounds more are being given to the richer countries of Western Europe. I cannot understand how the Government justify that.
To make things worse, that money is going across exchanges as a burden on our balance of payments, thereby making the full economic cost much greater. The cost is magnified by the restrictive fiscal and monetary policies that are made necessary by that burden. We have to constrain our economy in order to reduce imports so that we can correct the current account deficit. The estimates of most reputable economists are that the reduction in our gross domestic product has to be magnified three times—giving us a total reduction of between £3 billion and £5 billion. That is the real cost to our economy of our contributions to the budget. In addition, of course, we have to add on the trade deficit.
That is disastrous. We agree with the Financial Secretary that it is intolerable. We are redistributing wealth from the poor to the rich. The disparities in living standards are widening and the budget is making them worse. The Government talk about cuts in public expenditure at home, but they are not prepared to do
1070
anything about cutting public expenditure in relation to the Common Market.
Everyone is asking what we should do about the problem. I think that we shall have to take unilateral action. A distinguished Conservative Member—I shall not embarrass him by giving his name—explained in a public speech that the whole procedure is madness and that there is no logic in the CAP. Its raison d'être is that it is a method by which the ruling parties on the Continent bribe sections of the agricultural population to vote for them. That hon. Member said that he did not mind that, but he did object to those parties using British taxpayers' money for the bribes.
We have spent five years trying to reform the CAP and have had little success. The vested interests are such that I do not believe that we shall be able to reform the policy. What are we to do? I suggest that we should put a ceiling on the amount of taxes that we are prepared to pay.
We could withhold our taxes. I know what de Gaulle would have done if he were in our position. He would have withheld the taxes for a year and would not have taken his seat until the Common Market came to its senses. He was a good Frenchman. What about some of our Ministers being good Britons?
If we cannot get changes in that way, and if the other members of the Common Market want to continue to run their agriculture as they do at present, let us have an exemption for Britain so that we may do something different. We shall have an opportunity soon. The Commission has told us that it is running out of money and will need new taxes. It is talking about taxes on tobacco, alcohol, petrol and so on. We should block any changes until the drastic reform of the CAP has been brought about We want a completely different basis for financing the Community budget
I expect the Government to fight, to stand up for British interests and to do what de Gaulle did for the French. If they do that, they will receive the support of the British people, who are not willing to put up with the present position for much longer. If the Government continue with the policies that are runing this country and leading to its permanent decline and de-industrialisation the

1071
demands for Britain to get out of the Common Market will grow stronger.
5.57 p.m.
Mr. Tam Dalyell: I begin on a note of common ground. There are many who feel that it is deeply unsatisfactory that our debate should be truncated, even though it is in prime time. May I lay down a marker for next year by urging that a debate on the European budget ought to have a full day up to 10 o'clock?
As an unreconstructed pro-Marketeer, I am beginning to feel a bit like the last of the Mohicans, but I had better not try to answer the points raised by my hon. Friends because I shall get involved in a long debate.
I have a sharp and precise question in addition to the one that I asked during the Financial Secretary's speech. What is being done about the question of the court of auditors' investigative powers? We see on television a man driving his pigs from one side of the Irish border to the other, apparently attracting a levy every time he does it.
As a member of the former Public Accounts Committee Sub-Committee I know that the questions concerning the Como butter and the Italian lorries are still unresolved. It is about time that someone came to terms with the problem of the relationship between the court of auditors of the Commission and the police forces of the nation States. We shall not get far in determining cases of alleged fraud if there is not a working relationship with the police forces of the nation States.
When the budget committee of the European Parliament went to Rome, the Italian auditors were less than helpful on those problems. [Interruption.] Well, may there be mirth and ribaldry among my hon. Friends. I hope that some sort of answer will be given to what is a real problem. Those who miss a bus may have to pay a taxi fare. We missed the Community bus and I concede that we are paying a taxi fare. Like so many other costs, the taxi fare goes up year by year. We may be in the position of casting envious glances at those of our partners in the Community who are having something of a subsidised ride.
1072
The budget for 1980, initially proposed by the Commission, represented a signicant step forward in the attempt to provide a better balance between agricultural and non-agricultural spending. The proposals made by the Commission in June envisaged a decline in the share going to agriculture, from 65 per cent. to 58 per cent. in commitments and from 68 per cent. to 64 per cent. in payments. On the other hand, major increases in social spending, regional funding, support for energy and industry and Third world aid were put forward.
The Commission was obviously aware of the need to limit the overall growth in the Community's budget, which it set at 9 per cent. for payments and 13 per cent. for commitments—that is barely keeping pace with the rate of inflation for the Community. All this seems to be fairly reasonable. It is appropriate that the Commission should now seek to limit the overall growth of Community spending and should aim at a switch from agricultural spending to the other sectors of the budget.
However, the basis on which the Commission made these proposals was its determination to seek a price freeze for agricultural products in surplus and very moderate and prudent price increases elsewhere. Here, however, following the drawing up of the preliminary draft budget, the Commission was overruled by the Council of Ministers. Its decisions, permitting a significant overall increase in agricultural prices, have had a major effect on the budget, increasing agricultural spending by 1·3 billion European units of account, so that the initial moderate increase in agricultural spending now becomes a major one with the overall increase in the budget being set at 22 per cent. for commitments and nearly 19 per cent. for payments.
Whereas, under the Commission's original proposals, agriculture accounted, as I have said, for 58 per cent in commitments and 64 per cent. in payments, it will now account for 61 per cent. in commitments and 67 per cent. in payments. This is rather a different picture and surely I am entitled to ask that we consider where responsibility lies. Bluntly, it does not lie with the Commission or with the European Assembly, which supported the prudent price doctrine in the interests of tighter budgetary control.

1073
Responsibility lies with the Governments of the member States, including our own, who overruled the Commission in the agricultural price review and who are directly responsible for this extra burden on the European taxpayer and the return to this major disequilibrium within the budget.
That having been said, the budget contains certain significant improvements. The major increases in social spending and regional spending will permit the less prosperous regions and countries of the Community to have made available to them more significant amounts to fight unemployment and regional decline. As a Scot, I realise that we have a good deal to be grateful to the Commission for as regards Commission infrastructure projects.
The growth in energy spending is particularly significant: the Commission suggests increases of nearly 200 per cent. for the energy sector which would then have more than 150 million European units of account available, concentrated particularly on envisaging new sources of energy and encouraging energy saving schemes within the member States.
I ask a specific question about Culham and the reversed field experiment. The Financial Secretary said that he would answer questions when he replied. The experiment's construction is included in the proposal for a research and training programme for 1979–83 for the EAEC in the field of controlled thermonuclear fusion. This programme, unfortunately, has not yet been approved by the Council. It has been reported in the New Scientist and in the British press that the United States Department of Energy has offered to support the Culham project by providing hardware to a total sum of 8 million dollars. This offer is conditional upon the building of a large plasma current project of sufficient calibre to give results significantly in advance of those presently attainable. A project has already been approved by the UKAEA, which has a lower initial specification but which could be upgraded to meet the United States' requirements. I should like to know what the financial decisions are likely to be for that major Culham project.
It is also proposed to allow for the first time significant appropriations—more than 50 million EUAs—to help industrial
1074
sectors in particular difficulties. If this is finally approved, it will be the first year that any important budgetary effort has been made in this direction.
Finally, the growth in development aid spending continues with this sector now accounting for nearly 10 per cent. of the total budget. Many hon. Members on both sides of the House will approve that.
All the amounts that I have given for sectors other than agriculture can be criticised as being insufficient, but it may be that this is the maximum that can be absorbed under present payment systems. The record, particularly as regards the social fund, shows that the Commission has been in great difficulty in spending the amount of money available to it. This is because of the very stringent checking procedures and also because a relatively small number of officials are available for this kind of work.
It should be recalled that the overall establishment plan of the Commission remains small with the total administration accounting for less than 4 per cent. of the preliminary draft budget as revised. The total staff available to the Commission has increased only slightly in the past few years despite major new tasks being given to the institution as regards external relations, industrial policy, fishing policy and development.
If the Commission has to undertake such tasks, extra staff will be needed. It is no good hon. Members on both sides of the House talking about what the Commission should do for the Vietnamese boat people, for example, unless it is not provided with the wherewithall.
When the Government consider what line to take and when the Council of Ministers draws up the draft, I hope they will bear in mind that the preponderance of agricultural spending to which they have agreed will necessarily aggravate the problem of Britain's budgetary contribution. In the short term, undoubtedly, some new mechanism can be worked out which could limit the damage. In the longer term the only solution is to seek some reform of the common agricultural policy which will bring to an end the open-ended commitment to finance stockpiling, and will strengthen the social and regional policies of the Community so that a better balance can be achieved

1075
for the less prosperous countries. There is little point in preaching economy if the largest single sector of the budget is to escape the spirit of economy completely.
The Commission's original budget proposals were a reasonable basis upon which a dialogue could start between the European Parliament and Council. There has now been a setback following the agricultural price review. The Governments of the member States and the European Parliament should work together to restore a better balance.
If I have gabbled my speech, Mr. Deputy Speaker, it is because other hon. Members wish to speak and I think that they should have a chance to do so.
6.7 p.m.
Mr. Jack Straw: I am grateful to my hon. Friend the Member for West Lothian (Mr. Dalyell) for his speed and his kindness in allowing me to speak.
Not one hon. Member who has spoken this afternoon has been happy with the size of the budget, with the fact that 70 per cent. of the budget is devoted to agriculture, nor with the totally disproportionate burden that Britain has to bear. Many of my hon. Friends are also deeply unhappy about the Government's performance in their first three months in office. Their performance in Europe has been very different from their promise.
Reference has already been made to the Luxembourg farm price review. Apart from the Conservative manifesto commitment to insist on a freeze for all products in structural surplus, the Minister of Agriculture, Fisheries and Food went to Luxembourg and specifically said shortly before he began his negotiations that the Commission had the full-hearted support of the British Government in its proposals not only for a freeze on products in structural surplus but for a " general freeze " on prices this year. He said that the
" Council's main priority must be to make a start on eliminating surpluses so as to reduce the cost of the CAP."
As we know to our cost, the result of the Council of Agriculture Ministers meeting in Luxembourg was a failure for
1076
the British Government. Surpluses have been increased, the cost of the CAP has been increased, and there has been no freeze on prices save on milk.
The failure in Luxembourg was followed by one in Strasbourg. It is important to compare the rhetoric of the Government with what was achieved. When the Prime Minister returned from Luxembourg from the Heads of Government meeting, she claimed " a 100 per cent." success. She said that she had obtained all that she had gone for. Ministers should not be tempted to mislead the House about what exactly was agreed in Luxembourg. If we read the communiqué, we find that the Commission merely agreed to carry out an examination and
" to submit a reference paper describing the financial consequences of applying the budgetary system in each member State."
It also agreed to examine the financial mechanism. An indication of the weakness of the commitment may be gleaned from the fact that the day after this the French President was reported in The Guardian on 23 June as saying:
" All that has been agreed is that the Commission is to see if the budget's anomalies which exist are inequitable or excessive."
The prospect of making any real progress on our budgetary contribution in the light of the French attitude and that of the other countries is exceedingly slim, because any reduction in our budget has to be paid for by other member States. That is a point to which my right hon. Friend the Member for Llanelli (Mr. Davies) has already referred.
Secondly, we must take into account not only the self-interest of the member States, which is bad enough, but the deeply ingrained views and philosophies of the Commission, which is preparing the review about which Conservative Members make so much play. What is the Commission's approach to the so-called inequities within the budget? What is its approach to examining the budget in any detail?
Two recent statements from the Commission disclose a great deal. A written answer was given by the Commission to Lord Bessborough, a Member of the European Parliament. Lord Bessborough asked his question on 26 September 1978 and received a reply on 22 December. It

1077
took three months to produce the following reply:
" The Commission has always been reluctant to publish information "—
about the relative net transfer from the EEC budget to each State—
" because the figures give a false impression of what the Member States do for the Community and of the economic benefits they derive from it. The Commission also believes that calculations of a fair return do nothing to create a spirit of European co-operation."
The Commission set its face against any serious investigation of the inequities in the budget. Equally worrying is its attitude to the components that make up our budgetary contribution. The Commission has made clear that its view of equity, although it has moved a little since last December, applies only to value added tax. Paragraph 39 of the Commission's document " The Way Ahead ", referring to changes in budgetary contributions, said:
" Customs duties and agricultural levies would of course be excluded from the scope of this correction. "
VAT accounts this year for only 43·8 per cent. of our contribution. Customs duties account for almost as much at 42·5 per cent. The rest comes from agricultural levies. Over 55 per cent. of our contribution comes from customs duties and agricultural levies which the Commission has so far said it excludes from any consideration of equity. I hope to hear from the Financial Secretary what attitude the Government intend to take on that piece of Commission obduracy.
More fundamental than the method by which the gross contribution is calculated is the problem of what happens to the cash once it is in the Common Market coffers. As long as the common agricultural policy exists in its present form it is difficult to conceive of Britain as anything other than a net contributor to the Common Market. Given that situation, both the old Six and the Commission will fight hard for the CAP. We have to take account of the deep commitment of those who work in Brussels and the Commission to the concept of the CAP. It is all that they have got out of 20 years of the Common Market.
In paragraph 24 of its document " Into the 1990s ", the Commission said that the EEC
1078
" must maintain the asset of a powerful agricultural sector based on a strong common agricultural policy."
We can expect no encouragement of the kind of major changes in the CAP needed by Britain if there is to be a signicant alteration in our net contribution to the Common Market.
Some hon. Members have spoken of the possibility of the regional fund becoming an avenue for giving back to Britain part of what it gives to the rest of the EEC. Even that prospect is not encouraging. I do not believe that the House or the country have woken up sufficiently to the consequences for Britain, or for the Common Market, of the accession of Greece, Spain and Portugal. This will impose further and serious strains on the Common Market and particularly on Britain. Although the population of the EEC will increase by only 20 per cent. if those three States join—Greece is already in the process of accession—the numbers involved in agriculture within the EEC will double. As so many of the social problems of those countries are agricultural, the drain on the regional funds will be towards those countries and not to us.
In their excellent report on the EEC budget earlier this year, their noble Lordships said:
" It is likely that the net benefit to the United Kingdom from the Fund would be substantially reduced and possibly eliminated once all three applicants have joined the EEC."
The problems of securing a reduction in our contribution would pose difficulties for any Government. That is accepted. I am profoundly depressed, however, at the tactics of the Conservative Government. There is little evidence so far that the EEC takes the United Kingdom's new found "communautaire" approach as a sign of strength. It is taken much more as a sign of weakness and compliance. When the Prime Minister, as Leader of the Opposition, stood at the Dispatch Box and accused my right hon. Friend the then Prime Minister of being too abrasive, she was saying that she would be only too delighted to hand over a number of cards, aces and trumps, in the interests of Community spirit.
Unless we take a tough stand, there is no possibility of securing real change. There is deep concern on the Opposition Benches that France, particularly, and the other EEC States, will not permit us to

1079
stop paying them £1,000 million in cash unless we start paying them a similar benefit in oil. I had hoped to hear from the Financial Secretary what kind of horse trading on energy the Government have in mind when the matter comes to be settled finally at the Dublin summit. I do not believe—nor, I think would many other Labour Members—in such self-inflicted blackmail. We are much more likely to get what we want by adopting to tough stand, preferably along with Italy, but if not, by ourselves.
We should adopt a tough stance that accepts the possibility that we refuse to pay our contributions unless there is a clear commitment from the EEC on greater equity. Those who say that this is "non-communautaire" should recall the attitude taken by General de Gaulle in June and early July 1965 in defending what he saw as his self-interest and the sovereignty of France. In the early hours of 1 July, he effectively withdrew France from the Common Market until he had secured agreement. That took a further six months. If the French can adopt that tactic and win, there is no reason why we should not do the same. The situation for Britain is as serious as that which threatened France in 1965, and it requires similar tactics.
The Commission's paper on the inequities in the budget is due to be published in September. The Dublin summit which, one hopes, will finally decide these matters, will not be held until late November. I invite the Financial Secretary to spell out, when he replies, his proposals for consulting the House in the intervening period. Will the Government, as I hope, publish a White Paper on their reaction to the Commission's proposals? Will they also promise a full debate—not one that finishes at 7 p.m.—on this matter before the Dublin summit, so that when the Prime Minister and other Ministers go to Dublin they have the full backing and support of this House for their policies?
6.18 p.m.
Mr. Frank Holey: The most interesting of the documents before the House is the annex to volume 7. It is clear that the Commission is seriously worried about the financial consequence, of the lunacy of the common
1080
agricultural policy. Page 7 of the document says:
"Once more, therefore, there is the prospect of the own resources available within the present legal framework running out".
I emphasise the words "the present legal framework" because that seems to give us a hold on the matter when we come to renegotiate this impossible situation. The Commission goes on to say:
"The actual moment when present own resources might run out depends entirely on arrangements for agricultural expenditure in 1980. If the Council does not follow the Commission's proposals "—
of course, it has not followed the Commission's proposals"—
"on agricultural prices and connected measures this will inevitably have the effect of making present resources run out earlier".
In other words, the Commission is very worried about the consequences which the present agricultural policy will have on the financial arrangements. To try to alleviate this somewhat the Commissioners have worked out two calculations which they call by the delightful titles of hypothesis 1 and hypothesis 2. Presumably those are terms which we have to add to Common Market jargon.
On hypothesis 1, the Commissioners try to calculate what will happen if the idiocy of the common agricultural arrangements continue. It is alarming. The gross budget in 1980 will be £10 billion. By 1981, the figure will be £12·6 billion. By 1982, it will be £15 billion. Within a couple of years, therefore, on existing policies and arrangements, the budget will jump by 50 per cent.
On hypothesis 2, which is assuming rather recklessly and optimistically that the Commission can contain agricultural spending, we have £10 billion in 1980, £11·8 billion in 1981 and £13·1 billion in 1982. That represents a jump of 31 per cent. in two years.
The Commissioners claim that if they can enforce their hypothesis 2 arrangements, the agricultural part of the budget will go down to about 49 per cent. and more money will be available for the social fund, and so forth. But they are also worried about the revenue side of the account. They point out that tariff reductions under the Tokyo round will reduce the yield of customs levy. They also point out that if world food prices

1081
go up, the gap will be narrowed, resulting in a reduction in agricultural levies. So they are pushed back on to VAT.
At the moment, VAT is 0·76 per cent., as opposed to the maximum of 1 per cent. on the calculation base which is allowable now. On hypothesis 2, which is assuming that agricultural expenditure can be contained, VAT can be kept at 1 per cent. in 1982. But on hypothesis 1, if it cannot be contained, VAT will jump to 1·25 per cent.—a 25 per cent. jump over what is allowable at present.
I understood the Financial Secretary to say that the Government would not allow that sort of jump. I hope that he will say that again and again. I hope that he will say that in no circumstances will we allow this jump, with a VAT take of 1 per cent., going, up to 1·25 per cent.
Unfortunately for the Commissioners' recommendations and suggestions, their calculations have been knocked sideways already by the agricultural deal just concluded in Luxembourg. Our Minister of Agriculture, Fisheries and Food and his colleagues did not accept the Commission's proposals. They did a deal which, according to the Scrutiny Committee's calculations—which are said to be based on information from the Commission—will already increase the budget by £860 million and will increase the VAT take from 0·76 per cent. to 0·88 per cent. in 1980. It means that we are heading at very high speed for the 1 per cent. take which the Commission hoped we should not arrive at until 1982.
I am afraid that, as between hypothesis 1 and hypothesis 2, the Commission is already losing out at a high rate of knots and that by the end of the year it may have lost out entirely unless something very drastic is done about it.
What are the consequences of these figures for the United Kingdom? The Financial Secretary has admitted already that our gross contribution is £2,079 million. But we have also our share of the additional £860 million. I accept that we have not yet got this famous rectifying letter, but no doubt it will come through the front door of No. 12 at any minute. Certainly it will be of the order of £860 million, and our share of that is about £155 million. So that pushes up the 1980 figure for the United Kingdom to £2,235 million.
1082
If we start to look at the Commission's hypotheses 1 and 2 and assume that nothing is done about our 20 per cent. contribution to these extraordinary figures, we find that in 1982 we may be liable for a gross contribution of £3,350 million. That is on the Commission's hypothesis 1, assuming that we do not contain the agricultural policy consequences. On the Commission's more generous calculations, hypothesis 2, we shall still be liable for a contribution of £3,000 million, although, to be fair, on the second calculation we may at any rate expect a slightly larger refund in terms of the different balance between agricultural spending and social, regional, energy, industrial and research spending. On the second calculation of the Commission, there might be some slightly better drawback for the United Kingdom than on the first. However, the figures are clearly horrific.
My conclusion from this extremely interesting and frank document is that the Commissioners are very worried men. They see themselves heading rapidly for a ceiling, a dead end or a wall, and they are desperately urging the Council of Ministers and member States to show a little intelligence in the apportionment of funds between agriculture, regional policy, foreign policy, social policy and so forth. Unfortunately, on the basis of the latest results of negotiations, there is no evidence that there is a consensus among the member States about how the agricultural policy shall be contained and how a reasonable apportionment shall he made.
In those circumstances, the very minimum that the Government can do is to say that that ceiling is absolute and unbreakable, that the VAT take will in no circumstances exceed the 1 per cent. which is agreed on the present legal arrangements, and that any proposition to the contrary will be vetoed by the United Kingdom at all times. Of course, there is the wider calculation of reducing this absurd payment of £1,000 million—perhaps even £1,500 million—across the exchanges to the richest countries in the world. I echo the words of one of my hon. Friends. It is surely the height of obscenity that this country should pay two and a half to three times as much to subsidise the world's richest countries as, we do to help the poorest.
6.27 p.m.
Mr. Richard Shepherd: It was not my intention to intervene in this debate. The arguments about the nature of the budget and the United Kingdom's contribution to Europe have been well rehearsed already. However, when one hears the extent of our contribution to the budget in net terms, one becomes aware of welling concern and great anger. This is of some importance to us, because, since the beginning of May, on the Commission's arguments alone, it may be that we have transferred in net terms as much as £300 million to Brussels. In fact, we may have transferred as much as £1·5 million since this debate began.
I want to express in the strongest possible terms my support for those right hon. and hon. Members on both sides of the House who have expressed their concern about this matter. I represent a constituency in the West Midlands which has suffered from the results of a tremendous imbalance in the rise in the price of food, for example, and the effect that going into the European Community has had on our industrial production.
Had the effect been as projected originally, our objections would not be felt so strongly. But we are watching a massive transfer of our wealth to nations wealthier than ourselves. That must inhibit our ability to respond to our need for industrial regeneration. That gives concern to many people throughout the country and throughout this Chamber.
Without making a long or a laboured speech and without any peroration about the future of the EEC, I wish to stress the fundamental objection felt in this Chamber and in the country to the EEC. We find ourselves in a position in which no matter how we vote today—whether we reject the budget, stand on our heads or jump out of the window—it makes not the slightest difference. The issue of sovereignty gives us fundamental concern. It is a mockery that we discuss these matters in this House when whatever action we take—to reject or support—is of no consequence in Brussels or the Community at large.
I repeat that when I entered the Chamber it was not my intention to speak on the subject. I accept that I
1084
am ill-prepared, but I wished to voice the concern felt by many about the EEC, the shape of its budget, and our impotence in effecting any changes.
Although discussions are to take place in September or November, and perhaps alterations can be made if the President of France realises that there is an injustice, as each month goes by we are transferring to the EEC another £100 million of our scarce resources. I make that point because I cannot for the life of me see why the President of France and the Chancellor of Germany should think of changing the structure of the common agricultural policy. That policy is a cornerstone of the Community. It is fundamentally in their interest to see the transference of that wealth, and there is nothing that I can think of that will encourage them to change it.
6.31 p.m.
Mr. Peter Shore: It is my pleasant duty to open my remarks by congratulating the hon. Member for Basildon (Mr. Proctor) on his maiden speech. We all welcome and appreciate his remarks about his predecessor, Eric Moonman, a colleague whom we all miss. Virtually all of us were enheartened by the hon. Gentleman's approach, which seemed to me to be a healthy and a non-ideological approach to EEC affairs. His general message on the future of Europe, of national States co-operating for common aims where it is sensible to do so, and the way he turned his face against a supranational Europe, will find an increasingly resonant echo on both sides of the House. We look forward to his future contributions, especially on the whole question of the EEC.
It has been a timely debate, and one of considerable importance. It is timely because the budget Council of the EEC is due to meet on 23rd July, and the Financial Secretary is to attend that meeting. On that occasion the Council will formally establish the 1980 budget. It is essential that the views of the House should be expressed and conveyed to the Council of Ministers before that meeting takes place. That is why we tabled our amendment, and that is why, if the Government had not accepted it—and I am glad that they have—we would have voted upon it.

1085
Until this budget matter is resolved we must take a stand, certainly we on the Labour Benches must, and we shall have to back up our resolution with our votes where that is necessary. I hope that it will not be necessary. If the Government's actions match the general sentiments that they have expressed, there will be an extraordinary unity in the House that I would be the first to welcome and the first to assist.
The issues that have arisen from the documents before us are simple to state. In a sentence, they are the size of the budget, the shape of the budget and the wholly unacceptable contribution—whether considered to be a gross or net contribution—that falls upon the people of these islands. The 1980 Community budget provides for actual expenditure of around 15,000 million European units of account, or, translated into more familiar terms, some £10,000 million.
These figures were the Commission's estimates before the meeting of the Agriculture Ministers that ended on 21 June. They were based on the assumption of an overall price freeze on foodstuffs in 1980. If Commissioner Gundelach is correct the result of that day's work, when our Minister of Agriculture, Fisheries and Food abandoned his commitment to maintain an overall price freeze, has added at least another 1,000 million EUAs, or about £700 million, to the 1980 budget that is before us.
This is not only a large but a swollen budget. As my right hon. Friend the Member for Battersea, North (Mr. Jay) said, we cannot fail to note the relentless increase in the size of successive EEC budgets. In the first year of our membership, 1973, the total budget was 4,600 million EUAs. By 1976, three years later, it had risen to around 8,000 million EUAs. By 1978 it was over 12,000 million EUAs. As we have just seen, it is of the order of 16,000 million EUAs in 1980. That is an increase far beyond the increase in the normal cost of living and inflation during that period. It is an increase of 250 per cent. in seven years.
What has propelled the budget upwards throughout the period is, above all, the growth of expenditure and the common agricultural policy. The CAP has grown from 3,600 million EUAs in 1973 to over
1086
10,000 million EUAs in the budget for 1980. I shall not go over the ground on the CAP again today. But, whatever else can be said for it—and I do not think that anyone will doubt this—as a system of agricultural protection it is exceptionally costly in budgetary terms.
Our share of the budget has, quite properly, attracted the greatest attention. To the man in the street, and perhaps even to some hon. Members, the size of our gross contribution, as set out in the Treasury's explanatory memorandum, will have come as a shock. In 1980 the United Kingdom gross contribution will be no less than £2,079 million, which is equivalent to 20·8 per cent. of the total budget.
There will be budget expenditure in the United Kingdom, which will result in a much smaller net sum. However, it the proportion of gross to net remains at two to one—I invite the Minister to Give his assessment of the ratio—our net contribution cannot be less than £1,000 million in 1980. My own assessment, which has been reinforced by certain documents that I have looked at, is that it will be, even in 1980, substantially more than £1,000 million.
How can a country such as ours, where average income is only 75 per cent. of the Community's average, be a massive donor to, rather than a substantial recipient from, the Community budget? What about the immense increase in our net contribution? As my hon. Friend the Member for Newham, North-East (Mr. Leighton) explained, the answers are to be found in the extraordinary methods of financing the Community budget, which were agreed as long ago as 1970, and the acceptance of which by the then Conservative Government was one of the crucial surrenders made to overcome the French veto on Britain's entry.
I refer to the system of financing known as "own resources", the three-tax system. That is now hitting us with such force because 1980 marks the end of the seven-year transitional period, and the first full year in which the "own resources "system applies to Britain. However unpalatable, 1980 is nowhere near the end of the story. We were provided, for our illumination, with the Community's forecasts for 1981 and 1982. I am grateful to my hon. Friend the Member for Sheffield,

1087
Heeley (Mr. Hooley) for drawing attention in his brief but excellent speech to the contents of that document.
According to one hypothesis, by 1982 total expenditure will reach 22,500 million units of account. According to the other hypothesis, under which the Minister of Agriculture, Fisheries and Food will do what he should have done this year—namely, control agriculture prices—it will still reach 19,600 million units of account in 1982.
Neither total is acceptable. On the latter hypothesis, the implications for Britain are a contribution rising to over £2,600 million a year. On the other hypothesis it will rise to over 3,000 million a year. That is what the Commission estimates awaits us in two years.
Against that background we must turn our minds to the Commission's document, "Global Appraisal of the Budgetary Proposals of the Community", which was published before the budget. There has been too little comment on it during this brief debate. " Problem " is the key word to that document. Within two years the sum of the existing own resources taxes will fall short of total budgetary expenditure. That is why the Community invites us to turn our minds, not to retrenchment but to how we can increase the flow, volume and definition of our own resources to finance that increased expenditure.
I know the answer that we should and must give. The Community is running out of cash, and that provides us with a major opportunity. We must not fail to take it. It is an opportunity, not to make minor adjustments or revise financial mechanisms but to recast the way in which the money is raised and the burden of expenditure is fixed inside the EEC. That is why our amendment refers to the need for a fundamental reform. That is why it advances the doctrine that the contribution to the budget by Britain should be at least no greater than its receipts.
It is helpful that at least the House now has a common vocabulary when speaking about these issues. That is important. The British voice that will be heard on the other side of the Channel in Brussels must appear to be strong and united if it is to be heeded.
1088
We shall need a strong, consistent and persistent effort if we are to achieve any changes in the arrangements. My hon. Friend the Member for Blackburn (Mr. Straw) and other hon. Members are right to say that there is a strong interest in favour of the status quo. Britain is the principal country which supports and subsidises the European budget and the other nation States. We must produce compelling arguments and persuasive reasons if those other States are to abandon voluntarily that which they are now enjoying.
My hon. Friend was right in what he said about the Commission. It has its own view and doctrine. That doctrine requires it to maintain its grip on what it calls its own resources and to develop those resources for the future.
We must go far beyond the optimism with which the Financial Secretary opened the debate. He said that the present arrangements were out of line with the spirit and intention of the Community. I wonder where he has been in the past eight years. Not only are they not out of line but the budgetary arrangements were tailored precisely in 1970, and several months before, as a condition for the opening of negotiations for Britain's entry to the Community. There is no doubt that we are in for a difficult time.
I shall not tell the Financial Secretary now what assistance or advice we shall give him. We shall take his optimism at its face value and see what he comes up with in the next few months.
6.45 p.m.
Mr. Lawson: With the leave of the House, I shall reply to the debate, I begin by congratulating my hon. Friend the Member for Basildon (Mr. Proctor) on his excellent maiden speech. I shall not comment in detail on the many points that he made about his constituency and the germane arguments that he put to the House about the matter that we are discussing.
One of his remarks stuck in my mind. He said that the British people seek results in this difficult matter. That is right. It is not a question of discussing precisely the best negotiating tactic to achieve those results. At the end of the day we shall stand to be judged by the people according to the results that we can achieve. What I have said about my hon. Friend is more than a formality. I hope that we

1089
shall have the pleasure of hearing him on many occasions in future.
The right hon. Member for Stepney and Poplar (Mr. Shore) described my opening remarks as optimistic. That description surprises me. I believe that the huge net contribution that we are making—and, indeed, the large contribution that the Italians are making—was not the intention of the Community. It is hard to demonstrate that it was.
However, the right hon. Gentleman is right to say that once that situation has arisen it is not easy to put it right because vested interests are created.
Optimism is too strong a word—perhaps "hope" is better—to describe what I said. All that I said that may give ground for optimism was that this Government have achieved more in two months in this direction than the last Administration did in their entire five years of office. That is a fact.
This is only the first step. There are many steps to come. The existence of the problem is recognised and the Commission is now grappling with it. I am sorry that, in the interests of the country, Labour Members are not prepared to welcome this first step. They are however right to say that there are many steps still to be taken.
I shall try to reply briefly to some of the points raised in the debate. The hon. Member for West Lothian (Mr. Dalyell) asked me about two specific points. First he asked me about the Culham project. I shall write to him on this subject. That matter is apart from the main theme of the debate, although it is important in itself.
The hon. Member also asked me about the court of auditors. Of course, we do not support any misuse or abuse of Community funds. I do not know what the hon. Gentleman has seen on television but obviously he has time to watch television and has seen some curious things. The court of auditors is a relatively new institution. I do not think that it has been demonstrated that its powers are inadequate but if it does appear so this will be examined. If the court can produce evidence of the misuse of funds and can propose measures to rectify the situation and improve the control of spending of Community funds, that will have cer-
1090
tainly the support of the present Government.
Mr. Dalyell: We have good relations with the police forces of the various States. Not only I saw on television, but many people have seen, pigs driven from one side of the Irish border to the other attracting funds. The Como butter case has not been cleared up, and there are certain other allegations. The Commission itself estimates the fraud to be £2 million. Another estimate is £100 million. My right hon. Friend the Member for Deptford (Mr. Silkin), when asked on the television programme, said that he thought the amount was £1,000 million. These matters need to be cleared up.
Mr. Lawson: I quite agree. It is also fair to say that for many years—I am not talking about terrorism and so on—things have happened, such as smuggling across the Irish border, which have nothing to do with the existence of the European Community, as the hon. Member for West Lothian knows.
Mr. Nigel Spearing: I have been here for most of the debate. Does the hon. Gentleman recall that I asked him two questions about the court of auditors? Can he tell the House whether the Government have agreed to the discharge of the court of auditors report for the 1977 budget? If so, were they satisfied that no further action was required?
Mr. Lawson: In the Government's opinion the court of auditors report for 1977 was most valuable. There may well be cases where the court needs greater powers. If so, it is up to the court to bring them to the attention of the Community and member Governments.
I pay tribute to my hon. Friend the Member for Scarborough (Mr. Shaw), who was a Member of the European Parliament for many years. He did a sterling job there and was a senior member, if not chairman, of its budget committee. He played a very important part in that committee's proceedings.
My hon. Friend asked me, specifically, whether there could be a special contribution for temporary social measures from the social fund in connection with the restructuring of the steel industry. I entirely understand his concern in this matter. Unfortunately, there is a complication here, which I suspect my hon.

1091
Friend is aware of, as he is an expert in the minutiae of Community law. The resources of the European Coal and Steel Community are strictly limited. Although the Commission has proposed, for that very reason, that those resources should be supplemented by a special contribution from the main Community budget, I am advised that there is no legal basis for such a payment. Therefore, I should have no alternative but to oppose it if it were proposed. I understand that other member States take the same view.
The right hon. Member for Battersea, North (Mr. Jay), a veteran anti-Marketeer, once again made a very penetrating contribution to the debate. I do not propose in my remarks now to refight, as I thought he did, the whole question of whether we should be a member of the Community. That is a perfectly fair debate, but it is not what is before the House today.
The right hon. Gentleman tried to trump his right hon. Friend the Member for Llanelli (Mr. Davies), who said that the gross contribution to the European budget dwarfed even our balance of payments benefits from North Sea oil, by saying that our balance of payments deficit with the Community countries, of about £3 billion, dwarfed the benefits from North Sea oil. That is not the case. It does not alter the seriousness of the matter that we are debating, but the balance of payments benefit from North Sea oil now runs at about £4½ billion a year. So it is still greater than the other figures that have been quoted. To some extent that suggests what our balance of payments would be like were it not for North Sea oil.
The right hon. Member for Llanelli and other hon. Members made great play of, as they tried to make out, the exacerbation of the problem. I think that there was general agreement throughout the House that we were faced with a very serious situation. However, they said that the problem was exacerbated by the recent agreement at the meeting of the Council of Agriculture Ministers, and that my right hon. Friend the Minister of Agriculture, Fisheries and Food had something to answer for on that count. I think that they have got this matter wholly out of perspective.
1092
One of the problems is the curious way in which the Community does its arithmetic in certain cases. I think that the right hon. Member for Llanelli will understand what I mean when I tell him that the figure of 1,300 million units of account, or £875 million, which the Commission alleged was the increase in the agriculture budget as a result of the settlement, is largely accounted for by the fact that the Community had assumed a milk levy averaging 5 per cent. of the support price, and this extra levy was not agreed. I think that most hon. Members will agree that that was a good thing.
Most of us would believe that a milk levy was a tax, and that it was revenue. Under Community arithmetic it is classified not as revenue but as negative expenditure. Therefore, the absence of this negative sum is the main contributor to the apparent increase in agricultural expenditure as a result of the settlement. The true increase is some £265 million, and not £875 million, of which our contribution is £50 million. If we offset against that the benefits of the butter subsidy—I know how keen Opposition right hon. and hon. Members always are on subsidies in general and food subsidies in particular—we get a net benefit of £30 million.
Mr. Denzil Davies: But the hon. Gentleman cannot offset that against the budget. It still means that our budgetary contribution has risen by £50 million, which is an increase in public expenditure.
Mr. Lawson: That is quite right, but it is a much smaller increase than the figure that has been bandied about.
There are two further points that the right hon. Member for Llanelli ought to bear in mind. First, it would have been a very good thing if we had been able to secure a freeze in the prices of all agricultural commodities that were in surplus, but it was not possible to achieve agreement on that. Agreement was obtained on a freeze in the price of milk, which was the most important, and on the other commodities the increase was very much less than the rate of inflation. It was in fact a reduction in real terms. Overall, it was the smallest increase ever secured at any review since the accession of Britain to the European Community.
Mr. Shore: Before the hon. Gentleman becomes too euphoric about that, may I

1093
ask whether it is not also the first time the Commission itself has put forward a proposal for an overall freeze? Is it not a fact that through the exercise of the veto on the Agriculture Council we could have prevented any departure from those proposals?
Mr. Lawson: That is not so. It is true that it is the first time the Commission has put forward a freeze on everything, and that is very welcome. But if we had exercised the veto that would in so sense have meant that the Commission's proposals stood, which is what the right hon. Member for Stepney and Poplar is suggesting. Unfortunately, that was not the position. It was really a matter of negotiating the best possible arrangement with our partners in the Community.
The right hon. Member for Battersea, North also asked about the ECU swap, and why there had been no parliamentary authority, as he put it, for that swap. Indeed, he asked why this was different from the International Monetary Fund arrangement after the war. The difference is that this is a swap. In exchange we get ECUs—European currency units—which could be described as a basket of European currencies. This swap can be reversed. There is nothing irreversible about it. Indeed, the parliamentary authority is contained in the Exchange Equalisation Account Act 1979. I think that this was made clear by the previous Administration when the matter was under discussion. Therefore, no additional parliamentary authority was required to engage in this swap operation, a swap that can be reversed at any time.
Mr. Jay: The authority in that Act depends on the assumption that what we get in exchange is a security. Can the Financial Secretary explain in what sense we get a security in exchange?
Mr. Lawson: We get a security in the sense of a basket of currencies. I am sure that if the right hon. Gentleman wishes to challenge this in the courts it would make for some entertaining reading for some time.
The hon. Member for Blackburn (Mr. Straw) mentioned the agricultural decision and asked whether we agreed with the Commission and took into account only VAT when assessing whether there
1094
was justice in the budgetary arrangements. Of course not. That is precisely why I said that we believe the right way forward is an improved financial mechanism. It is regrettable that the existing financial mechanism has proved such a failure. This was a mistake in the renegotiations undertaken by the Labour Government in 1974–75. But the point of a financial mechanism is that it sweeps up everything. It addresses itself to the net contribution which takes into account all the own resources contribution—not merely VAT but the levies, which are very much smaller than my hon. and learned Friend the Member for Beaconsfield (Mr. Bell) seemed to make out, and the customs duty. It also takes into account expenditure on the CAP and, indeed, all other expenditure. It looks at the net result, having taken all these things into account. That is why we believe that the best approach is to get an improved mechanism which will produce justice in regard to the net contribution.
If another approach is offered, we shall be happy to consider it. But we feel that that is the best approach for the very reason which the hon. Member for Blackburn suggested—that it takes all the elements in the equation into account. As I made clear earlier, one of the big mistakes with the financial mechanism negotiated by the last Government was that it did not take all the elements into account, but considered only the revenue side and not the expenditure side of the budget.
Mr. Straw: Will the Financial Secretary also deal with my point about the need for a White Paper to be published, following the publication of the Commission's proposals in September on the budgetary changes? Does the hon. Gentleman agree that the Government should publish a White Paper and that there should be a full debate before the Dublin summit in late November?
Mr. Lawson: I have taken note of the hon. Gentleman's suggestion. It is a serious point. I am sure that my right hon. Friend the Chief Whip, who is present, will also have heard the hon. Gentleman suggest that there should be a debate before the Dublin summit. I can see that there is force in that argument. However, from time to time I hear of difficulties of fitting things into the parliamentary

1095
programme. Fortunately, that is not my problem, but is my right hon. Friend's problem. However, I take note of what the hon. Gentleman has said. It is a serious suggestion.
The right hon. Member for Llanelli made heavy weather of his disappointment that there was so little between the two sides of the House on this matter. There could be a big difference. Had the Labour Party had as its policy taking Britain out of the Community, there would have been a fundamental difference. But that is not its policy, and I am glad that it is not. That being so, there is very little difference between us, and the right hon. Gentleman knows it. I think that he made very heavy weather of trying to pretend that there was some kind of difference. To drag in the extraordinary fact the Minister of Agriculture, Fisheries and Food had answered a question on the effects of the price review rather than the Chancellor of the Exchequer, as if it was a big issue, seemed to be making heavy weather of this. The right hon. Gentleman should not also be worried about the Treasury losing its place in the hierarchy of Whitehall.
The right hon. Gentleman asked what we proposed. The question really is "What does he propose?" It is absolutely clear what we are proposing. It is to fight very hard indeed within the Community for justice. We shall fight to achieve, we hope through an improved corrective mechanism, a method by which in future it will be impossible for us to be paying a sum of, say, £1,000 million across the exchanges as a net contribution to the Community budget.
Mr. Denzil Davies: Will the Financial Secretary deal with my point about VAT? Will he make it clear that this Government, like the last Government, will not agree to any increase in the VAT ceiling of 1 per cent.?
Mr. Lawson: I have made it quite clear that we do not look with any favour on an increase in the resources for the Community budget. I agree with the point which the right hon. Gentleman and others have made—it is a fairly obvious one—that the fact that the Community is approaching the limit of its own resources, and will be needing more money, is a very important element in the negotiations that we shall be having. However, we shall, if possible, be seeking a solution before that point in time is reached.
I conclude by repeating that we have achieved more in two months than the previous Administration did in five years. We have a long way to go, but we are not interested in any lectures from Opposition Members on how we should behave. We are grateful for their support, and I shall go to Brussels on Monday fortified by the wide degree of bipartisan support for the stand that we shall be taking.
Amendment agreed to.
Main Question, as amended, put and agreed to.
Resolved,
That this House urges Her Majesty's Government, in view of the United Kingdom's massive and ever increasing net contribution to the Community Budget, to press for a fundamental reform of the budgetary arrangements so that Britain's contribution to the Budget is at least not greater than the receipts.

ORDERS OF THE DAY

  EDUCATION BILL
  Order for Third Reading read.
  7.9 p.m.
  The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): I beg to move, That the Bill be now read the Third time.
  We have already had a Second Reading debate on the Education Bill, which is not a very long Bill at that. We have also had the Committee stage and an interesting, if slightly elongated, Report stage in the early hours of Friday morning. It is now our pleasure, as it were, to debate the Third Reading of the Bill.
  I should like to say at the outset what the purpose of the Bill is, just as my right hon. and learned Friend the Secretary of State defined the purposes of the Bill on Second Reading. Basically, the Bill has two purposes. The first purpose is to pass back to local education authorities and to voluntary bodies—we talked about voluntary bodies at considerable length last Thursday, as the hon. Member for Lewisham, West (Mr. Price) will remember—the power to organise their schools as they wish, instead of all secondary schools in Britain having to be organised in the way that the Government—in this case, the Labour Government—wanted them to be organised.
  Therefore, the first purpose of the Bill relates to the dispersal of power. For those of us on the Government side of the House, this dispersal of power is an important matter. We do not want power to be totally centralised in the way in which the Labour Government wanted. We wish to enable local education authorities and the voluntary bodies to run their schools within the wishes of the people in their area.
  The Bill also has an educational purpose. I think it was the hon. Member for Bolton, West (Mrs. Taylor) who said that we had not made an educational case. I believe that there is a strong educational case for the Bill. I should like to take up the time of the House for a few minutes to make the educational case as well as the case for the dispersal of power.
  1098
  We do not believe that there is one educational system, suddenly discovered in the 1960s, put into practice in this country and other countries, which is the end of an educational process. We do not believe that some wisdom was given at that time to the educational administrators and thinkers which had never been given to other men, so that once this had arrived—almost like a second coming or a crossing of the Jordan—once the world has seen this vision, educational thought ended, and all schools henceforth had to be totally comprehensive, that the case for 100 per cent. Comprehensive schools had been accepted in this country and in other countries.
  Our view is that there are no such buffers to hit, no stage when there cannot be change or improvement. We believe that education exists not to follow doctrinaire or dogmatic views, whatever the day that the vision was seen, but to give children the best education possible. That is so whether we speak of the most able groups of children, average children or the least able children. We feel that education exists to give these children the greatest opportunity that they can have.
  Thus, we feel that it may be that in certain areas selective schools may give these children the best opportunities. In other areas it may be non-selective schools, according to the wishes of the people there. In certain areas, it may be mixed schools, or even varied schools—there is a difference between the two.
  My right hon. and learned Friend the Secretary of State said specifically on 3 February, well before the general election—the date 3 February is significant, because it was exactly three months before the election:
  "We are engaged in nothing less than a conflict of principle on which our future as a nation will depend. On the one side are the ' realists ', who believe that the true purpose of education is to develop every child's potential to the full and that any changes—whether in the organisation of schools, methods of teaching or examinations—should be considered solely on their educational merits. On the other side are the self-styled ' progressives ', who are concerned with using education for ideological ends; to obtain a more egalitarian society. And if that means equal shares in mediocrity, they seem unconcerned. The Conservative Party belongs unashamedly in the former camp."
  We assess situations as they arise.

  1099
  Whereas on one side of the Chamber apparently there is salvation by faith—the faith that the comprehensive principle has been discovered and must be put through, we on the Government side of the Chamber believe in salvation by works. I am not referring to the theological views of people on the Government Benches or the Opposition Benches. However, we are prepared to assess what happens in schools by the achievements of children attending them, as far as we are able to assess that in the round.
  On Second Reading, which was a very hurried, noisy and lively debate, we welcomed the hon. Member for Bedwellty (Mr. Kinnock) to the Opposition Front Bench. I have enjoyed the battles and arguments with the hon. Gentleman since then, and no doubt I shall continue to do so. I quoted then a statement made by Mrs. Williams on 12 July last year. She was reported as saying that information about comprehensive schools was still too patchy to draw firm conclusions on the crucial issue of standards.
  I could continue, as I did on Second Reading, to quote many other examples of this. The only other one I give—because of the shortness of time—relates to April this year, when the Royal Society—again, not a Conservative organisation or a Black Paper organisation—alleged that bright children were being held back in their education in smaller comprehensive schools, in which they did not in many cases get the education that their talents deserved.
  On educational grounds the case for all children being in comprehensive schools has not been made, either in this country or, as I shall show later, in any other country. It is important that we keep our options open, both locally and nationally, so that we can take advantage of information and research as to which, over a long period, is the most successful system.
  Mr. Neil Kinnock: I am very interested and, indeed, instructed by the allusions being made by the hon. Gentleman. Can he tell me where, now, there are any education authorities that are prepared to suggest that the answer or even the partial answer to the problem is selection on the basis of intelligence tests at the age of 11?
  Mr. Merlyn Rees: That is the point.
  Dr. Boyson: I am very interested in that intervention. It is interesting because there is no mention of 11-plus selection in the Bill. It concerns the question of the organisation of schools. The 11-plus was the whipping boy which brought the change around. I do not suppose that many people in Britain would defend the 11-plus examination, but that is not the issue of the Bill.
  Several Hon. Members Several Hon. Members rose—
  Dr. Boyson: I see that we are touching the nerve. I shall give way—although not too much, because others will wish to speak. Opposition Members are obsessed by the 11-plus to the extent of wanting us to go totally comprehensive irrespective of any alternative organisation of schools.
  Mr. Ernest Armstrong: Can the Minister tell us of any authority that takes advantage of the Bill that will be able to manage without selection at the age of 11?
  Dr. Boyson: I have a great respect for the right hon. Gentleman as an educationist. Any authority can keep its selective schools without using the 11-plus.
  Mr. Armstrong: Without selection?
  Dr. Boyson: No, with selection. We are not talking about that sort of selection. The hon. Member for Bedwellty raised the question, and I wish that his hon. Friends would listen to him as carefully as I do. I am always interested in what he says on the question of the 11-plus. Obviously, if one is saying that certain authorities can keep their selective schools, one has to have selection. I thought that even Opposition Members would understand that. But the issue raised by the hon. Member for Bedwellty concerned the 11-plus examination.
  Several Hon. Members Several Hon. Members rose—
  Dr. Boyson: I shall not give way again on that matter. I have made the position clear. There are none so blind as those who will not see.
  Several Hon. Members Several Hon. Members rose—
  Dr. Boyson: I shall give way once to the hon. Member for Stockport, North (Mr. Bennett).
  Mr. Andrew F. Bennett: The Minister will accept that the Bill does not permit the expenditure of any money. That being so—and the Minister says that it does not make provision for the 11-plus—may I remind the Minister that an 11-plus examination was held in Bolton? What was the authority for spending the money on that examination?
  Dr. Boyson: All the contortions on both sides of the Chamber on Thursday were rather beyond me. I was trying to get on to an educational point at that time. However, I am informed by good authority that the authority came in the 1944 Act. I do not want to be dragged down to dealing with money, although undoubtedly someone else may do so tonight. But in many areas which needed vast sums of money to be spent before they could become non-selective the measure would actually save money.
  Mr. Christopher Price: The 1944 Act does not exist. It has to be read as one with the other Education Acts passed since 1944. It must be read as one with the 1976 Act, under which plans had been approved for implementation in September, on a non-selective basis, in Bolton. Can the Minister seriously tell us, with all the the authority of the Department of Education and Science, that that expenditure in Bolton was properly made under the 1944 Act, which must be read as one with the 1976 Act?
  Dr. Boyson: The answer to this quesion is not the two letter word that I once used—"No". It is "Yes", a three-letter word. We are increasing in literacy. I believe that my right hon. and learned Friend will refer to this matter later. But we have no doubt about our beliefs in that respect.
  I see that Opposition Members do not like to hear the facts about the comprehensive situation. However, perhaps I may return to this matter so that we can continue. Comprehensive schools may work in some areas. Oxfordshire is totally comprehensive and has some of the best academic results in the country.
  1102
  On Report the hon. Member for Bedwellty mentioned the comparison of results between Tameside and Manchester. Those two areas contain basically the same socio-economic groups. Tameside has 29 per cent. of its population in the A/B classes and Manchester has 28·5 per cent There are inner city problems in Manchester, but it has an educational, administrative and cultural centre that does not exist in Tameside. In the age range 18-plus, there is a higher percentage of people with two A-levels and above in employment in Manchester than in Tameside. The hon. Member for Bedwellty said on Second Reading that more technical subjects are passed in Manchester than Tameside, but I shall have to check on that.
  In 1977, the O-level and CSE grade I passes per pupil were 23 per cent. more in Tameside than in Manchester and 52 per cent. more for O-levels only. In 1978, there were 9 per cent. more A to E grade A-level passes per pupil in Tameside and 31 per cent. A to C. I wonder whether those figures influenced the Conservative takeover of the council or its loss to Labour this time. Passes in English at O-level and CSE grade I per pupil for Tameside were 34 per cent. more and at O-level only they were 41 per cent. more. In foreign languages they were 41 per cent. more at O-level and CSE grade I in Tameside and at O-level only 243 per cent. In mathematics the figures were 29 per cent. more for O-level and CSE grade I and 79 per cent. for O-level only. For A-level, modern languages passes were 54 per cent. more in the A to E grades and 144 per cent. in A to C, in mathematics 31 per cent. A to E and 82 per cent. A to C and in natural sciences 17 per cent. A to E and 53 per cent. A to C.
  As a matter of interest 24 per cent. of the pupils in Tameside passing O-levels came from secondary modern schools as did 47 per cent. passing O-level and CSE grade I. Whatever may happen in the future, it will be interesting to analyse those figures. The statements made on Thursday were unfair to the schools of Tameside, whatever the political complexion of the teachers in them.
  Mr. Kinnock: The hon. Gentleman has ignored the fact that the teachers have repeatedly professed that they are

  1103
  in favour of comprehensive reorganisation on Tameside. He has also completely ignored the fact that my complaint about the A-levels on Tameside concerned the narrowness of the curriculum offered. Despite what he has said about secondary modern schools on Tameside, if there was such widespread satisfaction with the system there would be no demand for comprehensive change. The demand is so overwhelming that it secured the return of a Labour majority in the recent elections.
  Dr. Boyson: Other issues such as housing come up in local elections and not just education. I do not dispute what the hon. Gentleman says, but there is positive evidence that the number of A-level, O-level and CSE grade I passes per pupil show the overwhelming advantage of Tameside over Manchester. Manchester is distinguished by music and sport, but schools were created for academic purposes. I should be surprised if the hon. Member for Bedwellty or the right hon. Member for Durham, North-West (Mr. Armstrong) did not check the academic results of a school before sending their children to it. It is all very well to talk of education in the round, but an important part of the system is to obtain the necessary O-levels and A-levels to give children a proper chance in life. Schools that do not do that are betraying the children in them.
  We have debated non-selective or selective schools and when to select. There must be selection at some age. The debate does not exist only in this country but is going on all over the world. In Russia there are highly efficient selective schools for mathematics and natural sciences. That is similarly the case throughout Eastern Europe. There has been the return of the so-called magnet schools in America. They were once totally non-selective but some form of selection has been brought back, particularly in downtown and immigrant areas.
  On Radio 3 there was recently a broadcast on China revisited, dealing with what is happening in Chinese schools since the cultural revolution. I shall gladly give the date and transcript to Labour Members as a move towards their partial salvation. Special arrangements are being made for all high-flyers in those schools. Selection has been increased particularly
  1104
  at secondary level, and centres of excellence with competitive examinations have been reintroduced. I do not suggest that we all go on a tour to China during the Summer Recess, but it is not true to pretend that the world has taken an overall view on education for all time.
  We are not arguing about the 11-plus but whether we should have a totally comprehensive system or some form of selection for those areas that want it. That is what the Bill is about. I hope that the debate will proceed with the usual cheerful abrasiveness from both sides of the House.
  In 1961 I came to London to head a secondary modern school in the East End of London that was going comprehensive. I attended meetings on the right to have comprehensive school experiments at which some hon. Members were present. One such meeting was an early meeting of the comprehensive schools committee. At that time I supported the right for a comprehensive system to be tried in certain areas of different socio-economic groups to see whether the system was successful. I did not believe that every school should go comprehensive but neither did I believe that the tripartite or bipartite system had to be maintained for all children at all times.
  The wheel has come full circle. Here I am, 18 years later, arguing not for the right of comprehensive school experiments but for the right of local authorities to have schools that are not totally comprehensive. That is not a difference of attitude. I believe that the majority of schools will remain comprehensive for as long as parents and local authorities are happy with them. Schools cannot keep chopping and changing their methods. They have to grow roots. However, where areas wish to keep their grammar schools or return to some form of selection, they should be able to do so.
  Black Paper No. 2 is often quoted—and it is quite a collector's item. It says:
  "One cannot have grammar schools along side comprehensive schools or the latter will be nothing but misnamed secondary modern schools."
  That is perfectly true. One cannot have 20 per cent. selection for grammar schools and believe that the other 80 per cent. will be comprehensive, just because they have been renamed. There are two ways in which this problem can be overcome.

  1105
  Certain areas of an authority can be totally comprehensive and other areas can have grammar and secondary modern schools. We must remember that some authorities are 50 or 60 miles long and pupils will not cycle that far, even in these days of pedal power. It is easy to make a division in such cases.
  Secondly, there is the argument about the percentage of selection that can exist before comprehensive schools are impossible. The hon. Member for Lewisham, West has explored this question at length. In my opinion the figure is about 5 per cent. A figure higher than that will have injurious effects upon other schools. If, on the other hand, one takes out 5 per cent. the others cannot be comprehensive schools. This is giving a vote of confidence to the 11-plus which I would never give. It is, in effect, saying that this examination is so effective at the age of 11 that all the best children have been removed. The argument against 11-plus before was that it was ineffective; here, apparently, the argument is that it is effective. Labour Members cannot have it both ways.
  The same Black Paper says:
  "A search for complete equality, combined with a vague Rousseautic belief that all men left unhampered are good, has brought the pressure for full secondary comprehensification for social ends, for non-streaming and the adoption of so-called progressive ' and non-academic methods of teaching or non-teaching. This egalitarian movement driven forward by adult men and women with the sad simplicity of the militant students has made reasonable men of varied opinions jump for cover."
  I wrote that 11 years ago, and it has struck me that the vote on 3 May showed that reasonable men were jumping for cover. They were jumping for a cover under which they could buy their own houses, where they suffered less taxation and where they could run the schools as they wanted to. That is why I stand by those somewhat melodramatic statements in the Black Paper.
  7.33 p.m.
  Mrs. Ann Taylor: It will not surprise the House to learn that my right hon. and hon. Friends and I are opposed to the passage of this Bill. We opposed it on Second Reading and we shall vote against it again tonight.
  The basic provision of the Bill has nothing to do with the dispersal of power or with educational standards. It seeks
  1106
  to remove the requirement on local authorities to reorganise secondary education along comprehensive lines. That is the provision that we introduced in 1976. We think that it is right, and we stand by it.
  We are opposed to the Bill for three basic reasons. We oppose it in principle; we oppose it because of the haste with which it has been presented and the disruptive effects that it is already having; and we oppose it because it perpetuates the myths and fallacies upon which Conservative education policy is founded. We have heard some of those myths from the Under-Secretary tonight.
  We oppose the Bill in principle for two reasons. We oppose the selective system of education which has done so much damage to educational opportunities for so many children. The other reason why we oppose it is that we positively believe in comprehensive education for educational reasons.
  The arguments about comprehensive education and selection have been well rehearsed in this House on many occasions. It is remarkable how many mis-conceptions remain, and we have heard many of them this evening. We have heard about "one-system-comprehensive" education, as if all schemes were alike. This is utter nonsense. We have heard the famous quotation from the Black Paper, which many of us read and on reading it we thought that the hon. Member had learned something, namely, that one cannot have grammar schools and comprehensive schools together. The Under-Secretary spoke earlier about mixed schools and varied schools. I do not think that he understands the basic facts. The truth is that as far as educational standards, choice of subjects and educational opportunities are concerned, the comprehensive system wins hands down.
  In areas where selection still exists, there is a hierarchy in education. There are one or two grammar schools with the best reputations and these cream off the best pupils. Below them are a few grammar schools which imitate the so-called best and these merely demonstrate how limited the grammar school can be. Many of them have little choice of sixth form subjects, they specialise too early and place a great emphasis on examination

  1107
  results in order to compete with the best grammar schools. As a system of education, this does not do a great deal of good. It does no good to those in secondary modern schools. Wherever the selective system exists the vast majority of children end up in secondary modern schools and in many areas these are considered distinctly third rate. For the most part, they respond as such. The resources are distributed very often in such a way that the grammar schools get more than secondary modern schools and have better staff-pupil ratios. In these circumstances, it is hardly surprising that grammar schools get better results, and are liked by those who can take advantage of them.
  If the selective system is to be retained or even introduced, those who advocate it have a responsibility for showing how that selection will be made. Who will decide, and on what basis? What percentage of children should go to grammar schools? The Under-Secretary touched on this question a few minutes ago, but he did not say what proportion should go to grammar schools. Should it be 20 per cent., 30 per cent. or 40 per cent.? Is it good enough that the percentage who go to grammar schools should be dependent on the random situation in the area? If there is to be selection, surely the Secretary of State must be willing to say how he thinks the selection should be made. He should be willing to lay down guidelines for it.
  If the right hon. and learned Gentleman thinks that it is reasonable for 25 per cent. of children to go to grammar school, what will he do when he is presented with the problem of falling rolls in secondary modern schools? If an authority now has enough places for 25 per cent. of its 11-year-olds to go to grammar school, it may, in a few years, have enough places for 35 per cent. Is whether a child gets a chance to go to grammar school dependent on how many other children were born the same year, or is there a corrected proportion? We have heard nothing of this from the Secretary of State, but if he wants to put this Bill through to promote and facilitate a selective system he must have an obligation to tell us his thinking on the method of selection to be adopted.
  1108
  Many Conservative Ministers are very shy about saying what kind of selection should exist. They claim that they do not want to introduce the 11-plus. Even as recently as the Conservative Party conference of October 1977, the present Leader of the House said:
  "Let me lay to rest the false and malicious accusation that we intend to bring back the 11-plus. Of course we reject any such course. Let us hear no more nonsense about the Tories wanting to go back to the 11-plus."
  Perhaps that is why the right hon. Gentleman is now Leader of the House and not Secretary of State for Education and Science.
  The present Secretary of State for Education and Science has been very quiet on this score. Does the right hon. and learned Gentleman recognise that, as a direct result of this Bill, the 11-plus examination has already been introduced in one authority, Bolton? Is this what the Tories want? They cannot say that they are in favour of this Bill but against the 11-plus, because this Bill will lead to a perpetuation of 11-plus examinations. Has not the Secretary of State a responsibility to lay down guidelines?
  We in the Labour Party are opposed to selection at 11, and indeed to the 11-plus as such. We believe that a comprehensive system gives all children, including the brightest, a better chance of developing their full potential. For this reason alone, we oppose the Bill. However, there are other reasons.
  Mr. Nicholas Baker: Is the hon. Lady opposed to selection within a comprehensive school?
  Mrs. Taylor: There is no hard and fast way to select children for different schools. Within a comprehensive school there will be a degree of selection, possibly in regard to options on various subjects. The beauty of the comprehensive system is that it is infinite in the variety of education which it can provide. Not all children want to take A-level mathematics, but in a comprehensive system more children will be able to take the subjects they wish to take than if they attended grammar schools. One of the failings in many grammar schools is the narrow range of subjects offered to children. It is a narrow subject range at age 16 in regard to A-levels, but often it is very narrow from the age of 13 or 14 because many grammar schools

  1109
  impose a tight selection in regard to combinations of subjects taken. Many children have suffered from that failing.
  I wish to deal with the other reasons why we oppose the Bill. The Bill was introduced with great haste. It was one of the first Bills brought forward by the Government following the election. It is strange that the Secretary of State should be proud that his first Education Bill has the purpose of providing for the vast majority of children in some areas the right to continue to attend a secondary modern school. This Bill is never presented in that way, but it ensures that in certain areas the vast majority of childern will continue to attend a secondary modern school.
  The Bill has not been presented as a save-our-secondary-modern-schools Bill, but that is the reality of the situation for the majority of children who will be affected by its provisions. They will continue to attend secondary modern schools. The way in which the Bill is presented as a save-our-grammar-schools Bill shows that members of the Conservative Party are concerned about the tiny minority who attend grammar schools rather than about the rest of the children who attend secondary modern schools.
  The Secretary of State for Education and Science (Mr. Mark Carlisle): The hon. Lady said that the pupils who attended grammar schools suffered as a result of attending such schools. Will she clarify that statement?
  Mrs. Taylor: I believe that many children who attended grammar schools suffered as a result. Their educational opportunities were very greatly curtailed. They were not given the opportunity to take many of the subjects which they wished to study—indeed, they studied them later as a result of individual effort. The education offered in many grammar schools is very limited and it has many shortcomings. If grammar school education were better, I believe that people would be less resentful of the fact that such schools mislead people as to what education is all about.
  Mr. Harry Greenway: The hon. Lady's language is somewhat extravagant. She said that comprehensive schools provide an infinite variety of courses. Could she elaborate that point?
  Mrs. Taylor: I think I said that there was an infinite variety of ways in which to organise a comprehensive scheme. That at least was my emphasis. I believe that comprehensive schools offer many more opportunities. Children have wider opportunities to study varying subjects than if they attend grammar schools of the kind we have experienced in the past.
  Before the hon. Gentleman intervened, I was making the point that for the vast majority of children in the areas affected by the Bill the upshot will be that they will continue to attend secondary modern schools. For various children it is a protect - the - secondary - modern - schools Bill rather than a protect-our-grammar-schools Bill.
  There is another reason why we should be worried about the haste in which the Bill was prepared. I refer to the practical problems that arise in the area of Bolton. Bolton is the one area in which the authority has already decided to take advantage of the Bill. In that area the Bill has created educational chaos. We have had an emergency 11-plus. Children left primary school within days of the announcement of this Bill, and they did not know what secondary school they would attend. Headmasters have been appointed to schools which do not exist, and legal arguments are now ensuing over teachers' contracts in other schools.
  Is this what the Secretary of State required from the provisions of this Bill? Does he believe that it is in the interests of 11-year-olds in Bolton that this procedure has been adopted? If he takes that view, I have news for him. The parents of Bolton do not agree with him. Once the allocations go out, I believe that the Secretary of State will be kept very busy in dealing with appeals from parents who are dissatisfied about the allocations.
  Did the Secretary of State expect the Bill to create such chaos in Bolton? If he did, I am amazed that he went ahead with it. If he did not take that view, he should have thought through more thoroughly the effects of the Bill. I ask the right hon. and learned Gentleman to defend what has happened in Bolton by telling the House whether these provisions are in the interests of 11-year-olds.
  The third and final reason why we oppose the Bill is that it is supposed to

  1111
  be a Bill to give more freedom to local authorities. The Under-Secretary of State mentioned this fact. When Conservatives present their arguments in favour of selection, they always instance the issue of choice. Perhaps I may say a few words about the freedom which the Secretary of State says he is giving to local authorities in determining the nature of secondary education in their areas.
  In Committee the Under-Secretary of State attempted to argue that the Bill put the clock back to the situation before the 1976 Act. I submit that that is not the case. Before 1976 there were guidelines from the Secretary of State about the kind of secondary education he wished to see develop. It is impossible for the present Secretary of State to say that he wishes to abdicate responsibility for laying down general guidelines because there is a duty laid upon him in the 1944 Act. He must take responsibility for the general framework and development of secondary education.
  The hon. Member for Brent, North (Dr. Boyson) said that education is a continuing development and that our ideas are continually changing. He said that there was no buffer—no end of the line. If that is so, and if the Secretary of State agrees that education is developing all the time, he must be willing to lay down some guidelines about the way in which he wants to see education developing. If he is saying that he wishes to opt out of influencing the type of secondary education in this country, that is impossible. However, if he wants to opt out, how can he make other decisions? How can he pass an opinion, as he has already, on the type of examination system that there should be in this country? How can he decide how resources should be distributed? How can he consider on merit proposals to reorganise secondary education, as he recently told my hon. Friend the Member for Preston, South (Mr. Thorne), if he has no guidelines and no framework?
  The Secretary of State has said that he wishes to leave decisions to local authorities. Therefore, is he saying that if one year a local authority decides to continue or reintroduce a selective system that is all right by him? If the following years sees a change of political control
  1112
  in that authority and it wishes to reorganise along comprehensive lines, will that also be all right by him? If he is saying that, he is opting out altogether. If he is not saying that, on what basis will he judge the proposals for reorganisation?
  The Secretary of State cannot leave that vacuum. Either he should state directly and openly what he wishes to happen to secondary education over the next few years—or however long he may be in power, it may be months—or he will leave himself open to the charge of using back-door methods to bring about and encourage the kind of selective procedure that was advocated by the hon. Member for Brent, North.
  The education policy of the Bill is similar to the Government's taxation policy:
  "For unto every one that hath shall be given."
  That is not a principle that Labour Members adopt, and it worries us a great deal. If the Bill becomes law, we will have to rely on local authorities to be more progressive than they have been in the past so that they will ensure that there are as many and as good comprehensive schools as is possible.
  7.53 p.m.
  Mr. Robin Squire: I shall be grateful to receive your traditional tolerance, Mr. Speaker, and that of the House, should my speech extend over one or two areas that are not normally associated with education.
  I pay full tribute to my predecessor Mr. Alan Lee Williams. He was a great constituency Member of Parliament who enjoyed popularity on both sides of the House. Since my return to this place I had begun to think (at my election was almost as unpopular among Conservative Members as it was among Labour Members, so many friends did he have. I am delighted at his recent, publicised appointment. I trust that he will return to the House in the future, albeit in a different constituency.
  It is difficult to describe, my constituency as the most beatutiful constituency, which, I am told, is the tradition. However, it is a friendly constituency that nestles on the edge of London as created in 1964. Most of those who live there still prefer to think of themselves as living in Essex. I warn hon. Members whose

  1113
  constituencies have undergone recent reorganisation that it takes a long time for that feeling to pass. The industry is dominated by Ford. I share with the hon. Member for Dagenham (Mr. Parker) the distinction of having in my constituency the largest Ford plant in the country which employs about 28,000 people. Ford is the third largest company in the world, and it employs about 480,000 people world-wide. In 1977 and 1978 the company was the top seller in three specific areas—private cars, commercial vehicles, and tractors. That is a tremendous achievement and no other company has managed that triple.
  There are several factories in the constituency. British Oxygen produces most of the magnets for Europe. It is perhaps the clearest example of attracting industry to outer London. Lastly, there are many small businesses. Indeed, Horn-church is almost the home of small businesses.
  There is a Chinese proverb which says that by nature all men are alike but by education they are widely different. In my opinion, the Bill rightly restores the freedom to local authorities to determine how the difference should be recognised and applied.
  I appreciate that by tradition maiden speeches are non-controversial. Therefore, I have a problem because until I was elected I was the leader of the London borough of Sutton. As hon. Members will know, that borough was the subject of discussion on education matters for several years and we had differences of opinion with the former Government. Contrary to what is sometimes said, those differences of opinion were not on the comprehensive versus non-comprehensive ground. In the past I have voted for and supported comprehensive education, and a number of my colleagues on the council did so, too.
  It is more important that local councils should have the opportunity to determine their direction and how the education should be provided. It would be wrong to label any council as being for or against comprehensive education. It should be recognised as being a local matter. It is not as if there are not enough matters for Governments to be involved in nowadays. There are many
  1114
  areas in which they could be usefully employed without taking up that subject.
  What should be the overall aim of an education system? In Hornchurch, our concern is to achieve a system that will serve all children, the gifted and the talented as well as the less gifted and talented. The child of lesser ability should be given the chance to be educated to his ability. That is the most important aim in education. In education, as elsewhere, I was not elected to buttress the position of the rich and powerful, because by definition they do not need my assistance. My role is to assist and protect the weak, the handicapped and the incapable.
  That is the traditional role of Parliament, and we should not be selective in the way that we see it applied. That follows whether we are talking of defending the country against outside aggression or of defending the elderly against attack by vandals. It is long overdue that something should be done for the mentally handicapped. We should he concerned also in education to make provision for the less able, the slow readers and those who are unable to grasp mathematics and all the other intricate subjects.
  I was born in the same year as the Education Act 1944. In the words of the hon. Member for Bolton, West (Mrs. Taylor), I suffered a grammar school education. I did not feel that I was suffering at the time, but perhaps past events have shown that I did. Thirty-five years is a long time, and we have come a long way. However, the difference in standards between private education and State education still remains great. We have a responsibility within the available resources to reduce that gulf.
  The recent cuts, while they are necessary, do nothing to assist that aim. It is important that within financial difficulties we should never lose sight of an overall target. We should aim not just for better pupil-teacher ratios—in a sense that is almost a side issue—not just for better teacher training, although that is important and cannot be overlooked, or even for more parental support, although that would be welcome in many places where it does not exist at the moment. What we should try to achieve in an education

  1115
  system is the creation of a real thirst for education among those who are at present indifferent, if not totally hostile, to it. If that can be achieved, if those people can be brought back and shown the joys of learning so that their futures can be enhanced, we are giving them the finest legacy that can be given to future generations.
  John Stuart Mill wrote in "On Liberty" in 1859:
  "Human nature is not a machine to be built after a model and set to do exactly the work prescribed for it, but a tree which requires to grow and develop itself on all sides, according to the tendency of the inward forces which make it a living thing."
  I support the Bill.
  8.3 pm
  Mr. Ernest Armstrong: It is always a privilege to follow a maiden speaker and I am pleased to congratulate the hon. Member for Horn-church (Mr. Squire) on his contribution. It is appropriate that an hon. Member should make his maiden speech on education. I have been taking part in education debates for 15 years and, despite our arguments—and there will be arguments today—I have found that there is a consensus on education.
  I welcome the hon. Gentleman's tribute to his predecessor—who was highly regarded in the House—and his comments about his constituency. If the hon. Gentleman's experience is similar to my own, he will find that his Government will have rough passages. Indeed, it has got rough for his Government rather sooner than it does for most. Their honeymoon period did not last long. The hon. Gentleman will find consolation in his constituency and in getting away from the House and back to the folk who sent him here. That was certainly my consolation in the days when things were rough for my Government.
  I wish to take up some of the Under-Secretary's arguments. For a Government who came to power claiming to want less legislation, they are certainly rushing this Bill on to the statute book. When I think about the threat of redundancies among teachers, the uncertainty in the profession, the closure of schools—I was notified today that the Government have decided to close a school that is the centre of a village community—the
  1116
  threat to the school meals service—I put in a lot of work as a young teacher to establish such a service—and the threat to free school transport, I have to say that the Bill is a shocking indictment of the Government and their priorities in education.
  Anyone with a glimmer of interest in education—and that means everyone—must be concerned about the economic situation that is forcing the education service to accept cuts which 10 years ago one could not have envisaged being made to this great service which is so important to the country. My first criticism is that the Government have got their priorities wrong. The education service in England and Wales is unique. The Under-Secretary suggested that the aim of the education service should be to get as many children as possible up to GCE O- and A-level standard. The hon. Gentleman knows that the 1944 Act expresses the view that we should be concerned with the whole person.
  One of the problems since the war is that the general practitioner in the schools has become less well thought of than ever before. When I was a young teacher I was told that I would have to teach all sorts of subjects of which I had no experience. I was to be a general practitioner and my headmaster never tired of telling me that I was teaching children and not subjects. In terms of academic attainment, the earlier that one has specialisation, the more successful a school will be, but early specialisation is a menace to many children and many schools.
  I wish to widen the debate. Of course GCEs are important, but they are not the measure of the worth of a school. Far from it. We talk of mental, spiritual and moral development. We are not failing because we are not clever enough. There are plenty of clever folk. We are failing because of our attitudes, our philosophies, what we believe about people and what we believe about incentives and so on. It is because I think that education has a great contribution to make that I am taking part in the debate.
  The balance between central and local government is delicate. Ministers of all Governments have said that education is a national service administered locally. The idea that we can say to local authorities that they may organise their education

  1117
  systems in any way that they wish is nonsense. The Secretary of State knows that, and the Under-Secretary knows it from his own experience. We must have a national framework which enables schools and education authorities to develop in their own way.
  The uniqueness of the British system is that no two schools are alike. When the late Anthony Crosland issued his famous circular 10/65 he was criticised by some of his hon. Friends because it was not definite enough. There were not enough guidelines it was said. He suggested six methods of going comprehensive and I defy the Under-Secretary to instance anywhere in the country where a straitjacket was put on or where an authority was denied the opportunity of providing for the full development of every type of child. Far from being a straitjacket, Anthony Crosland's proposals were flexible and diverse. We had middle schools, sixth form colleges, community schools and all sorts of methods of organisation.
  The Under-Secretary says that he wants schools to be run as parents want them to be run, but he knows that he is talking about an unreal world. Decisions in schools are made by headmasters and staffs. I took a great interest in the Taylor committee. There is a dilemma and I am waiting for further proposals. Every parent has a right to say how his child should be educated, but how we can arrange, within our present system, to involve the community and to allow parents their natural rights is a difficult problem. We cannot lay down the rules and regulations in the House. We can merely provide the opportunities.
  We do not even determine the curriculum. The only compulsory subject in our schools is religious education and when we look at our nation we have to accept that we have not made a very good job of that subject. It is left to folk on the spot to decide what is taught. We do not decide how a subject should be taught. There is no more lonely or more powerful figure than the teacher who closes the classroom door at 9 o'clock on a Monday morning. He decides how subjects will be taught and, apart from the constraints of examinations, what subjects shall be taught. The idea that a straitjacket of central direction was put on when the Labour Government decided to
  1118
  abolish selection at 11 is a nonsense and everybody knows that.
  I could take hon. Members to good grammar schools where the less able are better catered for than they would be in some comprehensive schools. I could take hon. Members to comprehensive schools where streaming is more rigid than it is in some grammar schools. In relation to such decisions, the Secretary of State and the Under-Secretary will be told, as I was always told by the civil servants " You do not have the power, Minister ". It is not in the power of Ministers or in the power of the chairmen of governors or local authorities. We are talking about attitudes and philosophies and they take time to develop.
  Some of our comprehensive schools have a good name in the community because they are more like the old grammar schools and have retained the old grammar school staff. I know how difficult it must be for a teacher who has spent 15 or 20 years teaching selected children suddenly to have to start teaching at a comprehensive school. It is against his nature and it takes time for him to adjust. Nobody believes that we should return to selection. No Minister would dare to say from the Dispatch Box that we should reinstitute the 11-plus. All Ministers know that to segregate children in different schools denies opportunity.
  Mr. Christopher Price: The Under-Secretary of State has modified his Black Paper statement that grammar schools and comprehensive schools cannot exist side by side by saying that 5 per cent. is an acceptable percentage. Does my right hon. Friend think that that is the beginning of the new Conservative selection policy and that it could lead to Ministers saying that we need an 11-plus system for 5 per cent. of the school population?
  Mr. Armstrong: It is a piece of Conservative double-talk. It has not been thought through. There is the idea that in some areas of a local authority there can be a selective system and in other parts a comprehensive system. Those who advance that view are not living in the real world. It cannot be done.
  I am worried because the Bill is playing into the hands of the few backwoodsmen who still have charge of education in certain areas. The Bill is putting the

  1119
  clock back. We should be examining how best we can give opportunities for self-fulfilment and the development of all children. My hon. Friends and I seek to place no obstacle in the way of looking after the gifted child. I want to look after the gifted child. However, at a time of limited resources I should concentrate resources on the underprivileged rather than the privileged. I should concentrate on those who need help most. The children who need help most are not the 3 per cent., 4 per cent., or 5 per cent. that the Under-Secretary of State would send to a special school.
  I was interested yesterday when I read an article written by Mike Brearley that appeared in The Observer. It seems that his philosophy is in line with mine. He wrote about the difficult time it was for him when he was captain of the England cricket team in Australia. He was making no runs and there was much criticism of him. It was said that he should go. He wrote:
  "The feeling of inadequacy is hard to kill. It obstinately refuses to listen to reason … If I am no good at batting, or painting … people feel that I have failed as a person, that I am no good as a person."
  One of my strong objections to selection, the rat race in education, to competition and an elitist society is that those who do not win the prizes—there are always more who do not win than win—feel inadequate as persons. Britain needs good management. It needs not only good top management but good middle management, good technicians and good workmen. We have learnt over the years that even the folk who do the most menial tasks in society can hold the country to ransom. We have learnt that they do the jobs that must be done if our community is to remain civilised.
  An education system which divides, segregates and labels as ours does—probably more than any other education service in the world—produces a divided society, which is something from which we should escape. All that the Act provides, that the Bill seeks to repeal, is that we must stop selecting children on the basis of brains, and even that is not truly accurate.
  I have been reading "The Times Guide to the House of Commons"—I hardly dare mention it in view of the comments made by my right hon. Friend the Mem-
  1120
  ber for Manchester, Ardwick (Mr. Kaufman) about all the mistakes that it contains. I am amazed to learn that 204 Conservative Members went to public schools. It appears that 60 per cent of Conservative Members went to a public school. I am not quoting these figures in envy. If I had been sent away from my eight brothers and sisters at the age of eight years to a public school, I should have considered that the most terrible punishment that could be meted out to me.
  I was always taught that if we want to understand people we must sit where they sit. For 60 per cent. of Conservative Members to have been educated in the private sector is a terrible indictment of the separatist and segregated nature of our education service.
  Mr. Nicholas Baker: I have always been suspicious of the argument about feelings of inadequacy. The right hon. Gentleman's argument indicates that however illustrious or successful we are—we can even be the captain of the England cricket team—we still feel inadequate.
  Mr. Armstrong: The hon. Gentleman should read Mike Brearley's background. He is far from being inadequate.
  I have been the chairman of an education committee as well as being a Minister in the Department of Education and Science. It is my experience that if a really bright child elects to go into industry, chooses to go to a polytechnic instead of a university or takes science instead of the arts and the classics, it is felt that in some way he or she is letting the school down. That attitude is changing, and that is part of my argument. There is a different outlook mainly because of the new ideas that have come into education. However, attitudes take time to change, and my complaint about the Bill is that it sets the clock back. It brings into the argument again selection, elitism and ensuring that gifted children get ahead, and suggests that that approach contributes to a good society.
  Mr. Martin Flannery: I am interested to know that about 60 per cent. of Conservative Members went to a public school. Does my right hon. Friend agree that the position is even worse? In the Cabinet, which consists of about 21 Ministers, there are

  1121
  only two members who did not go to a public school. I understand that the Secretary of State went to a grammar school. I see that the Secretary of State shakes his head in dissent. The position is even worse than I thought. Does my right hon. Friend agree that a group of elitists are introducing a Bill for the State system when they have never passed through the State system and, therefore, have no real understanding of it?
  Mr. Armstrong: My hon. Friend is right. This is my great concern. We hear much about co-operation and working together. The previous Government acted to avoid placing a straightjacket on the education service. We took steps to give every authority and every school the opportunity to cater for each individual, from the brightest to the slow learner. That was the system introduced by Tony Crosland only a short time ago.
  The Secretary of State has a duty to provide a framework in which the education service can be free of a separate, segregated and elitist character. But such an aim is impossible. As the Under-Secretary of State knows, nobody on the Labour side of the House has suggested that comprehensive schools can solve all our education problems. Success depends on the attitude, the philosophy, the dedication and the ability of teachers. We owe a great deal to the teaching profession.
  I have not found parents who say that they insisted on their child going to a secondary modern school. If there are those who wish to declare that they wanted a secondary modern education for their child, I would like to hear them. The elitism of the Government's philosophy that means favouring the privileged, strengthening the strong, and allowing the weak to look after themselves on the basis that they will be caught up in the drive for a better society, is a denial of all I believe about education.
  I regret that this should be the first Bill that has come from the Secretary of State. I hope that he will look at it again. The morale of teachers, who see selection again becoming a political issue when they thought the matter settled, has suffered considerably. The Under-Secretary lives in the real world. He knows that
  1122
  conditions cannot be imposed on how children are taught or what they are taught. The Bill gives to one or two—there will not be many—reactionary authorities the chance to set back the clock and prevent teachers looking after children of all abilities in the comprehensive schools. I will vote against the Bill. I regret its passage.
  8.23 pm
  Mr. Harry Greenway: May I pay my tribute to my hon. Friend the Member for Hornchurch (Mr. Squire) for his lucidity. I know that he has a long and dedicated background in education.
  I welcome the Bill and the right that it gives to local authorities to determine the pattern of education in their areas. The Labour Party has done no service to education, particularly to comprehensive schools, in trying to force a unitary pattern in the secondary sector. This sort of compulsion has done more to damage the attitudes of parents, children and teachers than anything else. It amounts to compulsion versus choice.
  The Bill gives local authorities the right to choose the pattern of education in their areas. Therefore, the electors and, ultimately, the parents will also have the right to choose the pattern of education for their area. I stand by my long career in comprehensive schools and the fine ideal that they represent. But we do such schools no favour by saying that the whole country must be run on one principle alone.
  The Bill is concerned with schools. I believe that the House should give much more thought than I heard expressed in Committee and in subsequent discussion to the way in which schools are run.
  The right hon. Member for Durham, North-West (Mr. Armstrong) made an admirable reference to the management of schools. I felt that he knew what he was talking about. But schools are changing quickly. The atmosphere in schools, irrespective of their size or location, is changing rapidly. More attention needs to be given to the way which schools are run.
  I am concerned about those schools where there is no solid central ethos and where children are not achieving their full potential. That needs to be looked at again. There is too much of it.

  1123
  Schools have changed, but we must look again at the management and running of them. I wonder whether it is any longer sensible to have two distinct kinds of department in schools—the pastoral department and the academic department. I spent a great deal of my professional life trying to run the two together. In former times, when we did not feel that we had to have a pastoral structure, every teacher felt that he was a pastor to the children before him, and it worked very well. We need to blur the edges, and I hope that we shall find some way of doing it without lessening the career prospects of teachers.
  The motivation of children and teachers has changed, and we should study the current aspirations of both. They are different from what they were not all that long ago. The types of career towards which children are now moving as a result of their education are different from what they were only a few years ago. The way in which teachers are moving through the profession is quite different. Not enough attention has been given to the way that developments are moving.
  The one constant factor in education is the parents. Naturally, they have changed least. Their aim is constant. They want the best for their children. Schools must work primarily to provide what is best for children and to serve the children and the parents who are associated with them. I know that many schools could work very much more closely with parents than they do, and I should like to see much more such co-operation. I am not thinking particularly about parent-teacher associations. Parents can be brought in to assist in dealing with behavioural problems, under-achievement, and so on. In my view they should be brought in much more often than they are.
  The quality of schools must improve still more via better teaching, in my view. I should like to see much more concentration in teacher training on classroom craft and teaching techniques and much less on educational sociology.
  Mr. Andrew F. Bennett: I have listened carefully to the hon. Gentleman's last three or four remarks, which I find extremely interesting and which I support. But what relevance have they to the Bill?
  1124
  Surely the major criticism of the Bill is that it does not really deal with education matters and the way that schools are run.
  Mr. Greenway: I disagree with the hon. Gentleman. The Bill is concerned entirely with schools and the way that they are organised, including the way that local authorities choose to run them. As I said at the beginning of my remarks, local authorities will provide schools according to the wishes of voters and parents. That is what the Bill is about. It gives me an opportunity to make a few remarks which are designed to improve schools. It is the concern of the Government to improve schools. That is what the Bill sets out to do, and that is what it will achieve.
  The curriculum needs looking at constantly. By that, I do not mean that we must not stick to basics. We must, of course. In a few moments I shall pick up one or two of the comments of Opposition Members, since I have been criticised for looking at schools as such.
  We need to stick to basics in schools—to the three Rs, written and spoken English, mathematics and a solid core of subjects. Not everything can be pushed on to the school curriculum. I wish that Socialists would learn that. Every time a new fad comes up or a new social difficulty arises, they say that it should be pushed into the schools and handled there. Schools cannot do all that. It is not the function of schools to do it. That sort of thinking needs watching.
  We must support deprived children, push those in the middle and stretch the bright even more than we are doing now. In terms of the curriculum, many local education authorities are thinking either of pushing ahead with the organisation that they have, as they will be able to do under the Bill, or of producing a new organisation. Some of them are thinking of first, middle and high schools.
  A great deal more thought is needed about the relationship between the methods of teaching and the curriculum in middle schools and the teaching methods and curriculum in related high schools. There is a great deal of falling down here. If middle schools are regarded as providing the diagnostic education that comes in the years of early secondary education, the matter is even more crucial than might be realised.

  1125
  I am especially worried about attendance and behaviour in schools. If we can get this right, everything else will come right also. I liked the remarks of the right hon. Member for Durham. North-West about the need to put across sound moral and ethical teaching. Where there has been a lack of this, with no positive approach to the matter, schools and society have suffered as a result. Society and children suffer also by children finding that they do not know how to relate to the school. They also find that they are unable to relate to the family. Therefore an inquiry into behavioural trends would be worth while.
  We should look at the number of children being suspended and expelled from schools in certain areas. It is not good enough. When children are suspended they are without education. If they are expelled they are without education for seriously long periods of time. Rather than spending money looking at problems that any practising teacher could advise on, I believe that a study by the Schools Council into that matter might provide a sound basis for worthwhile changes to the Children and Young Persons Act of 1969.
  Individuality is essential. Schools, and LEAs through the schools, must ensure through their organisation that children have the right to their individuality.
  Mr. Christopher Price: On a point of order, Mr. Deputy Speaker. I apologise for making it. I always understood that there were strict rules about Third Reading debates and the sort of things one could say. All I have been able to hear is about the Children and Young Persons Act 1969.
  Mr. Deputy Speaker (Mr. Richard Crawshaw): The hon. Gentleman is quite right. The debate has been wide. A Third Reading debate should be confined to what is in the Bill.
  Mr. Greenway: I had reached the stage where I was answering points made by Labour Members. Since they were in order when they made the points, I take it that I may be allowed to answer them. I hope that the hon. Member for Lewisham, West (Mr. Price) will remember what is relevant when he next speaks. I had to listen to him at length in Committee, and that was a tedious business.
  1126
  Mike Brearley was mentioned. He was born in Greenford, North Ealing. He received a sound selective schooling and went on to university and did very well. He is an example of someone who went through the selective system and achieved a great deal.
  Conservative Members have been criticised for attending independent schools. Throughout much of my time in teaching I was amazed at the number of Labour Cabinet Ministers who sent their children to public schools, having been there themselves. The former Secretary of State for Education and Science, Mrs. Shirley Williams, chose to send her daughter to a highly selective grammar school that was surrounded by comprehensive schools. What about that?
  School courses were mentioned by the hon. Member for Bolton, West (Mrs. Taylor). She mentioned the infinite number of courses available in comprehensive schools. In many comprehensive schools the head and staff believe that a common course should be available to everybody or to nobody. Such common courses have often proved to be disasters and should be watched. Diversity is of great importance.
  The question of resources for grammar and secondary modern schools has been raised. Under the points system each pupil is allocated a given number of points. A total number of points is arrived at for an individual school. On the basis of that system staff are appointed.
  My experience is based mainly upon London. A per capita sum is paid for each child, regardless of whether that child attends a grammar, secondary modern or comprehensive school. The same method is used to assess primary schools.
  Mrs. Ann Taylor: We could all quote relevant statistics to prove our case. Two schools in my constituency are next to each other. The high school spends £440 per pupil per year and the grammar school spends £547 per pupil per year. That proves the point that I made about resources.
  Mr. Greenway: That is a selective argument. I know that what I have said is right.

  1127
  One of the most attractive features of the comprehensive schools is that usually they are new. Most of them have been built since 1957. They have fantastic facilities. They have fine gymnasiums, laboratories and great new classrooms. By comparison, the school down the road is mouldy with its ancient buildings.
  Mr. Mark Carlisle: Does my hon. Friend agree that the figures quoted by the hon. Member for Bolton, West (Mrs. Taylor) are nonsense and irrelevant unless one takes into account the size of the sixth forms in those schools? It is accepted that the cost of education in the sixth form is higher than it is in other forms. Since more pupils stay on at the grammar school, inevitably the cost per pupil is higher.
  Mr. Greenway: I accept that.
  Mr. Kinnock: Will the hon. Member give way?
  Mr. Greenway: I wish to resume my speech.
  At sixth form level pupils are worth six points, whether they attend a grammar school, a secondary modern or a comprehensive school.
  Mr. Kinnock: The hon. Member has answered the question I intended to ask by accepting the intervention made by the right hon. and learned Member for Runcorn (Mr. Carlisle). It is difficult to judge these matters without taking several other factors into account. What does the hon. Member think about the view of the Prime Minister and Secretary of State about the publication of the results of schools without a guarantee that all the relevant criteria are taken into account? Does that not hit his argument on the head?
  Mr. Greenway: That is a long way from the main argument. I have not heard any of my hon. Friends say that in the publication of results a suitable description of the school and its background should not be given.
  I remain loyal to my teaching background as I wish to take up the argument of Opposition Members about the difficulty involved in having a selective school in an area where there is a general principle of non-selection. To a large
  1128
  extent I accept that argument, but it should not be pushed too far.
  There was a very fine old school which had been in existence for 400 years. It had three-form entry and 90 pupils a year. It was surrounded by 18 comprehensive schools and the argument to diminish the selective school was put again and again. In the end it was closed in deference to the argument that its every existence was wrecking the 18 comprehensives that surrounded it. That sort of action does no favour to the comprehensive principle. That school was closed. The 90 pupils who would have gone to it every year were spread round the comprehensive schools and heaven knows where they are. That does not help the argument that is put forward in favour of the comprehensive principle.
  Schools are not youth clubs. They must be based upon learning and sound discipline. With correct attitudes in child-rent, good citizens will result.
  Secondary modern schools, past and present, should not be knocked so much. Many of them were very good, are very good and will be very good. Many people have achieved fine careers after attending a secondary modern school.
  In the end, as hard as we strive to achieve it, absolute equality is impossible. There may be two children with identical backgrounds, of the same sex and all the rest of it. They may be sent to the same school where they attend different classes. One of them may be taught by a teacher with 25 years' experience and the other may be taught by a teacher who is new to teaching. Already they are in a highly unequal situation. Therefore, one cannot achieve total equality. We must always go for equality of opportunity. As fain Macleod said, the purpose of the State in education is to give citizens equal opportunity of proving themselves unequal or different, because different we all are.
  8.42 p.m.
  Mr. A. J. Beith: The progress of this Bill through the House has been a rather depressing and miserable affair. It sets a depressing and miserable tone for education under this Government. Confirmation of that view can be gathered from the discussions among teachers in practically any staff room in the country that take

  1129
  place not because of the Bill alone but for far wider reasons, some concerned with the funds available for education.
  The Bill purports to give local authorities freedom to make a choice in the kind of system they employ for secondary education. The Bill gives that choice allegedly to local authorities that have had virtually all their practical freedom taken away by a financial climate in which they cannot afford to do anything very much. The amount of central resources which goes into schools by way of capital grant or through the rate support grant has been reduced. Frankly, any authority which at present contemplated a change in the system it operates would be attempting the impossible because it would be attempting to climb up a down escalator.
  All authorities at present face the impossibility of maintaining existing services. That is why we have case after case of local authorities, or, indeed, local authority associations, trying to decide what to give up. They ask themselves whether they can give up adult education or nursery education, or whether they can abandon free transport or school meals. All authorities are desperately looking for ways of abandoning parts of the services which they can no longer afford. The freedom is elusive because it is a freedom against a background of financial stringency.
  Secondly, the Bill purports to have something to do with freedom of choice for parents, or at least some of its supporters suggest this. It does nothing of the kind. In a financially better world, it may have given some freedom of choice to local authorities and thereby some ultimate freedom to the electors to decide what the overall system should be, but it has nothing to do with freedom of choice for individual parents in the education of their children. The Bill is about the preservation of a selective system which denies freedom of choice.
  The parent who is given the freedom to send his child to a secondary modern school is really being insulted if he is told that that is what freedom is all about. It has nothing to do with that kind of freedom. Indeed, I think that we shall have some very interesting discussions when, later in this Session, we discuss a second and, I hope, valuable education
  1130
  Bill which will contain at least some good things even though it may have some bad things in it. When we get to that Bill, we shall begin to talk about parental choice, how it can be implemented and how procedures can be set up to give parents rights of appeal.
  Frankly, there will be some fascinating appeals in local authorities that employ selective systems as parents drawn from the majority group who are consigned to the secondary modern schools ask "Where is our parental choice? We wish to insist upon our right to send our child to the nearby school which has better facilities, higher academic standards and higher objectives". What will we do about that in the appeals system that is being devised? Perhaps we can undo some of the damage that is being done by this Bill, but if we attempt to do so I believe that we shall meet sonic resistance from the Government.
  This Bill has been a strange illustration of current Conservative education thinking. There has been a great deal of haste over getting it through, but very little thought expressed about what secondary education is all about. I have been amazed by the Government's determination to get the Bill through before the Summer Recess and, indeed, to get it through next week. Hon. Members will remember that we spent the whole of last Thursday night engaged in a battle of wits, the outcome of which was to postpone Third Reading until tonight. What was fascinating about that was the determination of some elements in the Government, and to a very late hour, that there should not be a moment's delay in the Bill's passing and that the simple procedure, which they eventually accepted, that Third Reading should be deferred until tonight seemed to be thought by many to be an absolutely intolerable interruption in the progress of an urgent Bill which had been deliberately placed as the highest in the Government's domestic legislative programme. There was a real sense that, if necessary, the debate on the Abortion (Amendment) Bill might have to be sacrificed if the proceedings went on. There has been a lot of haste over this Bill, which I find hard to understand.
  But it is even harder to understand when there has been so little outlined by the Government about what they really

  1131
  want to do in secondary education. Listening to the Under-Secretary of State one gets the clear impression that he does not like the comprehensive system very much, at least for many areas of the country. He chose to quote remarks from his right hon. and learned Friend which suggest a similar objection to anything which might be called "progressive". I find that term singularly unhelpful The application of the term "progressive" is in my view, neutral as to whether something is good or bad. It simply means that something was not done before. But it is obviously a label currently used by Ministers to apply to some things in the education system that they do not like and is used as a term of abuse.
  Since this comes from a Government who are making a decision that in some way the direction of the education system should be checked, I should like indications of where they want it to go. I would have expected some spelling out of the kind of selective system that they would like, or preferably some indication that the direction taken by the vast majority of education authorities throughout the country enjoys some approval and support among Ministers. But, from the debate in Committee, one does not get the impression that the action of the majority of authorities, many of them Conservative controlled, in introducing, developing and maintaining comprehensive education is viewed with any approval whatever by the Government. Indeed, from what the Under-Secretary of State said tonight, it would seem that they are rushing dangerously ahead with an untried system, failing to build in elements of selection and failing to have selective schools in their areas so that they can check whether the comprehensive schools are doing well enough.
  This Bill is a world away from the education offices and education committees of most authorities in the country. It is a gesture. It is an attempt by a section of the Conservative Party to appease a section of Conservative opinion which thinks that comprehensive schools are an unmitigated disaster and that the sooner we get the grammar schools back the better. It is an attempt to appease that opinion without doing very much about it.
  1132
  However, I fear that it will be a green light to a number of types of selective system, including various bogus schemes such as guided parental choice. I should like to have heard a speech on behalf of members of the Cabinet who represent the Cumbria education authority area. because I am sure that at the back of their minds they want to get this fascinating system of guided parental choice under way—for which sections of Cumbria are pressing—so that they can say to parents "We think you should choose to send your child to this school, which we are not actually calling a secondary modern school but which is." I fear that that lies at the back of much Conservative thinking.
  I do not believe that the direct effects of this Bill will be very great, because the number of authorities that want to turn back the clock in this way and maintain a selective system based on the 11-plus, or something that does the same job, is quite small. Its indirect effects, however, will be wider—in encouraging some authorities to doubt the wisdom of the course that they are pursuing, but, much more, in lowering the morale of those authorities and teachers, the vast majority, that have committed themselves to making the comprehensive system work because they believe that it is right to give to all children throughout the secondary years the full range of educational opportunities.
  To be constantly sniped at in the attempt to do that, for it constantly to be hinted that the merits of the grammar school system are being lost, and for the Government to be seen not to give them any backing at all, is a great discouragement to those who are at the forefrom of making our system work. They are the majority in this country—and then are many Conservatives among them as well as Liberals and Socialists—and they deserve better than they are getting from the present Government.
  8.50 p.m.
  Mr. J. F. Pawsey: First, I add my tribute to those already paid to my hon. Friend the Member for Hornchurch (Mr. Squire). His maiden speech was a model and a pattern for other hon Members. I only wish that I had had the pleasure of hearing him speak before I made my own maiden speech.

  1133
  I took exception to only one of my hon. Friend's remarks. That was his reference to Ford motor cars. As the proud possessor of a Ford car which has recently broken down on a motorway, I hope that my hon. Friend will forgive me for saying that I found his remarks in this respect rather jaundiced.
  I turn to the speech of the hon. Member for Berwick-upon-Tweed (Mr. Beith). I agreed with what he said about the question of financial climate. Rugby is part of Warwickshire, and I know well that Warwickshire has suffered grieviously through cuts in the rate support grant. But I am sure that the hon. Member would agree with me that the Education Act 1976 imposed change, and the cost of imposing that change would have added even more strain to local authorities, whereas this Bill is a bill to restore choice to local authorities by allowing them to maintain, if they wish, their present system so that there would be no additional financial strain upon them should they decide to remain as they are.
  Secondly, I did not quite understand the hon. Member's criticism when he argued that the Bill had an undue amount of importance and urgency attached to it. Conservative Members certainly find that education is both important and urgent. I for one am pleased that we have been able to introduce this Bill and to aim at getting it on the statute book as rapidly as we are trying to do.
  I come now to the excellent and very eloquent speech of the hon. Member for Bolton, West (Mrs. Taylor). I was particularly impressed by her references to choice for local education authorities. The essence of the Bill is its freedom and choice. The Bill will restore freedom and choice to LEAs. It should not be interpreted as an attack on comprehensive education or on the comprehensive principle.
  To some extent, I can argue that the Bill is almost a Bill about devoluton, because it seeks to devolve power.
  Mr. Kinnock: Now I know why I am against the Bill.
  Mr. Pawsey: I heard with interest the utterance of the hon. Member for Bedwellty (Mr. Kinnock). We all know of the part that he played in the devolution debate, and I acknowledge that freely.
  1134
  This is a question of devolving power from the centre—that is, from this Camber to local councils and, above all, to local people. A by-product of the Bill will be the restoration of additional credibility to LEAs, for they will be seen actually to possess the power of responding to local people's wishes and the wishes of parents. They will be able to respond to the desires of the local community. I accept that parents know best what is right for their own children. To use an emotive phrase, this Bill really represents "power to the people". It shows that local authorities still possess authority—the authority to decide on their own education system.
  I refer here to my own local authority, Warwickshire. Until very recently, I was a member of the county council's education committee. I take up a point made by the hon. Member for Bolton, West. She seemed to cast some doubt on the ability of an LEA to operate various schemes within its area. Warwickshire operates comprehensive schemes in, for example, the northern area. But in the eastern area of Warwickshire, in Rugby, however, which is the constituency that I represent, we have a completely different system. We have grammar schools, a bilateral school, denominational schools and high schools.
  The Education Act 1976 sought to remove choice and impose the straitjacket of uniformity. It sought to impose change against the wishes of the people. I say that deliberately because, if the majority of people in a specific area wished to see change, that change would have been freely made. Parents are part of the electorate. Labour Members cannot seriously doubt that if parents had wanted change that change would have to have been imposed by the local authority.
  Mr. Andrew F. Bennett: When parents in due course ask the hon. Gentleman not to cut remedial classes at schools or not cut back on education spending here and there, will he tell his right hon. and learned Friend the Secretary of State that those cuts must not go through?
  Mr. Pawsey: The economic climate is such that much as I should like to maintain high standards in education across the board, I realise, alas, that we must cut

  1135
  our coat according to the cloth. At present the cloth is steadily shrinking. The present Government are endeavouring to alter the financial climate so that we can do the things that the hon. Gentleman refers to. I would press for the improvement of remedial classes and the extension of nursery classes.
  Mr. Flannery: Will there be cuts in private education and the education of young people in public schools? Will they suffer as the Government and the Bill will make our children suffer and will there be cuts across their board?
  Mr. Pawsey: I do not have a wide experience of private education which perhaps the hon. Gentleman possesses. I am not the product of a public school or even a grammar school. For me it was an elementary school and a technical school. Labour Members criticise us on this side of the House for knowing little about the State system, but I have certainly gone through the local education system. I was one of the three hon. Members mentioned previously. I have six sons and none of them attends private schools. All have been educated in the State system, so I speak with considerable personal knowledge of the State sector.
  Mr. William Wilson: I serve on the Warwickshire county council. When the contribution of the Warwickshire education committee to the number of pupils to be sent to the local school is next considered, will the hon. Gentleman accept a diminution of the number of places that it will buy at that school?
  Mr. Pawsey: I shall listen with interest to the arguments advanced and give a reasoned decision on the facts presented. I am sure that the hon. Gentleman will do the same, and I look forward to seeing him on that occasion voting perhaps with the Conservative majority on the Warwickshire county council.
  Rugby took the precaution of carrying out a survey of parents. It was not organised by any political party; it was quite impartial. In the survey 63 per cent. of parents voted to maintain the existing system of education. The balance of 37 per cent. were mostly "don't knows". Therefore, only a small pro-
  1136
  portion of parents in the eastern area of Warwickshire actually voted for change—a change that would have been imposed under the Education Act 1976. That is a clear example of the effect and the working of the 1976 Act, the teeth of which are drawn by this Bill. It would have imposed change against the wishes of the majority of parents in my constituency. I argue that case not from the basis of supposition but from a sound basis in fact. Rugby has a system that the majority of parents like. We have grammar schools, a bilateral school, high schools and denominational schools. It may not be perfect, but it works and evidently parents like it.
  I believe that education should reflect generally the wishes of parents. I cannot see the argument why education should be precisely the same throughout the length and breadth of the United Kingdom. Education authorities should administer locally a national service, and I see no reason why that should not continue to be the case. Local education authorities should reflect the views and desires of local people.
  There is one issue which has not been touched upon yet—the very real problem of school leavers looking for work. It is paradoxical that at a time when we have such a high number of vacancies for skilled workers so many boys and girls are seeking work in craft industries. I wonder whether this is an opportunity to raise once again the question of technical schools. I am the product of a technical school and I am well aware of the virtues of that form of education. Technical schools present the opportunity of teaching children the technical skills that are so necessary in future life.
  This Bill is not an attack on comprehensive education. I fail to see how giving greater choice can be interpreted as an attack on anything, other than blind prejudice. If Labour Members see this as a threat or an attack, perhaps that is an indication of the defensive posture that for some reason they seek to adopt. If comprehensive education is as good as people maintain, I fail to see what this argument is about, for I do not doubt that pressure from parents will call into being those very comprehensive schools which are so lauded by Labour Members. Labour Members should trust the parents, because a parent will ask and indeed

  1137
  demand what is best for his or her children. That is the essence of choice.
  This Bill is a charter for choice. I ask Labour Members to stop their ill-judged and prejudiced opposition to the Bill. I urge them to rediscover democracy. I believe that the Bill, which has been described as "small and squalid", is designed to liberate and not to restrict.
  9.3 pm
  Mr. Christopher Price: We have had a great deal of autobiography during this debate. We have heard who has been to which public school and to which secondary school. The Secretary of State has admitted that he went to public school, but that he did not go to Oxford like the rest of the Cabinet. I do not intend to pursue my autobiography on this occasion, because I made a long speech last time and I wish to be brief today.
  I disagree with my right hon. Friend the Member for Durham, North-West (Mr. Armstrong), although he made a well-considered and impressive speech. The burden of his remarks was that the people of Britain were sensible and that this little Bill would not have much effect. I hope that that is true, but I fear that the reverse will be the case. I fear that it is the beginning of the dismantling of comprehensive education. Day by day we learn a little more of the Tory plans, and this worries me enormously.
  The Secretary of State has decided not to repeal the duty under the 1976 Act to implement. That duty has some meaning only when read in connection with the 1976 Act, because that legislation involved dates and times. The former section 13 notices put in over the years since 1944 did not contain any dates. Therefore, a duty to implement cannot mean anything unless there is a date on which something shall be implemented.
  Is the right hon. and learned Gentleman saying that from now on every section 13 notice must contain a date? That was not the normal practice in the years since 1944. If such notices do not contain a date, what will the "duty to implement" mean after the passing of this Bill? In the old days local authorities had the right to obtain section 13 notices and then to do nothing about it because they did not contain a date.
  1138
  Is the Secretary of State suddenly introducing a new rule, which has never before been written down, about the setting down of section 13 notices? I hope that he will deal with this matter in his reply.
  Although the Conservatives constantly say that this Bill relates only to local options, I believe that it embodies a new Conservative policy for the 11-plus for 5 per cent. of pupils. That is the figure we extracted from the Under-Secretary of State. The Minister has modified his Black paper statement that comprehensive schools and grammar schools cannot live side by side.
  What makes me believe that this is a new Tory philosophy flows from statements made in The Observer yesterday by a character called Mr. Stuart Sexton. I understood that legislation was announced to the House of Commons first and that there were strong rules about allowing political advisers to make statements to newspapers in the first person singular. However, Mr. Sexton said:
  "I want to build in an incentive for schools to keep fees down."
  It is interesting that Mr. Stuart Sexton, who is a man unknown to the House of Commons, wants to do such a thing.
  Does the Secretary of State allow civil servants—even political civil servants—to give press interviews such as that set out in Education on 13 July? It refers to a draft Bill drawn up by Mr. Sexton. I thought that Bills were drawn up by parliamentary draftsmen rather than by ex-Croydon councillors drafted in to assist Secretaries of State. There are proprieties in these matters which were observed in the past.
  Mr. Nicholas Winterton: Not by the Labour Government.
  Mr. Price: They were observed by the Labour Government.
  If the Secretary of State intends to depart from those proprieties he should announce the new system and say that in future legislation will be announced by his political advisers and not to the House of Commons.
  The whole burden of the Secretary of State's £50 million direct grant gamble, on which Dr. John Rae of Westminster School commented pungently that it was a rotten gamble—
  Mr. Nicholas Winterton: He is a Liberal.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order.
  Mr. Price: We cannot expect order from the hon. Member for Macclesfield (Mr. Winterton). The report by Auriol Stevens in The Observer yesterday lays out in terms the fact that the Conservative Party wants to reintroduce an 11-plus system through an assisted-places scheme for about 5 per cent. of pupils, even in local education authorities that wish to remain fully comprehensive. We have discovered that voluntary schools will be able to issue section 13 notices to revert to grammar schools, even in authorities such as the ILEA which have opted to go comprehensive.
  That proves that the Conservatives are being hypocritical when they say that the Bill is about local option. It is not about local option but is about introducing a new educational policy. They refuse to come clean about that. If it is the policy of the Conservative Party they should come clean and stop all the silly humbug about local option.
  The final reason why it is clear that the Bill is not about local option but about the beginning of a new policy is the breakneck speed with which it has been rushed through. It is extraordinary that when the Conservatives win the election the first Bill that they rush through, against all constitutional proprieties, is the Education Bill.
  Mr. Mark Carlisle: Will the hon. Gentleman tell me what constitutional propriety has been broken by the Bill?
  Mr. Price: I invite the Secretary of State to read my 15-minute point of order of last Thursday.
  Mr. Mark Carlisle: Does not the hon. Gentleman remember that Mr. Speaker ruled not once but twice against his point of order?
  Mr. Price: Mr. Speaker ruled about order. I was talking not about order but about constitutional propriety—about money resolutions on Bills. However, I do not wish to get drawn into that argument.
  The speed with which the Bill is being rushed through has strange resemblances
  1140
  to the speed with which the courts decided to rush through their judgments on Tameside two years ago. At that time the House of Lords sat unprecedentedly in English history on a Saturday in order to rush through a judgment to have exactly the same effect as this Bill will have—to provide legislation to let some Tory local authorities off the hook.
  The Bill has been called a squalid little Bill. It is, and it is one that the Conservative Party will be ashamed of one day.
  9.14 pm
  Mr. Nicholas Baker: On the last—and first—occasion that I spoke in this place, my remarks coincided with the printers going on strike. No doubt, in your wisdom, Mr. Speaker, you have given me the privilege of speaking again to provide the magic ingredient that will cause the printers to start churning out the outpourings of hon. Members once more.
  I wish briefly to make three points, two of which arise from the state of education in my constituency and the third of which is more general. The first point relates to the reorganisation proposals for Shaftesbury schools to which clause 1(4) of the Bill applies.
  We have in Shaftesbury a fine and successful boys' grammar school, a girls' grammar school with a good reputation, but inadequate buildings, a secondary school with a good reputation, but also with inadequate buildings, and a primary school in Shaftesbury and others in the outlying villages.
  Comprehensive proposals were produced many years ago, but not under the threat of compulsion of the 1976 Act. At first, they received general acceptance, but more recently I, and no doubt the Secretary of State, have received representations from many concerned with schooling in the area who have reservations about the proposals. Their concern is that the high academic standards in the grammar schools should not be lost in the larger new school and they are concerned about the effect upon primary and village schools of their losing the two upper age groups.
  There is general agreement that some buildings are seriously deficient and there is support in the area for a modified scheme under which a co-educational

  1141
  grammar school would be created, a new secondary school built and the primary schools retained in their present form
  I am aware that the proposed cuts in the improvement element of the school building programme total about £10 million and it appears that Dorset is being asked to bear £1·2 million, or more than one-tenth of the total. Will my right hon. and learned Friend the Secretary of State inform us whether that apparently excessive share is attributable to the cancellation of the Shaftesbury proposals? If it is, I should like him to reconsider the matter. There are modifications to the proposals which would cost considerably less.
  I should also like to know the criteria by which my right hon. and learned Friend will judge these and, no doubt, other similar proposals if the local education authority makes the election referred to in clause 1(4). What measures will be taken to ascertain public opinion? A public inquiry might be an appropriate form of considering the matter, though I appreciate that there is no statutory provision for that.
  My second point is connected with the first point. There is deep and general concern about the future of village schools in rural areas. They are often associated with the highest educational standards and they are an essential part of community life and a vital focus, both social and from an amenity point of view. They are under continuing threat.
  I accept that drastically reduced school rolls mean that not all the village schools can be retained, but every time that one closes, another village dies a little. My proposal is that parents should be offered a chance of keeping their village school going and keeping costs down by providing some financial support and ancillary services to supplement and back up the teachers. That would give parents an even closer involvement with their children's education, which would do nothing but good. I hope that my right hon. and learned Friend will encourage education authorities and teachers' unions to co-operate in that matter.
  My third point relates to education expenditure. We all find it unpleasant to face the economic facts of life, but cuts have to be made and teachers in Dorset accept that as much as anyone
  1142
  else in the community. I hope that the cuts will fall—as they seem to be alling in Dorset, though with an over-severity—on equipment, aids and educational hardware rather than upon the teaching staff.
  One of the many ways in which our education system has gone wrong is that there has been too great a concentration of expenditure on televisions, typewriters, buildings and aids rather than on attracting and training teachers of the highest quality and dedication.
  Teachers work at the coalface of education and on their quality and talents the future of our children depends. In Plato's "Republic", Mr. Deputy Speaker, which I have no doubt you consult on a nightly basis, you will recall that only the noblest, the finest and the most gifted citizens were allowed to have the responsibility of teaching the young. That ideal is one to which we should all aspire.
  9.21 p.m.
  Mr. Neil Kinnock: This has been a most instructive debate. It is the first occasion on which we have heard from the hon. Member for Hornchurch (Mr. Squire), who in his maiden speech referred to Chinese philosophy and John Stuart Mill. The hon. Member for Dorset, North (Mr. Baker) referred to Plato. I suppose that the three references would provide us with an adequate definition of the present state of Tory education policy. If we throw in a little of Mr. Gradgrind and possibly a dash of Samuel Smiles, we have the full library of inspiration for present Conservative Party policy.
  However, the hon. Member for Hornchurch made his maiden speech and the debate was all the more interesting for that. It is interesting that the hon. Gentleman, in spite of being newly elected, appears to have left the Chamber. Evidently he has learned a great deal more in his few weeks in Parliament than most other hon. Members who visit us for the first time. However, we shall look forward to hearing from him again.
  We have heard also from the hon. Members for Ealing, North (Mr. Greenway), Rugby (Mr. Pawsey) and Dorset, North. I note that on Third Reading Conservative Members have abandoned the Trappist vows that apparently they took directly after Second Reading that prevented them from contributing to our

  1143
  debates in Committee and on Report. However elevating and instructive their contributions may have been—apart from the Under-Secretary of State, the only contributors to the debates in Committee and on Report were Labour Members—there was a certain bluntness about our scrutiny as we could not rely on Conservative Members.
  I have news for the hon. Member for Dorset, North. His hope for public inquiries and his attempt to salvage the rural schools will come to nought. The latter objective will be defeated by the Government's zeal for education cuts. His other objective of public inquiries is one that the Opposition advanced at considerable length in Committee.
  We urged full-scale parental consultation. We advanced our arguments on democratic and education grounds in the same way as the hon. Member for Dorset, North. Unfortunately, our appeals fell on deaf ears. Bearing in mind the Government's refusal to accept our arguments and the opportunity that the hon. Gentleman has in the next 25 minutes or so to read the report of our debates in Committee, I hope that we shall have his assistance come the Division.
  Throughout the passage of the Bill we have heard a great deal from the Under-Secretary of State, the hon. Member for Brent, North (Dr. Boyson). That is fitting as he is the architect of so much Conservative education policy. Were it not for the high esteem in which I hold the Secretary of State, I should consider the Under-Secretary of State to be a sort of Rod Hull operating behind an educational emu. I realise that that would be a most unfair assumption to make about the relationship between the two members of the Conservative Front Bench. We shall have to wait to hear what the right hon. and learned Gentleman has to say.
  We have in evidence the remarks of the right hon. and learned Gentleman on Second Reading and we have the views of the Under-Secretary of State, who was most vociferous on Third Reading with his criticism of the Labour Party for its inflexibility and its blinkered view that there can be only one form of satisfactory secondary schooling. I do not think that he will be able to find any evidence anywhere over any period that will give any
  1144
  support for his view that the Labour Party, or any spokesman representative of it, has said that there is only one pattern of comprehensive secondary education, or any one pattern of secondary education, that is satisfactory.
  As the radical party, we are willing to move with the times and to respond to the demands. That is consistently what we have done. The only element of strict continuity in our views over the last 30 years has been the solemn intention to get rid of selection on the basis of totally arbitrary testing at the age of 11. If that is the hon. Gentleman's definition of comprehensive schools, it leaves a great deal to be desired in his general vocabulary. We had come to expect better of the hon. Gentleman. He knows the objection that we have made. Apart from his allegations of inflexibility against us, we have heard from the hon. Gentleman all about these great new virtues of diversity and variety in the provision of secondary school education and that we can have all kinds of schools at secondary level, varying in different parts of the country and even within the same parts of the country. I suppose that his remarks are the answer to all the educational difficulties that we are now experiencing, except, conceivably, as the small ads in the Sunday Express say, for troublesome facial hair. The hon. Gentleman will know more about that subject than I.
  As a consequence, we are left with the great new idea that diversity gives strength to our secondary school system. The hon. Gentleman, as he admitted earlier this evening, has not always felt that way. The hon. Gentleman did us the credit of quoting from his own words in the 1969 Black Paper. He told us, as we have heard repeated many times in this House and elsewhere, that comprehensive schools and grammar schools could not really co-exist because comprehensive schools would then be little better than re-named secondary schools. I am sure that the hon. Gentleman has the precise quotation, but I do not believe that I have recorded unfaithfully what he said.
  We can afford to ignore that consideration. It is one of the few areas in which the hon. Gentleman has been able to obtain applause from the Opposition or from any enlightened opinion in education. For it was a statement of the

  1145
  obvious—that where there existed a selective system of education, after years of being accustomed to a bipartite system, anything that was not a grammar school or anything that was not a recipient school of the successes of that system of selection was bound to be regarded as the secondary modern school. Given the disparity of per capita provision of facilities in everything from domestic science to sport, in sexually segregated education, it was conforming, no matter what the school was called, to all the worst features of the bipartite system and the secondary modern school system, which was certainly secondary but in many cases anything but modern.
  Dr. Boyson: The hon. Gentleman pushed the comprehensive dogma in his party further in its demand for sexually separated schools than I have heard before. Am I to understand that the Labour Party does not believe in any form of sexually separated schools, even if parents want them? That would be going further than the Labour Party has ever previously gone.
  Mr. Kinnock: Some parents want their children to go to single sex schools. I have the greatest respect for their views. As the hon. Gentleman knows, the Labour Party, wherever possible, tries to accommodate those views. From his own assessment of education, even though he might be perverse in this view, it is difficult to make sexual segregation—all its falsity, the synthetic social atmosphere, the difficulties and dangers, and the waste and duplication—match up to the demands that we impose on our education system.
  It is in that sense and with those criteria that I should like the hon. Gentleman to assess the necessity of segregating secondary school education. The hon. Gentleman has entirely forsaken his 1969 analysis. He tells us now that it does not matter if there are several systems of secondary education in one area. The profound reason which explains his complacency about these matters is not an educational one. He says that we can afford to have that now. We can afford to have as many as three types of secondary education in one area, rather like a kind of educational minestrone, because some counties are 60 miles long. That is his justification now for
  1146
  having secondary modern schools, comprehensive schools, grammar schools and various other kinds of secondary schools in a glorious nationwide experiment that lacks the one thing that the secondary school sector demands more than anything else which is financial sustenance and stability of structure.
  After preaching for several years about the need for stability and standards, in this Bill the Conservatives are again reintroducing a destabilising factor for the sake of conforming to their political prejudice. In the abandonment of the Under-Secretary's original judgment, for which we respected him, he is not so much a Daniel come to judgment as a Daniel come to heel. In all that is happening now, all the variegations, all the variety and all the diversity which he tries to laud and pretend to enthuse about, he recognises the enormous educational illogicalities and inconsistencies of the system, and it is unfortunate that he has been cowed by the responsibilities of office to abandon his educational judgment in these respects.
  Government supporters say that they are not anti-comprehensive. They protest vehemently that their attitudes in this Bill and in other matters are not inspired by any opposition to comprehensive education. But they cannot protest with any sincerity or honesty their espousal of the comprehensive system or even respect for it or security for comprehensive schools and at the same time support this Bill. To do so is like the Salvation Army trying to sell pornography. There is an inconsistency which they cannot escape.
  Mr. Michael Brown: I was educated at a single sex secondary modern school, and I am proud of it. The hon. Member for Bedwellty (Mr. Kinnock) has gone beyond what I thought his party stood for. He seems to be suggesting that the Labour Party is no longer in favour of single sex schools. I ask him to clarify this on behalf of his party. Is he suggesting that the Labour Party is no longer in favour of single sex schools, which clearly benefit a large number of pupils?
  Mr. Kinnock: The deficiencies of the hon. Gentleman's education are amply demonstrated by the fact that his most recent employment was as a speech writer

  1147
  for the hon. Member for Macclesfield (Mr. Winterton).
  Mr. Nicholas Winterton: Will the hon. Member for Bedwellty (Mr. Kinnock) admit that we live in a democracy? Will the hon. Gentleman admit further that my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) won a seat held by a Labour Member during the last Parliament, that my hon. Friend was educated at a single sex secondary modern school, that he went on to university and that he subsequently won a seat for the Conservative Party previously held by Labour? Will he admit that democracy exists and that my hon. Friend represents a considerable body of opinion on the subject of education?
  Mr. Kinnock: I withdraw all that I said about the hon. Member for Brigg and Scunthorpe (Mr. Brown). When he was writing speeches for the hon. Member for Macclesfield they were much better than they are now.
  The question really before us—
  Mr. Winterton: The hon. Gentleman has not answered it.
  Mr. Kinnock: I can only advise the hon. Gentleman to read my careful choice of words in answer to the Under-Secretary of State.
  The evidence that we have to support our argument that the Bill is not about education, is not even for the purpose of returning choice to local education authorities and has nothing to do with endorsing or upholding the comprehensive principle where local education authorities want to follow it is to be found not just in the inconsistencies of Government supporters but in their manifesto:
  "We will halt the Labour Government's policies which have led to the destruction of good schools; keep those of proven worth; and repeal those sections of the 1976 Education Act which compel local authorities to reorganise along comprehensive lines"—
  and there is much more about the assistance the Conservatives were to give to independent schools.
  Why would it be necessary to enshrine in a Bill given the preface of this manifesto, the idea that the only target for attack is the comprehensive school? Why could that not await the endorsement of the comprehensive principle in the intro-
  1148
  duction of genuine choice for the local education authorities? We know that the reason is that for years past the Conservative Party has been conspiring to restore the selective principle to secondary education. We know that this is the first chance it has had of doing it. It is doing it to the confusion, frustration and disappointment of hundreds of thousands of parents and children.
  We shall repeal the Act. We shall restore the original freedom, not of the LEAs but of people to enjoy to the absolute maximum of their abilities the education that is best suited to them. That is plausible and possible only through a system that does not segregate children at the age of 11.
  We have heard that the real purpose of the Bill is the dispersal of power and the return of decision making to the local authorities. We have heard that it is in response to the demands of those authorities. We hear a great deal about the demands of the local authorities for the return of decision making to them, for the removal of the obligations imposed upon them by the law which has existed since 1944. We hear a great deal now in keeping with the principle of the Bill, as enunciated by the Under-Secretary, about restoring or giving powers, or granting new powers of determination to local education authorities.
  We hear this in its most dangerous and barbaric fashion from the Association of County Councils and the Tory-dominated organisations. We hear it, too—sadly, disastrously—from the Association of Metropolitan Authorities. We heard it last Saturday when the Secretary of State said that he knew that some Tory members of local education authorities
  "are urging that certain statutory obligations should be removed to give you more discretion—even complete freedom—at local level to make savings where you can from these items, and from some more fundamentally educational ones too. Though I offer no Government view today on these suggestions or on how the balance of savings should in the end be struck, I would like you to know that I am carefully considering these arguments."
  That was reported on 14 July—Bastille Day, which I thought was most appropriate.
  Coming as it does from the Secretary of State, who has responded to the regression and the reactionary demands for the destruction of the comprehensive

  1149
  schools, the prevention of comprehensive schooling, and for licence for Tory-dominated local education authorities to permit the retention of the selective system, that was a most ominous statement. It leads us to believe that the Secretary of State will crumble before those barbaric demands in company with the Hengist from Henley, the Secretary of State for the Environment, and allow the virtual destruction of all the supportive services for education. The effect of his presiding over those cuts, for which he should be ashamed, will be the loss of 50,000 teachers' jobs, the removal of subsidised school transport and the denial of educational opportunity.
  We hear and have heard a great deal from the Conservative Party, including in a section of its manifesto, about its dedication to standards. I say to the Secretary of State, as one person at his meeting last Friday said, that he cannot have the economic improvement, the technological advance, the individual self-fulfilment, the opportunity society, raised standards and freedom of choice for parents and children if he goes on cutting to the bone, if he acts in the barbaric fashion demanded by the knights of the shires and if he is bent upon the destruction of real opportunity for children and parents. He will experience the full vengeance of those who, in the next few years, will suffer irreparably and irreversibly as a consequence of the barbarity that he is visiting upon them now.
  9.40 p.m.
  The Secretary of State for Education and Science (Mr. Mark Carlisle): We have had a wide-ranging debate. I must tell the hon. Member for Bedwellty (Mr. Kinnock) that of course I regret, as do other members of the Government, that our economic inheritance has made it necessary to make reductions in Government expenditure. Inevitably, education must take its part. I shall be happy to debate those matters with the hon. Member at an appropriate time when the Government have made their decisions about the degree of any such reductions in expenditure and where they should fall. I ask the hon. Member to wait for those decisions before indulging in the type of hyperbole that he has indulged in today.
  Mr. Kinnock: The Secretary of State accused me of hyperbole, but does he
  1150
  accuse that modest and reserved organisation, the National Association of Head Teachers, of that when it says that the cuts are the most damaging for education standards that have been perpetrated by any Government since the Second World War?
  Mr. Carlisle: Since no decisions have been taken, I am entitled to answer "Yes". The hon. Member should wait and see what is decided and then I shall debate these matters happily.
  I add my congratulations to my hon. Friend the Member for Hornchurch (Mr. Squire) on his maiden speech. It was a polished speech, and we look forward to hearing him again.
  My hon. Friend said that he had been leader of the council in the borough of Sutton. The experience there answers part of the argument of the two Opposition Front Bench spokesmen who said that it was impossible to have both selective and comprehensive schools in the same education authority area. Sutton is often used by the Opposition as an example of a borough which retains selective schools. When I visited Sutton recently I went not to a selective school but to an extremely good comprehensive school. That school calls upon different catchment areas.
  Mrs. Ann Taylor: The right hon. and learned Gentleman has spoken of the possibility of having selective and non-selective schools in the same authority area but with different catchment areas. What arrangements does he think should be made for parents who live in an area where there is comprehensive education but who want their children to have selective education, and for parents who live in a selective area and who want their children to go to a non-selective school?
  Mr. Carlisle: The simple answer is to relax the basis of the catchment area. In Sutton and in an area in Lancashire which I visited recently both selective and non-selective schools operate within the same local authority area.
  In view of the wide-ranging nature of the debate, I remind the House of what this little Bill does. It is not squalid, but modest. It is a one-clause Bill the effect of which is twofold. It allows those local authorities that were required against their will by the previous Government

  1151
  to submit proposals for going comprehensive, if they have been approved by the former Secretary of State, to notify me and I can reverse that decision.
  Alternatively, where those proposals have not yet been approved, but have been put forward, the Bill allows them not to be continued with unless the wish is expressed that they should be. That is the total effect of this one-clause Bill. It is not an attack on comprehensive education as such. It is merely a restoration of the situation that existed before the 1976 Act to the balance that existed under the 1944 Act, which leaves to local education authorities the right to choose the type of secondary education which they wish in their area. It returns to them the requirement to initiate any application for change by section 13 procedure, rather than imposing that change upon them.
  Many local authorities have gone comprehensive of their own volition. I have no doubt that many areas will continue to go comprehensive. Indeed, I am aware that certain schools are, at the volition of the local education authority, at present changing their status from selective to comprehensive. The Bill does not prevent that happening. All that it does is to set out that where local education authorities do not wish to go down that road they need not do so.
  Mr. Nicholas Winterton: My right hon. and learned Friend will be aware that the Opposition spokesman on education described the Bill as barbarian. Will he indicate to the House how it can be in any way barbarian, bearing in mind that it returns to local education authorities the right to decide what system of secondary education is best suited to their areas?
  Mr. Carlisle: I am grateful to my hon. Friend for his assistance. I think that I have already described the speech of the hon. Member for Bedwellty as one that was riddled throughout with hyperbole.
  I accept that there are good comprehensive schools, just as I am sure that their are bad comprehensive schools. I accept that there are bad grammar and secondary modern schools, just as there are good grammar and secondary modern schools. What I do not accept is the total belief in the absolutism of the com-
  1152
  prehensive school that is always advanced by Opposition Members.
  I found it extraordinary that even the right hon. Member for Durham, North-West (Mr. Armstrong), who I am sure is regarded by many hon. Members as one of the most courteous Members, in his most interesting and valuable speech managed to acquire an air of total arrogance when it came to the issue of comprehensive schools, on the basis that if people care to question the absolutism of the comprehensive principle they are totally mistaken.
  I come back to what my hon. Friend the Member for Brent, North (Dr. Boyson) said at the beginning of this debate. Let us take the comparison of Tameside and Manchester. For the purpose of my case, I do not have to prove that the figures given in the absence of the hon. Member for Manchester, Gorton (Mr. Marks) by my hon. Friend—
  Mr. Ken Eastham Mr. Ken Eastham (Manchester, Blackley) rose—
  Mr. Carlisle: May I complete my point.
  I do not have to prove that the figures show that the education provided in grammar and secondary modern schools in Tameside is of a higher academic quality than that provided in areas of similar social background in Manchester. The burden is the other way round.
  All I have to say—
  Mr. Eastham Mr. Eastham rose—
  Mr. Carlisle: Let me complete this sentence, and then I shall give way.
  Those figures do not show that the case for comprehensive schools is so totally proved as to justify imposing them on areas of the country that do not want them. If, as I believe, the aim and purpose of an education system is to provide the best form of education available for each child according to its own abilities. I see no reason in not accepting that a degree of diversity in the provision of schools is more likely to achieve that aim.
  Mr. Eastham: Some serious things have been said this evening about Manchester, which are totally untrue. As a Manchester Member, I think that I am entitled to put the record right—
  Mr. Speaker: Order. Since the right hon. and learned Gentleman gave way, the hon. Gentleman is entitled to make a brief intervention on any point that he made, but not to make a speech as if he had been called.
  Mr. Eastham: Thank you, Mr. Speaker. Some quite inaccurate statements and comparisons have been made. I therefore ask the Secretary of State on what basis he makes these inaccurate claims about the comparisons between Tameside and Manchester. We made comparisons which prove that these statements were completely unfounded, and I am prepared to give the Secretary of State the information.
  Mr. Carlisle: With great respect, I made no such unfair attack on Manchester. I merely said that the figures quoted do not prove that the type of education in Manchester is so clearly superior to that in Tameside as to justify forcing the whole of the country to go one particular way. However, in the few minutes that I have left, I must get on.
  My second point to the right hon. Member for Durham, North-West is that if the case is so overwhelming, why was it necessary for the last Government to compel people to go that way? As my hon. Friend the Member for Ealing, North (Mr. Greenway) said, that very issue of compulsion probably did more harm to the comprehensive ideal than anything else.
  I have been accused by the hon. Member for Bolton, West (Mrs. Taylor) and by the hon. Member for Lewisham, West (Mr. Price) of undue haste in regard to the Bill. The hon. Gentleman talked about constitutional propriety. I remind him that this one-clause Bill had three meetings in Committee, a full day on the Floor of the House on Report, a full day on Second Reading and half a day on Third Reading. Therefore, even by his standards, I think that that charge was somewhat wild.
  Of course there is a reason for haste. This Bill is clearly intended to relieve those local authorities of the obligations that have been imposed upon them. Some of those obligations were required to be carried out during the course of this year. We made it clear that we would relieve them of those obligations when
  1154
  we came into power, and that we have done.
  I turn to another point made by the hon. Lady—the question of Bolton. She said that the Bill was responsible for the chaos in Bolton. I remind the hon. Lady of what she has said. Until last year, Bolton, at the wish of the local people, was continuing a situation where in certain areas it had selective schools. It was against the wish of the local authority that the then Government required it to go comprehensive. We have now removed that requirement and allowed it to continue with the process that it wanted. It is not we who have caused the chaos which the hon. Lady says exists in Bolton, but the decision of the previous Government in forcing the local authority to go in a direction that it did not want.
  Mrs. Ann Taylor: Can I remind the right hon. and learned Gentleman that the denominational schools in Bolton are still voluntarily going comprehensive? Can I remind him that in the local elections in May, the Labour Party won 10 seats on the local council, thus endorsing our decision? Can I remind him that it is only since the Bill was introduced that an emergency 11-plus examination has been introduced? Does he defend an emergency examination taken in June of this year?
  Mr. Carlisle: Of course it is only since this Bill was introduced, because until we had the good luck and good sense to win the general election, the people of Bolton were being required to go to a system of education against the wishes of the local authority. [Interruption.] The hon. Lady asked me many questions. She is not giving me much chance to try to answer them.
  Mrs. Ann Taylor: The right hon. and learned Gentleman is not trying very hard.
  Mr. Carlisle: The hon. Lady asked me on what basis we would judge proposals for secondary education reorganisation in the future. The answer is quite simple. I shall judge them on educational merit. I shall ask such questions as whether the proposals make sense, whether resources are available to carry them out, whether they have the support of local people, and whether they provide

  1155
  for the best education possible for each child, according to its ability, in the area. Those are the sort of guidelines which should guide a Secretary of State in deciding these issues, and not the basic political dogma of the Labour Party.
  The hon. Lady then asked me how I expected secondary schools to develop in the future. My answer is that I believe that as 83 per cent. of children are at present in comprehensive schools, the large majority of areas are likely to remain comprehensive by their own will. However, I say to the hon. Lady that the very effect of falling rolls will, I have no doubt, have some influence in itself on the type of organisation of secondary schools.
  I do not believe, for example, that as schools get smaller, one will be able to have every school having its own sixth form. I think that we shall have pooling of resources. We may well have some schools with sixth forms and some without them. Looking at the years ahead, my suspicion is that without any dramatic change, because of the nature of the school population and the dropping numbers, schools will tend to specialise in particular aspects of education.
  The hon. Lady also said that her objection to the Bill was that it perpetuated a myth—a Conservative myth, because it happened to disagree with her view on education. The only "myth" that the Bill perpetuates is the " myth " that the LEAs should decide and our belief that diversity of provision is what is needed to help the people.
  I was asked specifically about Tameside. My comment now takes up a point put to me on Report by the hon. Member for Bedwellty. The situation is that the Tameside LEA proposed to reorganise
  in 1975, and it did so with a date of implementation of 1976. After that, on a change of local control, the Conservative council, in May 1976, resolved not to proceed. Following upon that, in November 1976, my predecessor in the previous Government required the LEA to put in new proposals. Those proposals, which were different from the 1975 proposals, were under consideration at the time of the general election.
  It is for that combination of causes that I have taken the view—as I have expressed it in the past, as the hon. Member for Bedwellty knows—that that application is spent, and that if the authority wishes to consider reorganisation, it should put forward a new section 13 application. The hon. Member may wish to know that I shall be meeting a deputation from Tameside in the next few days.
  Finally, I say to the hon. Member for Lewisham, West that there is nothing sinister about not repealing section 4—indeed, very much the reverse. My view was that it was right for the purpose of certainty that an application under section 13 should have a time limit on it, so that people should know that the intention was to carry out, for instance, a closure of a school or a change of use, or whatever it may be. Far from having a sinister implication, as the hon. Gentleman suggested, it was with the intention of ensuring continuity that I decided to do it this way.
  I am not ashamed of the Bill. It implements a proposal in our election manifesto, and I ask the House to support it.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes, 228, Noes 178.

  Division No. 58]

  AYES

  [10.00 p.m.

  Alexander, Richard

  Bonsor, Sir Nicholas

  Budgen, Nick

  Ancram, Michael

  Boscawen, Hon Robert

  Bulmer, Esmond

  Aspinwall, Jack

  Bowden, Andrew

  Burden, F. A.

  Atkins, Robert (Preston North)

  Boyson, Dr Rhodes

  Butler, Hon Adam

  Atkinson, David (B'mouth, East)

  Bradford, Rev. R.

  Cadbury, Jocelyn

  Baker, Nicholas (North Dorset)

  Braine, Sir Bernard

  Carlisle, John (Luton West)

  Bell, Ronald

  Bright, Graham

  Carlisle, Kenneth (Lincoln)

  Bendall, Vivian

  Brinton, Tim

  Carlisle, Rt Hon Mark (Runcorn)

  Benyon, Thomas (Abingdon)

  Brttian, Leon

  Chalker, Mrs. Lynda

  Berry, Hon Anthony

  Brooke, Hon Peter

  Channon, Paul

  Best, Keith

  Brown, Michael (Brigg & Sc'thorpe)

  Chapman, Sydney

  Bevan, David Gilroy

  Bruce-Gardyne, John

  Clark, Hon Alan (Plymouth, Sutton)

  Blackburn, John

  Bryan, Sir Paul

  Clark, Dr William (Croydon South)

  Blaker, Peter

  Buchanan-Smith, Hon Alick

  Clarke, Kenneth (Rushcliffe)

  Body, Richard

  Buck, Antony

  Clegg, Walter

  Cockeram, Eric

  Johnson Smith, Geoffrey

  Rathbone, Tim

  Colvin, Michael

  Jopling, Rt Hon Michael

  Rees, Peter (Dover and Deal)

  Cope, John

  Kaberry, Sir Donald

  Rees-Davies, W. R.

  Corrie, John

  Kilfedder, James A.

  Rhodes James, Robert

  Cranborne, Viscount

  Kimball, Marcus

  Roberts, Wyn (Conway)

  Critchley, Julian

  King, Rt Hon Tom

  Rossi, Hugh

  Crouch, David

  Knight, Mrs Jill

  Rost, Peter

  Dean, Paul (North Somerset)

  Lamont, Norman

  Royle, Sir Anthony

  Dodsworth, Geoffrey

  Lang, Ian

  Sainsbury, Hon Timothy

  Derrell, Stephen

  Langford-Holt, Sir John

  St. John-Staves, Rt Hon Norman

  Douglas-Hamilton, Lord James

  Latham, Michael

  Scott, Nicholas

  Dover, Denshore

  Lawson, Nigel

  Shaw, Michael (Scarborough)

  du Cann, Rt Hon Edward

  Lee, John

  Shelton, William (Streatham)

  Dunn, Robert (Dartford)

  Le Marchant, Spencer

  Shepherd, Colin (Hereford)

  Dykes, Hugh

  Lennox-Boyd, Hon Mark

  Shepherd, Richard (Aldridge-Br'hills)

  Edwards, Rt Hon N. (Pembroke)

  Lester, Jim (Beeston)

  Shersby, Michael

  Egger, Timothy

  Lewis, Kenneth (Rutland)

  Silvester, Fred

  Elliott, Sir William

  Lloyd, Ian (Havant & Waterloo)

  Sims, Roger

  Faith, Mrs Sheila

  Lloyd, Peter (Fareham)

  Smith, Dudley (War. and Leam'ton)

  Fell, Anthony

  Lyell, Nicholas

  Speller, Tony

  Fenner, Mrs Peggy

  McCrindle, Robert

  Spence, John

  Fisher, Sir Nigel

  Macfarlane, Nell

  Squire, Robin

  Fletcher, Alexander (Edinburgh N)

  MacGregor, John

  Stanbrook, Ivor

  Fletcher-Cooke, Charles

  Macmillan, Rt Hon M. (Farnham)

  Steen, Anthony

  Fookes, Miss Janet

  McNair-Wilson, Patrick (New Forest)

  Stevens, Martin

  Forman, Nigel

  Madwel, David

  Stewart, John (East Renfrewshire)

  Fowler, Rt Hon Norman

  Major, John

  Stradling Thomas, J.

  Fox, Marcus

  Marlow, Tony

  Tebbit, Norman

  Fry, Peter

  Marshall, Michael (Arundel)

  Temple-Morris, Peter

  Galbraith, Hon T. G. D.

  Maude, Rt Hon Angus

  Thatcher, Rt Hon Mrs Margaret

  Gardiner, George (Reigate)

  Mawby, Ray

  Thomas, Rt Hon Peter (Hendon S)

  Gardner, Edward (South Fyide)

  Mawhinney, Dr Brian

  Thompson, Donald

  Garel-Jones, Tristan

  Maxwell-Hyslop, Robin

  Thornton, Malcolm

  Glyn, Dr Alan

  Mellor, David

  Townend, John (Bridlington)

  Gorst, John

  Meyer, Sir Anthony

  Trippier, David

  Gow, Ian

  Miller, Hal (Bromsgrove & Redditch)

  van Straubenzee, W. R.

  Gower, Sir Raymond

  Mills, Iain (Meriden)

  Vaughan, Dr Gerard

  Greenway, Harry

  Mills, Peter (West Devon)

  Viggers, Peter

  Grieve, Percy

  Miscampbell, Norman

  Waddington, David

  Griffiths, Eldon (Bury St Edmunds)

  Moate, Roger

  Wakeham, John

  Griffiths, Peter (Portsmouth N)

  Molyneaux, James

  Waldegrave, Hon William

  Grylls, Michael

  Montgomery, Fergus

  Walker, Rt Hon. Peter (Worcester)

  Gummer, John Selwyn

  Moore, John

  Walker-Smith, Rt Hon Sir Derek

  Hamilton, Hon Archie (Eps'm&Ew'll)

  Morgan, Geraint

  Wall, Patrick

  Hamilton, Michael (Salisbury)

  Morrison, Hon Peter (City of Chester)

  Waller, Gary

  Hampson, Dr Keith

  Mudd, David

  Ward, John

  Hannam, John

  Murphy, Christopher

  Warren, Kenneth

  Haselhurst, Alan

  Myles, David

  Watson, John

  Havers, Rt Hon Sir Michael

  Neubert, Michael

  Wells, Bowen (Hert'rd & Stev'nage)

  Hawkins, Paul

  Nott, Rt Hon John

  Wheeler, John

  Hawksley, Warren

  Onslow, Cranley

  Whitney, Raymond

  Hayhoe, Barney

  Osborn, John

  Wickenden, Keith

  Heath, Rt Hon Edward

  Page, John (Harrow, West)

  Wiggin, Jerry

  Heddle, John

  Page, Rt Hon R. Graham (Crosby)

  Wilkinson, John

  Hicks, Robert

  Parris, Matthew

  Williams, Delwyn (Montgomery)

  Higgins, Rt Hon Terence L.

  Patten, Christopher (Bath)

  Winterton, Nicholas

  Hill, James

  Pawsey, James

  Wolfson, Mark

  Hogg, Hon Douglas (Grantham)

  Percival, Sir Ian

  Young, Sir George (Acton)

  Holland, Philip (Carlton)

  Pollock, Alexander

  Hooson, Tom

  Porter, George

  TELLERS FOR THE AYES

  Hunt, John (Ravensbourne)

  Price, David (Eastleigh)

  Mr. Carol Mather and

  Jenkin, Rt Hon Patrick

  Proctor, K. Harvey

  Mr. Tony Newton.

  NOES

  Allaun, Frank

  Callaghan, Jim (Middleton & P)

  Davis, Terry (B'ham, Stechford)

  Alton, David

  Campbell-Savours, Dale

  Deakins, Eric

  Anderson, Donald

  Canavan, Dennis

  Dobson, Frank

  Archer, Rt Hon Peter

  Carmichael, Neil

  Dormand, Jack

  Armstrong, Rt Hon Ernest

  Carter-Jones, Lewis

  Douglas-Mann, Bruce

  Ashton, Joe

  Clark, Dr David (South Shields)

  Dunn, James A. (Liverpool, Kirkdale)

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

  Cocks, Rt Hon Michael (Bristol S)

  Dunwoody, Mrs Gwyneth

  Bagier, Gordon A. T.

  Cohen, Stanley

  Eadle, Alex

  Beith, A. J.

  Conlan, Bernard

  Eastham, Ken

  Benn, Rt Hon Anthony Wedgwood

  Cook, Robin F.

  Edwards, Robert (Wolv SE)

  Bennett, Andrew (Stockport N)

  Cowans, Harry

  Ellis, Raymond (NE Derbyshire)

  Bidwell, Sydney

  Crowther, J. S.

  English, Michael

  Booth, Rt Hon Albert

  Cryer, Bob

  Evans, Ioan (Aberdare)

  Bottomley, Rt Hon Arthur (M'brough)

  Cunliffe, Lawrence

  Ewing, Harry

  Bradley, Tom

  Cunningham, George (Islington S)

  Field, Frank

  Bray, Dr Jeremy

  Cunningham, Dr John (Whitehaven)

  Fitch, Alan

  Brown, Ronald W. (Hackney S)

  Delyell, Tam

  Flannery, Martin

  Brown, Ron (Edinburgh, Leith)

  Davies, Rt Hon Denzil (Llanelli)

  Fletcher, Ted (Darlington)

  Buchan, Norman

  Davies, E. Hudson (Caerphilly)

  Foot, Rt Hon Michael

  1158

  1159

  Ford, Ben

  Lyon, Alexander (York)

  Sever, John

  Foulkes, George

  Lyons, Edward (Bradford West)

  Sheerman, Barry

  Fraser, John (Lambeth, Norwood)

  Mabon, Rt Hon Dr J. Dickson

  Shore, Rt Hon Peter (Step and Pop)

  Garrett, W. E. (Walisend)

  McCartney, Hugh

  Silkin, Rt Hon S. C. (Dulwich)

  George, Bruce

  McDonald, Dr. Oonagh

  Silverman, Julius

  Ginsburg, David

  McElhone, Frank

  Skinner, Dennis

  Golding, John

  McGuire, Michael (Ince)

  Smith, Cyril (Rochdale)

  Gourlay, Harry

  McKay, Allen (Penistone)

  Smith, Rt Hon J. (North Lanarkshire)

  Grant, George (Morpeth)

  McKelvey, William

  Soley, Clive

  Grant, John (Islington C)

  McMillan, Tom (Glasgow, Central)

  Spearing, Nigel

  Hamilton, James (Bothwell)

  McWilliam, John

  Spriggs, Leslie

  Hamilton, W. W. (Central Fife)

  Marks, Kenneth

  Stallard, A. W.

  Hardy, Peter

  Marshall, Jim (Leicester South)

  Stoddart, David

  Harrison, Rt Hon Walter

  Mason, Rt Hon Roy

  Strang, Gavin

  Hattersley, Rt Hon Roy

  Maynard, Miss Joan

  Summerskill, Hon Dr Shirley

  Haynes, David

  Mellish, Rt Hon Robert

  Taylor, Mrs Ann (Bolton West)

  Heffer, Eric S.

  Millan, Rt Hon Bruce

  Thomas, Jeffrey (Abertillery)

  Hogg, Norman (E Dunbartonshire)

  Miller, Dr M. S. (East Kilbride)

  Thomas, Dr Roger (Carmarthen)

  Holland, Stuart (L'beth, Vauxhall)

  Mitchell, R. C. (Soton, Itchen)

  Tilley, John

  Home Robertson, John

  Morris, Rt Hon Alfred (Wythenshawe)

  Tinn, James

  Homewood, William

  Morris, Rt Hon Charles (Openshaw)

  Urwin, Rt Hon Tom

  Hooley, Frank

  Morton, George

  Varley, Rt Hon Eric G.

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

  Moyle, Rt Hon Roland

  Wainwright, Edwin (Dearne Valley)

  Howells, Geraint

  Mulley, Fit Hon Frederick

  Watkins, David

  Huckfield, Les

  Newens, Stanley

  Wellbeloved, James

  Hughes, Mark (Durham)

  Oakes, Rt Hon Gordon

  Welsh, Michael

  Hughes, Robert (Aberdeen North)

  Orme, Rt Hon Stanley

  White, Frank R. (Bury & Radcliffe)

  Hughes, Roy (Newport)

  Owen, Rt Hon Dr David

  Whitehead, Phillip

  Janner, Hon Greyille

  Palmer, Arthur

  Whitlock, William

  Jay, Rt Hon Douglas

  Park, George

  Willey, Rt Hon Frederick

  John, Brynmor

  Pendry, Tom

  Williams, Rt Hon Alan (Swansea W)

  Johnson, James (Hull West)

  Powell, Raymond (Ogmore)

  Williams, Sir Thomas (Warrington)

  Johnston, Russell (Inverness)

  Prescott, John

  Wilson, William (Coventry SE)

  Jones, Rt Hon Alec (Rhondda)

  Price, Christopher (Lewisham West)

  Winnick, David

  Jones, Barry (East Flint)

  Rees, Rt Hon Merlyn (Leeds South)

  Woolmer, Kenneth

  Jones, Dan (Burnley)

  Roberts, Albert (Normanton)

  Wright, Shelia

  Kerr, Russell

  Roberts, Ernest (Hackney North)

  Young, David (Bolton East)

  Kilroy-Silk, Robert

  Robertson, George

  Kinnock, Neil

  Rooker, J. W.

  TELLERS FOR THE NOES

  Lambie, David

  Ross, Ernest (Dundee West)

  Mr. Thomas Cox and

  Leighton, Ronald

  Ross, Stephen (Isle of Wight)

  Mr. Joseph Dean.

  Lofthouse, Geoffrey

  Sandelson, Neville

  Question accordingly agreed to.
  Bill read the Third time and passed.

  BUSINESS OF THE HOUSE
  Ordered,
  That the European Assembly (Salaries and Pensions) Bill may be proceeded with at this day's sitting, though opposed, until and hour.—[Lord James Douglas-Hamilton]

EUROPEAN ASSEMBLY (SALARIES AND PENSIONS) (MONEY) (No. 2)
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to make provision for the payment of salaries and pensions to or in respect of Representatives to the Assembly of the European Communities, it is expedient to authorise the payment out of money provided by Parliament of any expenses incurred by the Secretary of State in providing Representatives with any allowances or facilities available to them by virtue of that Act.—[Lord James Douglas-Hamilton.]

EUROPEAN ASSEMBLY (SALARIES AND PENSIONS) BILL
Motion made, and Question proposed,
That it be an Instruction to the Committee on the Bill that they have power to make provision in the Bill for making allowances and facilities available to Representatives.—[Mr. Britton.]
10.15 p.m.
Mr. Michael English: Why is an instruction necessary? I suspect that it is because amendments proposed by the Government would be outside the scope of the Bill, even if they were within the scope of the money resolution that we have just passed. However, I cannot believe that the Government, who are proposing to restrict and curtail public expenditure, are trying to persuade the House to provide by law for the expenses of European Assembly Members.
The Minister of State, Home Office (Mr. Leon Britton): The instruction is necessary to enable the Committee to consider the new clause providing that the Secretary of State may, with the concurrence of the Treasury, by order make provision with respect to the allowances which may be available to Representatives in connection with the performance within the United Kingdom of their duties.
I had anticipated explaining matters at slightly greater length when we reach that new clause, but the object of the exercise is not here now to make provision for any such allowances but to give the power for those allowances to be conferred if necessary. It is a contingent
1162
power because as envisaged in the new clause, that power can be exercised only if a resolution of each House is passed in support of the exercise of the power that is proposed.
At the moment the position, as compared with when the Bill was fist envisaged, is that some of the member States of the European Community have passed national legislation conferring allowances and facilities to Members of the European Parliament. It is our view and our intention that those facilities and allowances should be conferred by the Assembly, but there is a new factor in the passage of legislation by other Parliaments conferring such allowances. Therefore, we recognize that it would be wrong for us not—at least—to be able to consider the possibility for this House, without separate legislation but with the approval of another place, if necessary, to make provision for such allowances. It is in order to enable that to be debated that the instruction is before the House.
Mr. George Cunningham: Later in the evening we shall come to consider new clauses 1 and 2, which are the new clauses that are permitted to be discussed by the House by the instruction. New clause 1 stands in the name of the Opposition. Therefore, I commend my colleagues to support the instruction in order to permit the proposals in new clauses 1 and 2 to be discussed in substance later on.
Mr. Eric Ogden: We have just been informed that the Government believe that the instruction is necessary. I presume that moneys paid from the Consolidated Fund by this Parliament, whether for salaries, allowances or facilities, will be reclaimed from the European Commission. Is that correct or not? If it is correct, is there to be a reclamation in total of the average of payments made to all the European Representatives or will moneys be paid in accordance with the amount that we claim? The difference in figures might be that, if there is a reclaim from the EEC, either the EEC or the Government could profit from the reduced rate that we are offering to our EEC Representatives rather than the rate that is offered for European Representatives.
Mr. English: The Minister is usually very precise in his choice of words. He said that the instruction is necessary. I do not know what necessitates it.
Mr. Brittan: I do not think that the House would be much advanced in its deliberation on the Bill by considering whether the instruction is necessary. If it is not necessary, we are proceeding with an abundance of caution, but I think that it is wise to do that.
It is not possible to answer the question of the hon. Member for Liverpool, West Derby (Mr. Ogden) concerning who would finance such allowances because the Government are not proposing that any such allowances be paid. All that we are doing at this stage is seeking the consent of the House to an instruction to the Committee which would enable it to consider whether provision should be made for an arrangement whereby the question of such allowances could be brought before the House at a later date.
If the instruction is approved and the Committee considers the new clause, I shall seek to explain that we have no proposals to put to the House at the moment about the payment of such allowances and, therefore, we inevitably have no proposals about how such payments should be financed. It is only in order to enable that to be put before the House, if it is thought necessary, that the instruction is before the House and the new clause will be before the Committee.
Mr. George Cunningham: In case there is any confusion on the matter, perhaps the Minister can help us to clear it up. From a glance at the Bill, it seems that it would be outside the confines of the Bill, in normal terms, to move an amendment that permitted the Government to reimburse allowances or expenses, as against salaries.
Since new clauses 1 and 2 relate not to salaries for the performance of the duties of a Member of the European Parliament but to the reimbursement of expenses, that is the justification for the instruction before us. It is in case there were any doubts whether new clauses 1 and 2 were in order. I hope that the Minister will confirm that that is the explanation of the instruction.
Mr. Brittan: That is correct. I did not feel it necessary to go into the matter
1164
because if by some process of argument it could be suggested that it was possible to bring within the scope of the Bill the new clauses without the instruction, we would all be better off. If the instruction is passed, there can be no doubt about it. The thinking behind the instruction is exactly as the hon. Member for Islington, South and Finsbury (Mr. Cunningham) has suggested.
Question put and agreed to.
Bill considered in Committee.
[Mr. RICHARD CRAWSHAW in the Chair]

Clause 1

  SALARIES OF REPRESENTATIVES
  Mr. Brittan: I beg to move amendment No. 1, in page 1, line 5, leave out Subject to subsection (3) '.
  The Second Deputy Chairman (Mr. Richard Crawshaw): With this we may take the following amendments: Government amendment No. 2.
  No. 4, in page 1, line 10, leave out subsection (3) and insert—
  "(3) For any period during which a Representative is a Member there shall be payable to him as Member's ordinary salary only such proportion thereof as is payable to a junior Minister of the Crown for the time being."
  No. 5, in page 1, line 10, leave out subsection (3).
  Government amendments Nos. 6, 11, 12, 13.
  No. 19, in clause 2, page 2, line 31, at end add:—
  '(3) This section shall not apply to a person who immediately before the end of the five year period was entitled to receive a salary pursuant to any resolution or combination of resolutions of the House of Commons relating to the remuneration of Members.'.
  Government amendments Nos. 16, 17, 18.
  Mr. George Cunningham: On a point of order, Mr. Crawshaw. One of the amendments in the group is No. 19, standing in the names of my right hon. Friend the Member for Leeds, South (Mr. Rees), myself and other hon. Members. It raises issues separate from the other amendments and I hope that you will be prepared to consider, without necessarily committing yourself now, a request for

  1165
  a separate vote, if necessary, on amendment No. 19.
  The Second Deputy Chairman: Perhaps the hon. Gentleman will raise that point when we reach amendment No. 19.
  Mr. Ogden: On a point of order, Mr. Crawshaw. The provisional list of amendments does not include my amendment No. 3, which refers to a specific period of time. The clause and the amendments that have been accepted refer to "any period" of time, "a period" of time and even a specific day.
  I cannot ask why my amendment has not been accepted. I hope that there has been a mistake. It refers to a particular period of time, and the whole clause and the subsection refer to a period of time, or other periods of time. If that form of words was out of order, would it be possible for you, Mr. Crawshaw, to accept a manuscript amendment or new clause that would have virtually the same effect but would be within the rules of order?
  The Second Deputy Chairman: The hon. Gentleman may discuss that matter in the debate on the clause. The Chairman has selected the amendments, and is not for me to question why amendments have or have not been selected.
  Mr. Brittan: When the Bill received a Second Reading, I undertook that the Government would consider all the matters that had been raised by right hon. and hon. Members. I stressed that the strong views that had been expressed by several of my right hon. and hon. Friends about the position of dual-mandated Representatives would be examined and that the Government would give the matter fresh consideration. The result of the Government's reconsideration is set out in amendments Nos. 1, 2, 6, 11, 12, 13, 16, 17 and 18 in the name of my right hon. Friend the Secretary of State.
  The Government's proposal is that Representatives who are also Members of the House of Commons should receive two salaries, one ordinary salary as a Member of this place and a second salary as a Representative of the European Assembly which is equivalent to one-third of the ordinary salary of the House of Commons.
  There are other approaches to the issue on the Order Paper. The hon. Members
  1166
  for Liverpool, West Derby (Mr. Ogden) and for Nottingham, West (Mr. English) propose that dual-mandated representatives should receive two full salaries. My right hon. Friend the Member for Crosby (Mr. Page) and some of my hon. Friends favour the proposition that dual-mandated Members should receive a full salary as Members of the European Assembly together with a second salary as Members of Parliament, which would be abated in the same way as the parliamentary salary of a junior Minister of the Crown. In his attempt severely to limit the remuneration of European Parliament Members, the hon. Member for Swindon (Mr. Stoddart) is in the minority.
  In considering the payment of dual-mandated Members, the Government had to take into account how to react to the real expressions of opinion of many of my right hon. and hon. Friends based on the position in other Community countries. Of the other eight member States, only the Republic of Ireland has enacted legislation to pay two full salaries. Representatives from Belgium, the Federal Republic of Germany and France will receive only one salary, and that is likely to be the position in Italy. No decisions have yet been announced in Luxembourg or the Netherlands. In Denmark the Folketing salary of dual-mandated members will be abated when periods of leave of absence to attend the European Parliament have formally been granted.
  The Government are prepared to accept—
  Mr. Russell Johnston: What is the position of persons within the United Kingdom who hold a dual mandate in Northern Ireland and in the House of Commons?
  Mr. Brittan: I am not able to inform hon. Members without looking into the matter, but I shall certainly do so.
  Mr. English: The hon. and learned Gentleman did not quite explain the position in Germany. Is there any job for which anybody is permitted to obtain remuneration outside the German Parliament as well as a salary from the Bundestag?
  Mr. Brittan: I have no information about that.
  Mr. English: Then ask. The hon. and learned Gentleman is a Minister of the Crown.
  Mr. Brittan: If the hon. Gentleman will contain himself, I shall attempt to answer his question.
  Mr. English: Ask!
  10.30 p.m.
  Mr. Brittan: If the hon. Gentleman is not prepared to wait, it is much more difficult to give him an answer.
  The position in the Federal Republic of Germany and in France, in relation to the European Assembly, is that their Members will receive only one salary. I am not entirely persuaded that there is a direct analogy that we need to pursue regarding relations and regulations in Germany on other jobs done by Members of the Bundestag. I am merely setting out the general picture on the handling of this matter by the European Parliament. I am seeking, in that context, to explain the change that the Government are proposing compared with the Bill as it was when it first came before the House.
  The Government are prepared to accept now that there are unusual circumstances in the United Kingdom which require special recognition in the form of a supplement to the basic Member of Parliament's salary in spite of the fact that in so many of the countries of Europe only a single salary is to be paid. It is expected that the constituency links of a United Kingdom Representative will be more demanding than is elsewhere the case. It is acknowledged, for example, that this House sits for longer periods than is normally the case in Assemblies on the continent of Europe. We therefore acknowledge that Representatives with a dual mandate have a case for an extra portion of income.
  Mr. Nigel Spearing: During the debates on the European Assembly Elections Bill, it was stated often from this side of the House, on which Conservative Members then sat, that the need for the Bill was related to the impossibility of doing both jobs. Since those who put themselves forward as candidates at that time knew that the likelihood was that they would receive only one salary, will the hon. and learned Gentleman say that as there are only 24 hours to the day they must provide a
  1168
  lesser service in one set of circumstances or the other?
  Mr. Brittan: I do not accept the hon. Gentleman's proposition that those who put themselves forward for election both to this House and to the European Assembly thought, or had any reason to believe, that they would receive only one salary. The position was left open. We put the matter fairly and, I hope, clearly in the debate on Second Reading. We listened to what hon. Members said, and we are now responding. It is right that the gap should be filled, not on the basis of expectations that might or might not have been aroused in the absence of a clear definition or description one way or the other but on the basis of the merits of the case as expounded in debate in the House. I hope that the Committee will feel that the Government have been responsive to the arguments that have been put forward.
  My right hon. Friend the Member for Crosby suggested that the Government should align with the existing arrangements for junior Ministers. That proposal has considerable merits. My right hon. Friend's suggestion would involve an abatement of the House of Commons salary rather than the European salary. Although in principle the idea has its attractions, the difference in practice is not great. The advantages of proceeding in the way I have suggested are real, because the Bill is a Bill about European salaries rather than a Bill about the salaries of Members of this House.
  Once matters were put on the basis of what one should receive for membership of this House, a number of extraneous considerations would arise. Naturally, in attempting to reach what must be a compromise solution to this problem, one is bound, in a sense, to be arbitrary, but arbitrary, I hope, in a way that reflects the balance of feeling on this issue and the balance of the argument.
  Mr. R. C. Mitchell: The hon, and learned Gentleman has made a curious argument. I gather that the reason he gives for paying the extra salary to those with a dual mandate, whereas a similar position is not being adopted in France or Germany, is that in Britain the European Member will have greater constituency duties than Members in other countries. In that case,

  1169
  why is the extra money not being paid to all European MPs? They will have the same constituency duties. Dual-mandated Members will still receive an allowance for duties in relation to their jobs here. If that is the argument, why is payment not to be made to all Members?
  Mr. Brittan: The answer is simply that the other Members receive a full salary which is a more substantial recognition of the duties which they are performing.
  Our conclusion was that the most straightforward solution was to provide for the payment of an additional one-third of salary on the understanding that this would provide a firm basis for dual-mandated Representatives to carry out their duties.
  It might assist the Committee if I spelt out the consequences of that in money terms. It means that the five dual-mandated Representatives will receive £12,600 per annum, rising to £16,000 on 13 June 1981. This compares with £9,450, rising to £12,000, for those who are Members of the Westminster Parliament alone.
  Any solution to this problem is bound to savour of a compromise and in that sense to be arbitrary, but I hope the Committee will feel that the solution at which we have arrived recognises that the Members of the European Assembly who are also Members of this House have been properly and lawfully elected to serve in the two Parliaments and that recognition ought to be given to that in the financial provision made for them. That is the basic principle upon which we are operating.
  At the same time, it would be wrong simply to give them the two salaries, especially when one looks at what is going on in the other countries of Europe. Therefore, it is reasonable to arrive at a compromise. It is that compromise that I am seeking to put before the Committee.
  Mr. Ron Leighton: The hon. and learned Gentleman keeps referring to the "problem". What is the problem?
  Mr. Brittan: The problem is quite simply that there are some Members who have been elected both to this House and to the European Assembly. One pays them the full salaries for both Parliaments, pays them only for this Parliament
  1170
  and pays them nothing for the other Parliament, even though they have been properly and lawfully elected to it, or seeks to devise some sort of compromise recognizing that they are fully entitled to expect remuneration for their work in Europe but that it would be wrong to pay the full salary. It is this problem that the Government seek to solve in the way suggested in the amendments.
  Mr. English: When the hon. And learned Gentleman and his right hon. and hon. Friends were in Opposition, they supported the European Assembly Elections Bill. That measure was supported by both major parties and passed by an overwhelming majority in the House of Commons. Can the hon. and learned Gentleman refer me to where the then Opposition raised this point as a problem during the passage of that Bill?
  Mr. Brittan: I have no intention of giving any such reference, if it exists. It seems to me that at this stage the Committee should be considering what is the proper course to adopt in this matter. I do not believe that any useful purpose is served by going back into the history of it. This is not a matter on which there should be any conflicting interests. I should have thought that right hon. and hon. Members would want to do the right thing by Members of this House and by the Members of the European Assembly. That is what the Government are seeking to do.
  Mr. Russell Johnston: The hon. and learned Gentleman has referred more than once to the fact that in reaching this compromise, which he recognises to be such—I was amused slightly that he should feel that a compromise should be more arbitrary than a decision one way or the other—he had to take account of the fact that in Germany only one salary was being paid. Did he also take account of the level of that salary?
  Mr. Brittan: We have had to take account of all these factors. I do not think that there is anything amusing in the suggestion that a compromise is more arbitrary than a solution at either end of the spectrum. The reason why it is is that the solution at either end of the spectrum involves one in deciding that the particular considerations are overwhelming and must therefore he given

  1171
  effect. A solution by way of compromise recognises that both considerations are genuine and that one is seeking to balance the two. Precisely where one places the balance is bound to be arbitrary. In that sense, a compromise in a matter of this kind is likely to be less strictly logical than a solution in favour one one argument rather than another.
  Mr. Dennis Skinner: The Minister said that he did not want to hark back, but he has a duty to the Committee. He should explain why the Home Secretary and perhaps others changed their minds on this matter. The Committee has a right to know.
  Mr. Brittan: The reason is that the Government listened to the debate on Second Reading. It is as simple as that. Although the concept of listening to the argument and responding to it may be unfamiliar to the hon. Member for Bolsover (Mr. Skinner), it is one that the Government regard as being a creditable way of going about things.
  Mr. Spearing: In reply to an earlier intervention of mine, the Minister said that the matter was left open. When my hon. Friend the Member for Newham, North-East (Mr. Leighton) challenged him to provide chapter and verse from the time when his party was in Opposition, he declined to give it. He has also stated that the Home Secretary changed his mind. Since the Bill was published on 24 May, and clause 1(3) provided that no salary should be payable, how can he say that the matter was left open? Surely the matter was not left open by the fact that the Bill made no provision for a double salary.
  Mr. Brittan: The hon. Member is under a misapprehension, and I must apologise if anything I said led him to it, although I do not believe that it did. The matter was left open in the sense that international decisions that were taken before the formulation of the legislation was put before the House did not determine whether or how the question of dual-mandated Members would be dealt with.
  Let me now turn to amendment No. 19. The effect of this amendment is that a severance grant will not be paid to a Representative who is at the time of losing
  1172
  his seat also a Member of the House of Commons. Under the Bill as introduced, when no salary as a Representative was paid to dual-mandated Members, no severance grant was payable to such Members. But now that one-third of salary is to be paid to such people as Representatives, in addition to their House of Commons salaries, they will also be entitled to a one-third severance grant. That is one-third of salary for three months, equivalent to one month's House of Commons salary. At 1979 rates that is about £790 gross, and at 1981 rates £1,000.
  The Government do not accept that there is anything inconsistent or anomalous in the Bill as it stands. In general terms, clause 2 applies the House of Commons severance grant scheme for the purpose of Representatives in the European Parliament. Where a Representative loses the seat at a general election of Representatives, he will be entitled to three months' salary as a severance payment.
  10.45 p.m.
  The Representative who is solely a Representative to the European Parliament will receive three months' extra salary, which will be equivalent to three months' salary as a Member of Parliament. The Representative who holds the dual mandate and is thereby in receipt of a salary as a Member of the House of Commons and a one-third supplemental salary as a Representative will receive the three-months' severance grant in relation to his salary as a Representative. Clearly, such a person will not receive any severance grant in relation to his seat in the House of Commons until he loses that seat at a subsequent general election.
  If we recognise that it is right that a separate salary, however abated, should be paid to a Representative with a dual mandate, and that a separate pension should be provided, it follows that such Members should also be entitled to the appropriate severance payment if they lose their seats, although naturally, because the amount involved is less, the severance payment will also be less.
  For those reasons I advise the Committee not to accept amendment No. 19.
  Mr. Phillip Whitehead: We are dealing with the logic of Lewis Carroll. The whole purpose of severance pay is to compensate a legislator

  1173
  who has lost his job and who is without gainful employment. In this case it is, by definition, impossible since it is unlikely that we shall have a European election and a British general election at the same time. The Minister is proposing to compensate a man who is still in gainful employment.
  Mr. Brittan: That is a fallacy. If that were so, the ordinary severance payments which are enjoyed by Members of the House of Commons who lose their seats would not be enjoyed by those Members of the House who hold other jobs. I appreciate that some Labour Members think that it is wrong that any hon. Member should have any other gainful employment. I do not share that view. It would be absurd and illogical to carry out such a fundamental constitutional change by way of the side wind of European legislation.
  Mr. George Cunningham: When a Member of the House who is a Minister loses both his position as a Member of the House and as Minister, he receives three months' salary grant. Does he receive the equivalent when he ceases to be a Minister?
  Mr. Brittan: So far as I am aware, he does not. The hon. Member for Islington, South and Finsbury (Mr. Cunningham) with his disarming gestures, makes exactly the wrong comparison. We are talking about the loss of office by a Member of the European Parliament. We are not discussing the loss of executive office as a member of the Government. The position of a Member of the European Parliament who loses his seat is analogous to that of a Member of the Westminster Parliament. A comparison with Ministers is not fruitful.
  Mr. English: The Minister refers to a Member who loses his seat. Will he explain what he means? There is no severance pay for a Member who loses his seat. There is severance pay for a Member who stands and who is defeated in an election. This is an important matter. For example, if a Member is not re-adopted by his party there is no severance pay for that. If the Boundary Commission abolishes his seat, there is no severance pay for that. There is severance pay only if a Member stands and is defeated. He may stand as an indepen-
  1174
  dent or for another constituency, and then there is severance pay but there is no severance pay simply because a Member loses his seat.
  Mr. Brittan: It may be that I am entirely wrong in this matter, but I suspect that the hon. Gentleman is positively the only person in the Committee today who has any doubt about what I meant. It is quite clear that this legislation treats Members of the European Assembly in exactly the same way as Members of this House from the point of view of severance. Whether he thinks that the provisions relating to Members of this House are right or wrong, the hon. Gentleman knows perfectly well what that provision is, and this legislation seeks to do no more than treat Members of European Assembly in a comparable way.
  Mr. George Cunningham: The group of amendments that we are discussing relate principally to the proposal by the Government that a Member of this House who is also a Member of the European Parliament should be paid one full salary and one-third of the other salary. There are other matters also included in the group of amendments that we are discussing which are as important. These are, secondly, that the Member who is a dual should receive a pension in respect of his dual salary and, thirdly, the point that the Minister was just discussing, whether a Member who is a dual should receive a severance payment, if I can call it that, in relation not only to his House of Commons salary but also to his European salary.
  On the main subject of whether a Member of both Parliaments should receive more than one salary, my hon. Friend the Member for Swindon (Mr. Stoddart) has a related proposal to which we shall come later, although I suppose that it will fall if we adopt the Government's proposal in this group.
  We went over this ground on Second Reading in the House and the point should not be lost that the Government have changed their mind on the issue. Since bringing forward the Bill in its original form, quite clearly saying that a Member who was a Member of both Parliaments should receive one salary only and none of the other, the Government have changed their mind. Therefore the

  1175
  onus lies upon the Government to satisfy the Committee extensively that there is some reason not only for doing so but why their first thoughts have had to be changed. We know the arguments that were adduced on Second Reading for doing so, but I do not think that the Minister has sufficiently justified those arguments or rebutted the arguments in opposition.
  The Minister referred to the practice adopted by other member States of the Community. I acknowledge that it is rather difficult to obtain information about what other countries will do, if only because their proposals have not all been finalised as yet, but my information is that with the exception of the Irish Republic there is no certainty that any other member State of the Community will permit a dual to receive both, or a part of both, salaries. So the United Kingdom is putting itself into a different position from that of the other member States.
  The decision that was taken by the Council of Ministers last November or December was intended to allow the member States to pay at different levels. That was the essence of the agreement, that the salary paid to a British person in the European Parliament should reflect the salary paid to a Member of the British Parliament, and so on round the Community. But it was intended to introduce a measure of consistency between the nine member States.
  I suggest that the implication was that a person who was a Member of both Parliaments should not receive both salaries. Although that was not conclusively or explicitly stated in the agreement of last November or December, it was the implication of what was then agreed. That seems also to have been the conclusion of most of the other member States.
  It might be said that, because the British pay British Members of Parliament very little by comparison with what the Germans pay, we ought to adopt a different practice of the payment of a dual salary. But surely that is to fly in the face of the agreement which said that the salary of a European Member should reflect the salary paid to a Member of the national Parliament.
  Mr. Robert Rhodes James: Surely the hon. Gentleman will recollect that last December the Council of Ministers agreed that the salaries of Members of the European Assembly should be exactly the same as they were for the national Assemblies. There was no dealing with the problem of the dual mandate, and certainly there was no agreement that Members of the European Assembly should be paid nothing at all, which was the original proposal of the Government.
  Mr. Cunningham: I accept that the issue was not settled clearly by the Council of Ministers last November or December. What I am suggesting is that if one had to guess the intention from the decision as announced, it is more likely that one would guess that a dual salary should not be paid than that it should be paid. [Interruption.] Conservative Members are suggesting that I am wrong, but the fact is that most of the other member States are deciding the issue in a sense contrary to what the Government have now decided, and the Government are now deciding the issue in a sense different from what they themselves decided a couple of months back. Therefore, the balance of the argument seems to be on my side.
  Mr. William Shelton: We are in a different situation with our system for the simple reason that not only do we have Members of Parliament who are paid, but when they become Ministers they retain a measure of that payment as well. In that sense they are dual mandated within this country. [HON. MEMBERS: " No."] Surely, in that sense, we are retaining the same arrangement for European Members.
  Mr. Cunningham: If the hon. Gentleman thinks that that arrangement differentiates so starkly from the practices in other European countries, he does not know as much about the practices of other European countries as he ought to do in order to take part in this debate.
  Mr. Hugh Dykes: I am grateful to the hon. Gentleman for giving way, because he has given way a number of times already. Would he not accept that the greater consistency comes out of that to which my hon. and learned Friend the Minister referred, which was partly

  1177
  our more onerous duties because the Session here can be longer than in other Parliaments, but that, equally and pragmatically, this country, as well as the Republic of Ireland, with its multi-Member constituencies, is the only country of the Nine to have a constituency arrangement? Therefore, that provides its own justification.
  Mr. Cunningham: If one were to take that into account, one would certainly expect Luxembourg to have a different arrangement because of the extremely tiny size of that country.
  Mr. Brittan: Since the hon. Gentleman has mentioned Luxembourg, it is only right to reiterate that he would be wrong to assume that Luxembourg is making no arrangement for the payment of those with a dual mandate, because the position in Luxembourg is that no decision has yet been arrived at.
  Mr. Cunningham: I know that, but the situation in Luxembourg is that Members of the Luxembourg Parliament do the job part-time. Therefore, considerations apply that do not apply in the rest of the Community. I am only suggesting that the considerations invoked by a number of Conservative Members do not bear upon the issue before us.
  Let us concede at once that there is an argument for paying more than one full salary. It is not that there is no argument for it at all. There is an argument for doing so. It is that the law of the nation permits a person to be in both Parliaments. We could have said that it is so clearly impossible for a person to do both jobs that we will legally prohibit it. Some hon. Members might have wanted to do that, but we did not. My party prohibited it as a matter of party rules, but the law of the land permits it.
  11 p.m.
  Therefore, it is arguable that we should allow a person to draw at least part of the second salary if both bodies of electors are pleased to tolerate the situation. He will clearly have greater responsibilities and greater strains on his time and his pocket from doing both jobs, and there is a case for allowing him to have more than just one full salary. No one is suggesting that there is no case at all.
  1178
  On the other hand, that is not what the Government originally came forward with in the light of the decision last November and December, neither is it what the then Government came forward with in the immediate aftermath. It is not what most of the other member States have come forward with. Many of the larger ones have prohibited the receipt of two salaries. It may be said that they pay their Members of Parliament much more than we do, but the essence of the decision last November was that the salary of European Members should reflect the salary of a national Member. So that point is automatically irrelevant.
  Mr. R. C. Mitchell: There is a strong logical argument that because people have been elected by their constituents to two different jobs they should be paid two full salaries. There is also logic in the argument that they should be paid only one salary, but there is no logic in saying that they should be paid one and a bit salaries.
  Mr. Cunningham: There are many occasions in life when it is extremely sensible to reach a compromise between two logical solutions both of which are manifestly daft. My hon. Friend and I have exercised—over the past year in my case and rather longer in his—the job of being a delegate from this House to the European Parliament. On the basis of my experience in the past 15 months, I can say that we are talking not about two jobs but about at least three. There is the job in Westminster, the European Parliament and the constituency. In respect of at least one of the dual Members we are talking of four jobs, because the constituency for Europe is different from the constituency for Westminster. My experience was that out of the three jobs that I was expected to do during that 15 months, I could just about keep my head above water doing two but I certainly could not do three. It is, therefore, legitimate for us not to pay to any person who is exercising the dual mandate both full salaries.
  Mr. Russell Johnston: Despite the hon. Gentleman's disarming frankness about his own position, surely he would agree as a democrat that the electorate are entitled to decide whether they want this fellow to be a Member of the European

  1179
  Parliament, the county council or whatever? If they think that he or she will give value, they are entitled to chose that Member.
  Mr. Cunningham: If the hon. Gentleman were to put to the electorate in his constituency the question whether a Member should be paid one, two or 1·45 salaries, they would say to him "For goodness sake, what did we elect you for? "That is what we are deciding tonight. We are deciding the relative detail of just how much of two salaries should be paid to a Member who is exercising the dual mandate.
  On the basis of experience, it is not possible for a Member to do both jobs to the full extent. Therefore, we are justified in not paying two full salaries. Secondly, I concede that there is a respectable argument for saying that more than one full salary should be paid. However, I wonder whether two or three years from now such newspaper reports as have appeared this week about moneys likely to be forthcoming to a Member of the European Parliament are likely to stop. I do not think so. I think it is likely that in a couple of years a Member of the European Parliament will not be short of money. If anything, the stories that appear in the newspapers criticising the availability of money to Members of the European Parliament will intensify in bitterness and complaint. We must bear that in mind in reaching a decision tonight.
  On that basis, it would be wrong for the Committee to accede to the proposal of the right hon. Member for Crosby (Mr. Page) that a dual Member should be paid one full salary and also the reduced salary which is payable to a junior Minister in the British system. In my view, that would be absolutely excessive. But the Government have come forward with a proposal for less than that—one and one-third salaries. On balance, I think that the Committee would be well advised to vote against that and to say that the dual Member should receive, as originally proposed, only one salary.
  Mr. Cranley Onslow: I suspect that the hon. Member has not had the advantage of reading the debate on Second Reading. He has just advanced
  1180
  the proposition that it is not important to us that we should pay these elected Representatives what they deserve but we should leave them to make it up on expenses. That is a very dangerous and immoral argument, and it is specifically rejected by Boyle in his report on our expenses.
  Mr. Cunningham: Because of a new clause with which we shall deal in a later stage of the debate, we shall be able to discuss the question of expenses. It is entirely wrong to consider what salaries should be paid in the light of what expenses are available. But the general conditions available to a Member of the European Parliament should, to some extent, be taken into account.
  Mr. English: My hon. Friend is slightly confusing an issue. When he referred to one and one-third salaries, he did not explain that it was the opposite way round. Ministers' salaries are in total as Ministers, and their salaries as Members of Parliament are reduced. In this case it is the opposite way round. Here we have an interesting precedent for saying that a Member should get his full salary as a Member of the House and one-third of the salary for his outside job. My hon. Friend has not commented on the virtue of applying that principle to Ministers.
  Mr. Cunningham: In the normal way it should not matter, if we decide that a Member gets one and one-third salaries, whether he gets his full British salary and one-third of the other or vice versa. It is a matter of convenience.
  However, there is a consideration about tax, which is a point in favour of the Government's argument. If we leave the Bill as it is, the dual Member will actually be worse off than the Member who is only a Member of this place. That is because the Member who has a dual mandate will have no salary in respect of his European office and, therefore, he will not be able to set against any European emoluments the 25 per cent. tax-free rule arising from an earlier Finance Act. It is a very small argument in favour of the Government's proposal.
  May I point out to the Minister, in case he thinks of invoking this in his argument, that we do not allow our Foreign Service to take advantage of the

  1181
  25 per cent. rule. Members of that service serve not just 30 days abroad but whole years abroad. But, because of the nature of their employment abroad as representatives of the British Government, we specifically exempt them in the Finance Act from obtaining an advantage from the 1975 or 1976 rule. If we do that in respect of members of the Foreign Service, I fail to see why we should not also exempt from that privilege Members of the European Parliament. I hope that I have negatived that argument, which the Minister could have mentioned in supporting his case.
  I recommend to my hon. Friends that on balance—I stress the phrase "on balance "because there is a case on both sides—they should come down in favour of the Bill as it stands and against the Government's proposal.
  This group of amendments includes two other items. The first seeks to make the pension of a dual Member reflect not only his British salary but his European salary. I think that that is reasonable.
  Mr. Dykes: Would the hon. Gentleman change his mind in resisting the one and one-third basis if, for example, the European Parliament were to sit for two weeks in plenary session per month and five days in committee?
  Mr. Cunningham: I think that we must arrive at some defensible line between what is decided in this House about European Assembly Members and what is decided by the European Parliament itself. In so far as there is any difference in conditions applying to a European Assembly Member because the Parliament meets once a month or every two months, that factor should be reflected in the payments made by the European Parliament.
  A messy situation arises from the fact that payments are being made both from national funds on national decisions and from European funds on European decisions. Let us try to keep the line between them reasonably clear. We have to discuss on this group of amendments only the matter of salary, pension and termination of service grant. The considerations relevant thereto are those that the hon. and learned Member mentioned and not those raised by the hon. Member for Harrow, East (Mr. Dykes).
  1182
  The Bill as it stands and with the Government amendment will mean that when a dual Member ceases to be a Member of the European Parliament but continues to be a Member of this Parliament, he will receive a termination of European service grant equal to three months of his European salary. Even if the House decides that we are to pay one and one-third salaries to a dual Member, I say that there is no justification for paying a termination grant on the extra one-third. Such a person is continuing to be in full-time remunerated employment as a Member of this House. He is therefore not thrown out on the streets. He is ceasing to be a Member of the European Parliament but continuing to be a Member of this Parliament. What justification is there for his being provided, after he ceases to be a Member of the European Parliament, with three months' salary? We do not pay to a Minister who ceases to be a Minister while continuing to be a Member of this House any termination of service grant.
  A comparison has been drawn on Second Reading and tonight between the position of a dual Member of the British and European Parliaments and a person who is in this Parliament and also a Minister. If we are drawing that comparison, there is no justification for the arrangement that has been put forward by the Government. If the Committee accepts the Government's main amendment, it should also support amendment No. 19, which would deny to the dual the three months' termination grant of his European salary if he continued to be a Member of this Parliament. I hope that if the main amendment is passed a separate Division on amendment No. 19 will be tolerated.
  11.15 p.m.
  Mr. Graham Page: I am grateful to the Minister for moving the amendment and taking into account the strong feeling that is felt by some hon. Members that those holding the dual mandate should not be deprived entirely of one of those salaries. I am grateful that an amendment has been placed on the Order Paper to that effect. I do not believe that the amendment has got the position quite right, but it takes into account the feeling of the Committee.

  1183
  Whether or not one agrees with the idea of holding the dual mandate, it cannot be said that to be a Representative in the European Parliament reduces one's responsibilities in this House. There remain the responsibilities of keeping up with events in the House, taking part from time to time—just as often as the rest of us—in debates and carrying out constituency work. Those responsibilities are not reduced by election to the European Parliament, but there is an overlap of responsibilities. Therefore, there is not the capacity to spend as much time on each.
  That should be taken into account in fixing the salary for those who hold the dual mandate. The precedent, which is a fair one, is that of Ministers in the House. Therefore, amendment No. 4 has been tabled in order that the parliamentary salary of those who hold the dual mandate should be abated in the same way as the parliamentary salary of a junior Minister.
  I admit that I do not know what the figure would be, and I have never understood how the figure for a junior Minister's parliamentary salary is calculated. I tried to work it out on a small computer but, as always, I had to return to my fingers and work out the sums on paper. However, looking ahead to the figures for June 1981, I found a simple round set of calculations. The junior Minister will receive £7,000 of the £12,000 parliamentary salary. That gives the proportion of seven-twelfths. That is more generous than the figure in the Government amendment. Those who accept the dual mandate, having been elected to take the dual mandate, deserve more generosity than is proposed in the Government amendment. Therefore, I leave my amendment on the Order Paper and commend it to the Committee.
  Mr. Ogden: The more I listen to the debate, the more I am confirmed in my opinion that the less that this Parliament has to do with the salaries, allowances and facilities of Members of the European Assembly, the better it will be for us and for them.
  I also confirm again my opinion that I am a most modest, reasonable and restrained hon. Member. I explain that remark and its immodesty by the simple fact that amendment No. 1 first appeared
  1184
  in the name of the hon. Member for Liverpool, West Derby, to which was added, independently but with great common sense, the name of my hon. Friend the Member for Nottingham, West (Mr. English). It was then taken over—if that is the right expression—by the Home Secretary. It appears now with the names in the following order: the Secretary of State, the hon. Member for West Derby and the hon. Member for Nottingham, West. That is a list of three proconsuls which ought to bring tears to the eyes and terror to the hearts.
  Both Front Bench speakers have admitted that their arguments are slightly less than logical. Both, I fear, are not putting forward entirely their own opinions but are doing the jobs for which they have accepted responsibility. I certainly hope that the arguments of the Minister are not his own. If they are, his claim that there is a basic principle involved has passed me by. It was like looking for the gold at the end of a rainbow. A number of my hon. Friends and I have negotiated salaries with Leaders of the House over the past 15 years, but trying to negotiate with the Minister of State would be like trying to negotiate with jelly.
  I wish to refer to Government amendments Nos. 1, 2 and 6 and to amendment No. 5. I start on the narrow point that if the Government have virtually taken over amendments Nos. 1 and 6, they should also look at amendment No. 5 because that is a key amendment. If they are deleting provisions with amendments Nos. 1, 2 and 6, they ought also to delete the part of the Bill covered by amendment No. 5.
  My purpose in putting forward amendment No. 5 is to delete and to leave deleted clause 1(3) and not to delete that and put in something else, though we recognise that the Government have made proposals and have moved one-third of the way towards payment of an hon. Member.
  Let me give a parallel to the situation facing us. Some years ago, a multinational corporation was established on the Continent. Other national corporations decided that they would join it. The corporation grew in power and influence until its activities affected every part of its territories, and other corporations which had decided at first to stay out wanted to join. Whether the reasons of

  1185
  those corporations were good reasons or the old one of saying "If you cannot beat them, join them" is nothing to do with me.
  Like many corporations on the Continent, the multinational had two boards of directors—an executive board and an advisory board. At first, the advisory board consisted of people who were sent as representatives of the national corporations. Because, inevitably, a large corporation attracts criticism, for good reasons or bad, it was decided that the advisory board would be filled by more directors who would be chosen by those in the territories where the company operated.
  That was received with a great deal of interest. When a salary of £25,000 was mentioned for the directors, a very great deal of interest was attracted. Later a salary of £12,000 was mentioned, but there was still much interest. There was interest from those who were wholly in favour of the multinational corporation and from those who were opposed to the corporation and wanted it to be voluntarily liquidated or sent to Carey Street.
  The day came when everyone in the territory had the chance to elect his own representative for his own area. The advisory directors were elected. Everyone who wanted to take part in the election could do so. The date was 3 May. The multinational corporation was the European Assembly. Fortunately or unfortunately, not many electors decided to vote, but the directors were elected.
  If anyone in the Chamber or outside can honestly tell me that the electors did not expect the directors to be paid, I shall sit down immediately. The negotiations from £25,000 to £12,000 were hardly in the spirit of open government. They were not the burning topic of conversation. My complaint is that instead of getting the highest common multiple we achieved the lowest common denominator.
  My union, the National Union of Mineworkers, would not have accepted the negotiations that took place. If the NUM had been involved, they would never have passed the first stage. However, when the elections took place all those who wanted a say expected the man they chose to be paid for the job and that he would be paid the rate for the job.
  1186
  Following the elections, it became clear that Parliament was proposing that Representatives would not be paid the same rate and that the same rate would not even be paid to all the British Representatives. The result of the negotiations confirms my view that amateurs have been determining these matters, whether they be Conservative or Labour.
  There will be one assembly, the European Assembly. Its Representatives will be doing almost the same job. However, their salary will depend on the country from which they come and not on the job that they are doing. If there is one basic claim in the Labour Party, it is the rate for the job.
  Members from different countries will be paid different rates. At Bradford colliery, Manchester, there were English, Chinese, Dutch, Germans, Yugoslavs and others. If anyone had suggested that the rate we received for shifting coal should turn on the country of origin, he would not have lasted two minutes. He would not have remained a member of the union.
  Representatives from different countries will be paid different rates, but some United Kingdom Representatives will be paid while others will not. They will all do the same job. It will not matter whether they have full-time or part-time jobs, whether they have money from investments or trusts or whether they have public responsibilities or private responsibilities. The only criterion will be whether they are Members of the House of Commons who have been elected Representatives of the European Parliament.
  I remember the arguments about whether we should have direct elections. It was said that the people should decide who they wanted to represent them. There were arguments about patronage, power, Parliament and responsibility, but the central argument was that the people should decide. I say tonight that the people should decide. In fact, they have decided. They chose, rightly or wrongly, the United Kingdom representatives of the European Assembly.
  I do not know how many of the Representatives are loaded, whether they need the money or whether they are on social security. It must have been known to the electors whether the candidates were well heeled and whether they needed the

  1187
  money that would be paid to them. Everybody knew that there would be a salary for the job. That is where this Parliament has reneged, in principle if not on promises.
  Would any employer dare try it? No fear! To see a job advertised, go for it, be nominated and accepted and then be told that because one had an outside job one would not be accepted—
  11.30 p.m.
  Mr. George Cunningham: Before my hon. Friend gives the impression that the idea of denying a second salary is totally unacceptable, and would be to any reasonable person, perhaps he will concede that in the case of Denmark, Germany, France and the Netherlands, and maybe at least one other Community country, the second salary is not permitted.
  Mr. Ogden: Let them decide for themselves. I shall stand on the principle that my union stands on, as do the teachers, the boilermakers and everyone else. I ask my hon. Friend not to blame me for what is done in Denmark. It would not be accepted by the German miners, the Dutch miners or the Belgian miners.
  I say to the lawyers and to my hon. Friend that when one gets into the nitty-gritty and the details, the more complicated one makes a matter, the more difficult and illogical it becomes. This has been the whole basis of trying to have negotiations about our own salaries. We either have the principle and stick by it or we break it.
  Mr. English: Will my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) ask my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) in whose law the things that he described were done? We are supposed to be talking about a Community matter. There is no principle of Community law that says that all those people should not be paid the same.
  Mr. Ogden: I shall avoid that matter. My hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) will have heard the question and will no doubt reply to it. I get into enough trouble arguing about British law. My advice to my constituents is to keep as far away from the law as they can—to
  1188
  obey it but not to appeal to it, settling problems outside if possible
  There is a simple, basic truth in all things. If we cannot expound it from the Labour Benches—I would prefer to expound it from the Government Benches—it is a pity. There is a fair rate for the job and there is a fair day's work for the job. They should be the same, whatever other commitments people have.
  In the present circumstances, we have the worst of all possible worlds—complication upon complication. There is neither rhyme nor reason in what is proposed. We have a short time before the European Assembly Members will decide their own salaries—and let them pay for them properly. The only thing we can do in the meantime is to say "Other people on 3 May elected Representatives whom they expected to be paid. We should not later change the terms and conditions of employment."
  Mr. Paul Hawkins: I very much agree with what the hon. Member for Liverpool, West Derby (Mr. Ogden) has just said. The main argument is that the people elected their Representatives to the European Parliament—and I worked hard to get my Representative in—and expected them to be paid, as I expected to be paid when I came here. I am very surprised at the way in which the Government have behaved over our own salaries and the European Parliament salaries.
  I believe that consultation would have produced a much more satisfactory solution in both cases. It seems that it had to wait until we had had our debates, which is not a satisfactory way of going about matters. That the decision was wrong in the first instance was soon proved by the feelings of the House. Everyone knows that when the House feels strongly about a matter it is right. The Government unfortunately have been wrong over these two matters.
  I agree with my right hon. Friend the Member for Crosby (Mr. Page). I believe that the matter should have been dealt with as he suggested, although maybe we are not seeing the rate for the job. I do not know how on earth it was ever worked out.
  I support the argument advanced by the hon. Member for West Derby. I hope that, now that the Government have come

  1189
  some way towards our way of thinking, we shall be able to ensure that those who have this hard task receive a decent salary. This is a task which I would not want to do, but these people have taken it on and have been elected by their electors. We must back them now.
  Mr. English: May I ask the occupants of both Front Benches—I except hon. Members on the Back Benches on both sides of the Committee—why being elected to a job is supposed to be immoral? That is what the Bill is, in effect, saying and it is what both Front Bench representatives have been saying. They have been saying that it does not matter a hoot, once a person has been elected to the British House of Commons, if he takes any unelected outside job.
  It was mentioned, I think, that the hon. and learned Member for Cleveland and Whitby (Mr. Brittan), before he became a Minister, was a lawyer. This is not regarded as immoral in Britain.
  Mr. Ogden: Dangerous, but not immoral.
  Mr. English: I can see some force in the argument—it is an argument used by my hon. Friends the Members for Bolsover (Mr. Skinner) and for Keighley (Mr. Cryer)—that an hon. Member should not be paid for any job outside this legislature. It is an argument, incidentally, which has nothing to do with the Left or the Right. As I understand it, it is accepted by the German Bundestag, which admittedly pays its members, its Abgeordnete, the highest salaries in Europe but, I believe, prohibits them from taking other, outside jobs.
  If that is the argument of the two Front Benches—and I have to put the two Front Benches together because I wish to be fair to the hon. and learned Member for Cleveland and Whitby; we know that he has been landed in it. The Bill was originally drafted, as we understand it, by hon. Members on the Labour side of the Committee, although not the hon. Member for Islington, South and Finsbury (Mr. Cunningham), who is forced to defend it here. We are in the remarkable situation of the two poor saps on the Front Benches being forced to defend something for which they have no responsibility—one because he happens to be a Conservative and the Bill was
  1190
  drafted by a Labour Government and the other because he has just been put on to the Opposition Front Bench; he was not allowed to be on the Front Bench when we were in office.
  Mr. George Cunningham: This is, perhaps, the time to intervene to say that my strong experience in the past 15 months in the European Parliament has been that there inevitably is a reduction in the performance of an hon. Member of this House in this House as a result of doing even the minimum amount of service required in the European Parliament. I see my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) nodding his head. My hon. Friend will recall that in his recent report Lord Boyle made great play of the fact that hon. Members of this House on average give so many hours' attention per week to the service of this House. I say that, inevitably, the number of hours that an hon. Member can give to his British constituents through his service in this House of Commons is limited by his being in the European Parliament, and that is the justification for the messy sort of compromise we have here.
  Mr. English: I was not disputing that for a moment. What I was saying was that it is just possible—I put it no higher—that other outside jobs may infringe upon the totality of service that hon. Members may give to this House of Commons.
  I want to make my position plain. I think, although I do not have a job outside the House, that the House benefits by some hon. Members having outside jobs. I also think that it benefits from the fact that some hon. Members do not have such jobs. But I do not see why election is immoral. I do not see why, because a man is appointed by a business man to be on his board of directors, because a man is paid by solicitors to be a barrister, because a man is paid as a solicitor by clients outside, that should not be regarded as immoral but being elected by half a million people or 300,000 people should be regarded as immoral. On that basis, one must have one's salary reduced because it is nasty and devious to have an outside job in a position to which one has been elected by the public. I do not see the logic behind this belief that pay is moral if it is not decided democratically.
  Mr. Ogden: Surely the argument is not whether the job does or does not affect one job or the other or whether a Member of Parliament does his job less well because he is a Member of the European Parliament or does it better. I cannot see anyone doing both jobs equally well. Will my hon. Friend ask my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) and others who should decide whether a person is or is not doing a job? If those who elect a Member of Parliament decide that he cannot do his job because he is a Member of the European Parliament, they have a remedy. If they came from Liverpool, West Derby, they would certainly let the Member know. If the electors say that he cannot do the job, they will have to tell him. We should not decide who is or who is not doing a proper job. If one accepts that principle, there are dangers in this place for quite a few people.
  Mr. English: I am grateful to my hon. Friend for his helpful intervention.
  One point that I should like the Minister of State to answer is whether this is legal. My hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) correctly raised the point that the Treaty of Rome states clearly that once one stops indirectly electing Members of the European Assembly, one should elect them under a uniform law proposed by the European Assembly and agreed by the Council of Ministers. We have never done such a thing. They are elected by one form of election in one country, by a different form in another, and in Britain by a different system from all the others. We have gone further. We have said that we will not pay them as though they were European Assembly Members. We have said, as my hon. Friend, the Member for Liverpool, West Derby (Mr. Ogden) pointed out, that we will pay them as if they were not European Assembly Members but as if they were Frenchmen, British or Germans representing Frenchmen, British or Germans though not elected to the European Assembly, at least not in pay. It will become worse when we reach a later amendment, but I would be out of order if I dealt with the matter now.
  I should like to ask the Minister of State whether he has consulted the Law Officers about the legality of this matter.
  1192
  The European Community has a system different from English law. In English law, one can go to a court and seek a declaration that anyone, even a Government, is acting illegally. One can do that even if one belongs to the National Association for Freedom. One can even ask whether a trade union is acting legally. That is not possible in the European Community.
  An individual in Community law is prohibited from asking the European Court whether the Council of Ministers is acting illegally unless that individual happens to be directly and personally concerned. It might be possible, for example, for one of the five hon. Members about whom we are talking to go and ask the Community Court whether this Government and this Parliament are acting legally. But we, as individuals, cannot go and ask that question of a court as we could in Britain. If a Government are acting illegally, we are not told.
  Will the Minister say what legal advice the Government possess and what advice has been given by the Law Officers of the Crown? Will he tell the Committee and the public at large whether this proposal is legal in Community law?
  I turn to my hon. Friend the Member for Islington, South and Finsbury, who, I believe, has served in the Foreign Civil Service that he mentioned.
  Mr. George Cunningham Mr. George Cunningham indicated dissent.
  Mr. English: It was the Home Civil Service, was it?
  Mr. Cunningham Mr. Cunningham indicated dissent.
  Mr. English: Was it any Civil Service under the Crown?
  Mr. Cunningham Mr. Cunningham indicated assent.
  Mr. English: I thought that there was only a Home or a Foreign Civil Service. I thought there were only two, but there is, of course, a third in Northern Ireland. At any rate, I think that my hon. Friend has worked in a Civil Service under the Crown.
  11.45 p.m.
  Mr. Cunningham: Yes.
  Mr. English: I am grateful to my hon. Friend. I am intrigued to know which. Perhaps he will tell me later.

  1193
  But when my hon. Friend makes the comparison with civil servants, why does he not make the comparison between servants of the European Commission and home civil servants? This Community that we are in is not supposed to be a totally foreign body. I know that there are those hon. Members who wish it was, but it is not supposed to be. The Foreign Service is not a comparison. The Home Civil Service is a comparison with servants of the European Commission. But servants of the European Commission, unlike the elected Representatives to the European Assembly, are subjected only to a European form of tax which is at the most 25 per cent.—certainly less than our new standard rate and certainly less than our higher rates of tax.
  Why should we support a system in which elected representatives are supposed to be paid less and taxed more than unelected people who sit in the Commission headquarters in Brussels using their immunities? They were described in The Guardian this morning as using their immunities to buy cheap liquor and to buy cheaper food than is normally available in Brussels with the taxes which are imposed on food there. Why should we say that elected European Assembly Members should have worse pay and conditions than they have? Why, indeed, should they have better conditions than home civil servants or, for that matter, civil servants in France, Germany or elsewhere? Why should they be the best treated citizens of the 250 million people in the Common Market? As I said earlier, why should one say that election is immoral?
  I am grateful to the Secretary of State for adopting the amendment proposed by my hon. Friend the Member for West Derby and for adopting other amendments proposed by Government supporters. This is most generous. But I wonder whether, for once, we suffer from the lack of an Official Information Act such as those which exist in the United States and Sweden. This is a perfect example. Here we have a Bill which we all know was drafted by a previous Government. Under a peculiar rule called the previous Administration rule, criticised unanimously by the all-party Expenditure Committee, no member of the Cabinet is allowed to know why the previous Government adopted this stupid
  1194
  provision in the Bill. The hon. and learned Gentleman has to put it forward as though it were his own on behalf of a Government who do not know why it was put in the Bill.
  There must be something wrong with a system of government which allows that to happen. The Expenditure Committee recommended unanimously that we should at least follow the example of the Republic of Ireland, where members of a Government are entitled to look at the papers of the previous Government, even if they are not allowed to quote them.
  In this case, we are asked to amend a Bill containing a provision which says for some reason that in the House of Commons a precedent shall be created for not allowing people to be paid for a job outside if they are elected. If the hon. and learned Gentleman really thinks that that precedent will not be used by Members of this House to stop other hon. Members being paid for jobs outside, he needs to think again about the precedent that he has created. There are many of us who would say that it is an excellent precedent, but from the point of view of many of the Minister's colleagues and a few of mine it is a foolish one.
  This proposal was put forward originally by the previous Government. We are not allowed to know why. In the United States we could ask why. We must ask ourselves whether this was originally suggested by a Minister or a civil servant. We must ask whether it was suggested by a person who was elected or by someone who was unelected and was simply arrogantly assuming that election was worse than appointment.
  It is no wonder that there are people in this country who criticise and attack the Civil Service. If this sort of thing occurs—and, to be fair to them, there are many civil servants who genuinely believe that more open government would be better—are we to assume that Ministers of the Crown arrogantly assumed that people who were elected to jobs outside this Parliament were to be treated worse than people who were appointed to them Or are we to assume that appointed servants of the Crown made that assumption instead and that Ministers of the Crown merely accepted it without knowing what they were doing?
  Mr. David Stoddart: If hon. Members have studied the list of amendments they will see that I have tabled a couple of amendments, which may or may not be called, depending on what happens to the amendment now before us. My amendments show that I believe that Members of the European Assembly, far from receiving the same salary as Members of this House, should receive less.
  One amendment proposes that they should receive 75 per cent. of the salary of a Member of this House. In another I suggest that the salary should be based on attendance at the Assembly or its committees up to a maximum of £9,450 a year, and paid on the basis of £18 per sitting. The Minister will understand, therefore, that I do not support the Government amendment. I believe that it is dangerous. What the House of Commons is doing, and has been doing over a long period, is selling itself short. I wonder what is happening to the House of Commons.
  Whenever the House takes an action of this sort which tends to give the impression that the European Assembly, an Assembly outside this country and with no loyalty to it, assumes an importance greater than this House, it is treading a dangerous road. That is what the House does every time it attempts to inflate the importance of the European Assembly or any of the EEC institutions.
  The amendment proposes payment of a salary and one-third. On what basis can that be proposed? Has it been worked out scientifically, and, if so, on what basis? Or is it something that has just come into the Minister's head? Does he think that it will buy off the demand of five Members of this House out of a total of 635? Nearly half this House is precluded from taking on the two jobs. The Labour Party believes that a Member can do only one of the jobs properly at a time. I believe that. Boyle believes it as well. His recommendations for the salaries of Members of this House were based on the fact that it was a full-time occupation. If this is a full-time occupation, how on earth can a Member of this House do another job?
  Mr. Les Huckfield: I am glad that my hon. Friend mentioned the view of the Labour Party. It takes the view not only that it is difficult to do
  1196
  two jobs but that it is desirable for an hon. Member to resign from the House before seeking nomination to a European constituency. The view taken by the Labour Party is a strong reinforcement of my hon. Friend's argument.
  Mr. Stoddart: I am obliged to my hon. Friend. Being a Member of this House is a full-time job. It follows that a Member of both assemblies cannot do two jobs properly.
  Mr. Michael Brown: Is the hon. Member aware that when his party was in power there were about 100 Ministers, of whom the hon. Member for Nuneaton (Mr. Huckfield) was one, who did two jobs? It is never suggested that Ministers fail to do their constituency duties properly. Why should the hon. Member make that suggestion?
  Mr. Stoddart: I do not make that suggestion. Ministers are part of this Parliament. Unless they are Members of this Parliament they cannot be Ministers of the Crown. That is different from the position that exists in the EEC.
  Mr. Whitehead: Does my hon. Friend agree that a Minister, in addition to his constituency responsibility, does his job only in the sense that a hardworking Back Bencher does his on Select Committees and elsewhere?
  Mr. Stoddart: I am obliged to my hon. Friend. We are Members of a particular assembly. Whatever job we do within that assembly has its worth. Ministers are paid more than Back Benchers, although sometimes I wonder whether some of them are worth it.
  Let us examine the job that must be done in the European Assembly, for which we are proposing to pay time and one-third, which we are equating with the job of hon. Members and for which there shall be paid a similar salary. Before direct elections, just under 200 Members did the job which over 400 Representatives will now do. Those Members did the job without salary.
  Such people will still receive duty-free goods and expenses, but under the Bill they will also receive a salary which is equivalent to that of Members of the House of Commons. Previously, half the number did the same job for nothing. They had a salary for doing this job but

  1197
  no salary for doing the job in Europe. That is correct, is it not?
  12 midnight.
  Mr. Ogden: Given the difficulties of those Members who were sent as representatives of this Parliament to Europe, can my hon. Friend tell the House of anyone who complained in that time—not just that it was difficult and meant more work, but that it was impossible to do justice to his own constituents and do the European job at the same time? For three years that job was done on a dual mandate. No one complained that it was impossible and that he had to resign as a Member of this Parliament in order to serve in Europe.
  Mr. Stoddart: I spent a little time in the Whips Office and we certainly had a number of difficulties arising from the dual mandate at that time, but I shall not go into them.
  The responsibilities of European Assemblymen will not change. They have not changed and are not likely to change, certainly for as long as this House has anything to do with it—at least, I hope not. They will have no legislative power, yet we propose to nay them at the same rate of salary as Members of this House, and a greater salary than Members of the other place, who also have legislative powers.
  I might have gone along with the Bill as it stood. I might not have objected. I might have said that in the nature of things it is an elected body and we shall have to pay Members a salary and if we propose to pay them a salary we had better pay them the same amount we pay ourselves, even though they will in no sense do the same job or the same amount of work. But when I saw that the Government proposed to pay time and one-third to people who, on their own decision, had chosen dual membership, I began to be most unhappy, and that is the reason why I put down the amendments.
  When the Minister moved his amendment, he said that the reason why he proposed to pay the dual Members one-third extra was that, unlike their European counterparts, they would have constituency duties. I should have preferred that they did not have constituency duties. The protection of the people of this coun-
  1198
  try within the EEC rests with this House and not with the Assembly. God help us if it ever rests with the Assembly, where we are outnumbered by about five to one.
  One of the arguments that the Minister used was that the Members would have constituency duties, because we have organised our elections in a peculiar way. As I understand it, from the time the next elections are held there must be a single form of election. It is required under the Treaty of Rome that by the time the next elections come round we must have an identical form of election, which undoubtedly will be proportional representation. If that is correct, one of the Minister's prime arguments goes out of the window. Will he then propose that dual Members should have no additional remuneration? Perhaps the Minister would like to answer that question when he replies.
  Mr. English: My hon. Friend will recollect what I said earlier, that there is no requirement for the next elections to be on a uniform system. There always has been a requirement that after being indirectly elected there should be a uni form electoral law. There are those who believe—I think that my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) has a belief of this nature—that the present position of election by individual electoral laws is, in itself, illegal. Of course, there is no way of proving that under the constitution of the European Community.
  Mr. Stoddart: No. But the point I was making—I feel sure that my hon. Friend will agree—is that there will be pressure from the Assembly itself to have a uniform form of election. If it came about that we had a uniform type of election and that election was by proportional representation, the argument that the Minister himself used for paying Euro Assemblymen who are dual Members with this House one-third extra would go out of the window. If that happened, would the hon. and learned Gentleman come forward with an amendment getting rid of the time and one-third, if I may put it that way? Perhaps he will enlighten us on the Government's thinking on that aspect.
  I should like to say a lot more, but time is getting on and there is a lot more

  1199
  business to be done yet. I therefore conclude by saying that I think that this is a misconceived amendment. I sincerely hope that my hon. Friends and, indeed, other hon. Members will vote against it.
  Mr. Russell Johnston: I shall not detain the Committee very long, but I should like to look at one or two of the basic arguments that have been deployed. The argument that the performance of a Member in this House is reduced by virtue of being a Member of the European Parliament seems to be the fundamental argument that had been adduced, from personal experience in the case of the hon. Member for Islington, South and Finsbury (Mr. Cunningham) and by hearsay from the hon. and learned Member for Cleveland and Whitby (Mr. Brittan). In essence, that is what they both said. Indeed, it is what the hon. Member for Swindon (Mr. Stoddart) has just said. We pay them less, because, so to speak, they will not do a full day's work in either place.
  First, I agree entirely with the hon. Member for Liverpool, West Derby (Mr. Ogden). I do not accept that this is the kind of decision that the House can properly make. It is the kind of decision that the elector should make. Of course, hon. Members should bear in mind my views about our electoral system. But, leaving that aside entirely, I think that the sort of decision about whether a Member is hardworking, full-time, part-time, quarter-time or whatever is not a decision that we here can properly make. Therefore, I think that that invalidates the approach made from both Front Benches.
  It is not applied in local government and it was not previously applied in Northern Ireland. Perhaps the hon. and learned Gentleman can confirm that. Of course, it does not apply to Ministers. By virtue of being Ministers, it is not said that they are not doing their job in their constituencies. However, some of the candidates who fight these particular seats are from time to time prone to making that kind of remark. However, I do not think that that is something which this House regards as being a proper judgment to make.
  Mr. Les Huckfield: The hon. Gentleman said that this principle does not
  1200
  apply in local government. How is it that if a councillor claims his attendance allowances he has to lose a corresponding amount of money that is normally paid in wages from his employer? Surely the principle applies in local government.
  Mr. Ogden: I am an ex-member of a certain borough council in the North. There was a time when one claimed not allowances, not expenditure, but for loss of wages. That was changed to an attendance allowance. It was perfectly possible for someone on the night shift, afternoon shift or day shift to do that job as well and get an attendance allowance. I do not say that it is done often, but there is a difference between loss of wages and an attendance allowance.
  Mr. Johnston: Leaving aside the seated argument that is raging around me—
  Mr. Stoddart: While that is going on may I make this point? The allowance is based on attendance and is so much for a sitting. It was argued that it was up to our constituents to decide whether we were doing the job, and in that context local government was mentioned. In local government we laid down that if a member did not attend meetings for six months he was disqualified from holding office. Members in local government are under much greater constraints than Members of Parliament or of the European Assembly.
  Mr. Johnston: If it were widely known that a member had not attended to his business for six months, that would affect his likelihood of re-election, although to what degree might depend on the circumstances in the constituency. My point is that in local government it is widely accepted that people do two jobs—for instance, sitting on the county council and on the city council. No great exception is taken to that, nor is it necessarily argued with the moral rigour that the hon. Member for Islington, South and Finsbury loves to deploy that it represents a diminution in the member's contribution. That is largely a personal and individual matter. In the Highlands of Scotland there is a common saying that if someone wants a job done he should go to the busiest person in the village and ask him to do a bit more. That approach often bears fruit.

  1201
  We are in a messy situation, as the hon. Member for Islington, South and Finsbury rightly assessed. In my judgment, that is because the previous Administration, supported by the present one, decided that payment should be determined nationally rather than on a European level. There was a majority within the European Council at the time, and France certainly went along with that decision.
  Mr. English: It was unanimous.
  Mr. Johnston: I am suspicious of public unanimous decisions.
  Mr English: It was a private unanimous decision.
  Mr. Johnston: Publicly announced. I do not think that it was unanimous in private. In any event, it was a decision in which the previous Administration voluntarily participated and agreed. It is because of that that we are in this messy situation. I agree with the compelling argument adduced by the hon. Member for West Derby that it is fundamentally wrong that people should be paid different wages for the same job. There is no justification for that.
  There are signs that the House will reach not only a messy decision but one that is not well founded in principle. That is perhaps not altogether rare, but it does not make it more desirable.
  12.15 a.m.
  Mr. R. C. Mitchell: I spent four years operating the dual mandate, and I agree with my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) that this causes some difficulties. The difficulties vary considerably between individuals. However, it is the job of the electorate to decide whether a person is capable of doing two jobs. Personally, I think that the dual mandate is not on, but that is a matter for the electorate. The rule that my party made, debarring the dual mandate, was abominable. I suggest that the party makes another rule now saying that any Member of this House who wishes to stand for the national executive committee of the Labour Party should resign his parliamentary seat before standing. I say that with great respect to my hon. Friend the Member for Nuneaton (Mr. Huck-field).
  Mr. Les Huckfield: I take it that my hon. Friend understands that members of the NEC are already subjected to a process of mandatory reselection annually.
  Mr. Mitchell: The real problem is that it is quite impossible for anyone to do a proper job on the NEC and also be a Member of this House. In view of the poor job that the NEC has been doing over the past few years, that is a very strong argument.
  It is probably true that a person with a dual mandate allows his work in this House to suffer to some extent. I believe that I did not in any way neglect my constituency, but inevitably I was not here on occasions when I should have been. However, that is not an argument for what is being done now. That would be an argument for paying the full European salary and reducing the British salary, not vice versa.
  I find this whole business quite ridiculous. That is why I tried to divide the House on Second Reading, but I could not get another Member to support me in voting against the Bill. The wrong decision was made last year in the Council of Ministers. It should never have made the decision that the salaries of European Members should be paid on a national basis. That was what started all this nonsense. It is utterly absurd that a British Member of the European Parliament should sit next to a German Member who is being paid twice as much or that he should sit next to a Luxembourg Member and be paid one and a half times as much as that Member. That offends every trade union principle that I was brought up to believe in. In fact, that decision by the Council of Ministers was part of a package deal. Other countries agreed to give way on that matter if we would give way on something else. I cannot remember the issue involved, but it was part of a package and it turned out to be a disaster.
  The Government must face the fact that they must either pay both the European and British salaries or they must pay only one salary, as was the case in the original Bill. This one and one-third figure is a nonsense. I completely fail to understand how that figure was worked out. What is the rational basis for it? The Front Bench has tried to argue that the one-third in some way compensates

  1203
  the Member for the fact that he has a constituency, but this is irrelevant because all European Members, whether dual-mandate or not, have a constituency. Therefore, there is no reason to pay the dual-mandate Member more than the non-dual-mandate Member. There is no logic in that argument at all.
  I shall vote against the Government's amendment today merely because I think that the whole thing is a mess. It tries to give a little in order to stop an argument. It is not based on any principle. It is a shabby compromise, and I hope that the Committee will vote against it.
  Mr. Whitehead: I shall be brief. I want to make two points in exemplifying some of the things said by my Labour colleagues, though not always based on the same premises. Unlike some of them, I enthusiastically support the notion that there should be a directly elected European Parliament and that it should be a stronger body, just as I believe that this House should be a stronger body. I believe that the Members of both bodies should be as strong as their democratic mandate justifies and as well informed, well funded and well staffed as possible.
  However, there is a problem raised by the remarks of my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell). I agree with him that the Labour Party in examining the subject of the dual mandate has made nonsense of it. It was ridiculously restrictive to require Members of Parliament to resign their seats before they could even be candidates for the European Parliament. On the other hand, had they succeeded in being elected in the subsequent elections, as very few on our side did, it might then have been reasonable to say to them "Can you honestly say that you can do these two jobs?" I do not think one can do so by virtue of the time and the distinctions of effort involved.
  The Members of the European Assembly will, in the nature of the job, be away from this country for long periods and will be exhausted by the travel and the other arrangements. I see that the hon. Member for Inverness (Mr. Johnston), who was for so long a Member of the European Assembly, disagrees. What happened to the late Peter Kirk? He was killed by the job. I believe that
  1204
  it is not simple to undertake the job over a long period of time.
  Mr. Russell Johnston: I agree that it is not simple. On the other hand, I carried out the job for six years and at the end of that period my majority increased four times. That would indicate that I did not neglect my constituency. I am not saying that it is a tenable job to undertake for ever, but I argue that it is tenable for one parliamentary Session. The hon. Gentleman is being a little superficial in suggesting that it is totally out of the question. It depends on the individual.
  Mr. Whitehead: No individual could be more resilient, vigorous, perpetually youthful and eternally popular in his constituency than the hon. Gentleman, and I salute him for that. But he was in the European Parliament at a time when it was trying to find its feet and was a nominated Assembly. It then had no power and was largely ornamental. I hope that the European Assembly of the future will take to itself additional powers, and that will mean taking to itself additional work. [HON. MEMBERS: "Never."] There is always the chorus of "Never" from Labour colleagues, but that will happen and we all know it.
  Mr. English: My hon. Friend will realise that I agree with nearly all he said. But can he say why being a Member of the European Assembly would detract more from being a Member of this House than possessing any other job outside the House which we all know our colleagues often possess?
  Mr. Whitehead: My hon. Friend must not tempt me into that line of argument because he knows my strong view on the subject. I consider that hon. Members should not have outside employment of any kind. If that is a belief one holds fundamentally, by definition outside employment as a Member of the European Assembly counts as much as a directorship or anything else. By virtue of the time one has to put in at the other place over the sea, it will be more onerous than many of the highly remunerative jobs to which hon. Members of this House rush off to supplement their incomes.
  Mr. Ogden: Members of this House have been known to go to far corners

  1205
  of the world to take up complicated cases on behalf of companies, and distance has been no object. We are not arguing whether a person should or should not undertake both jobs. We are arguing about who should decide—this Parliament or the electors. That surely is the key question.
  Mr. Whitehead: Of course, any practice can be justified by the notion that the electorate at some time or another—
  Mr. Ogden: My hon. Friend should join the Front Bench.
  Mr. Whitehead: I am reminded of what I heard in New York when I was a young television producer listening to an indignant radical Negro who was denouncing to a small crowd in Harlem the misdeeds of Congressman Adam Clayton Powell. He listed his various sinecures, his high living, his expense accounts and his womanising. At the back of the audience another Negro shouted out "Man, that's real living!" The trouble is that the electorate often admire the hon. Member who is a bit of a card and who is always swanning around.
  It cannot be said that the last word of the electorate is final. We should try to set standards in this place about the work that we do. If it is believed that this is a full-time job, it follows that the dual mandate is not on. If that is so but, at the same time, we have not passed a law saying that it shall not be held, what can be said about the proposals that have been brought before the Committee? We believe in a deterrent theory. There should be a deterrent to people who hold the dual mandate in their own interests and in that of the electorate. That deterrent should be applied by not paying them a second salary for the job.
  Mr. Tony Marlow: If the hon. Gentleman believes that the dual mandate is wrong and that hon. Members should have no other activities and employment than their duties as Members of Parliament, does he also believe that it is wrong that Labour Members should be sent here by trade unions to work for them?
  Mr. Whitehead: I believe that it is wrong for anyone to be wholly occupied elsewhere, whether by a joint stock company or by a large trade union. There is a growing minority of hon. Members who judge the nature of the work as becoming essentially a full-time job. My hon. Friend the Member for Swindon (Mr. Stoddart) pointed out that that is the central argument of Boyle, although my hon. Friend ran away from the logical conclusion. Any outside remuneration and occupation diminishes from what is given to the House. That is why I believe that there should be a deterrent and that we should not pay the second salary to European Members, to prevent people seeking the dual mandate in future.
  Mr. Russell Johnston: Does the hon. Gentleman's argument lead him to agree with those countries which say that once a Member of Parliament becomes a Minister he should cease to be a Member of Parliament?
  Mr. Whitehead: This matter was touched upon in an intervention by the hon. Member for Brigg and Scunthorpe (Mr. Brown). In the function of a Minister and that of a Member of Parliament there is no necessary contradiction. An hon. Member who is the chairman of a Committee in this place may have functions at least as onerous as a Minister of State in the Government of the day, and he is not precluded by virtue of his activities here from being an effective representative of his constituents, because those duties take place within the same assembly. That is the point that the hon. Member for Inverness should take on board.
  12.30 a.m.
  I must pursue the nonsense of building the one-third principle into severance pay. It is ridiculous to suggest that we should pay a Member of the European Assembly who is defeated in a European election one-third of the parliamentary severance pay, even though he continues to be in full-time employment as an hon. Member drawing £12,000 a year.
  That is as much nonsense as it would be if we gave double severance pay to a Minister who lost his occupation or, as happened to my good friend Shirley Williams recently, his occupation and

  1207
  constituency. Although the salary received by a Minister is much greater than that received by an hon. Member there is no suggestion that Ministers should receive additional severance pay. I see no reason why additional public funds should be paid to someone who is in receipt of £12,000 a year from the taxpayer anyway. I do not believe that the Minister can justify that.
  Amendment agreed to.
  Amendment proposed:No. 2, in page 1, line 7, leave out subsections (2) and (3) and insert—
  Question accordingly agreed to.
  The Second Deputy Chairman: Does the hon. Member for Swindon (Mr. Stoddart) wish to move amendment No. 27?
  Mr. Stoddart: Yes, Mr. Crawshaw.
  Mr. English: On a point of order, Mr. Crawshaw. I am aware that you said that
  1208
  "(1A) The yearly rate of the salary payable to a Representative for any period shall be—

  (a) in the case of a period not within paragraph (b) , the same as that of a Member's ordinary salary for that period;

  (b) in the case of a period for which a salary is payable to him pursuant to any resolution or combination of resolutions of the House of Commons relating to the remuneration of Members, a rate equal to one-third of that of a Member's ordinary salary for that period.".—[Mr. Brittan.]

  Question put, That the amendment be made:—
  The Committee divided : Ayes 100, Noes 20.

  Division No. 59]

  AYES

  [12.32 a.m.

  Alexander, Richard

  Garel-Jones, Tristan

  Osborn, John

  Aspinwall, Jack

  Gorst, John

  Page, Rt Hon R. Graham (Crosby)

  Berry, Hon Anthony

  Gow, Ian

  Parris, Matthew

  Best, Keith

  Gower, Sir Raymond

  Pollock, Alexander

  Bevan, David Gilroy

  Griffiths, Peter (Portsmouth N)

  Rathbone, Tim

  Boscawen, Hon Robert

  Hawkins, Paul

  Rhodes James, Robert

  Bright, Graham

  Hawksley, Warren

  Shaw, Michael (Scarborough)

  Brinton, Timothy

  Heddle, John

  Shepherd, Colin (Hereford)

  Brittan, Leon

  Hicks, Robert

  Silvester, Fred

  Brooke, Hon Peter

  Hogg, Hon Douglas (Grantham)

  Sims, Roger

  Brown, Michael (Brigg & Sc'thorpe)

  Hooson, Tom

  Speller, Tony

  Bruce-Gardyne, John

  Hunt, John (Ravensbourne)

  Squire, Robin

  Buck, Antony

  Jopling, Rt Hon Michael

  Stevens, Martin

  Budgen, Nick

  Lawson, Nigel

  Stewart, John (East Renfrewshire)

  Bulmer, Esmond

  Lee, John

  Stradling Thomas, J.

  Cadbury, Jocelyn

  Le Marchant, Spencer

  Tebbit, Norman

  Carlisle, John (Luton West)

  Lester, Jim (Beeston)

  Thompson, Donald

  Chapman, Sydney

  Lloyd, Peter (Fareham)

  Thornton, George

  Clarke, Kenneth (Rushcliffe)

  Lyell Nicholas

  Trippier, David

  Colvin, Michael

  Macfariane, Neil

  Viggers, Peter

  Cope, John

  Major, John

  Wakeham, John

  Corrie, John

  Marlow, Antony

  Waldegrave, Hon William

  Cranborne, Viscount

  Mather, Carol

  Waller, Gary

  Dean, Paul (North Somerset)

  Mawhinney, Dr Brian

  Ward, John

  Dodsworth, Geoffrey

  Maxwell-Hyslop, Robin

  Watson, John

  Dorrell, Stephen

  Mellor, David

  Wheeler, John

  Douglas-Hamilton, Lord James

  Meyer, Sir Anthony

  Wickenden, Keith

  Dover, Denshore

  Miller, Hal (Bromsgrove & Redditch)

  Williams, Delwyn (Montgomery)

  Faith, Mrs Sheila

  Mills, lain (Meriden)

  Wolfson, Mark

  Fenner, Mrs Peggy

  Morrison, Hon Peter (City of Chester)

  Young, Sir George (Acton)

  Fisher, Sir Nigel

  Murphy, Christopher

  Fletcher-Cooke, Charles

  Myles, David

  TELLERS FOR THE AYES

  Forman, Nigel

  Neubert, Michael

  Mr. John MacGregor and

  Fox, Marcus

  Newton, Tony

  Mr. David Waddington.

  Gardiner, George (Reigate)

  Onslow, Cranley

  NOES

  Bennett, Andrew (Stockport N)

  Johnston, Russell (Inverness)

  Stoddart, David

  Cocks, Rt Hon Michael (Bristol S)

  McCartney, Hugh

  Summerskill, Hon Dr Shirley

  Cook, Robin F.

  McKay, Allen (Penistone)

  Whitehead, Phillip

  Cryer, Bob

  Mitchell, R. C. (Soton, Itchen)

  Whitlock, William

  Cunningham, George (Islington S)

  Prescott, John

  Davis, Terry (B'rm'ham, Stechford)

  Rooker, J. W.

  TELLERS FOR THE NOES

  Dormand, J. D.

  Skinner, Dennis

  Mr. Nigel Spearing and

  Harrison, Rt Hon Walter

  Smith, Cyril (Rochdale)

  Mr. Les Huckfield.

  amendment No. 26 had fallen, but you did not say at the time that amendment No. 24 had fallen. There are those of us who think that to pay a Member 75 per cent. of the salary that he should receive would be better than paying him only one-third of it.
  The Second Deputy Chairman: The other amendments in the group have fallen on amendment No. 2 having been agreed.
  Mr. R. C. Mitchell: On a point of order, Mr. Crawshaw. I thought that at the beginning we discussed having a separate Division on amendment No. 19.
  The Second Deputy Chairman: When we reach it, perhaps the hon. Gentleman will bring the matter up again.
  Mr. Ogden: Further to that point of order, Mr. Crawshaw. Amendment No. 5, in my name, comes well before amendment No. 19. Is it possible at least for a decision be made on that?
  The Second Deputy Chairman: That has fallen as well on amendment No. 2 being agreed.
  Mr. Stoddart: I beg to move amendment No. 27, in clause 1, page 1, line 13. at end insert—
  (3A) Any Assembly Member receiving outside remuneration in excess of £2,000 per annum shall have deducted from his annual salary half of the excess, but such deductions shall not exceed £3,800.'.
  The arguments were pretty well rehearsed in the previous debate, so I shall not delay the Committee long, but I should like to make the following point. The European Assembly meets on many fewer occasions than does this House, and the opportunities for Members of the Assembly to undertake other work and be able to draw other salaries will consequently be much greater.
  12.45 a.m.
  I remind the Committee that when we discussed hon. Members' salaries last Wednesday this amendment was tabled by my hon. Friend the Member for Derby, North (Mr. Whitehead) and it obtained a fair degree of support from the House. In those circumstances, it is right and proper that a similar amendment should be tabled in relation to the salaries of European Assembly Members. I hope that the amendment will be supported.
  Mr. English: I wonder whether the Minister will tell us one thing in his reply. Since he is now advocating that someone who holds an outside job should be paid only one-third of the salary, will he, when he returns to his former employment at the Bar—and no doubt he
  1210
  will—accept only one-third of the fee marked on each brief?
  Mr. Brittan: I do not think that the question asked by the hon. Member for Nottingham, West (Mr. English) in any way relates to the Bill, and I do not propose to answer it. I propose to make it quite clear that the Government do not accept the argument behind the amendment tabled by the hon. Member for Swindon (Mr. Stoddart). He referred to the fact that a comparable amendment was raised last week in the debates on Members' pay. That may have been so, but it was firmly defeated by the House and no effect was given to the principle for which the hon. Gentleman now seeks to argue. It would be quite illogical for us to seek to insert it in this legaslation, having rejected it last week.
  I ask the Committee not to accept the amendment.
  Amendment negatived
  Amendment made: No. 6, in page 1, line 14, leave out 'Subject to subsection (3) '.—[Mr. Brittan]
  Mr. Ogden: I beg to move amendment No. 8, in page 1, line 18, leave out from ' period to ' and ' in line 1 on page 2 and insert:
  ' beginning with the day of his election '.
  The Government propose that the principle—if that word can be used to describe any part of the Bill—should be that so far as possible the salary of the European Representative should be based upon that of the British Member of Parliament. Amendments Nos. 7, 8 and 9 are an attempt to bring together those arrangements more closely.
  Over the years the salary of a British Member of Parliament has been paid from the day of the election—not from the recall or calling of Parliament—until the date of the next general election. The purpose of these amendments is to try to bring the European situation into line with that. There may be technical reasons why this is not possible, but I hope that the Minister and my hon. Friends will he able to agree that we should aim for this principle in the European Assembly.
  Mr. George Cunningham: The proposal is that instead of being paid from 49 minutes ago—that is, the date of the first

  1211
  meeting of the European Parliament—Members of the European Parliament should be paid from the date of their election early in June. Although, on the face of it, that may seem to make sense to those accustomed to the way we do things for ourselves in the House of Commons, I would hope to convince my hon. Friend that there is a perfectly proper reason for doing it in the way provided by the Bill.
  First, the Act under which the direct elections take place provides that Members of the European Parliament will take office from the day of the first meeting of the European Parliament. Secondly, during the period from 7 June until today, Members of the European Parliament have been delegated from this House and from the House of Lords. Those Members, a small number of whom, including myself, are here tonight, have been attending one or two meetings during the period from 7 June until 16 July. It would be wrong in principle for public funds to be used to remunerate one group of Members as Members of the European Parliament during that time and also another group of Members as Members during that time.
  I accept that one or two other States in the Community have done this. They have provided for salaries under national legislation to be paid either from the date of the election or from the date of some formal acceptance of the election by the candidate. I suggest that the better principle is that enshrined in the Bill, which is that the new members take office and therefore draw their salaries from today, the first meeting of the new Parliament. On balance, I recommend my hon. Friends not to support the amendment but to support the Bill as it stands.
  Mr. English: I wonder whether the Minister of State, when he replies, will explain whether this clause applies to my own Member of the European Assembly, the one in whose constituency I reside when in London. Miss Roberts seems to have ignored the publication normally sent to members of the Labour Party by Transport House and to members of the Conservative Party by Central Office. It is the publication giving information on the posts from which
  1212
  one should resign before standing for election. Her agent also appears to have ignored the publication, although he will no doubt be dealt with as an employee of the Conservative Party.
  Mr. George Cunningham: The ratepayers still have to pay.
  Mr. English: I am not sure about the ratepayers. My hon. Friend is causing me to deviate. I think that the Home Office has to pay, which means that the taxpayer has to pay about £200,000.
  The question is whether or not Miss Roberts will be paid from the date she purported to be elected. There has been great lack of clarity. She issued a press statement saying that she had to resign because of a technicality. One cannot resign from something unless one was elected. I do not believe that holding an office of profit under the Crown is a technicality. That is, however, what she said in her press statement. If she is resigning, she has been elected. She is therefore, presumably, paid up to the time that she resigned. Either that or she may not have been telling the truth, in which case she may never have been elected. Does the clause apply in this case or not?
  Mr. Russell Johnston: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) rejected this amendment principally on the argument that on this occasion there is an overlap. The appointed Members, as the hon. Gentleman pointed out, continued to be appointed until yesterday. The appointed Members, such as he and I, continued to be recognised as Members of the European Parliament at the same time as there were elected Members. That may be true in this case, but, as far as I know, it will never happen again. The hon. Gentleman's argument is surely not an argument of substance. This is a unique moment of transfer from appointment to election. It will never happen again, and this is, therefore, not a good argument in itself.
  My second point relates to the preparatory work of the Assembly. I can speak only from the experience of the Liberal group, although I imagine that the experience of the other groups has been the same. Last week, the members of the Liberal group met to discuss the

  1213
  allocation of committees, who would do what, and the rest of it—in other words, the business of being a Member of the European Parliament. It is not very logical that they should gather to do this work and not be paid for it. But so much of the Bill does not seem very logical. So, with respect to the hon Member for Islington, South and Finsbury, for those two reasons his commendation to the Committee is not well based.
  Mr. Brittan: I deal first with the comments of the hon. Member for Inverness (Mr. Johnston) about the possibility of a future overlap. That does not arise. Now that the Members are elected, their period in office ends on the day before the opening of the first session of the next directly elected Parliament and not on the date of the next election.
  Mr. Graham Page: Does that mean that after the next election the Members who are not elected at that election will continue to be paid until the first day of the Assembly after that?
  Mr. Brittan: It means just that, because they continue to hold office until the newly elected Members take their seats. That is the procedure prescribed in the Act annexed to the decision of the Council of Ministers.
  As for the point made by the hon. Member for Nottingham, West (Mr. English), the position is that the first session of the directly elected Parliament commences on 17 July and therefore, under the provision as unamended, salaries would commence from that date. Therefore, anyone who has resigned or in any way ceased being a Member of the Assembly or has not become one prior to that date would not receive a salary.
  I come, then, to the main argument. I have no doubt that the hon. Member for Liverpool, West Derby (Mr. Ogden) will take a great deal more from the hon. Member for Islington, South and Finsbury (Mr. Cunningham) than he would from me. Therefore, it is perhaps appropriate that the argument in favour of the present arrangements in the Bill should have been deployed by the hon. Gentleman. I concur wholly with his argument, and, therefore, I cannot commend this amendment to the Committee.
  Mr. Ogden: The hon. and learned Gentleman thought that I would take a
  1214
  little more from my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) than I would from him. It all depends what is on offer. When I see the relationship which is developing between the two Front Benches, I am in some difficulty.
  When I was elected to this place, I was a coal miner. On the day I was elected, I stopped being an employee of the National Coal Board and I began to be promised a salary from this Parliament. Other people outside of my own political persuasion were elected to the European Assembly some months ago. Are they to tell their employers "I want to go to Europe to set up the Parliament. I want to get all these matters moving. But I still want you to pay my wages "? They are in this vacuum. In this Parliament we decide from election to election, and I think that that is the simplest course to adopt.
  I was grateful to my hon. Friend the Member for Islington, South and Finsbury for his information. It would have been even better if he had taken the opportunity to give it to me earlier, bearing in mind that my amendment has been on the Notice Paper for the past 10 days. After all, we still speak to each other, even though he is on the Front Bench and I am back here. That information would have been useful.
  Mr. George Cunningham: Such information was given to those of us who discussed these matters a few days ago.
  Mr. Ogden: Perhaps one of these days I shall join the charmed circle. It is interesting to hear one of my own Front Benchers say that this information has been discussed. It may be my own fault for not joining that discussion, but I think it would have been courteous to pass it on to me.
  I have no intention of pressing the amendment. Some sympathy has been expressed for my point of view. One can buy nothing with sympathy, but perhaps someone else will look at the matter again later.
  1 a.m.
  Mr. English: I did not get an answer to my question. Surely it is relevant when a former chairman of the Conservative annual conference has wasted £200,000 of

  1215
  taxpayers' money and the time of innumerable electors. Was she elected and did she resign, or did she not get elected in the first place—in either case, apparently, because of her own inefficiency?
  Amendment negatived.
  Amendments made: No. 11, in page 2, line 17, leave out ' rate ' and insert rates '.
  No. 12, in page 2, line 18, leave out '(2)' and insert (1A)'.—[Mr. Brittan.]
  Clause 1, as amended, ordered to stand part of the Bill.

Clause 2

  GRANTS TO REPRESENTATIVES LOSING THEIR SEATS
  Amendment made: No. 13, in page 2, line 25, leave out ' (if any) '.—[Mr. Brittan.]
  Mr. Ogden: I beg to move amendment No. 14, in page 2, line 26, at end insert
  ' Or to a grant of one month's salary for every year of service as a Member of the Assembly (and pro rata for every part year of service, whichever is the greater.'.
  The Chairman (Mr. Bernard Weatherill): With it we may also take amendment (a) to the proposed amendment, at end insert
  ' provided that such grant shall first have been provided for Members of the House of Commons.'.
  Mr. Ogden: The purpose of the amendment is to try to ensure that the severance pay provided for should have some relationship to the length of service in the European Assembly. The Leader of the House made a similar point in the recent debate on the salaries of Westminster Members. He said that he hoped that in the discussions that were to take place the severance pay of Members here would be related to the severance pay of people outside, in terms of years of service.
  I am suggesting nothing new. Almost all private employers and public corporations in the United Kingdom link the amount they pay upon retirement or redundancy with the length of service. The situation could arise in this Parlia-
  1216
  ment and under this Bill in which a Member or a Representative could be elected to the Assembly for one month, lose his seat in the next European election and receive three months' salary. Another person with five, 10 or 20 years' service would, upon losing his seat, receive the same amount. I propose that he should receive one month's pay for every year of service.
  Mr. Brittan: I wish on this occasion to express sympathy with the comments of the hon. Member for Liverpool, West Derby (Mr. Ogden). Clause 2 provides for severance pay for Members of the European Parliament on the same terms as apply to Westminster Members who lose their seats at a general election. The whole question of the way in which severance pay should be calculated for Members of Parliament here is currently under review by the Review Body on Top Salaries, and it is expected that that point will be covered in a report to be published later this year.
  Mr. English: The Minister seems to be answering the argument for sub-amendment (a) which has not yet been moved. Perhaps he could deal with the principal amendment first.
  Mr. Brittan: I am dealing with the argument of the hon. Member for West Derby, who appears to be content. It would be wrong to pre-empt the Review Body's consideration by accepting an amendment now. If the Boyle committee recommends a scheme which is substantively different and it is implemented by a resolution of the House in respect of Westminster Members, the Government will have to consider the consequences for Members of the European Parliament.
  Mr. Marlow: Is it possible that if we accept the amendment the Boyle comittee might decide that it is suitable for Members of this House?
  Mr. Brittan: That is equivalent to saying that we should vote first and consider afterwards. That is not sound. If it is useful to have the Boyle committee, we should examine what it recommends and then decide whether we like it. The House remains able to reject the recommendations of the Boyle committee or any other committee. We should at least

  1217
  see what it has to say, particularly since we are discussing a report which is to be published later this year. For now, the Government's recommendation for the European Parliament is right and we should not support the amendment.
  Mr. Stoddart: I hope that I may discuss amendment (a) which I have tabled to amendment No. 14. This is a precautionary amendment. My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) is advocating a dangerous principle. He proposes that the European Assembly should lead our salaries and conditions of service. The reverse should apply. We should lead European conditions and salaries, as we have done so far.
  The hon. Member for Northampton, North (Mr. Marlow) has not been in the House long enough to know that Governments make promises which they cannot always keep—because of wage freezes, for example. We might find that we give a concession to the European Assembly which the Government, because of a difficulty, cannot accord to us.
  My hon. Friend's amendment should not be passed without my precautionary amendment. I urge my hon. Friends to accept it.
  Mr. Graham Page: There is some merit in the amendment and the amendment to it. If the Boyle committee recommends an improvement in our payments in this respect, it will be necessary to introduce a new Bill to include Representatives of the European Assembly. But such an improvement could be brought into operation for us by resolution. If we pass the amendment and the amendment to it, such a change could come into operation automatically if we decided that it should apply to our salaries.
  Mr. Ogden: I hope that the Minister will consider carefully the wise words of his right hon. Friend the Member for Crosby (Mr. Page).
  My hon. Friend the Member for Swindon (Mr. Stoddart) is concerned about the relationship between this House and the other Assembly, which he clearly does not want to be thought more important. At this stage, I could not care less whether this House leads or lags behind Members of the European Assembly in salaries.
  1218
  The Minister said that we should not preempt Boyle. The Boyle committee spends a great deal of its time writing to Members of Parliament asking for advice.
  I would be more willing to accept the Minister's advice that we should leave the matter to Boyle if he would give me an undertaking that if Boyle comes up with a proposal for one month's pay for every year of service, or a better system than we have at present, he would at least try to persuade his colleagues in the Government to accept it.
  Anyone who has been present for most of the debate will have realised that I am using it to argue not only the case for Members of the European Parliament but also our own case. Whether we lead or lag behind, I could not care less; whether we pre-empt Boyle or limit it, I could not care less. It is a reasonable argument for us to put forward. On the basis of custom and practice outside the House, one month's pay per year of office is not unreasonable.
  Mr. George Cunningham: When the Minister replies to this point, perhaps he will clear up the point raised by the right hon. Gentleman the Member for Crosby (Mr. Page). If we were talking about the pension of a Member of the European Parliament, clearly the point raised by the right hon. Member for Crosby would not arise, because clause 3 of the Bill will give the Secretary of State carte blanche to alter the pension arrangements by means of an order, and an order subject to negative approval in this House, but the three month's provision dealt with in clause 2 is actually specifically built into the Bill in those terms.
  It seems to me that the important point is this. If the House were to decide to put the three months' grant on a different basis for Members of this House, would that require fresh legislation? If it requires fresh legislation to deal with our own stuation, clearly that fresh legislation can equally make a consequential amendment to clause 2 of the Bill. If we can alter the termination grant, or whatever it is called, for ourselves by means other than legislation, clearly it will be awkward to have arrangements for the Members of the European Parliament frozen in this Bill.

  1219
  We understand the problems. It will be difficult to settle this matter in the next minute or two. But if it were necessary to make an amendment at a later stage—that is, in the House of Lords—it would be worth looking at. The last thing that one wants is to have to amend by pri legislation for the European Parliament be done for ourselves by a less formal device.
  Mr. Brittan: The position with regard to our own severance pay is that it can be altered by resolution of the House, whereas my right hon. Friend the Member for Crosby (Mr. Page) is quite right to say that legislation would be required for the European Members. None the less, I think that all sorts of things could be recommended by Boyle that might have consequences for European Members. It is fair to say that in a sense the legislation is of an interim character. Although there is no obligation for a uniform system of elections or anything of that kind to be achieved by 1984, none the less that will plainly happen sooner or later, so that we are legislating for this time round more than anything else.
  If the Boyle committee makes a recommendation on the lines envisaged and if that proves acceptable to the House, the Government will certainly consider seriously the implications for European Members. I think that we should leave it at that for the moment.
  Mr. Graham Page: It seems to me so unnecessary that, if we accept it to apply to ourselves, if Boyle so recommends, we should have to come back for a statute to alter it for the European Assembly. Can the Minister give us an assurance that he will think again about this? If he does not like the idea of this proposal coming into operation automatically by the resolution, as it would according to these amendments, will he introduce the order procedure into this clause, as, indeed, he has in the very next clause in the Bill? It would be so simple to give the Secretary of State power by order to alter the severance payments in that way. It would be an order that we could discuss in the House, in
  1220
  Minister foresees alterations in pensions in the next clasue.
  Mr. English: My hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) said that it would make a great difference if the grant had to be amended by statute or if we could alter our own House of Commons sever ay by mere resolution. But, as I understand it, sub-amendment (a) merely says that the amendment should only apply
  "provided that such grant shall first have been provided for Members of the House of Commons".
  It does not say anything about its being provided by statute or resolution. It merely rests upon a matter of fact. If it has happened, however it happened, whether by statute, order or resolution, the condition applies. However, I do not think that that is the important point. Is there any particular reason why this should not apply for the moment and then later, if we wish, we can change it?
  1.15 a.m.
  Mr. Brittan: I must confess that I am extremely reluctant to give any support to the idea of legislating now in respect of something that may or may not be recommended, and may or may not commend itself to the House after it has been recommended. I shall certainly look into the point raised by my right hon. Friend with regard to the structure of the Bill, but I do so without any commitment at this stage.
  Mr. Ogden: Surely it can be made more simple than that. Either hon. Members have a rough idea that they want to keep the three months as it is for everyone, regardless of the length of service, or they think that it is reasonably fair that severance for this House or the European Assembly should be made on the basis of length of service. If that is so—that our practice here and in the European Assembly should be very much the same as outside—there is the other difficulty that European Members should not get it until we have got it. If both the amendments were accepted, Members of the European Parliament would not get it until we got it.
  The last objection is that we should not pre- Boyle. Boyle spends a great

  1221
  deal of time asking for our opinion. Let us tell him our opinion tonight by simply saying that those who are concerned enough to be here—some more willingly than others—have said "We think there should be a better severance arrangement than there is and we think there should be a better pension arrangement than there is, but Members of the European Assembly should not get it unless and until we have had it here." That is perfectly simple. If it is not introduced for British Members of Parliament, it would not be introduced for them. If Boyle wants to change anything later, he can make his own proposals.
  Mr. George Cunningham: I think that the Committee would do well to leave this matter with the Minister to think about it again on the basis suggested by the right hon. Member for Crosby (Mr. Page). The difficulty about my hon. Friend's suggestion is that it would deal with the situation if precisely the arrangement mentioned in his amendment was the one that was later adopted by ourselves, but it would not deal with the situation whereby some slight modification of that arrangement was adopted for ourselves. Therefore, we are not preempting what we are deciding here but are providing for something to be imitated for the European only if it happens to be precisely as stated here in my hon. Friend's amendment. I do not think it is an effective way of doing this by
  means of amendment No. 14 and sub amendment (a).
  I urge the Minister seriously to consider, before the Bill receives Royal Assent, the possibility of applying to clause 2 the arrangements that apply to clause 3. After all, the termination grant is one of the features of the pension arrangements. If the other features of the pension arrangements are subject to order, there is no reason why that particular feature should not be subject to alteration by order, although, I hope, subject to affirmative approval by the House.
  Amendment negatived.
  The Chairman: Does the hon. Member for Islington, South and Finsbury (Mr. Cunningham) wish to have a separate Division on amendment No. 19?
  Mr. R. C. Mitchell: We should like a separate Division on amendment No. 19.
  Amendment proposed: No. 19, in page 2, line 31, at end add: —
  '(3) This section shall not apply to a person who immediately before the end of the five year period was entitled to receive a salary pursuant to any resolution or combination of resolutions of the House of Commons relating to the remuneration of Members.'.—[Mr. R. C. Mitchell.]
  Question put, That the amendment be made: —
  The Committee divided : Ayes 13, Noes 93.

  Division No. 60]

  AYES

  [1.20 a.m.

  Cryer, Bob

  McKay, Allen (Penistone)

  Whitehead, Phillip

  Cunliffe, Lawrence

  Marlow, Antony

  Cunningham, George (Islington S)

  Marshall, Jim (Leicester South)

  TELLERS FOR THE AYES:

  Davis, Terry (B'rm'ham, Stechford)

  Proctor, K. Harvey

  Mr. R. C. Mitchell and

  Dormand, J. D.

  Skinner, Dennis

  Mr. David Stoddart.

  English, Michael

  Spearing, Nigel

  NOES

  Alexander, Richard

  Dorrell, Stephen

  Lawson, Nigel

  Aspinwall, Jack

  Douglas-Hamilton, Lord James

  Lee, John

  Earry, Hon Anthony

  Dover, Denshore

  Le Merchant, Spencer

  Best, Keith

  Faith, Mrs Sheila

  Lester, Jim (Beeston)

  Bevan, David Gllroy

  Fenner, Mrs Peggy

  Lloyd, Peter (Fareham)

  Bright, Graham

  Forman, Nigel

  Lyell, Nicholas

  Brinton, Timothy

  Fox, Marcus

  Macfarlane, Neil

  Brittan, Leon

  Gardiner, George (Reigate)

  MacGregor, John

  Brooke, Hon Peter

  Garel-Jones, Tristan

  Major, John

  Brown, Michael (Brlgg & Sc'thorpe)

  Gorst, John

  Mather, Carol

  Buck, Antony

  Gow, Ian

  Mawhinney, Dr Brian

  Budgen, Nick

  Gower, Sir Raymond

  Maxwell-Hyslop, Robin

  Bulmer, Esmond

  Griffiths, Peter (Portsmouth N)

  Mellor, David

  Cadbury, Jocelyn

  Hawkins, Paul

  Meyer, Sir Anthony

  Carlisle, John (Luton West)

  Hawksley, Warren

  Miller, Hal (Bromsgrove & Redditch)

  Chapman, Sydney

  Heddle, John

  Mills, Iain (Meriden)

  Colvin, Michael

  Hogg, Hon Douglas (Grantham)

  Morrison, Hon Peter (City of Chester)

  Corrie, John

  Hooson, Tom

  Murphy, Christopher

  Cranborne, Viscount

  Hunt, John (Ravensbourne)

  Myles, David

  Dean, Paul (North Somerset)

  Johnston, Russell (Inverness)

  Neubert, Michael

  Dodsworth, Geoffrey

  Jopling, Rt Hon Michael

  Newton, Tony

  Osborn, John

  Stewart, John (East Renfrewshire)

  Ward, John

  Parris, Matthew

  Stradling Thomas, J.

  Watson, John

  Pollock, Alexander

  Tebblt, Norman

  Wheeler, John

  Rathbone, Tim

  Thompson, Donald

  Wickenden, Keith

  Rhodes James, Robert

  Thornton, George

  Williams, Delwyn (Montgomery)

  Shaw, Michael (Scarborough)

  Trippier, David

  Wolf son, Mark

  Shepherd, Colin (Hereford)

  Viggers, Peter

  Young, Sir George (Acton)

  Silvester, Fred

  Waddington, David

  Sims, Roger

  Wakeham, John

  TELLERS FOR THE NOES:

  Speller, Tony

  Waldegrave, Hon William

  Mr. Robert Boscowen and

  Squire, Robin

  Waller, Gary

  Mr. John Cope

  Stevens, Martin

  Question accordingly negatived.
  Clause 2, as amended, ordered to stand part of the Bill.
  Clause 3 Ordered to stand part of the Bill.

  SALARY FOR PURPOSE OF CALCULATING PENSION BENEFITS
  Amendments made: No. 16, in page 4, line 9, leave out ' (if any) '.
  No. 17, in page 4, line 10, leave out from 'being' to end of line 11 and insert—

  (a) in the case of a period not within section 1(1A)(b), the same as that of a Member's pensionable salary for that period;

  (b) in the case of a period within section 1(1A)(b), a rate equal to one-third of that of a Member's pensionable salary for that period.'.

  No. 18, in page 4, line 13, leave out ' rate ' and insert ' rates '.—[Mr. Brittan.]
  Clause 4, as amended, ordered to stand part of the Bill.
  Clause 5 ordered to stand part of the Bill.

  EXPENSES AND RECEIPTS
  1. 30 a.m.
  Mr. Brittan: I beg to move amendment No. 20, in page 5, line 29, at end insert—
  "(a) any expenses incurred by the Secretary of State in providing allowances or facilities in pursuance of any order made under section (Allowances)."
  The Chairman: With this it may also be convenient to take Government amendments Nos. 21 and 22, Government new clause 2, new clause 1—Expenses—and Government amendment No. 23.
  Mr. Brittan: It may assist the House if I describe briefly the background to
  1224
  the amendments and the new clause introduced by the Government on the subject of allowances and facilities for Representatives, and to the new clause on the same theme, which is in the names of the spokesmen for the official Opposition.
  The understanding which was reached by the Council of Ministers in December 1978 and which was communicated to this House by the previous Administration was that the obligation to pay the remuneration of Representatives from national funds, subject to national taxation and at national rates, extended only to salaries and pensions. Allowances for travel and subsistence expenses, secretarial and research facilities and so on were matters which would be the responsibility of the European Parliament, as indeed they are now as far as the nominated Members are concerned. It was in this expectation that the previous Administration announced that their prospective legislation would not make provision for such allowances; and it was with this principle in mind that our Bill as introduced similarly made no such provision.
  Both during the Second Reading debate on this Bill and since, the Government have received cogent representations which have persuaded us that in our original proposals we may have made too rigid a distinction between remuneration in the form of salaries and pensions and the payment of allowances and other forms of reimbursement for the necessary costs incurred to Representatives carrying out their duties.
  First, it has been represented to us that it would be very difficult for the European Parliament to make provision for certain types of expenses which may very well all be incurred domestically within the United Kingdom. The Opposition's new clause refers to the Representative incurring expenditure on the cost of travel within his constituency and between his constituency and London. It is argued that the European

  1225
  Parliament will not accept these as legitimate expenses which it ought to bear and that the level at which they will be incurred in the United Kingdom will be uniquely high, given that we are the only member State of the EEC to have a fully fledged constituency system of representation. The United Kingdom Representatives will find themselvs in a minority in arguing for the extension of the allowances paid by the Parliament so that internal constituency travel and travel to national capitals is reimbursed.
  Secondly, it has been represented to us that, notwithstanding the agreement reached at the European Council last year, other member States have already made provision for the payment of certain allowances. I can confirm that this is the case—namely in the Federal Republic of Germany, within which the Representative will have free travel; in Denmark similarly; and in Italy and the Netherlands, where Representatives will receive various flat-rate allowances for internal travel on European parliamentary business. Such provision in national laws must weaken the effectiveness of the case for the European Parliament to pay all the necessary allowances.
  However, I must stress that that remains the preferred solution of the Government. We do not accept that there are any insuperable practical difficulties to the European Parliament paying for all the necessary expenses of Representatives. We believe that that is its responsibility and that the understanding created by the European Council in December 1978 should be enforced. It is our wish that the United Kingdom Representatives should press home that point.
  However, if the European Parliament is not prepared to meet such legitimate claims, it must be right that the national authorities should have the scope to make alternative provision. If that were not the case, our Representatives would be at a considerable financial disadvantage, not only in comparison with elected Representatives from other member States but also in comparison with Members of this House, who do, of course, receive certain rights and facilities in connection with travel to and from constituencies and free internal postage facilities.
  Mr. English: In reading his brief, the hon. and learned Gentleman has omitted
  1226
  a relevant fact. He says that it has been represented to the Government but he has not said by whom—whether by interested parties, the five Members we are discussing in part of the Bill, the 81 Members elected by the United Kingdom, the Brussels Commission, the officials of the Assembly or the Council of Ministers. Will he tell the Committee who has made these representations?
  Mr. Brittan: I am referring primarily to the views that were expressed by the House in the Second Reading debate.
  Our intention, therefore, is that the European Parliament should make provision to cover the legitimate expenses of Representatives. If it does not, I believe that, within the new clause which we have put down, it will be a matter for our Parliament to determine whether Representatives should receive such facilities as travel, whether on a general or a restricted basis, as well as other administrative expenses and such matters as free postage facilities.
  I give the clear assurance that the Government will not seek to introduce orders of this sort lightly, and will not introduce orders for the approval of both Houses of Parliament until that is absolutely necessary. The initiative on the matter rests squarely with the European Parliament. I stress that the new clause does no more than enable the matter to be brought before the House. Not a penny piece can be expended on such matters if the new clause is accepted unless and until Parliament approves the specific proposal. At the moment there is no specific proposal, and I hope that the European Parliament will accept that it is right to make proper provision for the matter and that there will be no need for a specific proposal.
  In view of what other countries have done and in view of the point made by my right hon. Friend the Member for Crosby (Mr. Page) about not having to come back to the House with fresh primary legislation in relation to these matters, there should be an order-making power in reserve provided that the House retains its paramount power to decide whether or not to exercise that power. For that reason, I commend the amendment to the Committee.
  Mr. Russell Johnston: The hon. and learned Gentleman indicated that comparable arrangements have been made in

  1227
  the Federal Republic of Germany, Denmark and so on. Does he believe that the expenses that will be incurred in travelling by British Members of the European Parliament will be greater because of the constituencies that have been created than is the case in Germany, Denmark and the other countries?
  Mr. Brittan: It is probable that they will be, but the fact that they are greater does not seem to be a reason why the European Parliament should not recognise that. I hope that our Representatives at the Parliament will be sufficiently persuasive in explaining their position and that the other Members will be sufficiently responsive to that persuasion to accept that the Parliament in respect of which expenses are incurred should take care of them.
  However, in case things do not work out as we hope, it is right that we should insert a provision into the Bill to enable the matter to be put right if the House desires.
  Mr. George Cunningham: The two new clauses tabled by the Government and the Opposition respectively achieve essentially the same purpose, namely, to allow the Government to make subordinate legislation, subject to the affirmative approval of the House, to reimburse Members of the European Parliament for expenses incurred, if necessary and if that job is not done by the European Parliament.
  I am glad that the Government have woken up to the fact that that is necessary. They might have anticipated it a little earlier, because one of the consequences of not doing so is that no order made under this provision can be passed until after the Summer Recess—say, late November. If there turns out to be a need, it will be unsatisfied for four or five months, and that is not a satisfactory situation.
  It is a pity that until two weeks ago when I discussed the matter with the Minister of State there seemed to be in Government circles an unawareness of the difficulty.
  Mr. Brittan: That is not entirely fair. We were aware of the problem. The difference that has occurred has been the passage of legislation in the other coun-
  1228
  tries which has led us to take a different view.
  I do not see the force of the hon. Gentleman's arguments about delay, because until the Bill receives Royal Assent there can be no question of exercising any order-making powers under it. It would have been no different if the new clause had been part of the original Bill.
  Mr. Cunningham: If the difficulty had been anticipated earlier, provisions could have been built into the Bill, not necessarily with the necessity for passing an order. It is an untidy situation and for too long the Government were unaware of there being a serious difficulty, partly because the job of obtaining information about what was being done in other countries was left to our diplomatic missions, which might be good at their normal duties but are pretty awful at finding out arrangements of a parliamentary nature in other countries. That is unsatisfactory.
  On the point of principle, I am sure that the Minister is right in saying that we in the House should govern the salary of British Members of the European Parliament, the pensions deriving from it, the termination grant and so on but that expenses should be dealt with by the European Parliament. Since most of the expenses will be dealt with by the European Parliament, it is particularly unsatisfactory that some should be dealt with by us.
  The arrangement provided is very much a second best and a fall-back position. However, something should be done, and not only because other member States of the Community have done something. There are arrangements on, for example, free post for Members of the European Parliament which require national action. The cost of that free post may be reimbursed from Community funds, but it requires national British action to provide, for example, franked envelopes for the use of British Members of the European Parliament.
  Mr. English: My hon. Friend is the person who can answer my question as he has been a Member of the European Assembly and, as we have just discovered, slightly overlapped the new Members. Were no provisions made for allowances for the former Members of

  1229
  the European Assembly? If allowances were available, what is inadequate about them for the newly elected Representatives?
  1.45 a.m.
  Mr. Cunningham: I was going to come to the point that the existing rules of the European Parliament provide for Members of the Parliament a monthly allowance, which at the moment, I think, runs at about £100 a month, to cover various administrative costs. And whatever is or is not included in that, I am sure that it was intended that that should cover the cost of postage. However, it really does not make sense, in my view, to cover the cost of free postage by reimbursing in cash. It is much better to provide franked envelopes, and much cheaper.
  What I am saying on this point is that some action by national authorities was necessary. It should have been anticipated that some action from national authorities would be necessary in the nature of the expenses involved, whatever had been done or not done by the Governments of the other member States. But I agree that action taken by other member States does complicate the matter.
  The German Government—the German Parliament, I am sorry—has provided that its Euro-Members will have free travel throughout the republic in the same way as Bundestag Members have. The Italian Parliament has provided that its Euro-Members will have free rail travel throughout Italy in the same way as Members of the Italian Parliament have. Therefore, it will be, perhaps, a little more difficult than might have been expected to persuade the European Parliament that it should do something for the British on internal travel which it is not needing to do in respect of the Germans and the Italians, and perhaps some other countries.
  The right solution is for the European Parliament to sort this matter out and to make provision for all travel expenses. At the moment it makes provision only for travel between a point—and the nature of that point still has to be decided, I think, but a point—in the member State of the Member and the place where a meeting is taking place. There is no provision for travel within the constituency or within the country of the Mem-
  1230
  ber of the Assembly for simply going about his own country.
  We could illustrate the need best, perhaps, by reference to the situation, if it is not hurtful to the hon. Member for Inverness (Mr. Johnston) to give this example, of our former colleague Mrs. Ewing. If Mrs. Ewing needs to travel to Shetland to talk about fish before going over to Brussels or Strasbourg or wherever, there is no means under the present allowances system of the Parliament for her to be reimbursed for the cost of that journey. If she has to travel from Inverness to London to have a meeting with the Ministry of Agriculture, Fisheries and Food on that subject and she is not doing so on the way to Brussels or Strasbourg, again there is no means of her being reimbursed for that journey.
  That cannot go on. Obviously such a person has to have reimbursement for those costs. The only questions are how is it to be done, whether it should be done by national legislation and provision or by Community provision.
  Our view is that it should be done by Community provision, but until such time as the European Parliament sorts itself out on this matter we have a responsibility to make sure that our Representatives in the Community are placed in a position where they can do their jobs without dipping into their pockets for those costs and where they are not put in a position that is very disadvantageous compared with the Representatives of other countries.
  Now there is a difference between the new clause tabled by the Government and the new clause tabled in the name of the Opposition. We suggested that the expenses which could be reimbursed were expenses on travel within the constituency and between the constituency and London. That might have been too restrictive. After all, there are Government offices in places other than London. But some such restriction is desirable.
  The Government's provision is extremely broad, as I think the Minister would accept. It is saying that the Order in Council can make any provision about allowances for any purpose. I am sure that the Minister's answer will be that since the order will be subject to approval by the House we do not need to be too restrictive. He will say "Let us make

  1231
  sure that we do not exclude anything" and that the House can make sure that he is not going too wide when the draft of the order comes before the House for approval.
  There is an argument on both sides. I think that on balance the Minister's way of doing it is acceptable, subject to this. When the order comes before the House, we shall not be able to amend it, because it is an order. Therefore, there must be consultation on the draft before it comes to the House. I am sure that the Minister will agree that that is highly desirable.
  After all, on this whole business there has already been much confusion and much evidence that people in Whitehall who should have known turned out not to know what the situation was, and so on. We are trying to pick up the pieces after the event. We do not want to do the same again. We do not want an order brought to the House with many of us who have experience of these matters saying "You have got it wrong again", and being unable to amend it, with the Government saying Pass it, and we shall have an amending order later "or something like that.
  Therefore, I want from the Minister an assurance, which I am sure he will give, that before the Government introduce an order under this clause there will be consultation, certainly with the official Opposition and perhaps with others, about the content of the order, so that we avoid to the maximum possible extent the need to tell the Government that they have got it wrong when the order comes before the House.
  Subject to that, I recommend my hon. Friends to support the Government amendment.
  Mr. Graham Page: It must be a matter of concern that my hon. and learned Friend the Minister has said that the order will not be brought in at once and that we may have to wait a considerable time for it. In the meantime, the Representatives in the European Assembly must be incurring expenses, which may be reimbursed at some time in the future. Will that be retrospective when the Assembly decides to pay those expenses? Will the order that is eventually brought before us be retrospective?
  1232
  On this very day, when the Representatives become fully fledged, because the first meeting of the Assembly starts today, they will be incurring expenses. At the same time, if they are dual-man-date Representatives they will be losing some of the advantages that they have had up to the present.
  For example, those with the dual mandate will lose the opportunity that they have had of facilities in this House. I mention particularly the resolution of the Services Committee, dated 17 May, which recommended that
  "Members of the delegation to the European Parliament be permitted to make free telephone calls from Westminster to offices of the European Communities in Brussels".
  They have been notified that that facility is taken away from them as from today.
  I do not know how many other facilities of that sort are taken away from those who have the dual mandate, although they are still Members of this House. But to consider such expenses falling on those who are not Members of this House is a matter of concern.
  Mr. English: Were they told upon what authority they were deprived, as Members of this House, of facilities to which Members of the House are entitled?
  Mr. Page: I have only the letter from the Clerk of the House to my hon. Friend the Member for Cheadle (Mr. Normanton) telling him that he must not, as from tonight, use those facilities of making telephone calls which up to the present he has been able to make from the House.
  I do not say that that is wrong. Perhaps we should not still be paying for that on the House of Commons Vote after tonight. But it is an expense which will fall upon the Representatives in Europe. There must be many other expenses of that kind—not only travelling expenses but the general expenses of being in this country and having to attend a Parliament in Europe.
  I am concerned that the order should not be brought in until we know whether the European Assembly will meet these expenses. Three or four months hence, when it has been decided in Europe what is to be done about these

  1233
  expenses, will the order be retrospective? The last thing I would normally advocate is retrospective legislation, but in this case I would approve it.
  Mr. Spearing: Some of the problems outlined most competently by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) stem from the inconclusive nature of the Council decision of last year which set the limits to the allowances and facilities which the Representatives will obtain directly from the European Assembly authorities. This illustrates one of the most annoying and undemocratic practices of the EEC in not publishing the full minutes or decisions of the Council of Ministers. It is an extraordinary situation. Any local authority in this country wishing to authorise expenditure or come to a simple decision about town planning or roads has an agenda. Everything is there and we know all about it. In this matter, as instanced by the new clauses, the terms of the EEC Council decision were, apparently, not very clear.
  This is another example of the difficulties that can be caused. My hon. Friend the Member for Islington, South and Finsbury has pointed out in new clause 2 the extremely broad phrasing:
  "provision with respect to the allowances and facilities".
  That is very wide. Let us consider allowances first. We have heard of travel to constituencies and within the United Kingdom. What about secretarial services in the United Kingdom? If the Assembly Representatives are to have adequate secretarial assistance for their large constituencies, they will want such services. They may want research assistants. What about the administering of these allowances? When I talk of allowances I mean reimbursable expenditure, for which the Representatives will sign in a similar manner to ourselves. Perhaps they will go one step further, as we ought to do, and be prepared to show receipts for money expended. That is a discipline we ought to put on our-selves but do not. I hope that the Assembly Representatives will be asked to provide receipts for moneys due. I hope that the Minister will address himself to that.
  Mr. Brittan: It might assist the hon. Gentleman if I say that in all these matters he is, with respect, jumping the gun. What we are saying is that all this is a matter for the European Parliament to deal with. If the European Parliament does not provide what is reasonable, it will be for the Government to place before the House the arrangements for alternative provision and it will be for the House to decide whether that is acceptable. To raise the question of these possible allowances, which may or may not be claimed or granted, is a little premature.
  Mr. Spearing: It is not at all premature. We know how these things are not dealt with properly in the EEC. That is why we have to discuss these new clauses. The Minister says that we must see what the Assembly decides. It may not decide anything. He is asking for a blank cheque.
  Mr. English: The Minister said that the Government were saying that that would happen if the Assembly did not do X, Y and Z. The clause does not say that. The Government could have drafted the clause in such a way as to provide that the power would come into effect if the European Assembly did not do something. That is not in the clause. It gives the Government the power to do something whether or not the European Assembly does something.
  2 a.m.
  Mr. Spearing: I am grateful to my hon. Friend. This reinforces the point that it is a blanker and even broader cheque than we were discussing previously.
  I should like to know what sort of administrative structure will be involved in the reimbursement of allowances. There are 81 Representatives. I trust that the operation will not be handled by our Vote Office, which faces enough complications in the months and years ahead. Any administration of this sort is quite different from that of the sovereign Parliament at Westminster. The hon. and learned Gentleman may say that I am jumping the gun, but we should be given some idea of the way the matter will be handled. As we have passed the money resolution, it will possibly be handled by a branch of the Treasury,

  1235
  which will no doubt mean more public expenditure and more civil servants.
  What about the facilities? The Chancellor of the Duchy of Lancaster made a wide-ranging statement at about 3 a.m. in the House a little over a week ago about the facilities Assembly Representatives might be seeking in Westminster. The right hon. Gentleman mentioned free HMSO publications, free stationery and postal and telephone facilities, which raise the question of how to monitor the cost. What about the cost of offices in Westminster and possibly in the constituencies? Offices in the constituencies, like those of hon. Members, may be a matter for the parties. But we shall certainly need to know more about the facilities.
  I know that the Minister of State's reply will be that we must wait and see. At this stage of the Bill, however, we should be told some of the Government's thoughts on the matter. It is clear that my hon. Friend the Member for Islington, South and Finsbury saw much further ahead than did the Government. It is not the first time that he has seen further ahead, not only of this Government but also of the previous Government. The Committee might learn from his perspicacity.
  I should like to know in what form and to whom the Government will apply for reimbursement. Will they apply to the authorities of the Assembly? Does the Assembly have to vote the money? Have the new clauses been introduced because of a defect in the Council's resolution? Will the Assembly be voting itself allowances, as this House was embarrassingly obliged to do last week?
  Mention has been of consultation prior to the laying of a statutory instrument which cannot be amended. A proposal has been put forward by the Procedure Committee—we hope that the Chancellor of the Duchy of Lancaster will bring another package of proposals before the House—for a debate on a proposal for a statutory instrument. There have been many complaints that secondary legislation cannot be amended. The question has been asked about amending statutory instruments. I believe that the right hon. Member for Crosby (Mr. Page) agrees with me that this would be wholly
  1236
  inappropriate. What can be done is to lay a proposal for a statutory instrument and to hold a discussion, perhaps upstairs in Committee, although possibly on the Floor of the House in this instance, after which the Government would lay a substantive instrument for possibly "nodding through" or subsequent debate.
  If that method was adopted in time, by the Chancellor of the Duchy of Lancaster looking at the Scrutiny Committee proposals, it would be one of the means of getting over what otherwise appears to be an awkward procedural problem.
  Mr. English: When the Minister opened this debate, some hon. Members did not realise why time had ceased to be all that essential. The Government have lost control of the debate, as the vote on the last amendment showed, when they had not got their closure majority. They will have to get it back before this debate can come to an end or await the pleasure of the Opposition.
  I wonder whether the hon. and learned Gentleman can explain why in new clause 2, in addition to allowances, to which he referred constantly, we have mention of "and facilities". We have few enough facilities here as Members of the House of Commons, without sharing them with Members of the European Assembly. I have no objection to the European Assembly providing facilities. Let it buy a building in central London. Let it provide an office in London. But at the moment European Assembly Members are provided with some facilities in London by the Crown, instead of by the European Assembly.
  Is it proposed that that should continue? Is it proposed that part of all the buildings from here to Norman Shaw should continue to be used by Members of the European Assembly at the British taxpayer's expense—and only the British taxpayer's expense—instead of some of the expense being shared with the rest of the Community? Is this to he another item on the already overburdened British contribution to the Community budget? Is it to be another case of people using facilities which might be available to Members of the House of Commons?
  Why is the word "facilities" mentioned at all?
  Mr. Russell Johnston: Postage.
  Mr. English: I am told postage, but my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) explained that, although the amount might be insufficient, Members of the European Assembly were currently paid £1,200 for such items as postage.
  I am sure my hon. Friend will agree that the word "facilities" could cover far more than postage. He said himself that the Government's new clause was much broader than the one that he had tabled. Why is this broad word "facilities" here? Are we to provide Members of the European Assembly with office accommodation? Are we to provide them with office equipment such as we provide for civil servants but not for Members of Parliament? Are we to treat these European Assembly Members in the way that we treat Members of the House of Commons? Are we to treat them better? Are we to treat them worse? What does the word "facilities" mean?
  It is no good putting a vague word into a measure and telling this Committee at 10 minutes past two in the morning "Provided you pass this, we will not use it." If the Government do not intend to use it and the European Assembly provides the facilities, why does not the clause say so? Is the hon. and learned Gentleman promising that when we come to Report he will move an amendment to limit the clause to what he said? He said that the Government would not use it if the European Assembly made provision.
  My hon. Friend the Member for Islington, South and Finsbury told the hon. and learned Gentleman that the European Assembly had made provision. It provides £1,200 a year in cash to cover such items as postage. I can see that some Members of the European Assembly—I trust that none of them is British—might prefer the amount in cash rather than in the form of franked envelopes such as my hon. Friend suggests. But, then, he is a Presbyterian Scot by origin, and no doubt he prefers franked envelopes to provision in cash. However, as I see it, under this clause the Members of the European Assembly will get both. They
  1238
  will get the franked envelopes and £1,200 from the European Assembly.
  I hope, Mr. Weatherill, that when you assume your other capacity as Mr. Deputy Speaker on Report, you will accept that we may move an amendment limiting payments under this clause, and deducting from such payments any payment already made by the Assembly. Such a provision is not there at the moment. There could be complete duplication.
  Mr. George Cunningham: My hon. Friend is making a valid point. I rise to invite his attention to the words that appear in new clause 1, which I tabled:
  "and when the representative is not reimbursed for such costs by the European Assembly",
  which were intended in that version to cover the point he is making.
  Mr. English: I am grateful to my hon. Friend. I have already said that his clause is more restrictive and more sensibly drafted. I am referring to Government new clause 2, which, as my hon. Friend said earlier, is extremely wide. The Minister cannot sit there representing a Government who purport to believe in the control of public expenditure and put before the Committee a clause that is so wide as to duplicate every provision made by the Assembly. I know that he did not say that the clause would be used in that way, but we have all known plenty of cases of Ministers saying one thing and of something else happening in later years.
  Does the Minister agree that some control over public expenditure should be inserted in the clause at a later stage so that there is no duplication of costs?
  I turn next to the question of travelling. I am sure that the hon. Member for Inverness (Mr. Johnston) will agree that there have been plenty of remarks about the remarkable way in which the travelling expenses of European Assembly Members have been stretched. I understand that the European Assembly has drafted its regulations on travelling expenses in such a way that a Member can obtain reimbursement for travelling from the point of his residence, wherever he may declare that to be. It was said in the British press that immediately the regulation was passed a startingly high number of Italian Member acquired residences in Sicily, which is a greater distance from Brussels than is, say, Milan.

  1239
  According to The Guardian today, some civil servants in the Brussels Commission have managed to acquire residences in the Shetlands because of the convenience of that in terms of claiming travelling allowances. If that is so, it is just possible—I put it no higher—that a Member who skilfully approaches the regulations of the European Assembly might not need quite so much reimbursement for travel within his constituency as, possibly, another Member who was more honest.
  The Minister will be aware that there are other hon. Members in this House who have been Members of the European Assembly and who are so honest as even to upset some of their colleagues by declaring to the Revenue that they made a profit on travelling expenses, therefore paying tax on a proportion of them. I am sure that hon. Members of this House would be as honest as that, but we do not know whether all the 81 who have been elected are that honest. We do not know whether all 81 would fail to adapt their circumstances to obtain the maximum travel allowances under the European Assembly provisions and in addition an extra allowance for travel within the constituency as provided for in the new clause. In that case they would certainly make a substantial profit upon that.
  Mr. Graham Page: I do not wish to make a frivolous comment, but there is a French possession in the Indian Ocean. Such an island would perhaps be a convenient place on which to have a residence for a Member who wished to claim excessive travel expenses.
  2.15 a.m.
  Mr. English: I have never understood the precise boundaries of the European Community in relation to the possessions of France. I have every reason to believe that they may be wide.
  I cannot understand why the Government wish us to accept a clause which permits this situation. It would be the simplest thing in the world to introduce a short amendment to ensure that the provision will be used only if the Community does not make adequate provision. It would be simple to include the proviso that no Member shall obtain moneys under this clause if he obtains
  1240
  them for the same purpose as a Representative of the European Assembly, or that one amount shall be deducted from the other so that there is no duplication.
  What is the point of drafting a clause so widely that these allowances and expenses can be obtained twice? I suspect that we are dealing with a draftsman's convenience. The draftsman says "Be damned to the House of Commons. We shall draft the clause as widely as possible, and it does not matter whether the money is paid twice. Then we can do what suits the Government." That attitude is not good enough.
  The Minister said that one of the five hon. Members who have been elected to the Assembly was told that he could not make a telephone call to Brussels. Originally each Member had to pay for all his telephone calls. The rule was changed so that we did not have to pay for calls within the United Kingdom. When we entered the European Community, the rule was changed again. We were told that whilst we might have to pay—and do pay—for a telephone call to the United States, we do not have to pay for a call to the European Commission in Brussels because that could come under the heading of parliamentary business.
  For someone to suggest whether—or not it is the Clerk of the House—that any hon. Member should be deprived of a right that other hon. Members possess is a breach of the privileges of the House and should be raised on an appropriate occasion. I have no wish to duplicate allowances. I have no wish for an hon. Member to be able to telephone Brussels under the provisions of this clause, in addition to being able to do so as a Member of the House of Commons. That would be stupid.
  We have been told that the new powers may never be exercised. If they were, they would have to be retrospective in order to be of benefit from now until September. Meanwhile, any one of the five hon. Members cannot be deprived of what he is entitled to as a Member of the House.
  Mr. Russell Johnston: At midnight the hon. Member for Cheadle (Mr. Normanton) ceased to be an appointed Member of the European Assembly and

  1241
  is now an elected Member. We are sitting here now because we have not decided about expenses for elected Members.
  Mr. English: The hon. Member for Cheadle (Mr. Normanton) did not cease to be a Member of the Assembly. He did not cease to be a Member of this House. The resolution of this House of Commons applied to a person who was both.
  Mr. George Cunningham: Perhaps I can help my hon. Friend. There is no right in a Member of this House who is not a Member of the European Parliament to make a call to Brussels and to have the cost paid out of public funds. Today, in the new dispensation, if a dual Member makes a call to Brussels the assumption is that he does it in right of his capacity as a Member of the European Parliament, whereas if I made a call yesterday the assumption was that I did it as a Member of this House because I existed in Europe only as a Member of this House. That is the distinction and I think that it is a perfectly proper distinction. It is right that a dual Member should no longer be able to make such calls at a cost to public funds from Britain.
  Mr. English: I am grateful to my hon. Friend for putting me right. I do not recollect—I may be wrong—that the resolution said that it applied only to Members of this House who were appointed Members of the European Assembly.
  Mr. Cunningham: Yes, it does.
  Mr. English: Perhaps we can have that point checked, Mr Weatherill. We have plenty of time. Did the resolution specify that to avail himself of, say, a free telephone call to Brussels, a person had to be both a Member of this House and a Member of the European Assembly? If that is so, five Members still fall under its provision and none of them is entitled to be deprived of that unless at some stage in this Bill we say that they are.
  Did the resolution say that or did it specifically say that they had to be appointed rather than elected to the European Assembly? I do not think that the resolution made such a specific distinction. It might be wise for the Govern-
  1242
  ment to withdraw this new clause and to have it redrafted and brought back at a later stage. There are certainly points of this character that do not seem to have been considered.
  I revert to my original and basic point. Why is the clause so widely drafted as to make possible the duplication of allowances and facilities for Members of the European Assembly? Why does it make it possible—I put it no higher—for the Government to produce an order paying Members what they could be receiving from the European Assembly?
  The Minister very fairly said that that was not the Government's intention. Why is not the clause so drafted? Will the Minister give the House an assurance that it will be so amended?
  Mr. Russell Johnston: I have three very quick points.
  First, when I intervened during the speech of the Minister to ask him whether, in his opinion, the fact that we have a constituency system would produce more expense for the Member concerned than was the case in the remainder of the Community he indicated that he thought that that was so. If that is right, I find it rather incredible. I have restrained myself by making practically no reference to this all night, but it is bad enough having the constituency system, which distorted the result in Europe, without actually expecting the Europeans to pay for it. That is carrying things too far. I find that a most unacceptable point of view.
  Secondly, the question of travel within the United Kingdom was raised. The hon. Member for Nottingham, West (Mr. English) discussed the possibility of duplication. With all respect to him, I do not think that there has been a great flowering of Italian residents in Sicily, and I do not believe that there are members of the Commission who have residences in the Shetlands for the purposes of expenses. One can spend a great deal of time suspecting politicians of all sorts of misdemeanours which they—
  Mr. English: I was only quoting the press.
  Mr. Johnston: That in itself is a dangerous exercise.
  If the Government's amendment is widely couched, it is reasonable in the

  1243
  circumstances. It is certainly reasonable that the European Members should have the benefit of travel in the United Kingdom. I noted the Freudian slip—if I can so describe it—of the hon. Member for Islington, South and Finsbury (Mr. Cunningham) who in his drafting—perhaps someone else was responsible—omitted the fact that there was a place such as Edinburgh, which he might feel it appropriate to visit from time to time as well as London, and doubtless Cardiff also. However, I shall not chide him too much on that.
  I very much agree with the right hon. Member for Crosby (Mr. Page) that a gap is very unsatisfactory. If there is to be no legislation, and if we shall not know about this until November or December, it is only fair that European Members be reimbursed with expenses retrospectively. It simply would not be fair to do it in any other way.
  It seems rather extraordinary to me that apparently this matter has not been thought about and worked out by the Government. The best example is the constituency which I fought, which the hon. Member for Islington, South and Finsbury has already instanced. Evidently, if a constituency stretches from Muckle Flugga to the Mull of Kintyre, it will involve the Member in a great amount of expense going back and forth.
  Mr. Ogden: You will know, Mr. Weatherill, from your former duties as a Deputy Chief Whip in Opposition, that at about 2.25 a.m. Opposition Members who have been persuaded, coerced or convinced that they ought to be here suddenly begin to get second wind. This is the way that we go along, and we are starting on the short and cheerful grind right up to the morning light. I do not say that to cause confusion or dismay among newer Conservative Members, but it is a fact that once one is here until 2.30 a.m. one begins to think "Let us make a night of it".
  However, I do not propose to comment on the debate about what allowances should or should not be paid or, indeed, who should pay them, except to say that this again underlines the confusion and difficulties when payment is to be made by one authority, paymaster or employer and allowances are to be paid by someone
  1244
  else. I do not know whether this happens in industry. Perhaps the hon. Member for Sheffield, Hallam (Mr. Osborn) can tell me whether companies with which he is associated have this changed situation, where the employers pay the pay and someone outside pays the salary.
  I should like to ask the Minister two questions in regard to Government amendment No. 22. Clause 8 provides:
  "This Act may be cited as the European Assembly (Salaries and Pensions) Act 1979";
  but under amendment No. 22 it would read:
  "This Act may be cited as the European Assembly (Pay and Pensions) Act 1979."
  That might be a last-minute gesture to Opposition Members. Perhaps we are more used to talking about pay and conditions than Conservative Members. But there must be a reason for this, and I ask the hon. and learned Gentleman what it is.
  I should also like to repeat a question that I put to the Minister earlier when we discussed the money resolution and the instruction to the Committee. I was trying to find out who pays the pay, the pension and the allowances. Will the pay, salary and allowances, whatever they happen to be—but particularly the pay and pensions—be paid by the Government of the United Kingdom, with money from the taxpayers of the United Kingdom coming from the Consolidated Fund, or will we reclaim any of that money from the European Commission? Who will finally pay?
  If we are to pay it ourselves, we could save up to £2 million a year by saying to the European Commission "You decide it and you pay it". If we are to pay and recoup some of the money, there is perhaps no reason why we should not pay European Members the full £25,000. It would cost no money out of our pocket. If we were to claim the full amount, and give them only half, the Government could then make a profit. It is quite simple. Why is there a change from salaries and pensions to pay and pensions, and who in the final analysis will pay the bill?
  Mr. Brittan: The word "pay" is broader than "salary" and covers such matters as allowances. On the question of who pays, as I said at the outset, our

  1245
  hope is that the European Parliament will pay. Only if it fails to make provision will it be necessary to come to this House with the appropriate order. This House will then be persuaded or not, as the case may, that it is right to incur nationally the necessary costs involved in meeting the expenses and allowances that have not been met ex hypothesi by the European Parliament.
  2.30 a.m.
  Mr. Ogden: I asked not only who will pay the pensions and expenses but who will pay the salaries and pay. The hon. and learned Gentleman has told me nothing that he has not told me before. Who pays the salaries and the pay?
  Mr. Brittan: They are paid out of our national funds.
  Mr. English: That is another contribution to the European Community by the British taxpayer. Why on earth is a European Assembly Member not paid by the European Community? However, will the hon. and learned Gentleman answer my point? Will the Government at a later stage in the Bill limit the clause so that there will be no duplication of expenditure and no recipient will be paid twice?
  Mr. Britton: It is not necessary to introduce legislation to that effect. I have made it quite clear that it is not the Government's intention to put forward an order that would lead to such double payment. I cannot believe for one moment that if the Government were so foolish as to attempt any such thing it would stand the slightest chance of being passed by the House.
  Mr. English: The hon. and learned Gentleman said that the Government do not intend that. I did not for one moment suggest that they did. But how can the Government stop the European Assembly doing it? It is a power of its own under the law of the Community, which is also the law of this country. If the European Assembly says that it will continue paying £100 a month or whatever the figure may be for postage in addition to the Government providing franked envelopes, how do the Government propose to stop it doing so? They cannot. How do they propose to deduct the value of the extra payment from the Member under a clause in which there
  1246
  is no provision for that? Without that happening, a European Assembly Member will get the same thing twice. He will get the postage once because of the franking and get it again in cash.
  Mr. Brittan: The hon. Gentleman is under a misapprehension. There is no question of that occurring. There is no such provision in the Bill. There is merely provision for an order. The Government do not have the slightest intention of inviting the House to pass an order that would duplicate payments that the European Parliament wishes to make. It is as simple as that.
  Mr. George Cunningham: There is a problem. Although no one in the past dispensation wanted to provide duplicated allowances, we did. We provided travel allowances for Members of this House between their constituency and London, and the European Parliament provided travel allowances covering the journey from the constituency or London to the place of the European meeting. There was therefore the possibility of a duplication of allowances. It is not as simple to avoid as the hon. and learned Gentleman is suggesting. In the end the only safe way is for us to have nothing to do with the expenses side and for that to be covered by the European Parliament. That is what the hon. and learned Gentleman wants and what we want.
  I do not believe that we have yet had the assurance that we asked for about advance consultation on the content of the order because it is unamendable. However, when the hon. and learned Gentleman brings the order before us, in addition to advance consultation it is important for the Government to provide for the House a formal document—I do not say that it has to be a Command Paper—that authoritatively sets out the situation as it exists with regard to the allowances available to Members of the European Parliament. That is the easy one because that will be printed by the European Parliament in a book that I cannot for the moment lay my hands on but which will certainly be readily available. Also, the position on allowances in other member States must be considered. The Government must tell us that much so that when we come to consider the order we shall know

  1247
  whether it is desirable to pass it in one form or another. However, it is not as simple as it sounds to avoid duplication of expenses.
  Mr. Brittan: I am grateful to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) for that awful warning of which we shall certainly take heed. I am very reluctant to make a commitment from the Dispatch Box to anything of a complex character, whether by way of consultation or by provision of documents. However, I accept absolutely that when the Government consider whether to bring forward the order it would be right to give the House the maximum information. Certainly we should not bring forward such an order without engaging in some form of consultation.
  Mr. Spearing: The Committee will appreciate the problems of the Minister, who is batting to the bowling from all sides. Also, he appreciates that this is a serious point, particularly in relation to the rights and privileges of the House of Commons, and the use of public money. Perhaps there will be another opportunity to ask the Minister about facilities. He seems a bit coy about this matter. Therefore, I shall not press him now on the range of facilities.
  To whom will the Government apply to ask the EEC authorities either to provide money, or to provide the allowances and facilities direct? Secondly, if that cannot be done, to whom will the Government apply for reimbursement? In the event of the Government being forced to undertake the administration of these facilities, who will do the administering? I hope that we shall have an assurance that it will be nothing to do with the Vote Office of the House of Commons, which should be kept a separate and distinct institution, related to Westminster only and to no other Parliament that may meet in other places.
  Mr. Britton: On the question of the initial payment, that is a matter for the European Parliament to decide. I think it unlikely that there would be any question of reimbursement unless there were some kind of negotiations between the United Kingdom Government and the European Parliament. In a situation in
  1248
  which the European Parliament has failed to make the provision, and the House has had to step in, it would be unrealistic to expect reimbursement.
  On the question of the administration of allowances, I reiterate the hope that there will not be any necessity, but we shall have to consider that as and when the time comes. The House will be able to consider such matters if and when an order is laid. At present there is no proposal before the House on this issue at all.
  Mr. George Cunningham: The Minister must see from experience in this debate, and indeed his general parliamentary experience, that consultation saves time. A few days of consultation about the contents of any order might well save him time. Because it is so important to avoid the chaos which may result if we provide for some allowances and the European Parliament provides for the others, I hope that the Government will contact, not the European Parliament, but the Governments of other member States. The Government should tell them that there is the making of a shambles and that we should all join in sorting it out.
  I am not suggesting that the matter should come up at the European Council or any such elevated level. In fact, I hope that the matter will not be raised at that level or we shall face the same mess again. I believe that somehow or other there should be consultation between the British Government and the Governments of the other member States to try to ensure that the business of allowances is dealt with by the European Parliament.
  My hon. Friends might be surprised to know that the decision is not taken by the European Parliament as a whole. Parliament as a whole has delegated this function—I have never discovered when it was delegated—to the Bureau of the Parliament. Therefore, the national States and perhaps the Bureau could get together and sort out the matter. Just as the British Government took the initiative on last November's decision, I believe that we could take the initiative in providing for allowances and to avoid our having to get into the business at all.
  Mr. English: When the Government consider my hon. Friend's remarks about

  1249
  consultation, will they remember that consultation should not take place only between two Front Benches? Will they agree to submit their draft order to the appropriate select Committee?
  Amendment agreed to.
  Clause 6, as amended, ordered to stand part of the Bill.

  INTERPRETATION AND ORDERS
  Mr. Stoddart: I beg to move amendment No. 28, in page 6, line 9, leave out from ' instrument' to end of line 10 and insert
  ' a draft of which shall have been approved by both Houses of Parliament.'.
  This Parliament has had a great deal of experience of the negative procedure as the result of which hon. Members who have wished to pray against an order suddenly find that the time has run out, without the Government having found time to debate the matter and, therefore, has by default.
  There are important financial matters which would be subject to the order procedure. I refer to such matters as making provision
  "as to the periods of service as a Representative which are to be taken into account for pension purposes'.
  and to provide
  "for deductions to he made by the Treasury from Representatives' salaries at a prescribed rate by way of contributions towards the cost of providing the pensions payable by virtue of this section'.
  The Committee has shown by these long debates that Parliament is interested in the subject of European Assembly salaries, conditions of service, pensions and the rest. Therefore, it would be right and proper that the affirmative procedure should be used on any order brought forward in connection with the Bill. Parliament is entitled to be certain that we shall discuss any orders that may be laid. It is democratic to do so, and the Government may find that they will avoid embarrassment and accusations that they want to cover matters up if they adopt the affirmative resolution procedure.
  I urge the hon. and learned Gentleman to consider and accept the amendment.
  2.45 a.m.
  Mr. Spearing: Today's discussion has shown that the Bill contains unforeseen pitfalls. If that has been demonstrated tonight, it will also surely be demonstrated in the months and years to come. The Assembly Representatives who are affected by the Bill and whose lives and facilities are governed by it will be active in the pursuance of their interests. We gather that they have been active since Second Reading. If that is the case, there will be strenuous activity when the vague picture emerges from the gloom. We are not sure, on the admission of the Minister how events will proceed.
  My hon. Friend the Member tot Swindon (Mr. Stoddart) has put down an amendent to make every statutory instrument subject to the affirmative procedure. That may sound extravagent, but I do not believe that it is, for this Bill, which not only causes problems but is a constitutional Bill because it provides the sustenance for those who are likely to be the rivals of all hon. Members. At some stage the House may want to go into these matters in detail and if the Bill provides for the negative procedure only that will make matters difficult. Front Bench Members will know that getting time to debate a negative order is not an easy matter. The Chairman of the Joint Committee on Statutory Instruments is present—
  Mr. Graham Page: The Chairman was present a moment ago—the hon. Member for Keighley (Mr. Cryer). I am the ex-Chairman.
  Mr. Spearing: I am grateful to the right hon. Member for Crosby (Mr. Page). He will confirm that the present procedure for dealing even with affirmative orders—let alone negative orders—is defective. The previous Labour Government put down an affirmative order at the end of the Order Paper after an uncontentious debate that might last for two or three hours and the House nodded it through at midnight or 2 a.m. The original intention was for it to go through at 3.30 p.m. at the commencement of public business. If the Procedure Committtee's proposals for such a change were to go through, that would facilitate matters.
  I support my hon. Friend the Member for Swindon. If the matter is routine it

  1251
  will go through on the nod without any difficulty. If we believe that hon. Members count—we are told that the Government believe that individuals count—there should be an affirmative procedure for every order. Defective though the procedure is, it is a greater measure of protection than that which operates at present.
  Mr. Graham Page: May I add a point for consideration by the Minister of State? I support what other hon. Members have said about the procedure for negative resolution being ineffective. Prayers may be put down against an order and never be debated. It is probable that if the Government have to obtain an affirmative resolution an order will be debated.
  In the Government's new clause, they have accepted the need for an affirmative resolution. That clause deals with the important matters of allowances and facilities, but I do not think that they are more important than pensions, severance grants and the block transfers under clause 5, which are included in the other part of the Bill under which orders are to be used. Those matters are just as important and interesting to the House.
  I know that there is no rule, or even a convention, as to which provisions should have the negative procedure and which should have the affirmative procedure, except the interest of the House. If the House has shown interest in a Bill that enables a Secretary of State to add to it by order, that should be recognised by making the order subject to the affirmative process.
  Mr. Brittan: My right hon. Friend the Member for Crosby (Mr. Page) is right in saying that there is a requirement for an affirmative resolution on the allowances provision. The amendment therefore applies primarily to the pension conditions.
  Although our parliamentary pension scheme is contained in Acts, it has been the normal practice for pension schemes in the public service to be made by sub-bordinate legislation and during the passage of the Parliamentary Pensions Act last year many hon. Members agreed that it would be desirable to get the parliamentary scheme out of primary
  1252
  legislation and into rules. In all other cases where pension schemes are made by subordinate legislation, the relevant statutory instruments have been made subject to annulment. There is no obligation to lay them before Parliament in draft and to have affirmative resolutions.
  In considering whether to take more precautions over the European pension scheme than over others, one should take into account that the Government intend that the scheme for European Members shall be modelled closely on that for Members of this House, with all the relevant provisions incorporated in full. Only where the nature of service as an Assembly Representative differs from that of being a Member of this House will variations be recommended. Such variations are expected to be confined to a few fairly minor points. I can assure the Committee that the Government do not intend that the terms available to European Members should be any more favourable than, or significantly different from, those available to Members of this House.
  There is, therefore, an important difference between the proposal to require an affirmative resolution for orders concerning expenses and the procedure in the Bill for orders relating to pension arrangements. Quite simply, we are not yet in a position to indicate what expenses might be met from the powers in the Bill, but we have stated quite clearly our plans for the pension arrangements of Assembly Representatives and their great similarity to our arrangements. I hope that in the light of those facts the Committee will feel that it is reasonable to proceed as envisaged in the Bill.
  Mr. English: This is not good enough. We have been in Committee for the best part of five hours and we have not had one concession from the Government Front Bench. We do not blame the Minister. We know why he cannot concede anything. There is a custom and practice on these premises. Once the Cabinet, or the appropriate committee of the Cabinet, has agreed something, assurances or concessions may be made only by a Cabinet Minister. But why send a boy to do a man's job? It is bad enough that the Government have to introduce something that they did not necessarily prepare themselves, but it is silly to have a Minister replying to

  1253
  debates who cannot give assurances on anything because he is not allowed to do so by his masters.
  My hon. Friend the Member for Swindon (Mr. Stoddart) has made a sensible suggestion. Earlier I made a suggestion that Members should not be paid twice and that there should be some control over public expenditure. No assurances have been given. The hon. and learned Gentleman did not even reply to something that he was capable of replying to, namely, whether the Bill is legal under Community law. These matters have not been replied to properly. It is not good enough.
  Mr. Stoddart: I am sorry that the hon. and learned Gentleman has not been able to make a concession. I understand his argument about pension schemes, but it may be that the House has slipped up. It may be that our own pension scheme and other schemes should be subject to the affirmative order procedure. There is a desire among hon. Members to be properly consulted and to be able properly to debate orders coming before the House of Commons. There is no question but that the negative order procedure causes great difficulties for Back-Bench Members. I know that a good deal of upset has been caused because, whether rightly or wrongly, Back Benchers have received the impression that the Government are out deliberately to do them down by refusing time to debate a negative order.
  I urge the hon. and learned Gentleman to reconsider his position on the procedure that I suggest in the amendment. If he did so, he would be making a step forward and pleasing the Committee. As my hon. Friend the Member for Nottingham, West (Mr. English) has said, he has not pleased it very much yet.
  Amendment negatived.
  Amendment made: No. 21, in page 6, line 9, after 'and', insert
  ', unless made under section (Allowances),'.—[Mr. Brittan.]
  Clause 7, as amended, ordered to stand part of the Bill.

  SHORT TITLE AND EXTENT
  Amendment made: No. 22, in page 6, line 12, leave out 'Salaries' and insert 'Pay'.—[Mr. Brittan.]
  Clause 8, as amended, ordered to stand part of the Bill.

  ALLOWANCES
  (1) Where a representative incurs expenditure on the cost of travel in the proper performance of his duties in the European Assembly

  (a) within his constituency

  (b) between his constituency and London and when the representative is not reimbursed for such costs by the European Assembly, the Secretary of State may reimburse the representative for such costs.

  (2) No payment shall be made under this section except in accordance with regulations made by the Secretary of State and no such regulations shall take effect until they have been approved by a resolution of the House of Commons.'.—[Mr. Britian.]
  Brought up, read the First and Second time and added to the Bill.

  Title
  3 a.m.
  Amendment made: No. 23, in title, line 1, at end insert
  ', and the provision of allowances and facilities,'.—[Mr. Brittan.]
  Bill reported, with amendments.
  As amended, considered.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): I have to inform the House that several manuscript amendments have been received. Mr. Speaker has been consulted, but none of these amendments has been selected for debate.
  Motion made, and Question proposed, Tht the Bill be now read the Third time.
  3.1 a.m.
  Mr. Spearing: I shall not detain the House long, but one or two things should be said on Third Reading. You have just informed us, Mr. Deputy Speaker, that Mr. Speaker did not select any of the manuscript amendments, which arose directly out of our debates. I want to draw attention to only one of the changes

  1255
  that have been made to the Bill, the addition of new clause 2, concerning
  " the provision of allowances and facilities",
  which has now been added to the long title. I do not know what would have happened if anyone other than the Government had wanted to put down the new clause. I suspect that he would have been told that it was outside the long title, but I shall not pursue that matter now.
  What I want to pursue is the phrase "and facilities". I have a horrible feeling that the change in the nature of the Bill which has happened in the past half hour, and which appeared on the Notice Paper only with the tabling of the new clauses, will cause the House and hon. Members, and possibly the country, some problem.
  "Facility" means the ease whereby something is achieved. I believe that by the new clause the Representatives to the Assembly will perhaps ease their way into the operation of public affairs in a way which will be to the detriment of the existing Members of the House and indeed to the House itself.
  First, the facilities that have already been granted by the Government are access to members of the Government, reception by Representatives of briefs from the Government, and a consideration of letters by Representatives to members of the Government equal to that already given to Members of Parliament.
  Those facilities have already been described in a written answer. Unfortunately, because of the Hansard printing problem, this has not been widely known. In other words, although it is not strictly within the terms of the Bill, the facilities that the Government have already decided of their own volition to give, and which do not depend on the Bill, are substantial.
  The Minister was not able to tell us what sort of facilities might be made available. He said "Let us wait and see what the Assembly does." The Assembly could say that it will provide in Westminster, perhaps across the road, offices for the Assemblymen, that it will provide them with telephones and perhaps switchboard operators, photocopying devices, telex machines, facilities for taking messages and all those appur-
  1256
  tenances which we in this House take for granted.
  I suggest that it is only the provision of these bits and pieces which enables hon. Members to discharge their duties. I also suggest that the provision of facilities for Assembly men and women in London, in particular in Westminster, will greatly enhance their function as individuals.
  I understand from what the Chancellor of the Duchy of Lancaster said last week that it is the intention of the Government to provide these facilities as far as they are able. Even if the Government do not of these bits and pieces which enables provide them out of moneys under this Bill, they may well be provided on repayment by the Assembly. This will mean that if the Government provide these facilities the Assembly representatives will be in a different position from the delegated, or chosen, representatives, such as my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham).
  Take, for example, what is to happen today. Today we are to have an important announcement about British industry. We are to have a Standing Order No. 9 debate on the steel industry. An Assembly personage concerned with steel, perhaps on a committee of the Assembly dealing with this subject, would be here, using those facilities and in direct contact with offices in Brussels and Strasbourg. He would be in an important position, particularly if he had a steelworks in his constituency.
  I suggest that such people armed with these devices would be, in terms of the Assembly, the Commission and the Council—in terms of our own Government—in a superior position to any hon. Member of this House representing a steel constituency. It is clear that the Government in their policies want to use these Representatives politically in dealing with the EEC. Any Government would. Of course they will provide the Representatives with these facilities. They will provide them with briefs and begin to put them into the political structure, particularly of the Foreign and Commonwealth Office, the Department of Industry and so on.
  There will be a section of each of the private offices of these Ministries which will be dealing with policy for the

  1257
  Assembly Representatives. If these facilities are provided access between the private offices of the Ministries of Whitehall and the Assembly personages will be facilitated. This will mean that their status, activities and importance will increase and those of Members of this House will decrease proportionately. That will come about because of the facilities which I believe the Government are to provide, for which this Bill makes allowance.
  The same could be said about the reform of the common agricultural policy, a matter of vast interest to all hon. Members. Given these facilities, but only given them, an Assembly Representative set-up in London with these bits and pieces will be in a strong position. Take away those facilities, let them not be provided by the Assembly or the Government, and the power and influence of these people would be much reduced. The provision of an effective operational base in or around the Palace of Westminster for Assembly Representatives will place them in a position of much greater power, enhancing their status and that of the Assembly of which they are Members. This will be partly due to the provisions of this Bill, to which this House in its unwisdom has given a Second Reading.
  3.10 a.m.
  Mr. English: This is a paltry little Bill. It seems to work on the assumption, as I said earlier, that there is something odd and immoral about getting oneself elected to office by large numbers of the people of the United Kingdom. It also seems to work on the principle that it is very bad if the person elected is paid even as much as the civil servants in Brussels who, if not subordinate to the European Assembly, are subject to consideration by it.
  The present Government and, I regret to say, the previous Government are making clear that, in their opinion, the civil servants and the Commissioners in Brussels are much more important than those who have been elected by tens of thousands of people of the United Kingdom. We are saying in the Bill that the person elected to the European Assembly should receive considerably less than the average civil servant in Brussels, perhaps a little more than a secretary in Brussels and perhaps a third or a quarter of the
  1258
  pay of other parliamentarians in other countries, whether they are paid in their own legislatures, like the Bundestag, or as members of the European Assembly. This shows what we think elected people are worth. It shows a distinct lack of faith and support for democratic principles.
  The bureaucratic person is well paid, as exemplified by the bureaucrats of the Brussels Commission. The Assembly, which may not be all that effective but which is the only institution of the Community based on a democratic principle, consists of those elected to represent the country or, say, the consumer in relation to the common agricultural policy, although many of its members are farmers. Yet those elected are regarded as less important and less well paid than those who sit in innumerable Brussels, Luxembourg and Strasbourg committees.
  It is difficult to discover from the Minister of State why we have the Bill at all. In no other federal institution in the world do the individual component parts of that institution pay for one of the federal institutions. Only in this peculiar case do we have the circumstance that the salaries of the European Assembly's Members are paid by the British taxpayer at a cost, according to the Bill, before it was recently amended in Committee, of £600,000 in a full year. Why is this amount payable by the British taxpayer? Why should not all Assembly Members be paid the same? Is it because of some mysterious feeling of envy and jealousy that if they were paid the same Members of the European Assembly might be receiving more than Members of the British Parliament? Why was that? It was possibly because successive Governments, both Labour and Conservative, had held down the latter rate of pay.
  There was no suggestion that it might be unwise to create an Assembly in which Members are paid different rates of pay. There has never been a suggestion that it might be unwise for one Member to represent a West German constituency, or West Germany as a whole, and be paid three or four times as much as another Member representing, say, the United Kingdom or Ireland. How are normal relationships between Members supposed to be conducted on a basis of equality,

  1259
  which should be the case in any legislature, if Members receive different pay for the same work? My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden), a miner, said that no trade union in this country would tolerate a situation where different individuals were paid different amounts for the same job. Here they are to be paid vastly different amounts. The Members of the European Assembly elected from Britain will be, with the possible exception of those from Ireland and Luxembourg, the poor men of Europe. Perhaps it is appropriate. After all, we increase our relative poverty deliberately by paying the biggest contributions across the exchanges into Community funds. We have not got the largest gross domestic product in the Community, but that is a minor irrelevance.
  We want to assist in the reduction of our relative gross domestic product by paying more into the Community's funds. As we have seen in the press, the other member States think that we can afford it because we are an oil producing country and therefore rich. The fact that individuals in this country are not rich in comparison with people in West Germany, the Netherlands, Belgium or France apparently is irrelevant. But we must make sure by means of an Act of Parliament that our 81 Representatives are paid as though we were the poor men of Europe whom they represent. They are paid to represent the poor men. They are paid by our poor poverty-stricken nation as apparently we think they deserve.
  That is a dreadful commentary on British society. If, as they are entitled to do as free men in a free society, they offer themselves for election, if the party of their choice has selected them, and if they are elected to both this House and the European Assembly which, in a free society, is a matter that our citizens are capable of deciding, who is to object?
  There is one Government supporter who is both a Member of this House and a Member of the European Assembly by election. I understand that during her election campaign she said that she would not take an additional salary for her additional duties. She is entitled to say that. That is her choice. She said it publicly during the election campaign so
  1260
  that she was elected upon the faith of that promise, and I am sure that she will adhere to it. But that is a matter between her and her constituents.
  We have to go further than that and say of all the others who are elected in that way that even if their electors voted for them believing that they might take up the rights, privileges and even the pay and allowances of a European Assembly Member as well as of a Member of this House, "You must not do that. You are being foolish if you suggest that someone should be paid for doing two jobs." What hypocrisy it is.
  If we acted like the German Bundestag and said that a Member would receive a higher rate of pay but would be forbidden to take money from outside sources, there would be some strength in the argument. Then it would be just as relevant to say that a Member should not be paid for his additional job in the European Assembly as it would be to say that a Member should not be paid for sitting on the board of a merchant bank, for acting as a barrister, for being a doctor or a solicitor or a member of any of the other professions for which Members of this House are paid in addition to their duties here.
  That is not the principle that we have in this House. It is not even a principle that I advocate, although some of my colleagues do, as I believe do some Government supporters. But what hypocrisy it is to say that this one occupation should be singled out for such treatment.
  One hon. Member was criticised a Parliament ago by his local newspaper for the frequency with which he carried out his duties in the British Parliament from France. He survived in his constituency. His constituents presumably did not mind him spending a lot of time on the Continent. That was a matter between him and them. But now, if a Member is elected to do that, he must be penalised. He must not be paid.
  Out of the 81 Members, some 76 will receive their full pay. Of all the Members of the House of Commons 630 will receive their pay either as Members of the House of Commons or as Ministers. Some part of the pay of a Member is abated if he is a Minister, but in total he gets a larger salary than a mere Back Bencher. All those Members except

  1261
  Ministers may take outside jobs and receive remuneration for them. Just five people out of the 81 and out of the 635 are singled out for special and differential treatment. By a remarkable concession—the only one that the Government have made all evening—they will be allowed to draw a third of their due entitlement as they were elected to receive it by the citizens of this country. That is a third of the paltry salary which is about a quarter of what some of their counterparts in Europe will be receiving.
  There used to be a phrase that was applicable to the Doge of Venice after his troops had taken Constantinople in 1205. He was the lord of about a quarter of the Roman empire, but it was not put like that. He had a half share of one quarter and a half share of another quarter. It was put in a complicated fractional way. Is not that appropriate? We are going to say of our Representatives in Europe that they should be paid perhaps a quarter the amount paid to other Representatives. If they are elected to this House also they may, as a concession, get a third of that quarter.
  The right hon. and learned Member for Hexham (Mr. Rippon) stated publicly—and perhaps this is why he did not get adopted for a Euro-constituency—that he was not concerned about the level of salary of Members of the European Assembly because, he said, he felt that in consultancy fees alone from the various lobbyists the job was worth £55,000. That statement may not be true, but if there is any truth in it, if organisations such as Unilever are likely to suggest to Members of the Assembly that they should support a high butter price so that more margarine can be sold—and these vested interests seem to be around all the legislatures and assemblies of the world—we are hardly encouraging the best results from the new quasi-legislature, the European Assembly, if the Members are to be tempted and swayed by such inducements.
  We should pay Representatives a sufficiently high salary to persuade them to ignore such inducements. We are not doing that. We are saying " You must not look to the British taxpayer, but you must look wherever else you can for your income. You must not expect to be treated as an equal or even be looked upon as an equal by your colleagues in
  1262
  Europe. You must accept that you go to Europe as a poor man, representing a poor country that is poverty stricken in spirit as well as in money."
  3.26 a.m.
  Mr. George Cunningham: I wish to make a personal prediction. I predict that within months the European Parliament will raise with the Court of Justice the validity of the action taken by the Council of Ministers under the Act. I do not say that in criticism of the Government, but someone must say it so that it can be said that the action was predicted.
  The provision under which the decision was taken permits the Council of Ministers to implement the Act. Should it appear necessary to adopt measures to implement the Act on direct elections the Council, acting unanimously on the proposal from the Assembly, after consulting the Commission, must adopt those measures, after endeavouring to reach agreement with the Assembly in a conciliation committee consisting of the Council and representatives of the Assembly.
  Other hon. Members have said that that is a shaky foundation on which to build. I do not blame the present Government for that. I predict that Parliament will raise with the Court of Justice the validity of the action and that the court will rule that the Council of Ministers was wrong to base upon that foundation. In a few months, or perhaps a year, Parliament will be accorded by the Court of Justice the right to determine the salaries of its Members.
  3.27 a.m.
  Mr. Brittan: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) says that he does not blame us. I hope that he will understand that I do not regard that as a generous concession. He was hardly in a position to take another view since the decision of the Council of Ministers was one to which the present Leader of the Opposition was an enthusiastic party, if not a prime mover. The force of the hon. Member's words of prophecy, as a political statement, is diminished by that.
  I do not claim to have the gift of prophecy even at this early hour. I hope that I shall be forgiven if I do not deal with all the arguments raised during the

  1263
  Third Reading debate as some were touched upon earlier.
  I do not believe that the wild fears, so ingeniously raised by the hon. Member for Newham, South (Mr. Spearing) on the peg of the word "facilities", or the gloomy approach taken by the hon. Member for Nottingham, West (Mr. English), are justified. The Bill is a simple vehicle for implementing the agreement for the payment of Members of the European Assembly. The agreement is interim. Nobody expects that this will be the final provision but it is the only provision. It would be absurd not to implement it. In that spirit, I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  HOSPITAL SERVICES (NOTTINGHAM)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooke.]
  3.29 a.m.
  Mr. William Whitlock: So many times over the years have I raised in the House the problems of the hospital service in Nottingham that I am heartily sick of doing so—heartily sick, that is, of the need to do so. I had hoped very much that the need would never arise again. Unfortunately, it has and once more we have a crisis in the Health Service in Nottingham and even at this late stage I feel that I must impress upon the Minister the gravity of the situation.
  Let me, as briefly as I can, recite yet once again some details of the relative deprivation of the Trent region as regards the provision of health services. I remind the Minister who is to reply that the Trent region covers an area which it not some remote, backward, underdeveloped, underpopulated part of the country. It is an important area of the country with a great diversity of industry and a population of 5 million people who deserve something much better from the Health Service than they are receiving at present.
  Repeatedly I have pointed out that the expenditure per head of population in the Trent region was below the national aver-
  1264
  age when the National Health Service came into being and that situation has continued down the years.
  In the Trent region waiting lists for hospital beds and outpatient appointments have been longer than those in the rest of the country. The number of doctors, specialists, professional and technical staff, nurses, midwives and ancillary staff per 100,000 of the population has been lower in the Trent region than the national average, and in some cases lower than the lowest figure in any region, while general practitioners have the longest lists of patients of any region in the country.
  That is the picture when one compares the Trent region with other regions. If one looks at the region itself, one finds that over the years the further south one travels from Sheffield the smaller has been the expenditure per head on health services and the worse the staff position. So the city of Nottingham has not had its fair share of the cake within the region, let alone within the national context.
  Minister after Minister, in both Conservative and Labour Governments, has had to concede that the Trent region is a severely deprived region and that the imbalance of provision between the regions should be eliminated. But always the day of justice was seen as coming some years from the date of a Minister's last publicly stated recognition of the need for it. It has always been jam at some ever receding date in the future and never jam today.
  We then had the report of the Resource Allocation Working Party and with it the hope that the allocation of proportionately more of the annual development funds to the relatively deprived regions would bring financial equality within a short time. That was the hope. In the event, we have been disappointed.
  It is true that in 1977–78 the Trent region received a 2·9 per cent. increase in resources compared with a national average of 1·4 per cent. The Trent region received 4 per cent. as against the national average of 2·3 per cent. in 1978–79, and this year it will receive 2·7 per cent. against a national average of 2 per cent. It is also true that, if one looks at the Nottingham city hospital site and the University hospital site, one cannot fail to see what significant developments have taken place in recent years, developments

  1265
  which have improved the standard of service in Nottingham.
  So a beginning has been made to rectify decades of injustice, but it is not a large enough beginning. As I have repeatedly pointed out on the occasions when I have raised the problems of the Nottingham area, truly vast sums of money are needed to recompense us for the unfairness of the past.
  That, then, is the scene against which the present crisis in the hospital service in the Nottingham area must be examined. Recently the Nottinghamshire area health authority produced a document on its operational plans for 1979–80 which shows that because of a cash shortage there are to be early closures of facilities where closures were already contemplated in the foreseeable future as improved services were to be made available, and there is to be postponement of the operation of plans for other services.
  Probably the largest reduction in programmes is involved in the likely delay of one year in the opening of phase 2 of the University hospital and the postponement until next year of geriatric beds at the general hospital. These represent urgent needs, especially the geriatric beds, since Nottingham has barely 60 per cent. of the geriatric beds that it needs, even with the 60 extra beds that have just been provided at the Highbury hospital.
  Going back to the time when the right hon. Member for Down, South (Mr. Powell) was Minister of Health, I have several times raised in the House the need for more geriatric beds in Nottingham. I was therefore very glad when in 1978, after there had been a bed crisis in Nottingham because large numbers of surgical beds were being blocked by their occupancy by old people needing geriatric beds, and after I had once more raised the inadequacy of the geriatric service, the area health authority decided that the provision of geriatric beds in Nottingham was a top priority. However, there is now to be a delay in the provision of some of those badly needed beds. So much for the priority.
  Phase 2 of the University hospital is essential, not only to meet service needs but to enable the medical school to meet the national priority of teaching more doctors. Delay in its opening is, therefore, nothing less than a disaster. Another
  1266
  serious blow is the delay in the opening of the mental handicap unit at the Highbury hospital. Yet another is the postponement for at least six months of the opening of the H-block at the Nottingham city hospital. I can tell the Minister that this has aroused a great deal of bitter comment.
  The H-block project was twice postponed during the period of the last Conservative Government, and because of cuts imposed by the Conservative Budget of December 1973, it was postponed for a third time early in the days of the last Labour Government. In a speech in the House over four years ago, I showed how grossly unsatisfactory were facilities at the city hospital for the treatment of burns and plastic surgery cases, and for paediatric and neo-natal surgery. The H-block was designed to replace those inadequate provisions. Also included in the new ward block were facilities for chronic renal dialysis, a speciality in which the area sadly lags behind.
  That new block has now been built, but because of the shortage of funds the Notts area health authority has postponed the bringing into commission of the badly needed facilities which that H-block would house. It is no exaggeration to say that a number of lives which would have been saved by these new facilities will now be lost because of the postponement of the H-block.
  Other measures are contemplated by the area health authority, and, while it might be said that they involve less pressure on the users of the health services, they will undoubtedly cause concern. Among them are the progressive rundown of the services at the Firs hospital in advance of the time when there would have been a transference of obstetric beds to phase 2 of the University hospital, the closure of a ward at the famous Harlow Wood orthopaedic hospital that services a wide area and the closure of Newstead hospital that provides pre-convalescent beds for the North Nottingham district.
  I see nothing in the area health authority's proposals concerning improved services for the deaf, but I hope that these improvements will not be delayed. There is most certainly a need for them, as I explained in the House some time ago, and for a good system of

  1267
  early identification of deafness. I asked that an outstation of the Institute of Hearing Research be sited in Nottingham. When that was agreed, I urged that comprehensive multi-disciplinary facilities be set up in close association with the outstation. I understand that the staff cost of one year of operation of a new assessment unit in an existing building would be only £25,000.
  I hope that the area health authority will look favourably on that small but important development, and also that it is continuing to give active consideration to the need for a second accident and emergency department in Nottingham, a matter that I raised in the House in 1976.
  On 18 June my right hon. Friend the Member for Mansfield (Mr. Concannon) initiated a debate on the crisis facing the central Nottinghamshire hospital services, and I sympathise with everything that he said on that occasion. He and my hon. Friend the Member for Ash-field (Mr. Haynes) tended to look with some envy at hospital provision in Nottingham, and they appeared to regard the University hospital as a monster sucking in funds which ought in fairness to go to improvements for their area.
  I agree that the University hospital is too big. It is the manifestation of the dreams of planners and architects of a decade or so ago, and we should never again build anything so large. What must be realised, however, is that it is a teaching hospital which will be producing doctors for the nation, and that it will also increasingly contain modern diagnostic and treatment facilities to reduce existing outdated facilities elsewhere.
  I feel sure that my hon. Friends will not spend their energies bewailing the fact that in some respects hospital provision in their area lags behind that in Nottingham, but that they will unreservedly join me in demanding for the Nottinghamshire area the long overdue justice for which I have been calling in this House for almost 20 years.
  The present crisis in the hospital service in Nottinghamshire, involving as it does premature closures, postponements and a squeeze on staffing, is caused by a shortfall of funds amounting to a mere £1 million. I say to the Minister and his right hon. Friend the Secretary of State
  1268
  that they will be hated in Nottinghamshire if that comparatively small sum of money is not made available to the area health authority so that the proposed postponements, closures and squeeze on staffing need not take place. That sum is indeed a bagatelle when one considers the astronomical sums of money that would have been spent in the Nottinghamshire area over the past 30 years had there been in operation a scheme to correct the imbalance of provision between the regions.
  We do not ask the Minister to perform the miracle of providing what might have been, but only to have the will to say that what has already been proposed by way of justice shall operate. If there are to be more cuts in expenditure in the Health Service in Nottinghamshire, they will be seen as doctrinaire sabotage of a service which, though chronically short of cash, is yet a boon and a blessing to all those who need the dedicated attention which our medical and nursing staff readily give.
  Let the Minister bear in mind that his Department has accepted the need for the improvement of acute hospital services in the region, especially those needed for clinical teaching of medical students and those which are seriously under-provisioned. It has accepted the need for expanded hospital provision for the mentally handicapped and the need for substantial staffing increases. None of these things can be provided without more money. I hope that it will be made available.
  I ask the Minister to remember all this and to bear in mind that, outside of London, the Trent region is unique. It contains three medical schools and it is therefore not only trying to serve the needs of its own districts but it is providing also a nationwide service in the teaching of doctors, with all the financial strains which this entails. For the sake of suffering humanity throughout the nation he must therefore see to it that the hospital services of the Trent region are able to do the job which is expected of them and which they are so very well able to do if they have the necessary resources. I hope that he will say that, following a meeting last week between the area health authority and the Trent region, moves are now being made to ensure those resources are made available.
  3.48 a.m.
  The Under-Secretary of State for Health and Social Security (Sir George Young): I congratulate the hon. Member for Nottingham, North (Mr. Whitlock) on the very eloquent and reasonable way in which he has, once again, drawn the House's attention to the deficiencies in the hospital service in the Nottingham area. Nottinghamshire is indeed fortunate in having such stalwart champions in the House. Having listened to the hon. Gentleman tonight and recently also to other hon. Members with a local interest from both sides of the House, I am left in do doubt at all about the problems facing the area and its health authority.
  I readily acknowldge that the AHA has a very difficult task in attempting to improve services for elderly, mentally ill and mentally handicapped people and to develop primary care services, whilst at the same time opening new capital developments including a major new teaching hospital and maintaining the momentum of growth of medical education. Like other area health authorities throughout the country, Nottinghamshire has to make difficult decisions on competing priorities against a background of rising demand and limited resources. We have to accept that such decisions, difficult and unpopular though they may be, have to be taken if health authorities are to manage within their budgets. I am afraid that it is inevitable in the present economic climate that some highly desirable Health Service improvements will take longer than we would all wish.
  At a meeting on 7 June, the Nottinghamshire area health authority discussed the next steps in its operational plan in the light of the latest information on resource availability. I understand that, partly because of an overspend by the area in the past financial year, the districts are being asked to manage within tighter budgets this year. The hon. Gentleman has told the House of some of the consequences, including the postponed opening of a new ward block at the City hospital—block H—and of phase 2 of the Queen's medical centre in the new University teaching hospital. I know that for many years the hon. Gentleman has taken a keen interest in the development of block H. As the hon. Gentleman has said, this will provide improved Health Service facilities, include-
  1270
  ing a new renal dialysis unit which will be able to take 40 new patients a year compared with 20 to 25 in the temporary facilities now being used.
  I fully understand the bitter disappointment which the hon. Gentleman and the people of Nottingham must feel on learning that the opening of the new block scheduled for November this year will have to be delayed. The area health authority shares this concern, but has to be realistic about its resource prospects this year. The opening of block H is one of the area's top priorities for 1980. The progressive opening of phase 2 of the University hospital to meet service and teaching needs is also a top priority for the area, but on present resource assumptions it will not be possible to bring it into use before 1981–82.
  Another way in which the area is seeking to balance its budget is by rationalising the existing hospital services and subject, of course, to consultation with local interests and the agreement of the community health council, closure of under-used facilities so as to make more efficient use of scarce resources.
  Despite the area's resource difficulties, the AHA is succeeding in making some progress in improving Health Service provision. The hon. Gentleman mentioned some improvements. For instance, great importance is attached to developing services for the elderly, and 100 geriatric beds are being opened during 1979–80 at Highbury hospital. The AHA has also asked the South Nottingham district management team to see whether sufficient savings can be made in support services and accommodation costs at Nottingham general hospital to enable 85 new geriatric beds in the hospital to be opened. In the longer term, the area strategic plan for 1979–80 to 1988–89 recommends an average increase of 40 geriatric beds a year over the next five years, and more if resources permit.
  Services for the mentally handicapped cannot be developed as fast as the AHA would wish, but it hopes to open the day hospital element of Highbury mental handicap unit within the current financial year. At least part of the unit's new inpatient accommodation can also be brought into use this year, allowing patients to be transferred from unsatis-

  1271
  factory accommodation at Mansfield, Victoria and Balderton hospitals.
  I understand that the new accident and emergency department at the University hospital, which replaces facilities at Nottingham general hospital, will open on 22 July, An evaluation team will be studying how the unit copes with the level of demand. There are tentative plans to provide a second unit, should it prove necessary, at the City hospital.
  The hon. Gentleman will need no reminding that the central Government are at several tiers removed from where decisions are taken on the allocation of resources by AHAs, and I know that he will not expect me to say that there is any prospect of direct Government help for Nottinghamshire. Indeed, one of the keystones of our policy towards the Health Service is that decisions should, as far as possible, be taken not from a distance by people who are inevitably remote from local needs and circumstances but by those who have a first-hand knowledge of them. So although decisions on resource allocations to regional health authorities are taken by Ministers centrally, it must be for RHAs to determine allocations to the area health authorities and AHAs must be responsible for allocating funds to health districts.
  The problems facing Nottinghamshire go back some time. The hon. Gentleman quite rightly reminded the House that a long period of under-investment in the Health Service, not only in Nottinghamshire but in the Trent region as a whole, is the underlying cause of many of the deficiencies he has described. He referred to the new system of allocating resources within the Health Service based on the recommendations of the Resource Allocation Working Party which aims to secure a pattern of resource distribution based on relative health care need. Under the RAWP formula, Trent has emerged as one of the most needy regions and has received the third highest growth rate this year—2·7 per cent, compared with a national average of 2 per cent.—and the second highest in the previous two years. The result has been a steady move towards target from 10·1 per cent. below average following the 1977–78 allocation to 7·25 per cent. below this year.
  1272
  It is always an unenviable task to have to decide the fairest way of allocating new resources, particularly, as in present times, when they are so scarce. Not only is it impossible to satisfy everyone. It is scarcely possible to satisfy anybody. It has come as no surprise to hear of the difficulties of the better-off regions in making ends meet from a position of virtually nil growth in the past, and from the less well endowed regions, such as Trent, about the need from their point of view for a much faster redistribution of resources. This year, with a weighted population of about 9·5 per cent., of incomes, Trent's capital allocation is 10·9 per cent. of the total sum allocated.
  Let me say, however, that my right hon. Friend supports—and intends to pursue—the principle of a fairer distribution of health care across the country. I envisage that the RAWP process will continue to play a major part in this, since it is the best objective measure of health care need we have available to us at the moment. But the ultimate decision has to lie with my right hon. Friend as to how quickly we can sensibly move resources around. I can assure the hon. Member that the points he has made will be brought to his attention and taken very much into account in our consideration of national policies on Health Service resources. My right hon. Friend cannot afford, however, to ignore the fact that the former Administration, in reaching decisions on the 1979–80 allocations, found it necessary to slow down the pace of change towards targets. This was mainly because of the very real problems being experienced by the relatively well-off regions, which found it impossible to rationalise their services and redistribute resources to their deprived areas on the very small growth in resources that had been allowed to them in the previous years. We must not lose sight of the fact that in well provided regions there are still areas which are deprived even by national standards.
  Our ability to continue the process of redistribution will depend crucially on the additional resources available nationally. We have inherited from the previous Government public expenditure provision for the hospital and community health services which, for next year, gives us growth nationally of less than half a per cent. This is not enough to cope with

  1273
  demographic demands and advances in medical technology, and obviously will set back the redistribution process. The provision of more resources will come from a stronger economy, which the Government are aiming to create the right conditions to bring about and are determined to achieve.
  As for RAWP principles below regional level, regional health authorities have been asked to apply them in their allocations to areas. I know that Trent regional health authority is making every effort to achieve a fairer distribution of Health Service resources within the region, but there are constraints on the rate at which the legacy of inequalities within regions can be eliminated. A major building programme is under way in the region and new hospitals are being opened, not only in Nottingham, but also in Leicester, Sheffield, Barnsley and Rotherham. Funds to open these have to be found from within the region's overall revenue allocation. Another major constraint is the commitment, endorsed by successive Governments, to the expansion of medical education. Trent is unique outside London in that it contains three medical schools—Sheffield, Nottingham and Leicester.
  The RHA fully recognises the difficulties which Nottinghamshire faces in attempting to alleviate the acknowledged deficiencies in health services whilst bringing into use the new university teaching hospital. The region has set a minimum growth rate for all areas, but in addition, in recognition of the particular needs of the Nottinghamshire area, it has consistently maintained its development rate above the regional average. During the next four years the area's average
  1274
  annual percentage growth rate is expected to be about 3 per cent., the second highest of all areas in the Trent region. Within this period, Nottinghamshire is expected to reach 95.5 per cent. of the RAWP national target, again the second highest area in the region.
  In addition, I understand that Nottinghamshire AHA has recently submitted a case to the regional health authority claiming that it needs an additional £5 million over and above its notified resource assumptions for the next five years in order to meet its teaching commitments and implement all the national guidelines relating to priority health care groups.
  I am fully aware of the concern that is felt in the NHS about the pressures to which the hon. Gentleman referred. The Chief Secretary to the Treasury in the previous Administration laid down that there would be no increase in cash limits for excess inflation and he introduced the exception to increases for pay. The Chancellor of the Exchequer made clear when we assumed office that we had inherited a significant number of pay commitments for which no provision had been made and a public expenditure programme far in excess of what the country could afford. Even in what is a difficult year we have afforded the health programme a considerable degree of protection.
  The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at one minute to four o'clock a.m.

TRADE
  Electronic Components
  Electronic Components
  Coastguard Service (Seahouses)
  Coastguard Service (Seahouses)
  Third London Airport
  Third London Airport
  British Airways (Gibraltar-Madrid Air Service)
  British Airways (Gibraltar-Madrid Air Service)
  NATIONAL FRONT
  NATIONAL FRONT
DEFENCE
  Service Widows
  Service Widows
  Royal Naval Dockyard, Portsmouth
  Royal Naval Dockyard, Portsmouth
HOME DEPARTMENT
  Broadcasting Media (Access)
  Broadcasting Media (Access)
  Location of Prisoners
  Location of Prisoners
  Female Earnings
  Female Earnings
  LD50 Test
  LD50 Test
  Vietnamese Refugees
  Vietnamese Refugees
  Liquor Licences
  Liquor Licences
  Indo-Chinese Refugees
  Indo-Chinese Refugees
  Taxi Fares
  Taxi Fares
OVERSEAS DEVELOPMENT
  Ocean Island
  Ocean Island
  SALT II
  SALT II
AGRICULTURE, FISHERIES AND FOOD
  Livestock (Transport)
  Livestock (Transport)
  Poultry Meat (Inspections)
  Poultry Meat (Inspections)
  Aujesky's Disease
  Aujesky's Disease
  ARTS COUNCIL
  ARTS COUNCIL
  WELSH ARTS COUNCIL
  WELSH ARTS COUNCIL
  ARTS (PRIVATE PATRONAGE)
  ARTS (PRIVATE PATRONAGE)
HOUSE OF COMMONS
  Parliamentary Questions
  Parliamentary Questions
  VIETNAMESE REFUGEES
  VIETNAMESE REFUGEES
INDUSTRY
  Industrial Development (Inner London)
  Industrial Development (Inner London)
  British Shipbuilders
  British Shipbuilders
  National Enterprise Board
  National Enterprise Board
  Advance and Nursery Factories (South-West Durham)
  Advance and Nursery Factories (South-West Durham)
  Foundry Industry
  Foundry Industry
  Post Office (Productivity)
  Post Office (Productivity)
  Aircraft Development (Fuel Economy)
  Aircraft Development (Fuel Economy)
  Videotape Recorders
  Videotape Recorders
  Robot Technology
  Robot Technology
  Factory Units
  Factory Units
  Postal Services
  Postal Services
  Steel Manufacture (International Comparisons)
  Steel Manufacture (International Comparisons)
  Motor Vehicles (Imports)
  Motor Vehicles (Imports)
  Shipbuilding
  Shipbuilding
  Regional Development Grant (Jarrow)
  Regional Development Grant (Jarrow)
  Regional Development Grant and Aid
  Regional Development Grant and Aid
  Crocidolite
  Crocidolite
NATIONAL FINANCE
  Investment Surcharge
  Investment Surcharge
  Tax Revenue
  Tax Revenue
  Lower Incomes
  Lower Incomes
  Heathrow (Customs)
  Heathrow (Customs)
  Works of Art (Public Access)
  Works of Art (Public Access)
  Luncheon Vouchers
  Luncheon Vouchers
  Economic Forecasts
  Economic Forecasts
  Income Tax
  Income Tax
  National Savings
  National Savings
ENVIRONMENT
  Departmental Land
  Departmental Land
  Rating
  Rating
  Rent and Rate Rebates
  Rent and Rate Rebates
  Rate Support Grant
  Rate Support Grant
  Housing (Maintenance Grants)
  Housing (Maintenance Grants)
  Local Government Expenditure
  Local Government Expenditure
  Departmental Grants and Loans
  Departmental Grants and Loans
  Council Housing (Security of Tenure)
  Council Housing (Security of Tenure)
  Construction Industry Manpower Board
  Construction Industry Manpower Board
  Thermal Insulation
  Thermal Insulation
  Rate Support Grant (Wales)
  Rate Support Grant (Wales)
  Water Rates
  Water Rates
  Rental Purchase Agreements
  Rental Purchase Agreements
  Rent Increases
  Rent Increases
  Mixed Use Properties
  Mixed Use Properties
  Northcote Road, Walton
  Northcote Road, Walton
  Mixed Use Properties
  Mixed Use Properties
EDUCATION AND SCIENCE
  Student Grants
  Student Grants
  Countryside Commission
  Countryside Commission
  School Meals
  School Meals
  Local Authority Expenditure
  Local Authority Expenditure
  Universities (Full-time Undergraduates)
  Universities (Full-time Undergraduates)
  Educational Standards
  Educational Standards
  Computers (Wolverhampton Schools)
  Computers (Wolverhampton Schools)
  Student Unions
  Student Unions
ENERGY
  Energy Commission
  Energy Commission
  Public Utilities (Advertising)
  Public Utilities (Advertising)
  Electricity (Unit Costs)
  Electricity (Unit Costs)
  Oil Usage
  Oil Usage
  Power Stations
  Power Stations
  Fast Breeder Reactor
  Fast Breeder Reactor
  Oil and Petroleum Products (Exports)
  Oil and Petroleum Products (Exports)
  Nuclear Power Stations
  Nuclear Power Stations
  Teversal Colliery
  Teversal Colliery
  Coal (Exports)
  Coal (Exports)
  Deep Sea Drilling
  Deep Sea Drilling
SCOTLAND
  Departmental Grants and Loans
  Departmental Grants and Loans
  Port of Leith
  Port of Leith
  Council Houses (Sale)
  Council Houses (Sale)
  Schools (Rebuilding)
  Schools (Rebuilding)
  Tenants' Charter
  Tenants' Charter
  Rabbits (Damage)
  Rabbits (Damage)
WALES
  Welshpool Bypass
  Welshpool Bypass
  Departmental Grants and Loans
  Departmental Grants and Loans
  Bangor (Training Centre)
  Bangor (Training Centre)
  Prince of Wales Orthopaedic Hospital
  Prince of Wales Orthopaedic Hospital
  A465 (Glynneath—Aberdulais)
  A465 (Glynneath—Aberdulais)
  Forestry Commission
  Forestry Commission
NORTHERN IRELAND
  Crossmaglen (Bomb Incident)
  Crossmaglen (Bomb Incident)
TRANSPORT
  Coaches (Retarders)
  Coaches (Retarders)
  Petrol (Lead Content)
  Petrol (Lead Content)
  Family Planning
  Family Planning
SOCIAL SERVICES
  Benefits
  Benefits
  Hospitals (Mentally III Patients)
  Hospitals (Mentally III Patients)
  National Health Service Dentists
  National Health Service Dentists
  Medical Certificates
  Medical Certificates
  Vehicles for the Disabled
  Vehicles for the Disabled
  Health and Personal Services (Coventry)
  Health and Personal Services (Coventry)
  Pharmacists (Remuneration)
  Pharmacists (Remuneration)
  Family Allowance Centre, Newcastle
  Family Allowance Centre, Newcastle
  Earnings Rule
  Earnings Rule
  Children (Employment)
  Children (Employment)
  Departmental Expenditure
  Departmental Expenditure
  War Pensioners (Car Allowance)
  War Pensioners (Car Allowance)
  Area Health Authorities (Expenditure)
  Area Health Authorities (Expenditure)
  Family Courts
  Family Courts
EMPLOYMENT
  Nationalised Industries
  Nationalised Industries
  Training Allowance
  Training Allowance
  Children (Employment)
  Children (Employment)
  Manpower Services Commission
  Manpower Services Commission
  International Labour Organisation (Conference)
  International Labour Organisation (Conference)
  Cancer Agents
  Cancer Agents
  Jarrow
  Jarrow
  Disabled Persons
  Disabled Persons
  Youth Unemployment
  Youth Unemployment
  Occupational Cancers
  Occupational Cancers
FOREIGN AND COMMONWEALTH AFFAIRS
  Turks and Caicos Islands
  Turks and Caicos Islands
  Germany
  Germany
  Kiribati
  Kiribati
  Anatoly Shcharansky
  Anatoly Shcharansky
  North Sea Oil (Exports)
  North Sea Oil (Exports)
  Gibraltar
  Gibraltar
  San Salvador
  San Salvador
  British Citizens (Chile)
  British Citizens (Chile)
  Chile
  Chile
EUROPEAN COMMUNITY
  European Conventions and Agreements
  European Conventions and Agreements
  Council of Europe
  Council of Europe
CIVIL SERVICE
  Institution of Professional Civil Servants
  Institution of Professional Civil Servants
  St. Stephen's Press
  St. Stephen's Press
  Pay (Independent Conciliator)
  Pay (Independent Conciliator)
  Manpower Services Commission
  Manpower Services Commission

Preamble
The House met at a quarter past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Peterborough.

LORD GALPERN
Sir Myer Galpern, Knight, having been created Baron Galpern, of Shettleston in the District of Glasgow—Was, in his robes, introduced between the Lord Segal and the Lord Wells-Pestell.
LORD RENTON
The Right Honourable Sir David Lockhart-Mure Renton, KBE, TD, QC, having been created Baron Renton, of Huntingdon in the County of Cambridgeshire—Was, in his robes, introduced between the Lord De Ramsey and the Lord Drumalbyn.

FOG DISPERSAL AERODROMES
2.43 p.m.
Lord BRAYE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the fact that England remains one of the most fog-bound countries in Europe, some suitable fog dispersal unit, burning natural gas, could be installed at one of our major airports, as, despite the advent of the electronic landing system, considerable delays to passengers and mail occurred last winter owing to fog.
Lord TREFGARNE: My Lords, the matter of suitable equipment for use at United Kingdom aerodromes to promote regularity and safety of operations comes within the responsibility of the Civil Aviation Authority. However, as the noble Lord will recall, studies were conducted in the early 1970s into the possi-
1128
bility of developing a fog dispersal system similar to the FIDO system used during the 1939–45 War. Use of natural gas as a fuel was included in these studies. The conclusions reached were that the installation and running costs of such a system, however fuelled, would be too high and there would be unacceptable safety hazards. I understand that there are no indications that these conclusions would be any different today. The expert view in this country, in common with that in other leading aviation States, is that electronic approach and landing systems provide the best means of promoting regularity and safety in conditions of low visibility, and development remains concentrated on such means.
Lord BRAYE: My Lords, while thanking my noble friend for that reply, I should like to ask him a supplementary question regarding the electronic landing system. Why was it that last winter there were so many delays, despite the fact that aerodromes had the electronic landing system?
Lord TREFGARNE: My Lords, even the electronic system is not capable, except in the most favourable circumstances, of bringing aircraft in to land when visibility drops to the very lowest levels which we sometimes experience, but even if we had had the FIDO system last autumn the regularity of operations would not have been improved.

GHANA: REPRESENTATIONS AGAINST EXECUTIONS
2.46 p.m.
Earl GREY: 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 representations the High Commissioner in Ghana has made to the military régime with regard to the execution of the Head of State and members of the Supreme Military Council.
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords,

1129
on 26th June, our High Commissioner in Accra expressed to the Armed Forces Revolutionary Council the Government's abhorrence of these executions, which have aroused widespread revulsion in this country. Our High Commissioner also participated in representations which were made jointly by EEC heads of mission on behalf of all EEC Governments on 28th June.
Earl GREY: My Lords, while thanking the noble Lord the Foreign Minister for that satisfactory reply, may I ask him one or two questions which are perhaps a little outside the main Question? Will the Government impress upon Flight Lieutenant Rawlings the urgency of accepting the will of the people of Ghana by handing over power completely to the new democratically-elected Government? Also, can the noble Lord say who is going to represent Ghana at the Lusaka conference?
Lord CARRINGTON: My Lords, I am afraid I do not know the answer to the second part of the question. In answer to the first part of the question, we look forward to working with the newly-elected and democratically-elected President of Ghana.
Lord GORONWY-ROBERTS: My Lords, will the noble Lord the Foreign Secretary bear in mind that we, the Opposition, join with Her Majesty's Government in expressing abhorrence of practices such as these in that country or in any other country, but, equally with Her Majesty's Government, we hope that Ghana will find its way back to democratic practices and certainly will be represented in Lusaka.
Lord CARRINGTON: My Lords, I am grateful to the noble Lord for what he has said, and I think the whole House will share in his wishes. It is interesting to note that after the representations made by the High Commissioner and by the EEC in Accra, Flight Lieutenant Rawlings in a broadcast on 30th June said that Ghana would not abandon her traditional respect for the rule of law and the principles of justice and human rights. I think that was a clear indication that there would be no further incidents.
Lord SHINWELL: My Lords, in view of executions having become in some countries almost a national pastime, I should like to ask the Foreign Secretary whether he can give any guarantee that the newly-elected person, to whom he has referred, will not be executed shortly?
Lord CARRINGTON: My Lords, I could not, on behalf of any other Government, anywhere, give any promises about anything.

BELIZE AND GUATEMALA
2.48 p.m.
Baroness VICKERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether any agreement has been reached between Belize and Guatemala, and, if not, what action they propose to take.
Lord CARRINGTON: My Lords, no agreement has been reached. Her Majesty's Government will continue to pursue a negotiated settlement.
Baroness VICKERS: My Lords, in view of the fact, as I understand it, that the majority of countries at the United Nations supported Belize recently, may I ask the noble Lord whether they are planning to take action? If not, will Her Majesty's Government reopen the matter with the United Nations? Are they continuing to build the new capital? Is the new mental hospital under construction?
Lord CARRINGTON: My Lords, my noble friend is, of course, quite right about the United Nations, and in common with noble Lords opposite we all of us want to see a settlement here, so that Belize can get its independence. But I do not think there is much point in starting negotiations, unless one can see that progress is likely to be made. As my noble friend knows, there is going to be an election in Belize in the not very distant future. Perhaps we shall have a better idea after that about what the situation is likely to be.
Baroness VICKERS: My Lords, could my noble friend answer my last two points concerning the new capital and the mental hospital?
Lord CARRINGTON: My Lords, I very much regret that I could not without notice; but I will write to the noble Baroness.

NUCLEAR DEFENCE SYSTEMS
2.46 p.m.
Lord WIGG: 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 the policy Statement on Nuclear Defence Systems announced on 21st December 1962 and amplified by the Statement of 1st October 1963, by which Polaris submarines and elements of the United States strategic forces are targeted jointly in accordance with a NATO plan, is still in operation.
The MINISTER of STATE, MINISTRY OF DEFENCE (Lord Strathcona and Mount Royal): My Lords, I can confirm that the arrangements for the assignment and targetting of our Polaris force, and elements of the United States' strategic forces, remain in accordance with the criteria laid down in the Statement on Nuclear Defence Systems of 21st December 1962 and subsequent Statements, such as that of 1st October 1963.
Lord WIGG: My Lords, would the noble Lord not agree that the Polaris force, whether it is owned by this country or by the United States, is in an advanced stage of obsolescence? We have four, not more than one of which is at sea. They are not independently targetted. They have a very limited range. The United States has 10, which are now assigned to secondary roles, and are being phased out with the emergence of Trident. As we are now five generations behind the United States, is there any useful purpose, except the political one, in claiming that we have an independent nuclear force?
Lord STRATHCONA AND MOUNT ROYAL: My Lords, I would not accept the noble Lord's statement that they are in an advanced stage of obsolescence. It is recognised that they will have to be replaced in the 1990s.
Lord WIGG: My Lords, how does the noble Lord manage to make that statement—I am sure he believes it—when the United States are phasing theirs out as fast as they can? They have 10 Polaris, and, as I say, all assigned to secondary roles, 27 Poseidons armed with C3, all of which are multiple independently targetted, which Polaris is not, plus Tridents armed with C4. They also have the U.S.S. "Ohio" coming into operation next year, with one generation being developed beyond that.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I would not contest with the noble Lord that the United States' nuclear forces are more modern and no doubt more dangerous than our own. But I would still like to point out to the noble Lord that I think it would be exceedingly unpleasant to be on the receiving end of our Polaris.
Lord GLADWYN: My Lords, is it not a fact that the Government have turned down the possible employment of cruise missiles as substitutes for the renewal of our Polaris force in 10 years' time?
Lord STRATHCONA and MOUNT ROYAL: My Lords, it has not been turned down.
Lord SHINWELL: My Lords, is the noble Lord aware that the question just addressed to him about the cruise missile is completely irrelevant? The issue is whether some weapon we have in our possession is comparable to weapons possessed by one of our allies. Is he aware that the answer he has given might have been understood if it had come from the previous Government? But as it is coming from a Government that have believed in building up a realistic defence, why does he not accept that the Polaris missiles are completely outmoded? The Americans have produced something very advanced, which proves conclusively that the reference to the Polaris being completely outmoded is absolutely accurate.

1133
Why not be realistic about it? Would it not be far better to admit that, with weapons which are no longer of any value, we are weak instead of pretending that we are strong?
Lord STRATHCONA and MOUNT ROYAL: My Lords, the noble Lord has raised a fair number of questions which we have dealt with to some extent during the defence debates. I would say this, that we believe that our Polaris force, as modernised, remains a weapon capable of inflicting damage on a potential adversary, and they would not lightly put themselves in a position where that could happen.
Lord SHINWELL: My Lords, is the noble Lord aware that what he is talking about is 1962? This happens to be 1979. Many years have passed and certain weapons have now become obsolete. Why do we not admit it?
Lord STRATHCONA and MOUNT ROYAL: My Lords, I have nothing to add to my previous reply; I can only repeat it.
Lord WIGG: My Lords, the noble Lord said "the Polaris force, as modernised". However, once we modernise it we go into a different generation. We either take on the Poseidon, which is itself becoming out of date, or we take on the Trident at tremendous cost. Which is it? We should not claim an independence which, in fact, we do not have.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I shall get into some difficulties if I try to elaborate on exactly what is meant by modernising the Polaris missile. I can only repeat that the Government are satisfied that the Polaris missile will remain a deterrent into the 1990s, and we shall then have to look at what is to replace it.
Lord BROCKWAY: My Lords, does the Minister agree that, however modernised, these forces would be insignificant compared with those of the Soviet Union and the United States of America, and would have no effect at all if war occurred? Would they not be an invitation to an enemy to bomb the people of this country?
Lord STRATHCONA and MOUNT ROYAL: No, my Lords, that is the philo-
1134
sophical question about which we have argued many times in this House. We do not aim in any way to measure up to the capabilities of either the Soviet Union or the United States. However, we believe that the independent nuclear deterrent possessed by this country is sufficient to deter, and will continue to be so until the 1990s.
Lord ORR-EWING: My Lords, will my noble friend bear in mind that there are many other people in this country who believe that it is very important that we should retain this deterrent? We would not wish France to be the only country in Western Europe operating a nuclear deterrent. We are sharing the burden with her and, if NATO is involved, of course, with the United States. In the meantime, it is no comfort for the Russians to say, "We are being bombarded by 16 atomic weapons which are slightly obsolescent". In that case obsolescence is of no importance as long as the range is adequate—which it is—from the launching areas which we have within our operational sphere.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I am very grateful to my noble friend.

LABORATORY ANIMALS PROTECTION BILL [H.L.]
2.57 p.m.
The Earl of HALSBURY: My Lords, I beg to introduce a Bill to regulate the use of laboratory animals and related matters; and for purposes connected therewith. I beg to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Earl of Halshury.)
On Question, Bill read 1a, and to be printed.

LORDS' EXPENSES
The LORD PRESIDENT of the COUNCIL (Lord Soames)The LORD PRESIDENT of the COUNCIL (Lord Soames) rose to move, That this House approves the following
(1) Members of this House, except members of the Cabinet, shall be enabled to recover, in addition to the

1135
costs of travel for which other provision is made, but within the limits hereafter mentioned, expenses incurred after 30th June 1979 and certified by them as—

(a) expense incurred (otherwise than as mentioned in (c) below) for the purpose of attendance at sittings of this House or of Committees of this House other than judicial sittings; or

(b) expenses incurred (otherwise than as mentioned in (c) below) for the purpose of attendance at judicial sittings of this House or Committees of this House or under section 9 of the Appellate Jurisdiction Act 1876, if incurred by Lords of Appeal who are neither Lords of Appeal in Ordinary nor holders of high judicial office within the meaning of that Act; or

(c) expenses incurred in staying overnight away from their main or only residence, where this is necessary for the purpose stated in (a) above and also, if incurred by such Lords of Appeal as are mentioned in (b) above, where this is necessary for the purpose stated in (b) above; or

(d) expenses incurred in the performance of their parliamentary duties as general office expenses or on secretarial or research assistance.

(2) The limits are—

(a) for (1)(a) and (1)(b) above, £9 for each day of attendance;

(b) for (1)(c) above, £18·50 for each day of attendance;

(c) for (1)(d) above, the sum arrived at by multiplying the number of days of attendance falling within (1)(a) or (1)(b) above by £8·50;

and for any expenses recoverable under (1) above by the Chairman or Principal Deputy Chairman of Committees or by a member who receives a salary under the Ministerial and other Salaries Act 1975, £700 per annum.
The noble Lord said: My Lords, I beg to move the first Motion standing in my name on the Order Paper.
The intention of this Motion is to give effect to the changes in Peers' expenses allowance proposed in my Statement on
1136
21st June. I explained to your Lordships on that occasion that the Government accepted the recommendations made by the Review Body on Top Salaries for increasing the allowance limits and making certain changes in the definition of eligible expenditure. I should now like to explain these proposals to the House in more detail.
The Review Body on Top Salaries commented in their 9th Report, published in 1977, that the coverage of Peers' expenses allowance, since its first introduction in 1957, had never been clearly defined. To remedy this they proposed that there should be a clear specification of the items of expenditure that could properly be claimed in attending the House. The Review Body therefore recommended that the single overall allowance which then existed should be split into separate elements, each with its own limit. The separate limits were to cover night subsistence, day subsistence, secretarial expenses, and postage together with certain other expenses—that is four separate categories.
The previous Government said that they welcomed the Review Body's analysis of this problem, but in the light of their incomes policy, decided to defer detailed consideration of the recommendation. It was agreed, however, that Peers who had to stay overnight in London should be able to claim up to a maximum of £16·50 for each sitting day instead of f13·50.
The Review Body was invited to look at the Peers' expenses allowance again last year, as part of a general review of parliamentary pay and allowances. The conclusion reached in their 12th Report is that the grouping system previously suggested should be adopted but with a total of three instead of four categories. The Government accept this.
The limits which have now been recommended, and which I propose should apply from the beginning of this month of July, are as follows. For Peers who necessarily have to use overnight accommodation away from their usual residence, a daily—perhaps I should say nightly—limit of £18·50 will apply. For day subsistence—that is, to cover meals and incidental travel—the limit will be £9. Secretarial costs, postage, and certain

1137
additional expenses as defined in the Review Body's report, may be met within a cumulative limit of £8·50 a day—in other words, claims may be arranged to recover expenditure over a period. These daily limits together total £36. However, I must make clear that we are talking about a maximum figure within which Members of this House may reclaim those sums which they have actually spent in attending to their parliamentary duties.
Thus, only those Peers who actually have to incur overnight accommodation expenses in London will be eligible to claim within the £18·50 limit. Other Peers will be restricted to the £17·50 total provided under the second two categories. In this connection, I should like to draw to the attention of your Lordships and to others the concluding remarks made by the Review Body in their 9th Report. My predecessor quoted these remarks in his Statement in 1977, but I think they warrant quoting again:
"We have observed during the course of this review that an impression exists outside Parliament—and, indeed, that it has been fostered over the years—that the Peers' expenses allowance is a daily attendance fee that Peers can claim as of right by attending the House of Lords. The impression is false, but it has persisted in spite of periodic restatements of the facts … The allowance has always been a maximum daily amount against which Peers can claim reimbursement of at least some of the expenses that they have actually incurred in attending parliamentary business".
My Lords, I beg to move.
Moved, That the aforesaid Motion be agreed to.—(Lord Soames.)
3.3 p.m.
Lord SHINWELL: My Lords, recently in your Lordships' House we have had some most interesting and illuminating debates in which I have refrained from participating, largely because I sometimes come to the conclusion that although the speeches are, in substance and in delivery, impeccable, illuminating, informative, interesting and sometimes fascinating, at the end of the day the one thing we forget or ignore is implementation. That derives from the peculiar position of your Lordships' House; that is, we are not vested with authority, which is regrettable.
On this occasion—and there is nothing illuminating or fascinating about it, although it is informative, which is something to be going on with—I find
1138
myself in a quandary. It is not very pleasant to find oneself in a quandary. One seeks a means of escape. The only possible means of escape that occurs to me—it is almost an afterthought for I have not indulged in any research into it—is to send this proposal back to the Review Body with our compliments and, I would add, with our contempt.
I start with a question, Socratic-fashion. As noble Lords know, I have great respect for the noble Lord, Lord Soames, the Leader of the House. I have known him for many years; we have always been friendly towards each other—at least I have. The noble Lord referred almost apologetically—I emphasise the word "apologetically"—to the maximum sum mentioned and to the vast sums that we are to receive! Obviously he had in mind the honourable Members of another place who dislike us and want to abolish us. It cannot be that they want to abolish us on the ground that our expenditure is excessive—not at all.
A thought has suddenly occurred to me, and because I do not want to forget it, I shall refer to it now. Occasionaly in our debates we have discussed the subject of comparability, which is very relevant to this matter. Along the corridor they have been moaning and groaning—I hope that those words are not regarded as unparliamentary by the noble and learned Lord who sits on the Woolsack—about their financial emoluments. I use the term "financial emoluments" because there are other emoluments about which we hear very little, but that is another story. Comparability? Their salaries have gone up sky-high, and we are to have another £8·50 a day. That is the assumption underlying the proposition. Let there be no nonsense about this. The maximum? Yes, but on the understanding, on the assumption—it is not a certainty; details are not requested, or at least may not be requested—that there is expenditure on research, office equipment and secretaries.
What will happen as a result of all this? Those in another place will continue to do what they have been doing for some considerable time; that is, they will continue to complain about the sums that we have been receiving. Time and again I have noted in the Press references that emerge from another place

1139
about the £16·50 that Members here have received. Of course, they received nothing of the sort. That sum applied only to those who required overnight accommodation when they came to the Metropolis. The proposition is that we are to receive £9 per day. That is automatic.
Several noble Lords: No.
Lord SHINWELL: My Lords, by "automatic" I mean that that is what we shall expect to receive for our daily attendance. If it is not automatic, what is it? If it is not automatic, it must depend on circumstances, on conditions, on this or that, or what-have-you. At any rate, I suggest that the proposition is that we can claim £9 per day if we attend. You must attend before you can receive it. Members of another place do not necessarily have to attend in order to claim their allowances; they can go off for a week or so. The Whips may complain, but they receive their salary regardless. During the Recess—and one is almost upon us—we receive no attendance allowance. In another place Members receive their salary, even for a two-and-a-half-month recess. As to expenses, I cannot say.
Let us consider this addition of £8·50. Of course, this £8·50 depends on conditions. There must be research. There must be secretarial assistance. There must be offices available. If I may say so, putting it bluntly, that is treating the House with contempt. Indeed, that is all we deserve unless we face up to it. This is not a question of wanting more money. There may be Members of your Lordships' House who may need it, but most of us do not. This is of very little consequence. It is a question of prestige; a question of not being regarded as inferior or treated with contempt.
Despite the apologetic references that the noble Lord made—almost saying, "Don't blame us for doing this. We didn't want to do it, but we couldn't help ourselves. It was the Review Body from whom the proposition emerged "—are the other side going to thank us for this? They would still repeat their cry "Abolish the Lords", even if we made it £20 a day.
I want to ask this question. The Review Body has been operating for some
1140
time. We can claim £17·50, provided all the conditions—and the noble Lord assents to it—contained in the document are observed. I wonder what the Review Body received per day. It would be interesting to know what they received per day. I will wager with the noble Lord £100 to £10—I will take a chance—that they got far more than £17·50 a day. Why? Of course, they are engaged in this most difficult operation of-deciding what we should receive. That requires research; office equipment; secretarial assistance; and a great deal of thought and meditation, et cetera—unlike ourselves. I wonder what they are receiving per day.
This ought to be sent back to them. Indeed, I never have been satisfied with the Boyle reviews, and there are other noble Lords who are in a similar position. I do not personally complain. I have not complained about my pension. But if I could be assured that there was anybody willing to support me in your Lordships' House on this subject as a Teller, I would vote against it and send it back to them. It is not good enough. Now what is going to happen? In the Press I can imagine, "The House of Lords has provided itself with an increased allowance". We shall have Mr. Arthur Lewis in particular making speeches on this subject. I single him out because he has been notable on this subject. It is not good enough. I could go on for a long time.
Several noble Lords: No!
Lord SHINWELL: Of course I could. Indeed, I am entitled to. That is what I claim my allowance for. I know that I am not making the speech that I ought to be making. I ought to be just making fun of the whole business, and indeed that is all it deserves. I can imagine that you get your £9—just imagine the sum, £9!—and then you can claim £8·50, the assumption being that you have got secretaries, research, office equipment, and all the rest of it. You claim it, and you feel you have done your duty. Your responsibility has been fulfilled. But in all this I wonder really whether he has any office equipment, or even indulges in any research, or requires secretarial assistance. On that subject I can give some information right away. Unfor-

1141
tunately, sometimes I indulge in observations and, to my surprise and astonishment, I get fan mail in consequence running almost to 100 letters. My letters are not franked, as is the case in another place. I get stamps. Do I have to give details of that? Of course not. I am not expected to furnish details. But what is the assumption outside? "Is he actually buying the stamps? Is he answering the letters? Does he deserve the £17·50 a day that is now available?"
I treat the whole thing with contempt, and that is what we should all do. I should rather that it had been left at the £13·50, except of course for the provincial Members. On this subject of provincial Members, I am on the record for many years. Some of my colleagues will recall that many years ago I said that some of those provincial Members who come and have to get accommodation in London certainly could not afford it. But, £3 a night was provided. What sort of accommodation were they expected to get for £3 a night? Was that not treating them with contempt?
I said at the time, "Never mind about the London Members. They can manage". Even that was objected to by a Member of your Lordships' House, the noble Baroness, Lady Hornsby-Smith, who said at the time, "What about the accommodation we have to provide ourselves with in London? The rents are so high", and the rest of it. The provincial Members, yes, that I accept; but for the London Members there is no reason why there should be any change.
I do not expect that I shall get much support. That will not matter. I will hold strongly to the opinions I have just expressed. I shall tell the people in another place what I think of them. I have often done that in the past, and I hope that I shall get a little more time to do it in the future, and this will afford me another opportunity and a substantial reason. That is all I have to say. I am not blaming the noble Lord. Far from it. I know that he is affable, pleasant, benevolent, even generous, but for Heaven's sake do not be apologetic for what we are doing! I think that that is enough.
Lord PANNELL: My Lords, can the noble Lord tell the House whether the £9 a day is in substitution for the £13·50 that we are entitled to claim now?
3.18 p.m.
Lord SOAMES: My Lords, with the permission of the House, may I respond to the few questions that have been put to me. The noble Lord, Lord Shinwell, said that he was in a quandary. I have seldom known him not to find his way out of a quandary. He said today that too often do we discuss in this House matters which do not later come to implementation. Well, we are discussing the implementation of a decision taken by a Review Body to which successive Governments put the question of how to handle the matter of expenses for this House. They were asked to look into the expenses, not into a salary. This House has traditionally been a House that has not had a salary but whose expenses have, to some extent, albeit not very generously, been met up to now at least.
The noble Lord, Lord Shinwell, asked me what the Review Body had got. I am afraid I cannot tell him what they got in the way of expenses. What I can tell him is that they were unpaid for the job that they did. I am quite sure that where expenses were concerned they were not entitled, neither would they have wished, to claim anything beyond what they actually spent on expenses in the course of their duties.
That is the case I am putting to the House today. I am not saying that the sum of £18·50 for an overnight stay in London is all that generous, but it is at least £3 more than it has been up to now. As to the question whether the £9 should be seen in relation to the £13, the answer is that the £9 plus £8·50—in other words £17·50—if it be spent in duties incurred by noble Lords in attending this House and fulfilling their duties within this House, means that what was one has been split into two, as it were; and, as for the total for sitting days as opposed to expenses incurred by an overnight stay in London, I suppose if one were to compare like with like, it would be £17·50 compared with £13.
I am sorry that the noble Lord, Lord Shinwell—for whose judgment and feelings I have long had the greatest respect—

1143
should feel that this has not been well done and that the Review Body has not done a good job, and that he would apparently have liked to see the Government turn down the Review Body report, feeling that either it should have been more or it should have been a lot less. I am sorry about that, but at least the Government this time have felt it right to accept in toto what the Review Body, which was set up to do a specific job under the very able chairmanship of my noble friend Lord Boyle, recommended.
Lord PEART: My Lords, I feel that I should now thank the noble Lord the Leader of the House for his Statement, and I am sure the House is grateful to him. He has given a clear explanation of the increases in the Peers' expenses allowance and I believe the figures will show that this is a sensible advance. I had the privilege of giving evidence, with my noble friend the then Chief Whip, to the Boyle Committee, and I suggest we should now move on to the next Business of the House; I see no reason why we should not now accept the Motion.
On Question, Motion agreed to.

EUROPEAN PARLIAMENT
3.23 p.m.
Lord SOAMES Lord SOAMES rose to move, That, with effect from 17th July 1979, the order designating certain Lords members of the European Parliament dated 3rd July 1975, as amended by the orders dated 21st February 1978 and 29th June 1978, be discharged. The noble Lord said: My Lords, I apologise for taking up so much of your Lordships' time today, but I think I should explain briefly the purpose of this Motion. Noble Lords will be aware that the European Parliament will meet tomorrow to begin its new life as an Assembly composed of directly elected Members. The present Motion discharges the existing orders of the House which designated the Members of this House who have served on the United Kingdom delegation to the European Parliament until now.
It also provides me with a welcome opportunity to express the appreciation which is felt in all parts of the House for the first-class work done by all those noble Lords who have served as members of the
1144
delegation from this House. I should also like to offer my personal contratulations and those of the House as a whole to those in this House who have been elected to serve in the newly constituted European Parliament. I wish them well in this exciting enterprise, and I wish them boundless energy because I know they will need it.
Moved, That, with effect from 17th July 1979, the order designating certain Lords members of the European Parliament dated 3rd July 1975, as amended by the orders dated 21st February 1978 and 29th June 1978, be discharged.—(Lord Soames.)
The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Lord Greenwood of Rossendale): My Lords, I wish briefly on behalf of the Select Committee to echo the felicitous words that the Lord President has spoken. We should like to thank the Members of the European Parliament for the help they have given us on many occasions and, if I may say so, for the great service they have rendered to this House and the country. They rendered it under very difficult circumstances, and in some cases at least they rendered it at some peril to their own health.
Now we wish to extend our best wishes to the Members of the new Parliament. We remember, at a time when Her Majesty's Government were not the most popular member of the Community, in what respect the Members whom we sent to them were held. We are sure the new Members will be held in equal respect and we hope before long to hear what steps have been taken to ensure that the same happy relationship is established between this House and the new Parliament as has existed in the past. We are most grateful to them and to the Lord President for what he said.
On Question, Motion agreed to.

LIMITATION AMENDMENT BILL [H.L.]
3.26 p.m.
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The BARONESS WOOTTON OF ABINGER in the Chair.]
Clause 1 agreed to.
Clause 2 [Limitation if case of theft]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 1:
Page 2, leave out from beginning of line 21 to end of line 13 on page 3 and insert—
(" 3A.—(1) Where a chattel is stolen from any person, sections 2 and 3 of this Act shall have effect in their application to his case subject to the following provisions of this section.
(2) Nothing in section 2(1)(a) of this Act shall bar any right of action accruing to him in respect of the theft or any related conversion.
(3) Section 3 of this Act shall apply to his case without modification where the original conversion is an innocent conversion preceding the theft.
(4) In any case not within subsection (3) above, section 3(1) shall not bar his right to bring an action in respect of any conversion following the theft except as provided by subsection (5) below.
(5) If any such conversion is an innocent conversion, section 3(1) shall have effect in relation to his right to bring an action in respect of any further conversions (innocent or otherwise) following that conversion as if that conversion were the original conversion.
(6) In any case not within subsection (3) above, his title to the chattel may be extinguished under section 3(2) by reference to the expiry of the time within which he may bring an action in respect of the first innocent conversion (if any) following the theft.
(7) Where the chattel is stolen a second or subsequent time from the person in question before he recovers possession of it, references to the theft in subsections (3) to (6) above shall be taken as references to the first theft".)
The noble and learned Lord said: This is a rather long Amendment and my brief contains this significant sentence: "There is no substantial change of policy and the amendments may fairly be described as drafting and indeed technical". The Committee may be slightly surprised at those words, having regard to the rather formidable length and complexity of this and other amendments, and perhaps I should therefore—I have satis-
1146
fled myself that those words represent the truth—say a word in support of them.
The clause as originally printed has thrown up two minor defects, both of which were spotted by a lawyer who serves in the Home Office. The first is that, in failing to gloss Section 3(2) of the Limitation Act 1939, the clause does not convey sufficiently clearly the policy that an owner should lose his proprietory rights in stolen property six years after the property had been bought by a bona fide purchaser but he should at the same time retain indefinitely his rights in respect of a theft or other conversions preceding the bona fide purchase. Section 3(2) provides for the extension of title when the limitation period has gone, and the present draft might allow an owner to say as against a bona fide purchaser that his, the owner's, title has never disappeared because the time of suing the thief had not expired.
Secondly, as printed the clause fails to deal with successive thefts; it is wonderful what things people can think of! In some circumstances a second thief in a chain of conversions would be able to set up the first theft as the point when time began to run in the second thief's favour as against the original owner. This is because subsection (3)(b) provides for Section 3(1) to have effect in relation to any innocent conversions following the theft as if the theft had not taken place, thus allowing a subsequent thief to claim the benefit of Section 3(1) without any amendment. In the course of eliminating these rather esoteric defects, the draftsman has taken the opportunity to recast the clause without any further changes of policy but perhaps in a rather simpler form. I beg to move.
Lord ELWYN-JONES: I am inclined to agree with the noble and learned Lord the Lord Chancellor that the amendment is indeed drafting and technical. The degree of detail and elaboration involved in dealing with the, presumably, exceptional case of successive thefts not only of the same object, but from the same person, must be piling Pelion upon Ossa, or whatever the appropriate metaphor is. However, I agree with the noble and learned Lord.
On Question, amendment agreed to.
Clause 2, as amended, agreed to.
Clauses 3 to 5 agreed to.
3.32 p.m.
Viscount DILHORNE Viscount DILHORNE moved Amendment No. 2:
After Clause 5, insert the following new clause:
Extension of time for disability not to apply if action previously brought
In section 22 of the principal Act (extension of limitation period in case of disability) the following new paragraph shall be inserted after paragraph (c) of the Proviso—
"(d) no action shall be brought by virtue of this section by any person who has previously brought any action (whether by virtue of this section or not) in reliance on the right of action in question".
The noble and learned Viscount said: On Second Reading I drew attention to a problem of some difficulty, and I invited the Lord Chancellor to find a solution to it and to propose an amendment to the Bill or a new clause giving effect to that solution. I may say straight away that that was rather a tease because I do not think there is any solution to the problem. So I was not disappointed to find no amendment or new clause tabled in the name of the noble and learned Lord, but I am most grateful to him for allowing parliamentary counsel to draft this new clause, with a request that I should put it down, which reached me at the same time as I wrote to the Lord Chancellor saying that I thought a clause on these lines should be tabled. The new clause, though not a solution, will I believe constitute an improvement on the present position.
I believe that everyone recognises the desirability that personal injury actions should be tried within a reasonable time. If there is a great deal of delay there may be great injustice, and indeed the administration of justice becomes very difficult. Of course, sometimes the injury or disease does not become apparent until many years after the cause of action has arisen. Our law makes provision for that, and my amendment does not alter it in any respect.
Between 1939 and 1954—quite a considerable period—an adult could start an action for tort at any time before the expiry of six years from the date of the cause of action arising. In 1954 Parliament thought that that period was too long and reduced it to three years generally in respect of an action for tort. But special provision before then, and since
1148
then, has always been made where the person claiming is under a disability, and from 1939 to 1954 such a person, as a general rule, might start his action at any time within six years after the ending of his disability. That meant that an infant who suffered an injury during that period could start his action at any time before he was 27. If injured when a child of two, he had consequently a quarter of a century in which to start his action, and after the lapse of anything like that time witnesses may well have forgotten entirely what happened at the time that the cause of action arose.
Parliament in 1954 must have thought that something should be done about that, for in that year the law was altered. An Act was passed in that year which provided that if at the time the infant suffered his injury he was in the custody of a parent, he should have no extended time within which to bring his action, it had to be brought within three years just as if he had been an adult. But if the infant was not in the custody of a parent, he could sue at any time before the expiry of three years of coming of age.
Parliament presumably thought that parents with an injured child in their custody could be relied upon to see that a claim for damages would be made speedily; but, for reasons that I need not go into, difficulties arose with regard to that. So in 1975 Parliament abolished the different treatment of children in the custody of a parent from that of those who were not, and Parliament then made it a general rule that actions for negligence, nuisance and breach of duty could be brought by infants at any time within three years of their attaining their majority; that is to say, now at any time before they reach the age of 21.
I reminded your Lordships on Second Reading of a case that we had recently heard in this House, and which shows I believe that the present position is not at all satisfactory. The facts of the case, shortly stated, were as follows. In 1964 an infant girl, 2½ years old, was walking along a pavement holding her mother's hand. She put a foot into the roadway, and she was struck by a car; and it was alleged that the driver of that car was guilty of negligence. Nearly three years later, just before the expiry of the time limit within which an action could have

1149
been brought if she had been an adult, a writ was issued against the motorist. That was in 1967, and then for the next 10 years nothing was done. Why that was I do not know. It may have been thought that the action had little chance of succeeding. It may have been—one does not know—that there was some neglect on the part of the solicitors then acting. Then, in 1977, there was a change of solicitors and notice was given of intention to proceed with the action and a statement of claim was delivered.
What, then, was the position of the defendant to that action, and of his insurers? All police records of the accident had been destroyed. All the statements of witnesses had disappeard. There can be no doubt that if this action now comes on for trial, the defendant will be gravely prejudiced by the delay; and whatever conclusion is reached—whether that the motorist was guilty of negligence, or was not—there is bound to be doubt as to whether the conclusion is the correct one. That there was gross and inexcusable delay in the prosecution of this action is beyond doubt, and the defendant tried without success to get it dismissed for want of prosecution. He failed because there was no point in dismissing that action when a fresh writ could immediately have been issued.
The amendment does not seek to alter the position where no writ has been issued claiming damages for an infant. If the amendment is carried, he will still have until he is 21 to issue a writ for damages for personal injuries for negligence, nuisance, or breach of statutory duty. But should an infant be allowed more than one bite at the cherry? If he has issued one writ, the action should be proceeded with; and if that had been done in this case, the interests of justice would have been achieved. If a writ has been issued, what further protection, as my noble and learned friend Lord Wilberforce said, do the interests of the infant require?
"Why",
he said,
"when proper steps have been taken in accordance with the law to enforce her rights, should she have the opportunity to start another action 15 years after the event and 12 years after the action had been started?
It is to deprive such a plaintiff of that opportunity that this amendment is de-
1150
signed, for I do not see why, when one writ has been issued claiming damages for the injury, it should, after great delay, be possible to issue yet another one. It really is not fair to a defendant, and must make the administraion of justice very difficult, if not impossible.
This is a technical and difficult subject, but not without importance; and I commend this amendment to the Committee in the belief that, if accepted, it will make an improvement to the present situation. I beg to move.
3.41 p.m.
The LORD CHANCELLOR: First of all, I should like to thank my noble and learned friend on the Cross-Benches for the trouble he has taken over this matter, for bringing it to the attention of the Committee and for putting down an amendment. I hope I have played absolutely fair about this business. I do not find it at all as easy as perhaps one often does in the case of highly technical matters. As I said on Second Reading, my judgment was rather against an amendment of this kind, and I think it probably still is, for reasons which I shall elaborate. But the weighty authority of my noble and learned friend on the Cross-Benches—and I think he was supported by the noble and learned Lord, Lord Diplock; I think he said that on Second Reading—obviously deserved a airing of this matter in one way or another so I lent him the full resources of my Office and, so far as I was able, the parliamentary draftsman. This amendment is therefore what has emerged, and I hope the Committee will think that in that respect I have acted fairly.
Viscount DILHORNE: If I may interrupt the noble and learned Lord, I do not think anyone would suggest the contrary. I implied, if I did not say it expressly, that I am most grateful indeed for the help that the noble and learned Lord has given.
The LORD CHANCELLOR: I am indeed grateful to my noble and learned friend. I do not want to appear either unfair or ungracious in this matter, but I do want to explain to the Committee what has caused me to have my doubts about this. I am only too conscious that I may be wrong; and, if I am wrong, the Committee will say so, and I shall not take the smallest umbrage about it. In

1151
the first place, I steered clear of the rather boggy ground of personal injuries altogether in this Limitation Amendment Bill. It has a habit of turning out to be controversial, and if it is controversial one is apt to lose one's rather humble little effort at law reform altogether, because it bogs down in a Committee somewhere at the other end of the corridor.
I do not think this would have been quite so important to me as one or two questions of principle which I should like to put before the Committee. If the Committee likes this amendment, I do not want to stand in its way at all, but I should like the Committee to know exactly what it is doing. This amendment is, of course, cutting down the rights of a child: do not make any mistake about it. It cuts down a child's rights to compensation for personal injuries—I do not think this applies only in personal injuries cases, but in practice that is what we are talking about—and I do not think the Committee should cut down the rights of a child to compensation for personal injuries unless somebody, at any rate (and it ought to be the Lord Chancellor), explains to it exactly what is being asked of it. As my noble and learned friend has lucidly and quite correctly explained, if a personal injuries claim is not prosecuted diligently, it may be dismissed. I am not now talking solely about children or minors. Incidentally, may I correct a slip of the tongue which my noble and learned friend made? The age is 18 now, not 21.
Viscount DILHORNE: Eighteen plus three I made 21.
The LORD CHANCELLOR: Then I apologise for any error I may have made, but as I caught it I thought it was incorrect. At any rate, if an action for personal injuries is not diligently prosecuted, it may in certain fairly extreme circumstances be cut out and dismissed for want of prosecution, and the plaintiff then loses his rights—unless, of course, he can get them by a side wind, by bringing an action for negligence against his solicitor or somebody else. That is fair enough, or may be fair enough, in the case of an adult; but what the Committee is being asked to do is to say that it should be so in the case of a child. In other words, the child is being deprived
1152
of his rights to damages for personal injuries if his father or mother, his next friend or what-have-you has had his action dismissed for want of prosecution, or is liable to have his action dismissed for want of prosecution.
What the House of Lords, in its judicial capacity, decided in Tolley v. Morris, which is the case my noble and learned friend was deciding upon, was that you could not do that because the child could of course have a new writ issued the next day, and therefore could not be deprived of his rights. We are now being asked to deprive the child of that right which, in Tolley v. Morris, the House of Lords, by a majority—and the fact that it was decided by a majority shows that this is a very difficult subject, about which one may well be wrong—decided it should have. There cannot be any doubt, I think, about the fact that if this amendment is carried then, of course, if Tolley v. Morris represents a wrong—and my noble and learned friend clearly thinks it did, and put very powerful reasons in support of it—it will correct that wrong.
But there is a new anomaly now created. Suppose a child is injured in the road and an action is duly brought by the next friend (say the father) and is not diligently prosecuted. If that action is dismissed for want of prosecution, the child's rights are extinguished, if my noble and learned friend's amendment is carried. On the other hand, if he has a still more negligent father who does not bring an action at all, and nobody brings an action on the child's behalf, there is therefore no question of the child's action being dismissed for want of prosecution and the child is still able to bring an action within three years of his attaining majority. So you may get the situation of two children, both injured in a road accident at, say, the age of two. In the case of one, the action is brought, is negligently prosecuted and is dismissed, and therefore that child gets no damages. In the other case, no action is brought owing to the extreme negligence of the father or mother, and the result is that there is nothing to dismiss and the child can pursue his remedy after majority. Does that make sense?
The answer, of course, as my noble and learned friend candidly admitted at the beginning of his speech, is that there is no

1153
solution to these problems. One has frankly to admit that there is no solution. The fact is that this is a highly technical matter. I do not want to stand against two very eminent members of the Appellate Committee of your Lordships' House, but I should rather like to know what the Committee thinks about it; and I hope I have explained it fairly.
Lord ELWYN-JONES: I am sorry the noble and learned Lord the Lord Chancellor is having difficulty. We have sympathy with him, and he must not worry about the fact that he is not quite as consistently articulate as we normally have the pleasure of enjoying him.
I do not find this an easy matter, but I am bound to say that the kind of anomalous situation which would result in the state of the law if this amendment were approved would render the law a little ridiculous. The noble and learned Viscount, Lord Dilhorne, does not like the idea of the infant we are concerned with in the amendment having two bites of the cherry. But he does not really get a single bite of the cherry because of the negligence, either of parent or solicitor or whoever may have purported to act for him in initiating the action with the issuance of a writ in the first place, in simply failing in his duty to carry it through. Therefore, we should be penalising the infant who would have to prove the sufference of disability. Yet if there was a situation where a disabled infant did nothing at all during the period of minority, the prejudice to the defendant—and one fully sympathises with that—would be all the greater than in the particular case that the noble and learned Viscount, Lord Dilhorne, has brought before us. We are always grateful to him for his persistence and energy in bringing forward these difficult legal issues. I am bound to say that, although what will emerge by leaving the law as it is will produce difficulties and grievances for insurers and defendants, my inclination is to prefer that they should suffer rather than the injured infant.
Lord MISHCON: May I follow my noble and learned friend with one short observation? If I say immediately that I happen to agree, most respectfully, with what the noble and learned Lord the Lord Chancellor has said, I hope that he will
1154
take it as an inducement to be equally gracious to me when I rise later to move three amendments. I want to offer this short point. The noble and learned Viscount, Lord Dilhorne, remarked that it was a great injustice to a defendant if, after many years, he suddenly finds that an action which had once been brought against him is brought again; because in that event he may find himself in great difficulty in respect of the evidence that he requires in order to refute the allegations of negligence that may be made against him.
I did not quite follow that point, because the fact is that, from a practical point of view, when you are acting for a defendant, once the writ has been issued, you are certainly not looking after him with that degree of care which you should as a lawyer if you do not immediately try to get such evidence as is available at that time. If you are taking statements from witnesses, you obviously endeavour to get the signatures of the witnesses to the statements. In certain eventualities, if, say, after the passage of time a witness has passed to a better world or for some other reason is not procurable, it may be possible to get in that evidence under the Civil Evidence Act and the defendant does not suffer that handicap.
If, on the other hand, without any action being brought at all, all of a sudden after many years the defendant finds himself faced with a writ and then comes to his advisers, he is in a far greater difficulty because indeed he has had no warning of the proceedings which has enabled his advisers to procure the evidence which may be furnished in a defence to his case. I add that short point, in support of what the noble and learned Lord the Lord Chancellor has said and of what my noble and learned friend Lord Elwyn-Jones has said, in saying that this amendment is, I feel, not one that should be supported.
Viscount DILHORNE: The noble Lord, Lord Mishcon, certainly has made a short point but I cannot agree with him that it is a very good one; and for this reason. Although it is true that in a perfect world the solicitor would keep everything, including all statements of witnesses, duly signed by them, the fact is that this particular case is an indication of what can happen. The insurers who, no doubt, had a very eminent firm of

1155
solicitors acting for them had not got—after 10 years when nothing had been happening—the statements of witnesses; the police had no records at all—and I need not elaborate on that. Of course, it may be that if an action is started by an infant only when the infant is 20 years old, and without any previous notice, the defendant will be in very great difficulty. That is recognised.
The noble and learned Lord the Lord Chancellor has said that this would be cutting down children's rights. I would ask the Committee to bear in mind that there have over a considerable period been differences between children's rights. In 1954, if a child was in the custody of a parent, the time within which an action could be brought in respect of injuries to that child was three years. Until 1975, that was the position in relation to a child in custody of the parents. If the child was not in custody of a parent, it still had a period of years after attaining its majority within which to bring an action.
I myself think that it is unlikely, if an infant has suffered injuries, that there will be a wait of 18 to 20 years before an action is brought. I do not believe that there can be many cases of that kind. What I am concerned with are the cases of which one has had illustration, where a writ has been issued, perhaps without undue delay, and then everything has been allowed to go to sleep. I think that when the noble and learned Lord the Lord Chancellor made some comments about the case of Tolley v. Morris, he was, perhaps, thinking of another case which came before your Lordships' House, the case of Birkett v. James. In Tolley v. Morris, it was the case that a majority decided that the action should not be dismissed; and they did so because, as I said, they felt that there was no point in dismissing it. On the other hand, a minority in the House—my noble and learned friend Lord Wilberforce and I—thought that the present law was that if a writ was issued on behalf of an infant during the extended period, that was that and another writ could not be issued. It was Birkett v. James in which it was held that you could issue as many writs as you liked before the period of limitation had expired. But there was that difference of view in the case of Tolley v. Morris as to what the law, in fact, was.
1156
This amendment would, I have to admit, bring the law in this narrow field back to what my noble and learned friend Lord Wilberforce and I thought it was by Act of Parliament. It is cutting down, it is true, in respect of some infants, rights that they have had since 1975; but from 1954 to 1975 there was different treatment of children depending on whether or not they were in the custody of their parents. The change made in 1953 was, I am sure, made after consideration by one of the committees which considered this subject in view of the need for justice to be done that the actions should be tried soon after the personal injuries were suffered. It is a case of striking the balance. I think that the balance would be wrong if the law were left as it is at the present time. But, in view of the opinions expressed by two noble and learned Lords who followed me upon the Woolsack, I will not press this amendment.
Amendment, by leave, withdrawn.
Clause 6 [Effect of acknowledgement or part payment]:
On Question, Whether Clause 6 shall stand part of the Bill?
4 p.m.
Lord MISHCON: A moment ago the Committee heard falling from the lips of the noble and learned Viscount the statement that he was talking about a very human problem. If I may say so to the Committee, in moving this amendment which seeks to leave out Clause 6, I too am dealing with a very human problem; and it is somewhat easy to solve if the Committee will agree to the omission of Clause 6. Indeed, it would leave the law exactly where it stands at the moment.
Before I embark on an explanation of why I think that the Committee should agree to leave out Clause 6, may I make it quite clear that my amendment, and indeed the following amendments, would not have the respect which I would hope for if they merely came from me. They do in fact come at the instance of the Law Society, who I know have communicated, as they always do, with the noble and learned Lord the Lord Chancellor in order to give him a clear intimation of the views they hold.
The problem is not a difficult one. It is this. When one is dealing with the matter

1157
of the statutes of limitation—the old phrase that lawyers and many laymen alike know well—one is dealing with the balance of justice between a claimant and a person against whom a claim is being made. What one is trying to do is to say: "I will not deprive somebody of a remedy unless it is just to do so; on the other hand, I will not allow a defendant to go for year after year almost into eternity wondering whether a remedy by way of an action is going to be instigated against him"—if one can instigate a remedy; I am not sure whether that is right, but let us take it that one can—because a plaintiff suddenly decides to issue a writ so many years after the cause of action arose.
There is no difficulty about the situation, once one has fixed the number of years whether it be, as in the instance that the Committee were discussing a moment ago, the question of a personal injury case where by and large the period is three years, or whether, as in the ordinary case, one is dealing with a debt and is considering a period of six years. If during that period of six years a debtor acknowledges in writing that the debt is due to his creditor then the period—the six years—commences to run again from the moment of that acknowledgment. Furthermore, if the debtor makes a part payment of his debt, and that happens in the course of the six years, again the period of six years starts to run from that moment. Indeed, that is the position if either the acknowledgment in writing or the part payment takes place only one day before the expiration of the six years.
What is the position, however, under the present law if the six years has already expired? It is this. Again, because the law says that it is not the rights that the creditor has lost, but only the remedy of action—and, incidentally, he does not lose his other rights of recovery; if indeed he happens to have a lien or a set-off he can exercise it even after six years—and no writ has been issued, be it because the creditor could not find the debtor, or be it because the creditor is one of those rather more merciful people who do not decide to issue writs as long as they feel that they are dealing with somebody honourable who one day will pay them, if the six years has expired and after that the creditor receives from the debtor an acknowledgment that the debt is still due,
1158
or a part payment, the law says, one might think very justly: "Now the period starts to run again". There is no injustice in that, obviously, to the debtor. The Committee may feel that there would be an injustice if there was a disputed claim—an obviously disputed claim—where all of a sudden it is for some reason resurrected. But here there is a debtor who has to acknowledge in writing his indebtedness or who has to make a part payment. It would be the odd situation indeed if this were a matter of dispute thereafter. It could happen but it would be the exception to the rule.
The Law Reform Commission sat upon this matter and others, and I must at once tell the Committee that they did not (if I may use the phrase) get very hot and bothered about it. What they said—if your Lordships will allow me to read it out—at paragraphs 270 and 271 of their 21st Report, on page 24, is this:
"In our consultative document we sought views on the desirability of changing that rule. There was general support for the principle that once lapse of time had extinguished a title no subsequent acknowledgment should be capable of reviving it. But there was a marked difference of opinion on the question"—
and this is the question we are considering—
"whether a similar principle should apply to the barring of a remedy where the right still persisted. It was argued in favour of making the change that the contrary rule gives rise to such uncertainty and is also something of a trap in that for example a company's accounts required by law to be published may have to include a balance sheet showing statute-barred debts and these may then be revived having been 'acknowledged', although no such revival was intended to be the result of the publication of the accounts. On the other hand, we recognise that the current rule"
that is, if I may say this in parenthesis, the law as it is at this moment—
"by which legal effect is given to an out of time acknowledgment is logically consistent with the principle that limitation only bars the remedy and leaves the right unaffected. Nevertheless, we think the rule is somewhat unreal and serves no very useful purpose".
Then I miss out the next sentence. The report continues:
"Therefore although the issue is not one of prime importance, we think the law should be changed".
I am leaving out the rest of that sentence.
We have the position therefore that not even the committee whose recommendations in the main have been followed in this Bill thought this a matter of prime importance. The Committee may there

1159
fore feel that, if they are not dealing with a matter of prime importance, why alter the law as it stands, if the position seems to be just and if it seems to follow the situation which I have tried to explain to your Lordships, where no great hardship would seem to occur to the debtor? The noble and learned Lord the Lord Chancellor was good enough to listen to the point on Second Reading and to give what I hope was a provisional reply. He then said that he thought the change that was recommended in Clause 6, which would no longer give the creditor any right at all to pursue his remedy by issuing a writ after the termination of the limitation period, made for more certainty. I am afraid I do not follow that because, as I explained to the Committee, if anything like this happens—the acknowledgment in writing or the part payment—in the course of the six years, then the whole of the period commences to run again, and once more in those circumstances there is a period of uncertainty.
In the example given of a company's accounts, there again the question of certainty is by no means answered if you admit that rather odd example. I describe it as an odd example, because in fairness I must say it was a matter dealt with in a case only a few months ago. In that case it was held, as I understand it, that although a company has to put in its balance sheet an account of statute-barred debts, which may be a document which in law is directed to the creditor, the creditor has to receive it before it can be deemed to be an acknowledgment. The Company Law Committee of the Law Society, consisting of very experienced company practitioners in the law, have decided that, in their view, this is unlikely to create any difficulty at all and certainly no substantial difficulty. Indeed, your Lordships may wonder whether it is just that a company in these circumstances should be exempted from paying what they have freely admitted to be a statute-barred debt.
In any event, how does it help on the certainty point?—because if this is law it would mean that a company's balance sheet issued six months before the expiration of the period, although the creditor may not know about it, would start the period running all over again; so,
1160
again, there is no certainty in regard to this. I think that is all I can usefully say to the Committee in support of a plea that the law should remain as it is.
I should like to add only one observation and, with respect, I would ask that the noble and learned Lord the Lord Chancellor should deal with it. There occur now in this Bill, even if Clause 6 is accepted, not only the words "written acknowledgement" and "part payment", but the additional word "promise"; in other words, not even a promise after the termination of this period would allow the time to be revived. The word "promise", in addition to a written acknowledgment and the question of part payment, does possibly pose questions for the future in regard to interpretation. Of course, it does not say a promise with or without consideration, and it may very well be that a promise with consideration would amount to a new contract.
To give a quick example, if the creditor happens to have a right of set-off or a lien upon certain documents and is induced by a promise not to exercise his right of set-off or his lien upon the documents, it may be said that a new contract has arisen and that the time may run again, if he is not paid, and therefore he may again be able to institute proceedings. That may be the answer, but it is not quite clear, especially when the loose word "promise", if I may say this with deference, is used and there is clear indication that the promise does not amount to an enforceable contract.
Lord LLOYD of KILGERRAN: I should like to presume to support the noble Lord, Lord Mishcon, over this amendment, which he has so ably presented. I hesitate to intervene in any argument which involves so many noble and learned Lords, but when I examined the previous consideration given by your Lordships to this matter I did not, with great respect, follow the arguments of the noble and learned Lord who sits on the Woolsack on the question of certainty.
I agree that certainty is to some extent essential in this kind of company law matter, subject to the fact that the principle of certainty does not conflict with natural justice. The Company Law Committee of the Law Society has adopted a very realistic view of this. Examples are given

1161
by the Law Reform Committee in paragraph 270 on page 24 of their report, dealing with the traps which arise in this matter in relation to so-called admissions made in relation to balance sheets. Therefore, may I simply support the arguments put forward on this matter by the noble Lord, Lord Mishcon.
4.17 p.m.
The LORD CHANCELLOR: Nothing ever amazes me so much as the conservatism (with a small c) of my profession and of the solicitors' profession. Perhaps that is a good thing—and who am I to say that it is not ? Indeed, the noble Lord, Lord Mishcon, whom I should like to thank for his lucid and courteous approach to this question, made what I think is almost the classical argument for Conservatism (with a big C) when he said: "If not of prime importance, why alter the law as it stands?" That seems to me to be one of the foundations upon which the party of which I am a member would wish to rely, and base its case against its enemies on all the opposite sides of the Committee.
All the same, I am not altogether happy about it in this instance. As the noble Lord, Lord Mishcon, candidly admitted, we are in the face of a unanimous recommendation—and I apologise in parenthesis for having inadvertently let your Lordships believe on Second Reading that the recommendation was not unanimous—of the Law Reform Committee, after taking evidence from every kind of body. The evidence, of course, was not unanimous but moved in different directions.
I am bound to say that my general policy on law reform is to make it as uncontroversial as possible and also to accept, where I can, the recommendations of a committee of this kind or of the Law Commission, as the case may be. I applied my mind to this, both before introducing this Bill and after having heard the speech of the noble Lord, Lord Mishcon, on Second Reading. I am afraid that my own inclination remains exactly where it was; namely, that the Law Reform Committee was right and that the Law Society, for whom I entertain the very greatest possible friendliness and respect, have possibly allowed their learning to run away with them on this occasion.
1162
I was mildly encouraged in my radical approach to this matter by what I understood the noble and learned Lord, Lord Elwyn-Jones, to say on really the same sort of material. He, without feeling that it would be the end of the world if somebody took a different view—and I cannot pretend that I do either—had rather come down on the same side as me. I do in fact come down in the end on the same side as I did before. This is really the old argument about the Pharisees and the Sadducees. The view of the Pharisees is that there is, or ought to be, resurrection after the cause of action has died. On this occasion, heretical as it may sound, I am with the Sadducees, that after death—of the remedy, to be pedantic and correct—there should be no resurrection.
The case to which the noble Lord referred, which I understand is called in re Campania de Electricidad and which, if my Spanish is correct, means the Company of Electricity, rather indicates the pitfalls which might beset an accountant who published a statute-barred debt in his company accounts, only to find the cause of action revived as a result of his doing so. I think that that is a pity. I do not myself find any difficulty in the conundrum which the noble Lord, Lord Mishcon, put to me at the end of his speech. I do not think there is any doubt that if, for consideration, or in some other way carrying out a legal obligation, parties to a contract decided to revive their obligation, the old obligation would revive. All we have said in the Bill is that after death part payment and acknowledgment or the other acts in the subsection will not suffice to revive the cause of action.
It is true that we were taught in the law schools that what died was not the right, but the remedy. But I am bound to say that I agree with the committee in their report, when they say that in this kind of action logic is rather unreal, and that the rule is rather unreal and serves no very useful purpose. They went on to say—and I think these are the words which were omitted by the noble Lord, Lord Mishcon, but they are relevant to my own argument:
"If the debtor and the creditor both wish to preserve the former's liability, they can do so easily in some other manner, and it seems to us to be better and make for a greater measure of certainty, once a debt has become statute-barred, that it should remain irrecoverable by action".

1163
Another argument, although it is not a conclusive one, in favour of the clause as it stands is that the history of limitation since 1939 shows that the fact that our law extinguishes the remedy and not the right has never been allowed to stand in the way of changes that are regarded as justified on other grounds, particularly on grounds of principle. For instance, Section 3 which deals with chattels, or Section 16 which deals with land, are in fact extinctive, and if there is to be a change of classification that could be dealt with separately from the question whether the right or the remedy is extinguished.
I also ought to point out to the Committee that the decision of the Law Reform Committee, which is at page 29 of their report, about the whole question of time running might have been different had they not come to this conclusion in paragraph 271, which has now been referred to by both the noble Lord, Lord Mishcon, and myself. I am not going to pretend that there is the smallest question of confidence or amour-propre about this, but I still remain of the same opinion. I do not know what the noble and learned Lord on the other Front Bench thinks, but I should be very glad to hear it if he has anything to say.
Lord ELWYN-JONES: I cannot resist that invitation. I do not find this easy, but I am bound to say that while Parliament is under no kind of obligation to accept recommendations of law reform committees, however eminent, my inclination is to consider very carefully indeed their conclusions and, unless there seems to be some good reason to the contrary, on the whole to accept them. There is, after all, as the noble and learned Lord the Lord Chancellor has said, a fairly elaborate process of consultation and discussion with interested parties. When one looks at one of the annexes to this report, there is an impressive list of those who were consulted, those with interests which might be affected, and I am inclined to the view—although I would not go the stake for it—that probably the Bill is right as it stands.
I shall not enter into the theology of resurrection. I thought that the noble and learned Lord was extending his range of theology rather dangerously wide at
1164
one point. The happy event of the arrival of the right reverend Prelate occurred, alas! too late. Otherwise, we might have had the benefit of his views on the merits of resurrection, which were adumbrated by the noble and learned Lord. But, broadly speaking, in the sphere of the law of limitation, once the cause of action is dead, then dead it should remain. I am afraid that I still hold the same view.
4.26 p.m.
Lord DOUGLAS of BARLOCH: I am sorry for disagreeing with the Lord Chancellor and with an ex-Lord Chancellor, for both of whom I have the greatest regard and respect, but this problem is a little different from the ordinary problems with regard to limitation of actions. It is nothing like, for example, the one that we discussed a few minutes ago, where indeed people may be put to severe disadvantage by actions being brought many years after the cause arose. Here we have a simple case in which the debtor does not deny the debt; in which, on the contrary, he acknowledges it. He writes a letter to say, or presumably indicates, that he intends to pay up or else he makes a payment on account. He is at no disadvantage. The Statute of Limitations is not injuring him in any way. He is willing to pay his debt.
Lord ELWYN-JONES: Will my noble friend allow me to intervene? Why does he not pay up, if he feels so virtuously about it? There is nothing to stop him.
Lord DOUGLAS of BARLOCH: There may be the simple reason that he does not have enough money. That is one of the most common reasons why people do not pay their debts. Anyway, if he acknowledges that there is a debt and indicates that he is willing to pay it, I do not see why he should be prevented from doing so, and that is the object of my noble friend's amendment which I think ought to be carried.
Lord MISHCON: I have indeed a formidable opposition. I was endeavouring to use all my powers of hypnotism from this Back Bench on to my own Front Bench, but those powers have obviously failed. For the purpose of the record, and in the hope that something may intervene between the Committee

1165
stage and the Report stage, I should like very briefly, I promise, to deal with a couple of the points that have been made. I, too, will not follow the noble and learned Lord the Lord Chancellor into the division into which my noble race was once divided; namely, those of the Pharisees and the Sadducees. I shall only, for a moment, tell him that, as a rule, sitting on these Benches, there is no difficulty in deciding what we want to alter, and what we regard as of prime importance to alter. If the noble and learned Lord the Lord Chancellor finds difficulty over altering anything, because he cannot decide what is or is not of prime importance, that is a matter of difficulty for those who sit on his Benches, not for us.
To be serious for one moment, the noble and learned Lord the Lord Chancellor very fairly read out a sentence from the Law Reform Committee's report which said that the two parties, if they wanted to, could very easily come to some sort of agreement. I ought to be the last person in the world to force people away from lawyers' offices, but the fact remains that in order to obtain a document of that kind, legal advice would be necessary both for the creditor and the debtor, although in normal human affairs that is not so. I can only say, to follow the noble and learned Lord the Lord Chancellor into the New Testament for a moment, that if the creditor happens to be a Good Samartian and does not rush into the issue of a writ and if the debtor is honest enough afterwards not only to acknowledge the debt but even, in the language of this clause, promises to pay in writing, surely the creditor should not in those circumstances be robbed of his rights.
As I have said, it would not be a very practical exercise for me to try to divide the Committee, in view of the opposition, couched in the most courteous and gentle language, of the noble and learned Lord the Lord Chancellor and my noble and learned friend Lord Elwyn-Jones. Therefore—
Lord LLOYD of KILGERRAN: I wonder whether the noble Lord would be good enough to give way to me. One phrase was used by the noble and learned Lord the Lord Chancellor which I could not understand. He referred to the Company Law Committee of the Law Society as, "having allowed their learning
1166
to run away with themselves". I understand that the noble Lord, Lord Mischon, comes here with the support of the Company Law Committee. If ever there was a committee—and I appreciate its membership—which adopts a realistic approach to the practical matters with which companies are concerned, that is it. I wonder, therefore, whether the noble Lord, Lord Mishcon, would care to deal with this expression which was used in passing by the noble and learned Lord the Lord Chancellor when he suggested that perhaps the Company Law Committee have "allowed their learning to run away with themselves", whereas it is their realistic approach to the matter which is clearly to be seen—and whether or not this is an amendment which the noble and learned Lord might care to take away and reconsider
The LORD CHANCELLOR: I do not know whether that question is addressed to me or to the noble Lord, Lord Mishcon.
Lord LLOYD of KILGERRAN: I was addressing both noble Lords.
Lord MISHCON: I do not intend to follow up this question, although it was a most helpful intervention, because I do not think it will help my amendment. I am trying hard to persuade the noble and learned Lord the Lord Chancellor, with such powers as I have, to agree with me, and to quarrel over the composition of the Company Law Committee of the Law Society is hardly likely to accelerate that end.
There is one point which I forgot to mention, of which I have been reminded by the intervention of the noble Lord. Therefore I am grateful to him. The noble and learned Lord the Lord Chancellor did not deal in any way with my question with regard to the word "promise". Obviously he would have dealt with the question in the event of a new contract. I am not quite sure what "promise" means in this context and why it has to be added to the usual words "acknowledgment of indebtedness". It seems to me to be an example of tautology which may very well lead to misunderstanding in future cases, if this clause becomes a section of the Act. Nevertheless, in view of the opposition which has been expressed but still in the lively hope

1167
of second or third thoughts being applied to it, I shall not press the matter any further.
Clause 6 agreed to.
Clause 7 [Postponement of limitation period in case of fraud or mistake]:
4.36 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 3:
Page 6, line 5, leave out from ("defendant") to end of line 10.
The noble Lord said: As I have already said, this amendment has been inspired by the Law Society, and I have the privilege of moving it. It is one which can be described as a probing amendment, because I should very much like to have, as would others, some elucidation of its subsections. I promise again not to be legal and to try to speak in what I believe is described as "layman's language".
This clause deals, very understandably, with the fact that no relief should be given to anybody in regard to the limitation period if that person has been guilty of fraud, or if that person has, with another person, made a mutual mistake. It deals with a third matter: cases where there has been a deliberate concealment. I believe that it would be far better if the rubric referred to concealment. In fact, it does not. It refers only to fraud and mistake, but it is very important that the clause should deal with concealment.
If noble Lords will look at Section 26(2) they will find that it deals with concealment. It says that:
"…the period of limitation shall not begin to run until the plaintiff has discovered the defendant's concealment of the fact in question or could with reasonable diligence have discovered it"
The whole clause, however, depends upon two paragraphs with regard to the concealment. They are paragraphs (a) and (b) at the top of page 6 of the Bill. Paragraph (a) states that the period of limitation shall not begin to run until the plaintiff has discovered the defendant's concealment of:
"any fact relevant to the plaintiff's right of action [which] has been deliberately concealed from him by the defendant".
That would obviously seem to be a correct way to deal with the matter. Indeed, the
1168
committee, which cannot always be relied upon to be omniscient and all-wise, suggested that the word "dishonestly" should occur. It was suggested by the Law Society that it was not necessary, surely, to go so far as to have to prove dishonesty and that to know that there had been a deliberate concealment was surely enough. I am glad, as I believe the committee will be, that that point has obviously been taken up in the drafting of this Bill.
To turn to the subject matter of my amendment, my suggestion to the Committee is that the next paragraph should be deleted. Your Lordships will find that the word "or" does not occur at the end of paragraph (a); the word "and" occurs there. Therefore, quite apart from a deliberate concealment, it is necessary to prove that it would be unjust, in view of the defendant's conduct in that or any other relevant respect, to allow him to rely for his defence on the expiry of the period of limitation otherwise prescribed by this Act. It may be difficult enough to show that there has been a deliberate concealment. However, the committee may well feel that once having shown there is a deliberate concealment, it would be quite wrong for the person who had deliberately concealed to be able to take avantage of the termination of the period of limitation.
This Bill seeks to go further and says, in effect, not only that the onus is upon the person concerned to show that the defendant deliberately concealed something from him; he also has to go on to show to the court that it would be unjust, in view of the defendant's conduct, to allow him to rely for his defence on the expiry of the period of limitation otherwise prescribed by the Act. The Committee may well feel that this is a completely unnecessary onus. I ought to say that both paragraphs are new and that therefore they ought to be looked at by the Committee with the greatest of care. So far as I know, they have not occurred in any previous Act. As I have said, this is more or less a probing amendment. I feel that unless the noble and learned Lord the Lord Chancellor can give a justification which satisfies the Committee for the additional onus of proving sub-paragraph (b)—namely, that it would be unjust to allow the defendant to rely for his defence on the expiry—I hope that what the noble and

1169
learned Lord the Lord Chancellor will do in addition will be to explain to the Committee the reason for these clauses (I am of course speaking only in regard to Clause 2) because I believe that, as they are new clauses, it will be most valuable to have at the Committee stage his explanation, which is always a lucid one, upon the record of the Official Report. But in particular by this amendment I am endeavouring to exclude this additional onus put upon a plaintiff by subsection (2)(b) at the top of page 6. I beg to move.
The LORD CHANCELLOR: The noble Lord, Lord Mishcon, said that he would try to explain his amendment in layman's language. I am not absolutely sure, either that he has succeeded in that ambition or that in my reply I shall be able to use only layman's language in order to explain what the clause is about. The background, at any rate, is a perfectly simple one: it is that, if somebody has deliberately hidden his own wrongdoing or in certain other cases where his action has been such that it would be unconscionable for him to rely on the limitation period to save him from the consequences of his wrongdoing, he should not be able to take advantage of the limitation period. The noble Lord quite rightly says that it is a new clause but the purpose of the clause is to restate the law more or less as it is, in language which is more or less contemporary, because the old law has come to be interpreted by the courts in such a way that the old language is no longer contemporary and this is thought to be an easier way of putting it.
Basically speaking, I understood that the noble Lord was really probing when he proposed his amendment. The amendment would omit subsection (2)(b) in cases where a plaintiff seeks an extension of the limitation period on the grounds that a fact relevant to his right of action has been deliberately concealed. This imposes an additional requirement, namely that the court should be satisfied that the defendant's conduct was such that it would be unjust to allow him to set up a defence of limitation. The reason for this requirement, in one word, is "un-conscionability". It reflects paragraph 2.22 of the Law Reform Committee's report. They emphasise there that the
1170
essential feature of the concealed fraud approach is reformulated in subsections (2) and (3) of the new clause and is that it operates on some degree of blameworthiness on the part of the defendant over and above his failure to comply with his strict legal obligations. The traditional expression used is "unconscionable conduct". Subsection (2)(b), as to the meaning of which I am now being asked, will be useful to the courts because it will leave them with as much flexibility as they had before in interpreting fraud in the old Section 26 which is being replaced, in order to determinine when a defendant has behaved so badly that he should not he allowed to rely on the expiry of the relevant limitation period.
As I understand the Law Society's problem, they would like to know, first, why in subsection (2)(a) it is not the right of action which must be concealed but any fact relevant to the plaintiff's right of action which should be concealed. The present Section 26 operates on the date of the discovery of the fraud but this phrase cannot be reproduced in the new clause because the purpose of the clause is to get rid of the term "concealed fraud" as a concept, as a term of art. So one needs some new expression for the event which is to trigger off the limitation period.
The Law Reform Committee in their draft clause—and that is found in paragraph 2.24 of their report for those who desire the reference—suggested the phrase, "the discovery of the right of action", but we think it would be safer to use the expression which we have used—"fact relevant to the right of action". That is closer in concept to the discovery of fraud and it is only on his discovery that the defendant has concealed a relevant fact from him that the plaintiff will realise that he has any surviving right of action, so as to bring the section into operation. What will amount to a relevant fact will of course be a question for the court to decide.
There is a further point which I understand to be raised on behalf of, and indeed in correspondence by, the Law Society. That arises on Clause 3(3), where the definition of a "deliberate concealment" is extended to include the deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time. That is required

1171
since it is not intended that the new section should be in any way more restrictive than the present law. There was a case of the Court of Appeal—and again for the sake of those who like references and may want to refer to it again it is Beaman v. A.R.T.S. Ltd. and was reported in 1949 King's Bench, 550.
The Court of Appeal held that the plaintiff's right of action was concealed by fraud simply because of the surreptitious way in which the defendants had committed their breach of duty. On such facts, subsection (3) as at present drafted could make a difference. So, for example, a builder might take no steps deliberately to conceal his breach of duty but he might know perfectly well that it would not be discovered for some time. Then subsection (3) would bring his conduct within the ambit of the clause and the plaintiff would be entitled to the extension of time that it confers.
It could be argued against this part of the clause that the Law Reform Committee stated their considered preference not to include any reference to the likelihood of a defendant's wrongful act remaining undiscoverable for a substantial period or at all. Again the reference is paragraph 2.25 of the report. But against that I think it should be explained that the committee took the view that it would be wrong for the operation of the provision to depend solely on the probable undiscoverability of the defendant's breach of duty. The clause follows this view, in that undiscoverability is not such a prerequisite to the operation of the clause but comes in as a rider in certain cases only.
I realise that I have not succeeded entirely in using layman's language in that explanation. Probably those who are interested in it would like to read it rather than make up their minds about it in the course of what is necessarily an oral exposition. I hope that that will, at any rate, help the noble Lord, Lord Mishcon, either now, having heard it, or later, having read it, to feel more certain about the purpose and meaning of the rather technical matter which we are discussing.
4.50 p.m.
Lord ELWYN-JONES: I am bound to say I have a degree of sympathy with the approach of my noble friend Lord Mishcon
1172
about this matter. It seems to me that where a defendant has by his conduct deliberately concealed from the plaintiff some circumstance which would establish the plaintiff's right of action, that course of conduct is not only blameworthy but, I should have thought, unconscionable. I am not at the moment fully satisfied with the need of a double proof of that blameworthy conduct required by the plaintiff, to establish not only deliberate concealment but also what is presumably intended as a further element in the burden of proof upon him, namely, to prove that
"it would be unjust in view of the defendant's conduct (in that or in any other relevant respect) to allow him to rely for his defence on the expiry of the period of limitation…".
All I would say at this moment is that perhaps the noble and learned Lord would be willing to look at this again, as we who have listened to his explanation will, of course, be ready to review the matter ourselves in the light of reading that which, however clearly expressed orally, may nevertheless need a little time for full consumption and understanding.
The LORD CHANCELLOR: If I may say so, the noble and learned Lord has made a very reasonable request. These are very recondite matters and the last thing I want to do is stand on my dignity, if I have any. At any rate, I make the promise which the noble and learned Lord has asked me to make. I hope everybody will meditate upon these words. I shall certainly not only do so myself but will ask my advisers to help me in the course of my lucubrations.
Lord MISHCON: In view of the assurance the noble and learned Lord the Lord Chancellor has been good enough to give in response to the gracious words, that I could not have uttered but would love to have done, which were uttered by my noble and learned friend Lord Elwyn-Jones, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
4.52 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 4:

1173
After Clause 7, insert the following new clause:
Suspension of limitation periods during emergency period
The following section shall be added after Section 26 of the principal Act—
30A.—(1) The Lord Chancellor may by order made by statutory instrument perscribe the dates for the commencement and the termination of an emergency period.
(2) Where under any provision of this Act a period of limitation would otherwise expire during an emergency period that period of limitation shall expire one month after the termination of the emergency period".
The noble Lord said: I rise, hopefully, your Lordships may think, for the last time in order to move an amendment by way of an additional clause. If ever there was a clause which could be understood by lawyer and layman alike it is certainly this one. I have to add the word "unfortunately", because the clause endeavours to deal with the situation, which has becomes a little too common, that arises as a result of industrial action. Recently, of course, we suffered in the metropolis—and it was suffered elsewhere—in that the work of the courts was interfered with.
This clause asks, and it provides, that in these circumstances the limitation period may be extended by order. This, unfortunately, has already been done in Scotland; I say "unfortunately" only because of the necessity that arose there for it to be done. I have endeavoured, with the help of the Law Society obviously, whose wording this is, to forward this amendment in roughly the same form as occurs in the Scottish Bill. I feel that I need only add these couple of sentences. Your Lordships may feel that this really comes outside the scope of this Bill, in that we are dealing with a general situation and not one limited to the situation created if this Bill becomes law or indeed created by the whole question of the Statute of Limitations and limitation periods.
As we have heard time and again in the discussions that have taken place in the Committee, the fact is that no court has the power except in very limited circumstances, which have been defined in the course of the discussions here this afternoon, to extend the period of limitation. Therefore, the situation is that if—and it could be for a very good reason—a creditor, relying, if you like, until the very last moment upon the goodwill and good sense and decency
1174
of a debtor to pay his debt or satisfy his claim, whatever it may be, may suddenly find himself beaten by a situation completely outside his control, namely, that the courts are not open to receive a request for the issue of a writ on the very last day or last day but one before the period expires. As we are dealing with a situation where the time limit is a fixed one, and in the sort of case I am talking about there is no discretion for an extension, your Lordships may think it convenient to put this clause in the Bill and to see that proper machinery is available for the state of emergency to be covered by an extension.
I entirely realise, as does the Law Society, that this may be thought to be only a draft which ought to be considered between now and Report stage. As I have said, the copy is from a Scottish Bill and it may very well be that our circumstances may need different wording. I am really trying to get the principle accepted this afternoon, and would of course look with great respect upon any alteration in the wording that might turn up by the Report stage.
The LORD CHANCELLOR: Again I am delighted in one sense, but surprised in another, that this suggestion should come from the Benches opposite and not from behind me. What the noble Lord, with all the authority of the Law Society behind him, is saying is that I should use a non-contentious law reform Bill as a vehicle for making contingency provision against the possibility of future strikes in the public service. I am advised that this might make the Bill contentious in another place, and unless the amendment is absolutely essential it ought not for that reason to be agreed to, law reform being by consent or not at all. I think this is really the stage at which the politician takes the place in my heart in preference to the lawyer. Of course, if the noble and learned Lord, Lord Elwyn-Jones, were to assure me that his party were solidly behind the Law Society and the noble Lord, Lord Mishcon, then it is conceivable that my heart might soften towards Lord Mishcon. But unless I get such an assurance I am bound to advise the Committee that this is not really a good thing to do in the way suggested.
I am a little less sympathetic to it than I would otherwise be because I always have an element of want of sympathy to people

1175
who leave things to the last possible moment. But I am now about to embark upon a very highly technical argument, in which I have some confidence because I have confidence in my advisers, that really this is not necessary. Therefore, on the ground that unless the amendment is essential it ought not to be agreed to because it might be contentious in another place and so prevent our little Bill from getting through, I must remind the House of the case—why litigants always have such funny names I never know—of Pritam Kaur v. S. Russell reported in 1973 Queen's Bench at page 336. It was there decided that an extra day for the issue of a writ could be allowed in any case where a limitation period expires on a day when the court office is not open. They never said, because it was not relevant to that case, that the reason it might not be open was a strike. However, I do not think that it is limited to cases where it happens to fall on a Bank Holiday, a Sunday, or whenever it may be.
Therefore, I am told that there is no reason why, in principle, the authority in Pritam Kaur ought not to be applied in cases where the office of the court is closed through industrial action instead of merely at the weekend or on a holiday. Of course, if the industrial action were so serious that it was physically impossible for litigants to approach the court for a period, I imagine that Parliament would have to legislate ad hoc. But my advice at present to the Committee, to the noble Lord, Lord Mishcon, and to the Law Society is that—although, quite obviously, a Conservative Government do not view this with any hostility—we must try to keep our proceedings as amiable as possible both here and elsewhere; and unless the noble and learned Lord who represents his party in this House has really got them all in control down the corridor and can tell me so, I think that I must turn a blind eye, or rather a deaf ear, to the eloquence of the noble Lord, Lord Mishcon.
Lord ELWYN-JONES: The questions that the noble and learned Lord has addressed to me namely, whether the Labour Party is fully in support of the amendment of my noble friend Lord Mishcon, rather reminds me of Serjeant Sullivan's famous answer when there was a great argument in the court about the
1176
application of the principle of volenti non fit injuria He said,: "Yes in Ballymena"—or wherever it was—"they talk of nothing else, my Lord" or whatever the phrase may be.
I do not think that I can give either my noble friend or the noble and learned Lord the assurance which they seek. If it be that the case of Pritam Kaur—whatever his circumstances may have been and whom God no doubt will preserve—has clearly established that to achieve the purpose of my noble friend's amendment the proposal in the new clause is not necessary we are certainy treading on, to call it delicate ground would be an underestimate of the situation. It would really mean as I understand it that the Lord Chancellor of the day before a proclamation of a state of emergency had been determined by the Cabinet would with his undoubtedly great and abundant authority, plunge himself in the middle of the industrial dispute. And, in order to protect the sanctity of his courts—no doubt a worthy consideration—and what is more important their daily working efficiency, he would declare his own little state of emergency. All would then he resolved, because all so impressed by the majesty of that intervention would quickly come to heel. It is a little unreal. It is dangerous ground and I hope that my noble friend will not push us into it.
Lord MISHCON: The last thing in the world that I would ever do is to push in any direction which my noble and learned friend Lord Elwyn-Jones advised me not to push. However I should like to make a few observations. First, if I had ever raised a discussion about the causes of an industrial dispute I could well understand that there could be political differences. I was endeavouring to deal in a very limited way with the results of an industrial dispute when the law courts were not available. I frankly thought—and obviously I am disappointed about what I had hoped for—that I was not embarking on any opportunity for the noble and learned Lord the Lord Chancellor to make a political point. He always finds it so tempting that I cannot blame him if he has taken advantage of the opportunity and has endeavoured to make one.
However, what I do want to say is that I am very glad that at least the point has

1177
been ventilated so that it can be considered. If indeed it is covered by the existing case then, of course, I am absolutely content. However, the noble and learned Lord the Lord Chancellor realised I was not speaking in any way for my party; I was not even speaking on behalf of these Benches. It so happens that my location—and I am proud that it is my location—is in these Benches; but I was speaking, as I said, on behalf of the Law Society. In the circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Remaining clauses agreed to.
Schedule 1 [Amendments]:
5.05 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 5:
Page 11, line 20, leave out paragraph 5 and insert—
(" 5. In section 3—

(a) the words "or wrongful detention" and the words "or detention" shall be omitted wherever they occur in subsection (1); and

(b) in subsection (2), the words from 'and for' to 'aforesaid' shall be omitted").

The noble and learned Lord said: I beg to move Amendment No. 5, and, with your Lordships' permission, I shall speak to Amendment No. 6. These two amendments appear to be related to the same subject. Again, it is wonderful what people think of. These are rather technical amendments and they remove an obscure anomaly in Section 3(2) of the Limitation Act 1939. The present law appears to be that if there is a conversion from a sane owner who goes mad before a second conversion from the first converter, the owner's title against both converters will not be extinguished until six years after the owner recovers his sanity. That ought not to be the law since the subsequent disability should not deny the first converter his rights under Section 3 declaring that the owner's title is extinguished. I beg to move.
Lord ELWYN-JONES: May I ask whether that brilliant piece of intervention is the product of the Home Office mind or what the Lord Chancellor's Department is pleased to call its mind?
The LORD CHANCELLOR: These matters are wrapped like others in impenetrable mystery and I can only remind the noble and learned Lord of the words of the White Knight in Alice Through the Looking-Glass, when he said, "It is all my own invention".
On Question, amendment agreed to.
Schedule 1, as amended, agreed to.
Schedule 2 [Enactments Repealed]
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 6:
Page 12, line 25, column 3, at end insert—
("in sub-section (1), and in subsection (2) the words from 'and for' to 'aforesaid'.").
On Question, amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 7:
Page 12, line 30, column 3, at end insert—
(" In section 22, paragraph (e) of the proviso.")
The noble and learned Lord said: I beg to move Amendment No. 7. This is a drafting amendment which repeals paragraph (e) of the proviso to Section 22 of the 1939 Act and is consequential on the repeal of Section 2(5) in Schedule 1, paragraph 2.
On Question, amendment agreed to.
Schedule 2, as amended, agreed to.
House resumed: Bill reported with the amendments.

COMPANIES BILL [H.L.]
5.10 p.m.
Report received.
Clause 5 [Re-registration of private companies as public companies]
Lord LYELL Lord LYELL moved Amendments Nos. 1 and 2:
Page 5, leave out lines 38 and 39 and insert—
(" (i) that the special resolution mentioned in subsection (1)(a) above has been passed and that the conditions specified in subsection (1)(c) above have been satisfied; and").
Page 6, line 6, leave out from ("evidence") to end of line 7 and insert ("that the special resolution has been passed and the said conditions have been satisfied").
The noble Lord said: My Lords, at the outset I should like to say a few words of apology to the House. The House will note a series of Government amendments in the names of my noble friends Lord Trenchard and Lord Cullen of Ashbourne and myself. My noble friend Lord Trenchard is unavoidably prevented from assisting and partaking in your Lordships' deliberations because, as noble Lords may be aware, he has responsibilities for one or two other matters besides the Companies Bill. I hope that the House will accept his apology that he is unable to be here this afternoon to move some of the amendments standing in his name. However, he intends no discourtesy at all. Having said that, I hope that the House will permit me to speak to Amendments Nos. 1, 2, 4 and 5.
The first two amendments with which we are dealing—Nos. 1 and 2—are purely drafting amendments. They are exactly parallel amendments to those in Clause 8. In Clause 8 we find Amendments Nos. 4 and 5. With your Lordships' permission, I shall deal with them all. These amendments are needed in this Bill to cure some confusion which at present exists in Clause 5 and in Clause 8 between "conditions" and "requirements". Your Lordships willl see that Clause 5(3)(e)(i) refers to the requirements of sub-section (1)(a) and (c) of Clause 5, whereas in fact those provisions do not impose requirements but lay down conditions. The amendments recognise this small point of drafting and I hope that what I have said will satisfy the House. I beg to move these Amendments en bloc.
On Question, amendments agreed to.
Lord LYELL Lord LYELL moved Amendment No. 3:
Page 6, line 11, at beginning insert ("subsection (1) of").
The noble Lord said: My Lords, this is a purely drafting amendment, which I beg to move formally.
On Question, amendment agreed to.
Clause 8 [Old public companies]:
Lord LYELL Lord LYELL moved Amendments Nos. 4 and 5:
Page 11, line 8, leave out from second ("the") to end of line 10 and insert ("resolution mentioned in subsection (3)(a) above has been passed
1180
and that the conditions specified in subsection (11) below were satisfied at the time of the resolution.").
Page 11, line 12, leave out from ("evidence") to end of line 13 and insert ("that the said resolution has been passed and the said conditions were so satisfied").
The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move Amendments Nos. 4 and 5 en bloc.
On Question, amendments agreed to.
Clause 13 [Registration of joint stock companies as public companies]:
5.15 p.m.
Lord LYELL Lord LYELL moved Amendments Nos. 6 to 8:
Page 17, line 7, leave out ("this section") and insert ("subsection (4) below").
Page 17, line 13, leave out ("(1)(a)").
Page 18, line 8, leave out ("subsection") and insert ("paragraph").
The noble Lord said: My Lords, with the approval of the House, I seek to speak to and deal with Amendments Nos. 6, 7 and 8. These are all simple drafting amendments. I hope the House will agree that I may deal with them formally. I beg to move these amendments en bloc.
On Question, amendments agreed to.
Clause 14 [Authority of company required for allotment of certain securities by directors]:
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 9:
Page 19, line 36, leave out from ("on") to ("the") in line 37 and insert ("conviction on indictment to a fine and on summary conviction to a fine not exceeding").
The noble Lord said: My Lords, during the Committee stage I undertook to your Lordships to bring forward amendments to Clauses 14 and 34 to increase the penalties for breach of these provisions. Amendment No. 9 amends Clause 14, as I undertook, and Amendment No. 17 makes a similar amendment to Clause 34. Both amendments increase the penalty from a fine of £200 on summary conviction alone to an unlimited fine on indictment and a maximum fine of £1,000 on summary conviction.
During the Committee stage the noble and learned Lord, Lord Elwyn-Jones,

1181
indicated that the approach in these amendments seemed reasonable, and he said he would like to see the colour of these amendments on Report. I hope that he will find the colour to his liking—neither too strong nor too weak. I beg to move.
Lord ELWYN-JONES: My Lords, happily I am not colour-blind. I am grateful to the noble Lord for tabling these amendments. They make the penalties realistic and more fitting to the offending conduct complained of.
Lord LLOYD of KILGERRAN: My Lords, I should also like to support the noble and learned Lord, Lord Elwyn-Jones, in saying that these penalties are more realistic than they were in the original Bill. If it is not improper, I should like to take the opportunity to congratulate the noble and learned Lord, Lord Elwyn-Jones, upon his election to one of the highest offices in the legal hierarchy; that is, Treasurer of Gray's Inn.
Lord ELWYN-JONES: My Lords, I thank my noble friend, who has the benefit of being a member of that great establishment.
On Question, amendment agreed to.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 10:
Page 20, line 2, after ("re-registration" insert ("or registration").
The noble Lord said: My Lords, Amendment No. 10 to Clause 14 is a technical amendment. There are parallel amendments to other clauses—Amendments Nos. 16, 20, 21 and 24. With your Lordships' permission, I shall take them all together. The amendments all deal with what might be called transitional arrangements for the introduction of new rules and provisions. Therefore, they apply to all existing companies. However, in one case it does not work quite as intended. For old public companies and private companies which are re-registered as public the phrase "re-registration" is appropriate, but there will be companies which became public companies under Clause 13 and they have never been registered before, and therefore the phrase "re-registered" is not appropriate to them. In that case the appropriate phrase is "registration" and
1182
this is what the amendment seeks to achieve. I beg to move.
On Question, amendment agreed to.
Clause 31 [Application of ss. 20 to 30 in special cases.]:
Lord LYELL Lord LYELL moved Amendments Nos. 11 and 12:
Page 39, line 35, after ("resolution") insert ("to be re-registered").
Page 39, line 37, after ("resolution") insert ("to be re-registered").
The noble Lord said: My Lords, I hope it will be for the convenience of the House if I deal with, and speak to. Amendments Nos. 11 and 12 together. These are once again drafting amendments, I hope that the noble and learned Lord, Lord Elwyn-Jones, will accept that this is indeed the case. I assure him it is, and I beg to move.
Lord ELWYN-JONES: My Lords, the noble Lord, Lord Lyell, having more than once assured the House that these Amendments are drafting, he does not need to repeat the assurance too frequently.
On Question, Amendments agreed to.
5.22 p.m.
Clause 32 [Variation of rights attached to special classes of shares]:
Lord LYELL Lord LYELL moved Amendments Nos. 13 to 15:
Page 42, line 11, after ("above") insert ("or 47 below").
Page 42, line 13, after ("members)") insert ("and").
Page 42, line 14, leave out from ("companies)") to end of line 15.
The noble Lord said: My Lords, with the permission of the House I would speak to a long list of Amendments—Nos. 13, 14, 15, 18, 19, 30, 32, 33, 36, 38 and 41. This collection of amendments appertains to what is now Clause 47 because at Committee stage this new clause was added to the Bill. It was to provide better protection for minority shareholders. Section 210 of the 1948 Act, together with Section 35(2) of the 1967 Act, is therefore to be repealed since both these provided a lower level of protection than is envisaged in the new Bill. The amendment I have just moved, Amendment No. 13, together

1183
with the long list of other amendments, replaces references in the Bill that your Lordships are discussing today, and indeed in other Acts, to Sections 210 and 35 with references to Clause 47. The other amendments which, with your Lordships' permission, I shall not go through individually, are the numbers I dealt with.
There is a further point on Amendment No. 13 in that Schedule 3, paragraph 4 of the Bill in front of us—I think we find it on page 103 of the Bill, as reprinted—amends Section 5 of the 1948 Act by adding three new subsections. Section 23 of the 1948 Act refers to this Section 5 that we are adding to today, and Section 23 applies to many of the provisions of Section 5 of the old Act. Thus, it is now necessary to refer also to those new provisions which are added to Section 5 of the 1948 Act by the present Bill. This is what Amendment No. 30 does. That is a little less technical than the other amendments, but they all stand together.
Lord ELWYN-JONES: My Lords, these amendments flow from the acceptance by the Government of the Opposition's proposal that a number of the provisions included in the Labour Government's Companies Bill should be included in this Bill. Unhappily we were only able to persuade the Government on three items in the Labour Bill, if I may call it that for short, and some of the more important items in the Labour Bill they have presistently refused to embody in this; such as insider dealing, loans to directors, and many other matters that are notoriously needing urgent attention. But I shall not repeat that argument. However, it will be repeated most vigorously, I am quite sure, in another place when it comes along, particularly at a time when, I understand, Her Majesty's Government are contemplating highly controversial legislation in the field of industrial relations.
I have no doubt that the stark contrast between their refusal to deal with these company scandals compared with the eagerness with which they go into the field of industrial relations is going to cost them a great deal of trouble. We warned them about it. They have taken no action (which they could have done on this Bill) to prevent that criticism, and here we are. For what it is worth, we must be thankful for this modest accept-
1184
ance of what was proposed. It is rather like the pea which St. Anthony is supposed to have had presented to him by the devil, about which he said, "It is good, so far as it goes." That is about as far as this goes. But I should like, if I may, to thank the draftsmen and officials who had to translate into the minutiae of the Bill the effect of the inclusion of Clause 47. They have not had much time to do it, and least of all have we had much time to absorb what they have done, but I am sure that they have pretty effectively given effect to the inclusion of Clause 47.
Lord LYELL: My Lords, I would suggest to the noble and learned Lord that never could I have received such reprobation and a word of caution with such charming demeanour. I should like to thank him, and also take careful note of what he has said. Although, if the noble and learned Lord believes that legislation is dealt with in another place with more contumely, perhaps he will recall some of the later stages of the Committee stage of this Bill in your Lordships' House, when some of us on the Government Front Bench felt—I seem to remember myself quoting—something like a rabbit in a shooting gallery as the points rained down. We fielded some of them. We moved three amendments. I take note of the pea of St. Anthony, so carefully put forward by the noble and learned Lord. I hope we can suggest that this is a mere pod of peas, but at least that this is a start to the stew.
On Question, amendments agreed to.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 16:
Page 42, line 20, after ("re-registration") insert ("or registration").
The noble Lord said: My Lords, this amendment is consequential. I beg to move.
On Question, amendment agreed to.
Clause 34 [Obligation to convene extraordinary general meeting in event of serious loss of capital]:
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 17:
Page 43, line 35, leave out from ("on") to ("the") in line 36 and insert ("conviction on indictment to a fine and on summary conviction I to a fine not exceeding").
The noble Lord said: My Lords, this also is a consequential amendment. I beg to move.
On Question, amendment agreed to.
Clause 35 [Acquisition of company's shares by the company]:
Lord LYELL Lord LYELL moved Amendments Nos. 18 and 19:
Page 44, line 23, after ("above") insert ("or 47 below").
line 24, leave out from ("objects)") to second ("of") in line 25.
The noble Lord said: My Lords, Amendments Nos. 18 and 19 are consequential to Amendment No. 13, to which I have already spoken. I beg to move.
On Question, amendments agreed to.
Clause 38 [Charges taken by public companies on own shares]:
5.30 p.m.
Lord CULLEN of ASH BOURNE Lord CULLEN of ASH BOURNE moved Amendments Nos. 20 and 21:
Page 47, line 24, after ("re-registered") insert ("or registered under section 13 above").
Page 47, line 26, after ("re-registration") insert ("or, as the case may be, registration").
The noble Lord said: These are both consequential on Amendment No. 10. I beg to move.
On Question, amendments agreed to.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 22:
Page 47, line 30, leave out ("in accordance with section 8(7)") and insert ("under section 8").
The noble Lord said: This is also a drafting amendment, but to remove an error. Clause 8 has been redrafted in the Bill and the reference to Clause 8(7) in Clause 38, which was carried forward from the previous measure, is incorrect. I beg to move.
On Question, amendment agreed to.
Clause 40 [Restriction on distribution of assets]:
Lord LYELL Lord LYELL moved Amendment No. 23:
Page 49, line 12, leave out from ("articles") to end of line 15.
The noble Lord said: This is a drafting amendment. The provision contained in the words of the amendment seeks to leave out words already provided for by Section 394(2) of the Companies Act 1948. Noble Lords will find that the words we are seeking to leave out are an unnecessary duplication of Section 394(2), and if these words were left in the Bill there would be serious doubt as to the effect of the subsection in the 1948 Act, and for that reason I beg to move.
On Question, amendment agreed to (Clause 45 [Ancillary provision]:
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 24:
Page 56, line 36, after ("re-registration") insert ("or registration").
The noble Lord said: This is consequential on Amendment No. 10. I beg to move.
On Question, amendment agreed to.
Clause 47 [Power to court to grant relief against company where members unfairly prejudiced]:
Lord LYELL Lord LYELL moved Amendment No 25:
Page 57, line 14, leave out ("of the members (including") and insert ("part of the members (including at least").
The noble Lord said: This amendment deals with Clause 47, which we think is a important provision, and indeed noble Lords have recognised it as such; I eschew the comment of the noble and learned Lord about a pea in a pod, but I hope this is a starting point. It has been put to us that the clause as drafted could not be used by one single member of a company whose complaint was that his interests alone had been unfairly prejudiced. The argument put to us was that the words in the subsection:
"unfairly prejudicial to the interests of some of the members (including himself)"
necessarily imply that the interests of two or more members must be in question. Having considered the matter, we have come to the view that such an interpretation is indeed possible, and since that was not our intention the amendment makes it clear that we are not arbitrarily excluding from the clause cases where acts complained of prejudice just one member of the company.
Lord ELWYN-JONES: I recognise that the amendment is an improvement to the clause as originally drafted, and I say the same—perhaps it is a little out of order but it will save time—about Amendments Nos. 26 and 27 which will follow in respect of the same clause.
On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 26:
Page 57, line 38, leave out paragraph (b) and insert—
(" (b) require the company to refrain from doing or continuing an act complained of by the petitioner or to do an act which the petitioner has complained it has omitted to do;").
The noble Lord said: Subsection (4)(b)
of this Clause describes one of the orders which the court may make if it, the court, is satisfied that the petition is well-founded. The court is limited in the present draft to ordering a company not to do something, but it has been pointed out to the Government that a petition may be on an unjustified omission, and the amendment seeks to substitute a new paragraph which covers cases of commission and of omission, and for that purpose I beg to move.
On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 27:
Page 58, line 15, after ("order") insert ("or such longer period as the court may allow").
The noble Lord said: This follows on from the previous amendment, still dealing with Clause 47. When the court wishes to make an order, an office copy of the order is drawn up. Where this order alters or adds to or gives leave to alter or add to the company's articles and memorandum, subsection (6) will require an office copy to be delivered to the Registrar of Companies within 14 days of the court making that order. The Registrar of the Companies Court has suggested that it could in difficult cases present some problems to comply with this timetable and the Registrar has suggested that the court should be empowered to set a somewhat longer period for delivery to the Registrar of Companies. This seems sensible, and that is what the amendment would achieve. I beg to move.
On Question, amendment agreed to.
5.38 p.m.
The Earl of LAUDERDALE The Earl of LAUDERDALE moved Amendment No. 28:
Before Clause 48, insert the following new clause:
Directors' Report to include particulars of consumption of fuel and electricity and of energy conservation measures
.—(1) In this section the directors' report" means the report by the directors of a company attached to a balance sheet of the company prepared under section 1 of the Companies Act 1976 (or under that section taken with section 150 of the principal Act).
(2) There shall he contained in the directors' report—

(a) particulars of the consumption of fuel and electricity in the course of the company's business during the financial year to which the report relates; and

(b) a statement of the measures, if any, taken by the directors in that year to further the conservation of fuel and electricity in relation to such consumption.

(3) The Secretary of State shall have power by regulations made by statutory instrument to prescribe the extent of the particulars to be given under subsection (2)(a) above and the methods according to which they shall he given, and such regulations may make different provisions in respect of different categories of company specified in the regulations.
(4) The Secretary of State shall have power by regulations made by statutory instrument to exempt any company or any category of company specified in the regulations from the requirements of this section.
(5) A statutory instrument containing regulations made under subsection (3) or (4) of this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6) This section shall not apply to the directors' report in respect of a financial year ending before this section comes into operation.
The noble Earl said: My Lords, I should first apologise to the Committee that this amendment went down for the Report stage rather than for the Committee stage. That was due to a series of circumstances; I was away and my attention had not been drawn to this opportunity. I therefore hope noble Lords will accept my sincere apology for any discourtesy in advertising this matter so late on in the progress of the Bill.
The object of the amendment would be to require companies to produce energy as well as financial accounts, and at a time when we are dominated today, of all days, after President Carter's speech, by the problems of energy pricing and the need to conserve, I should have thought that the principle of this amendment

1189
required very little advocacy. Speaking broadly, Britain's energy use is roughly about 28 per cent. in buildings, largely housing; about 20 per cent. in transport; and about 44 per cent. in industry. Thus industry are really the largest group of energy users in the country, and that goes for industry using energy either as feedstock or as a necessary support supply. It is instructive that the chemical industry, which is highly capital-intensive, has actually over the last 11 years cut its energy consumption per unit of output or per hundred units of output by some 30 per cent. It is a very considerable achievement, which has gone largely unremarked in the media and elsewhere, but of course it means that the chemical industry still accounts for about 30 per cent. of all industrial use. So it may be said that there is no need of a physician here, and I do not think that there is where the capital-intensive chemical industry is concerned.
But what about the rest of industry? If the rest consumes about 30 per cent. of all energy use, the physician here is very urgently required. How many factory managers know as much about the boiler fuel consumption in their plants and about its heat and power generation as they do about miles per gallon of their company-supplied motor car? The fact is that every factory manager, every factory foreman, every factory workman knows all about miles per gallon in his car, but very few of them know, and still fewer of them care at all, about the energy consumption of the factory as a whole.
The amendment as drafted might be said to be defective: I have no doubt that my noble friends on the Front Bench will say that and other things. But the short point is that unit cost is a familiar notion to production managers; it is a familiar notion to sales managers; and it is a familiar notion to purchasing managers in regard to the input of materials. But the energy unit cost is another matter altogether. I think that the concept of the energy unit cost in any particular product is a relatively new one, speaking generally.
With the indulgence of the House (which I must ask for) it may be to the advantage of your Lordships, and later to that of those who will read the report of the
1190
debate, if I quote a very remarkable report produced last year by the Watt Energy Committee, which is a group of professional persons in all walks of life who have assembled themselves voluntarily and unpaid to look at aspects of our energy problem.
In a large and rather expensive document on the Rational Use of Energy they include a chapter on instrumentation, motivation, and human relations. This was composed by representatives of the Institution of Plant Engineers, the Royal Aeronautical Society, the Institute of Cost and Management Accountants, and the Institution of Mechanical Engineers. There are some passages in this document which struck me so forcefully when they were drawn to my attention that I believe they are worth quoting here.
The report points out that comprehensive instrument panels
"are most often found in the energy intensive industries where professional fuel engineers supported by instrument engineers are employed. It does not follow, however, that such industries employing competent staff are always provided with comprehensive instrumentation. Indeed many engineers are very frustrated because of the lack of instrumentation or because a system of instruments, once effective, has become worn out or no longer applicable to the work in hand."
"In this area"—
the report goes on —
"the obsolete panel or partly effective panel is now very common so that decisions are often based on incomplete data".
The report goes on to say that by law all boilers need a pressure gauge and, where applicable, a water level gauge as well for safety. Has not the time come, the report asks, for equipment which assists in the reduction of waste also to be made a compulsory feature—and I stress the word "compulsory"—of all new installations?
The report continues:
"Many energy systems … are still being installed with a complete lack of appreciation of the need for measurement of vital parameters … The lack of thermometers in offices is just one example of … a measuring device which could assist to conserve energy.
"The reliance of many processes on rule of thumb methods shows a disregard for the maintenance of production standards as well as waste of resources including energy. The over-drying of materials is a good example … In one case it was found that only 5 per cent. of metal purchased was sold as final product but the remaining 95 per cent. had been heated and cooled during processing to no ultimate effect. Furnaces of all

1191
types are operating on gas or oil firing with no individual meter to give vital data of day to day and hour to hour performance.
"There is nearly always the instrument which is due for a visit from the Service Engineer—usually the CO2 recorder—and the inevitable instrument whose chart has not been changed for weeks—or whose chart is missing altogether.
"On the other hand there are cases where instruments are well maintained but whose readings are never consulted, the charts being stacked, as is the custom, in neat but useless piles.
"The calibration of many instruments leaves a great deal to be desired and it is not uncommon to find that an inferential type flowmeter has been moved from one position to another with no attention being paid to the basic calibration conditions of temperature, pressure and orifice to pipe ratio".
Then the report continues with regard to maintenance:
"Most instruments … are delicate machines; however they are frequently required to operate under conditions of corrosion, vibration, heat and/or cold, in dirty or humid atmospheres.
Great stress is therefore laid on the need to provide a maintenance service which ensures that the instrument is available and accurate at all times.…
"The object of instrumentation … is to measure energy usage not only at the boiler or at the process plant but in terms of 'Energy per unit of production per unit of time'."
The report concludes—and I come within sight of the end of my quotation:
"It is not enough to change charts and file data regularly, but the daily chart change, where carried out, should be the start of a daily question time, e.g. Why are the charts showing the same readings? Was the weather the same?
"These are the basic questions from which other relevant questions can arise to point the way to optimum fuel usage per unit of production.
"The ideal, of course, is to planimeter the charts to obtain average daily readings as a base for daily costings but rarely is this seen to happen."
My Lords, the House will be relieved to know that that is the end of my quotation.
I am told by my friends in industry there are many furnaces using gas or oil, and yet they carry no meter on day-to-day, let alone hour-to-hour, performance. So the object of the amendment is to lead to managers facing up to the need for energy accounting, to face up to an area of critical responsibility. It would not surprise me if my noble friends on the Front Bench, despite their enthusiasm for the new, the novel, and the revolutionary, somehow find that their hearts quail a little at the introduction of this notion into a Bill of this kind at this stage. They may say that my amendment is defective in drafting. It may even
1192
be considered that such an amendment is rather out of place for such an important issue to be started up as a kind of fudge among miscellaneous provisions at the tail end of a Bill like this.
However that may be, it is essentially an enabling amendment. It requires directors to report once, and only once, the Government have prescribed the data that need to be collected, analysed, and published, and once the Government have decided how consumption of energy is indeed to be measured. It leaves it to the Government to prescribe the particulars required, and it leaves it to the Government to prescribe the categories of company to be subject to such obligations.
At this time, when we are literally engulfed by a frightening problem of energy shortage, on the one hand, and public resistance to or an anxiety about rising energy costs, on the other, here, surely, is a simple and modest contribution to the start of a campaign, which we trust the Government will further and prosecute, to enable the country to conserve energy in every possible way, but especially in industry. With that purpose in mind, I beg to move.
5.51 p.m.
Lord LLOYD of KILGERRAN: My Lords, may I strongly support the general principle behind the amendment which has been moved by the noble Earl, Lord Lauderdale, that company reports should include particulars of the progress, at least, of energy conservation measures which they have introduced during the previous year. It really is about time that many companies, apart from those in the chemical industry, applied their corporate minds to this important question of the conservation of energy. It is in my view a matter of corporate social conscience, to preserve our national assets in energy. The question comes: How can any progress be made in this important matter?
Of course, exhortations by Ministers and Government departments are helpful; and public announcements on the television are obviously a part of the educative principles in relation to assisting towards the conservation of energy. But in my view it would be very helpful if, ill this

1193
part of the Bill, relating, as it does, among the miscellaneous matters, to certain assets, the Government were to support in statutory form some general expression as to how energy could be conserved by companies. There is no need to introduce any kind of clause saying, "If you do not do this you will be fined", or something; but a general indication to companies in a Bill of this kind would in my view be very helpful in this important matter.
Of course, as the noble Earl, Lord Lauderdale, has indicated—and I am sure he will not be offended if I say so—there are certain drafting difficulties in introducing a provision of this kind, and I am sure he would agree with me that this is not an amendment in its final form. But I ask most earnestly of the Government that, in the present circumstances of the conservation of energy and the conservation of our national assets, they should think about this amendment, even though it has been introduced at this rather late stage—and the noble Earl has expressed his apologies and indicated the reasons why it is late in its introduction.
Lord MOTTISTONE: My Lords, I hope my noble friend Lord Lauderdale will forgive me if I say that I think that this clause is unnecessary. The fact of the matter is that things have been happening very fast in industry during these last two or three months. I have a lot of contact with several companies, and it is quite remarkable how they have reacted to the fact that their fuel costs have gone up by something of the order of 50 per cent. The fact is that the hard economics of life are being a much more effective disciplining weapon, if you like, to persuade people to take the very measures that my noble friend so rightly says should be taken; and it is happening so fast that, unless you are quite closely in contact, which I have to be, you are not aware of precisely what is happening.
The fact of the matter is that this sort of extra "Auntie Government tells you what to do" attitude is not really necessary in this regard, as it is not in many other regards, with great respect to noble Lords opposite—but that is another point. The fact is that companies are taking all sorts of measures, and are seeking ways of taking even more, in just the way that my noble friend said they should. There are
1194
difficulties. My noble friend mentioned the importance of having, in offices, thermometers which work, and of reading them. I know of a case where a thermometer in a warehouse had the reverse effect to that which might be intended because of a thing called the Offices, Shops and Railway Premises Act 1963, which says that warehouses must be kept at 60 degrees Fahrenheit, or some such temperature. In this case, when the temperature was below that, the Government inspectors insisted on this temperature even though the chaps working there were given Fearnaught clothing, and the like, and there was no need for it.
So there are in fact times when it is perhaps better to have a thermometer which suffers from the same sort of defect as Nelson's eye; and one cannot be sure that all the things mentioned in the report that my noble friend react out to us should be taken absolutely at face value. Therefore, my Lords, I hope that my noble friends on the Front Bench will find some way to persuade my noble friend Lord Lauderdale not to press his amendment.
Lord LLOYD of KILGERRAN: My Lords, before the noble Lord sits down, may I ask him whether he would be prepared to disclose to this House those companies which, within the last two or three months, as he said, have taken very active measures, because of the increase in the cost of fuel, to pursue a course in relation to the conservation of energy? My experience, which is not too bad in relation to industry, is that many companies are not worrying about the conservation of energy. They are not prepared to consider, at board level, how to conserve energy. I have had that experience. We have had from the noble Lord, Lord Mottistone, a generalisation, trying to persuade us to leave companies to do what they like. I am not prepared—
Lord LYELL: My Lords, I should like to remind the noble Lord, Lord Lloyd, that this is Report stage. Perhaps he could ask a question. If he could draw his remarks to a conclusion, they ought to be in the form of a question.
Lord LLOYD of KILGERRAN: My Lords, I am very grateful to the noble Lord on the Government Front Bench for having reminded me that, in my

1195
enthusiasm for supporting, this most important matter, I was not conforming to the traditions of this House but was making a second speech. I apologise to the House. The only question I should like to ask the noble Lord, Lord Mottistone, therefore is: Would he disclose the names of those companies which are doing such wonderful work in the conservation of energy?
Lord MOTTISTONE: My Lords, with the leave of the House, no, I am afraid I cannot tell your Lordships. No, do not laugh. I cannot tell the House publicly the names of the companies because I know them confidentially; but I am very prepared to tell the noble Lord, Lord Lloyd, at any time privately, and on his promise not to disclose these names, exactly what I am talking about. I can tell your Lordships that, of the companies with which I am closely in touch, I know for a fact that 25 per cent. of them are talking very active measures, and another 25 per cent. are starting to do so. I cannot go further than that.
Baroness PHILLIPS: My Lords, I know that the noble Earl will forgive me for saying that it seems to me as a layman, perhaps, though I do have to work under the control of the Companies Act, that this is not quite the right place to put this new clause. Nevertheless, I should like to congratulate him on raising this very important point and perhaps draw his attention to another path along which he could pursue it. Undoubtedly some of the greatest sinners—even more than industry, I would suspect—are the public corporations. I know for a fact that schools, hospitals, and so on, have a totally arbitrary period of the year in which boilers are stoked up, irrespective of the weather, or damped down even though you may well be freezing. So it seems to me that an intelligent approach to the use of fuel in our public corporations would also be very worthy of the attentions of the noble Earl. This is not only to support him in this, but indeed, to thank him most cordially for bringing forward this very important point.
Lord CULLEN of ASHBOURNE: My Lords, my noble friend Lord Lauderdale apologised for raising this matter
1196
on Report and not at the Committee stage. I think that he did us rather a good turn, for we have had a most interesting and informative period in the middle of a lot of rather dull drafting amendments. I think he has done very well to raise the matter. The Government have considerable sympathy with the purpose underlying his amendment. Whether it is appropriate in a Companies' Bill or not is a matter of opinion. The Government recognises the importance of the need to conserve energy and to support measures designed to give a fresh impetus to creating public awareness of the need for efficient use of finite energy resources.
However, for the reasons which I shall give, the Government do not believe it would be profitable at this stage to pursue in legislation the idea of mandatory reporting by companies in their annual reports on energy usage and conservation. In July 1977 the then-Government published a Green Paper, The Future of Company Reports. One of the suggestions aired in the Green Paper was that a statement on energy usage might be made a requirement in the company report. The Department of Trade consulted widely on the Green Paper proposals and found that the vast majority of those organisations specifically commenting on the energy suggestion was strongly opposed to any mandatory requirement. Commentators on the Green Paper recognised that the intention behind such a requirement was to highlight energy usage and therefore to focus the attention of companies on the need to avoid wasting fuel, but pointed out that in practice the likely impact would be marginal. Companies by their nature were concerned with cost saving wherever possible and energy saving was a matter of day-to-day discipline and the operation of technical developments at operating unit level. Furthermore, it was considered that such a statement would not enable readers to judge how efficiently a company managed its fuel resources unless it was supported by a comprehensive and detailed energy audit. This would be time-consuming and expensive to produce, particularly in a report covering a large group of companies.
I believe that there is considerable weight in these views which were advanced by a wide spectrum of respondents to the Green Paper. Any measures which com

1197
panies may voluntarily undertake to publicise their efforts in energy conservation are fully supported and welcomed by the Government. But we do not wish to add to the legislative burden on British industry where the overall benefits of doing so are in doubt. A mandatory requirement to disclose energy usage and conservation measures would be an extra burden, and while I would wish to associate myself with my noble friend in his most worthwhile overall objective of achieving a saving in energy usage, I hope that he will recognise the merits of not proceeding by legislation in this particular matter and that he will not press his amendment.
Lord ELWYN-JONES: My Lords, I should like to echo the view that has been expressed, but it is most laudable of the noble Earl, Lord Lauderdale—and I hope I do not get too confused by those two conceptions—to express the need to emphasise energy conservation. I am bound to say that I am inclined to agree with the noble Lord, Lord Lloyd of Kilgerran, that a great deal needs to be done in many companies affairs where the saving in energy conservation is thought to be fairly minimal compared with major operative costs of a company's activities. For that reason very often that factor is not sufficiently taken into account. I think there is need for a great deal more energy—if the Government do not mind my saying so—on their part in emphasizing the crucial role that conservation should play in respect to our fuel problems at the present time. Therefore, it is excellent that they should be prodded—I was about to use an unhappy phrase—from behind (shall I say?) in this direction.
However, whether a Bill which is described as
"An Act to amend the law relating to companies."
is appropriate for this purpose is another matter. This is not the first time that the Government have paid a high price for the Long Title of the Bill; nevertheless, I think that on this occasion I should not twist their arm too strongly myself—but this is not to under-estimate the importance and value of the point which the noble Earl has raised.
Lord LYELL: My Lords, one or two points have come to my notice. First, I would apologise to the noble Lord,
1198
Lord Lloyd of Kilgerran. I felt that his enthusiasm was approaching my enthusiasm, which may spill over, but I shall be brief. I was interested to hear the views of my noble friend Lord Lauderdale. I think that in both what I had in mind and in what he has in mind, we should pay attention to the great bard from our country, Sir Harry Lauder, who said:
"Though the way be long, let your hearts be strong."
I would stress that the Government's hearts are strong in this matter of energy conservation and energy saving; but I would reiterate that the Government do not see the need to demand further legislative burdens and what I would say would be a costly audit to fulfil mandatory requirements which, as we heard from my noble friend Lord Mottistone, are in the forefront.
The object of any mandatory requirements, we believe, can be achieved by the soaring costs of all forms of energy. I think it was the noble and learned Lord, Lord Elwyn-Jones, who mentioned that these costs of energy might not he very great; but I think they are certainly rising significantly in percentage terms so far as energy is concerned and also that this must increase costs to be borne by the British economy and on a world scale. The comments of the noble Lord, Lord Lloyd of Kilgerran, are helpful; but he believes that we need to watch the expenditure on energy. I wonder whether he has considered the hugely expensive process involved—which I think is suggested and, indeed, laid out in the noble Earl's Amendment—in an energy audit. I think that quis custodiet ipsos custodes? comes very much to mind. Company directors are watching very carefully their energy expenditure; and I wonder whether the House would deem it necessary that there should be a further mandatory requirement and an audit to verify something in the minds of the directors themselves.
Certainly we should like to thank my noble friend for his Amendment and for his statement. He need have no fears. The Government are full of support for his objectives; but I think that the matter was put more succinctly than I put it by the noble and learned Lord, Lord Elwyn-Jones, who wondered what energy conservation had necessarily to do with a

1199
Companies Bill—although I took the noble and learned Lord's sally about the broad title of the Bill.
The Earl of LAUDERDALE: My Lords, I think that the last 20 minutes have not been wasted. I cannot help thinking that the happy mood which has spread through the House following my intervention means that noble Lords on all sides have taken as their tag:
Quis diligit deum diligat et fratrem suum.
But never mind about the Latin. I thought I must cap that of my noble friend Lord Lyell. The critical argument used by the Front Bench is that mandatory requirements of this sort were rejected three years ago. May I say that they were three "OPEC years ago" and not three ordinary years.
The second point that was made just now by my noble friend, Lord Lyell, and also by my noble friend Lord Mottistone was that energy prices are rising so fast in all directions—and all energy prices are rising so fast—that these provide the motive for such conservation. I wish that were true. The point which it seems to me should be made to the House at this time is that, while our new and splendid Government are wedded to the market economy, they have signally failed to respect it in one aspect of the energy picture. There has been no mention either in the Budget Speech or since of any proposal to amend the Gas Act so that the Gas Council can sell gas at the market rate. Gas continues to be subsidised to the domestic consumer and, as a result of that, industry can only get it on an interruptable basis at an absurdly subsidised rate. So in fact the case that has been made by the Front Bench that all energy prices are rising and therefore that provides the motive, is incorrect. I have no doubt that my noble friends will take note of what I have said in that regard and pass on my message in the sweetest way they know how through their Departments to the Department of Energy and get that point home.
Having said that, may I add that there are several noble Lords who have already spoken on this subject in broad support of the idea of my amendment, and I take that to mean that there must be some demand in this House for a comprehensive
1200
Government programme in regard to conservation. I have not seen any hint of such a programme yet, no doubt it is coming, no doubt raising gas prices and amending the Gas Act will be part of that programme when it comes. I take the point made by the noble and learned Lord, Lord Elwyn-Jones, and others, that this perhaps is not the most apt vehicle for launching a conservation campaign. Therefore, with the leave of your Lordships, I beg to withdraw my amendment.
Amendment, by leave, withdrawn.
Clause 48 [Trading under misleading name, etc.]:
6.12 p.m.
On Question, Whether Clause 48 shall stand part of the Bill?
Lord MOTTISTONE: My Lords, I beg to leave out Clause 48. The object of this amendment is one of purely probing the Government. Your Lordships may remember that at Committee stage I had amendments down to what was then Clause 46, which has now become Clause 48—to be nore specific, to subsection (3) of that clause—to the effect that the six months' period that public companies will be allowed to change their name wherever that occurs—whether on stationery, packaging, vans, or on the facias of banks—really was not enough. Your Lordships will remember that the noble Lord, Lord Lyell, at the Committee stage (in column 155 of Hansard) said that there would be consultations before this present stave of the Bill. I am deeply grateful to my noble friend, and to my noble friend, Lord Trenchard, who was there too, for those consultations. It was possible for experts in this field to put the facts before my noble friends. They have, I understand, been very accommodating, and I shall be most interested to hear what they have to say. I beg to move.
Lord LYELL: First of all, I particularly should like to thank my noble friends Lord Mottistone and Lord Redmayne for raising this very important question of the time which is to be allowed for public companies to make this particular changeover from their old to their new name. The noble Lord, Lord Mottistone, has pointed out that I gave various assurances during the

1201
Committee stage, but I would stress once again that we are very anxious to ensure that the changeover should be as smooth, efficient and, above all, as economical as possible for companies which may have to make the changes to which my noble friend Lord Mottistone has referred.
He pointed out that we have between the last stage and today considered this matters of name changing further and, as a result of these considerations, it is quite clear to us that the clause as drafted, without amendment, would still cause industry significant problems and, above all, a great deal of unnecessary expense. This is certainly not the wish of the Government. Therefore we propose to suggest a number of amendments to this clause. These amendments will require very careful preparation and thus they will be introduced in another place.
With the leave of your Lordships, I should like to outline the Government's intention. First of all, we think that the actual offence which is set out in subsection (2) is at present too widely drawn. Noble Lords will see that in subsection (2) it is stated that a public company, other than an old public company, shall be guilty of an offence if it carries on any trade, profession or business under a name which is likely to give the impression that that company is a private company. However, we consider that this ought to be an offence only where the company gives such an impression to a person in circumstances where it is likely to be material to that person that the company is a public limited company and not a private company. The effect of such a change would be that public companies which continued to use their old names in circumstances where it really did not matter would not be committing an offence.
The second point that we would propose is that companies should be allowed a longer time to make the changeover from their old name to the new name. It has been pointed out to us—particularly by the noble Lords, Lord Mottistone and Lord Redmayne—that the six months' period after re-registration is too short. Even allowing a 12 months' period for durable items like containers and the packaging material that has been mentioned in the previous stage, this would not remove all the problems and the expense
1202
for industry. On the other hand, we have to ensure that the period of changeover is not so long that the use of both old and new names by public companies would lead to confusion. We hope that those who are pressing and desire a longer period of changeover recognise that it is a transitional provision which we believe has to be of limited duration.
The question to which we address ourselves is: How long a period should be allowed? I hope that we first may take Section 108 of the 1948 Act. This relates to the publication of the name of the company. In Section 108 we will find mention of the company's name on its business letters, official publications, on its seal and so forth. From the representations we have received a clear consensus has emerged, that 12 months would be about the right length of time for these purposes. Indeed, this was the period of time which was suggested by my noble friends Lord Mottistone and Lord Redmayne in their amendment at the Committee stage. The Government would therefore propose that 12 months' interchangeability should be allowed for the provisions of Section 108 of the 1948 Act which, as I referred to, deals with the company's name on business letters, publications and the seal. But it is also clear to us that this 12 months' period would not be long enough for other purposes.
As the noble Lords, Lord Mottistone and Lord Redmayne, are aware, there are regulations on the labelling of goods which require the correct name of the company to be shown. There are a number of products which are covered by these regulations which are nothing to do with the Bill we have before us. These regulations deal with such items as medicinal and pharmaceutical products. Especially in these cases there is a fairly long lead time for production. It is some time before the product is actually sold or put on the retailers' shelves. The Government will need to consult further, but it is clear that a significantly longer period is necessary for these purposes. We wonder whether a period of perhaps three years of interchangeability of names would be justified in the bulk of these cases.
These questions are very important and need careful consideration and, above all, preparation. We are, therefore, during

1203
the summer going to consult with interested persons who will, of course, include the noble Lords who have put their names to this amendment. The Government will be introducing amendments to this clause on the lines I have indicated, when the Bill reaches another place.
I must apologise for this lengthy and detailed statement, but it is an important matter and such a statement is the least that my noble friends Lord Mottistone and Lord Redmayne deserve. I hope your Lordships will see the reason for it and will accept it.
Lord MOTTISTONE: My Lords, I am most grateful to my noble friend for the statement, which goes as far as we could have hoped for in our happiest moments. I can speak also on behalf of my noble friend Lord Redmayne, who most unfortunately had another appointment at this time and has asked me to apologise to your Lordships for his absence. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
In the Schedules.
Schedule 3 [Minor and consequential amendments]:
6.22 p.m.
Lord LYELL Lord LYELL moved Amendment No. 30:
Page 103, line 44, at end insert—
("In section 23 (alteration of memorandum)—

(a) in subsection (1) for the words "two hundred and ten of this Act" there shall be substituted the words "47 of the Companies Act 1979"; and

(b) in subsection (3) for "(3), (4)" there shall be substituted the words "to (4C).").

The noble Lord said: My Lords, I spoke to this amendment with the group of amendments earlier. I beg to move.
On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 31:
Page 104, line 34, at end insert ("(within the meaning of the Companies Act 1979)").
The noble Lord said: My Lords, I think it would be for the convenience of the House if I were to speak to Amendments Nos. 31, 34 and 35 together. These three amendments are purely drafting amendments. I beg to move.
On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 32:
Page 106, line 12, leave out from ("section") to ("after") and insert ("394 (effect of registration under Part VIII)—
(a) in subsection (2)").
The noble Lord said: My Lords, this amendment is consequential on Amendment No. 13 and I have already spoken to it. I beg to move.
On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 33:
The noble Lord said: My Lords, this amendment is also consequential, and I beg to move.
Page 106, line 15, at end insert—
("(b) in subsection (6) for the words from "this Act" to "thereof" there shall be substituted the words "the Companies Acts 1948 to 1979 (apart from those of section 47(5) of the Companies Act 1979)".").
On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendments Nos. 34 and 35:
Page 108, line 15, leave out ("value") and insert ("amount").
Page 109, line 21, leave out ("within the meaning") and insert ("for the purposes").
The noble Lord said: My Lords, with the leave of the House I should like to move Amendments Nos. 34 and 35 together. They are consequential on Amendment No. 31, and I have already spoken to that. I beg to move.
On Question, amendments agreed to.
Schedule 4 [Repeals]:
Lord LYELL Lord LYELL moved Amendment No. 36:
The noble Lord said: My Lords, this amendment is consequental on Amendment No. 13, to which I have already spoken. I beg to move.
Page 111, column 3, line 10, at end insert ("Section 210").
On Question, amendment agreed to.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 37:
Page 111, column 3, line 26, at end insert ("Section 440(1)").
The noble Lord said: My Lords, at Committee stage what is now Clause 51 was, together with Schedule 2, added to the Bill. Clause 51 introduces certain amendments to the law apart from providing the authority for Schedule 2. These changes call for certain consequential amendments to other provisions, and Amendments Nos. 37, 39, 40 and 42 make the necessary technical and drafting changes. I beg to move.
On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 38:
The noble Lord said: My Lords, this Amendment is consequential on Amendment No. 13: I have already spoken to it and I beg to move.
Page 112, column 3, line 8, at end insert ("and subsection (2)").
On Question, amendment agreed to.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 39:
The noble Lord said: This amendment is consequential, and I beg to move.
Page 112, column 3, line 8, at end insert ("Section 49(1)").
On Question, amendment agreed to.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE: moved Amendment No. 40:
The noble Lord said: this Amendment is consequential and I beg to move.
Page 112, line 26, at end insert—

("1977 c. 45.

Criminal Law Act 1977.

In section 63(2), Act 1977.the words "Companies Act 1967". In Schedule 12 the entry relating to the Companies Act 1967.").

On Question, amendment agreed to.
Lord LYELL Lord LYELL moved Amendment No. 41:
The noble Lord said: My Lords, this is consequential upon Amendment No. 13, and I beg to move.
Page 112, line 28, at end insert—
("( ) The repeal by this Schedule of section 210 of the 1948 Act and section 35(2) of the 1967 Act shall have effect subject to the saving in section 47 (10) above;").
On Question, amendment agreed.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 42:
The noble Lord said: My Lords, this is consequential and I beg to move.
Page 112, line 30, at end insert—
("( ) The repeal by this Schedule of section 49(1) of the 1967 Act (and the consequential repeals made in the Criminal Law Act 1977) shall have effect subject to the saving in section 51(5) above").
On Question, amendment agreed to.

ROSS AND CROMARTY (COASTAL WATERS POLLUTION) ORDER CONFIRMATION BILL
Brought from the Commons and read 1a; then, pursuant to the Private Legislation Procedure (Scotland) Act 1936, deemed to have been read 2a and reported from the Committee.

DEALINGS WITH WITNESSES BILL [H.L.]
6.26 p.m.
Lord WIGODER: My Lords, I beg to move that this Bill be read a second time. Four weeks ago today, Mr. Justice Cantley began his summing-up at the Central Criminal Court. There followed, as your Lordships will remember, a lengthy retirement by the jury and, as the minutes passed into hours and the hours passed into days, so I am sure all your Lordships will have shared with me a feeling of deep sympathy with those who were undergoing the agony of that very great ordeal, because their whole future was in jeaopardy and depended upon the verdicts of the jury. I have in mind particularly the journalists and the witnesses who stood to make so much money if only there were a conviction, and whose fondest hopes were so bitterly dashed by

1207
the unkind acquittals which the jury in due course returned.
One had hoped since 1966 that this situation would never occur. I say "since 1966" because, as your Lordships will remember, there then occurred the Moors Murder trial, in the course of which it transpired that the chief witness for the prosecution had been paid by a newspaper under a contract that involved his providing information to them. The noble and learned Lord, Lord Elwyn-Jones, will remember this well because he was Attorney General at the time. It is right to say on that occasion there was no evidence that a bigger sum was offered to the witness in the event of a conviction; hut misgivings were felt as long ago as that time that those payments might lead to the colouring of evidence and might prejudice the proper conduct of a trial.
In the result, the Press Council made a declaration of principle about this matter. What they said was this:
"No payment or offer of payment should be made by a newspaper to any person known or reasonably expected to be a witness in criminal proceedings already begun in exchange for any story or information in connection with the proceedings, until they have been concluded".
Unhappily, the Press Council then left a "get-out" clause at the end, which said this:
"The Council does not intend that the principles enunciated shall preclude reasonable contemporaneous inquiries in relation to the commission of crime when these are carried out with due regard to the administration of justice. There may be occasions on which the activities of newspapers are affected by over-riding questions of public interest, such as the exposure of wrongdoing".
In other words, the Press Council left it to each newspaper to be the judge in its own cause as to whether the situation was such that the principles might be flouted.
However, little happened in the succeeding years as to this form of journalism. It was considered by the Phillimore Committee on Contempt of Court in 1974. Perhaps I might define "contempt of court"—because it may become relevant in the course of this short debate—as conduct which tends to obstruct, prejudice or abuse the administration of justice. What the Phillimore Committee reported in 1974, with some prescience, was this:
"One particular activity referred to is the offer by the Press, or indeed anyone else, to
1208
purchase a story from a witness in legal proceedings, usually for publication after the trial, the purchase being made contingent upon the outcome of the case. The object of the Press in making the offer contingent would be to ensure that it did not buy a worthless asset. If in a criminal case, for example, the trial ended in an acquittal the story could well be unpublishable for fear of defamation proceedings. The purchaser would probably not intend to pervert the course of justice nor even necessarily foresee this as a likely consequence unless the offer was very large, in which case intention or foresight might legitimately be inferred. But the offer could clearly have serious effects upon the way the witness gave his evidence, and if the position was revealed at the trial upon the witness's credibility and the outcome of the trial."
That was in paragraph 78.
The Committee went on to say in the following paragraph:
"We regard the potential dangers as sufficiently grave to warrant further inquiry as to its prevalence and if found necessary legislation to restrain or wholly prohibit this practice. We recommend that such inquiry should be carried out."
Such inquiry was not carried out, and the matter was next considered by the Royal Commission on the Press, presided over by Lord McGregor, which reported, as your Lordships will remember, in 1977. It was then able to report that, as a result of what it had been told by the Press Council—this is in paragraph 10.150—
"There has been a decline in certain kinds of complaint and in degrees of gravity within complaints relating, for example, to cheque book journalism."
It was able to report in the same chapter at paragraph 10.147:
We inquired of the newspapers and the Press Council about cheque book journalism. As was to be expected, we found no evidence of payments to witnesses or potential witnesses of the kind which were criticised so widely in 1966."
It concluded that section by saying:
"We do not recommend legislative measures to deal with cheque book journalism. We do, however, urge the Press Council to keep a special watch to ensure that its declaration is obeyed."
It is clear, therefore, from what has happened in the course of the Phillimore Committee and the Press Council's declaration, that cheque book journalism of a kind which involves payments to witnesses may well be a breach of the Press Council's declaration, and may well amount to a contempt of court. Despite that, there have been in the recent trial a series of instances that must cause grave anxiety. I do not propose to refer to them all; four, I think, will suffice.

1209
There was at some stage—and I do not know the date nor the precise terms—a contract between the London Evening News and one of the prosecution witnesses, a Mr. Newton. Mr. Newton was asked as to what that contract was about, in the course of an American television programme on 10th September 1978. What Mr. Newton then said—and I quote from the transcript—was this:
"The deal that the London Evening News wanted was that if I could reveal conspirators in this, the conspiracy to murder, they would offer various sums of money. They had a price on the heads of various people—£150,000, which is 300,000 dollars, for Harold Wilson, the Prime Minister, 200,000 dollars for Jeremy Thorpe and 120,000 or 130,000 for David Holmes, if I could prove to them that they were involved in the conspiracy to murder".
That is such a fanciful, preposterous suggestion, that any newspaper could seriously have indulged in any discussion of that sort, that one would have expected the London Evening News at once to issue the most indignant denial. But, in fact, the editor of the London Evening News took part in the programme and his immediate comment, following upon Mr. Newton's statement, was this:
"There were discussions with him about the people who would be implicated if he were to tell his full and true story, and in the course of this discussion he and his solicitors who were representing him were seeking to place different values upon different people".
So far as I know, to this day the London Evening News has never denied Mr. Newton's extraordinary account of those negotiations.
The second instance was this. On 10th November 1977, after the police inquiry had started, the Sunday People entered into a contract with another prosecution witness, Mr. Miller. They were to pay him £8,000 for various writings, and also very substantial subsidiary rights under the contract, such as a 50 per cent. share of the worldwide syndication rights in due course. It is right to say that that is not a contingent payment. On the other hand, it is equally right to say that the offer of substantial subsidiary rights of that nature clearly must have indicated to the witness how very much more likely he was to obtain a substantial sum of money if there were a conviction, than if his story had to be based on the comparatively uninteresting and unsensational fact of an acquittal.
1210
The third instance was 13th October 1978, when the Daily Telegraph Ltd., and a company called Milbest Publications Incorporated, acting for another witness called Mr. Bessell, entered into a contract, the effect of which was—and I stress "the effect of which was"—that Mr. Bessell would be paid £50,000 if there were a conviction for certain writings, and £25,000 if there were an acquittal. Let me say at once that, of course, the lawyers who drew up that contract did not indulge in any crude language of that kind. It was disguised very simply in this way. In Clause 1 of the contract it was stated that, in consideration of the sum of £50,000 sterling, the licensor granted to the publisher exclusive world rights to publish extracts from his book. Then in clause 4 it was stated:
"If, on the advice of his legal advisers, the publisher is not able to publish the extracts then instead the publisher will pay £25,000 for up to six articles".
What that meant was what Mr. Bessell understood it to mean, that in the event of an acquittal the book he was writing could not be published because of the laws of libel, and, therefore, in effect, the substance of the contract was that Mr. Bessell stood to gain very handsomely if there were a conviction. I should add in relation to that contract that it was entered into after Mr. Bessell had made his statement to the police. That was a matter which Mr. Justice Cantley referred to specifically in taking the view that it might not amount, therefore, to a contempt of court. In view of the evil that was created by this form of activity by various newspapers, which I shall come to in a moment, I am bound to say that it seems to me to be wholly irrelevant whether a contract of that nature is entered into before or after a witness makes his statement to the police.
The fourth instance refers to a Mr. Scott who entered into a contract with the Daily Mirror group—Mirror Books to be precise—on 30th November 1978, on a day when Mr. Scott was actually giving evidence at Minehead and being cross-examined. The contract provided that Mr. Scott should receive the sum of £3,000, plus very substantial royalties and other rights, and the amount quite clearly would depend—although it was not expressed as depending—upon the sensational value of his story, which in

1211
due course would depend upon whether or not there was a conviction.
The effect of those various contracts—there were others but these were the principal ones—was that there were twin evils. There was a twin interference with the administration of justice. I say at once that I do not for one moment suggest that any of the newspapers involved intended that there should be this effect, or contemplated that this effect would necessarily follow.
First, witnesses in that situation are bound to have a financial incentive to secure a conviction. This means that they are bound to have a financial incentive to adhere to their statements, if they have already made one, to the police, which is why the fact is irrelevant in relation to the Daily Telegraph's contract. They are bound to seek to adhere to their statement, to embroider their statement, and to press as hard as they can to ensure that a conviction should result. The second evil was that once this web of contracts came to light, as it did during the trial, doubt was cast upon the whole of the evidence of those witnesses as to whether it was truthful. It was in both of those ways that danger existed over the proper and fair administration of justice.
Clearly, those contracts, or some of them, were in breach of the Press Council's rulings. I note that the Press Council is to reconsider the matter and I am glad that it should do so, although I have no great confidence that much can result because of its inevitably limited powers. The Press Council has the power of public rebuke, and that is all. It is an effective power in 99 per cent. of the cases which it investigates but, as we have seen in recent months, it is not effective when newspapers decide that a case is so sensational that they are prepared to break the Press Council's rulings. Not only were some of those instances—clearly, I would suggest—breaches of the Press Council's rulings but some of them certainly provided substantial evidence that they were contempts of court.
I mention this in particular, because I know that in the course of the gracious Speech the Government indicated that they were going to bring forward this session
1212
legislation to deal with problems of contempt of court. I wait with interest to hear if the noble Lord, Lord Belstead, is able to assist as to whether there is a reasonable possibility that this problem which I am putting before your Lordships today will be dealt with in that Bill. Unless it can be dealt with in that Bill in that way, then I see no alternative but to proceed with the Bill whose Second Reading I am moving today.
This Bill provides, quite simply, that any person who makes any contingent payment to any witness—that is, a payment which is dependent in any way, whether in whole or in part, upon the outcome of the proceedings—shall be guilty of a criminal offence. Although it is a simple Bill, I accept that certain problems arise from it. Those problems are two-fold. First, as was made clear by some of the instances to which I referred your Lordships, payments which are not expressed as being dependent upon the result of the proceedings may, in certain circumstances, be just as harmful to the administration of justice as payments that are dependent upon the outcome of the proceedings, yet it would be difficult to frame legislation that would cover all such payments.
Secondly, I have certainly found the greatest difficulty in drafting this Bill so as to lead it to cover the sort of conflict that went on in the course of the recent case while at the same time not covering innocent conduct, such as offers of payment to informers which were made dependent upon a conviction being obtained—the ordinary kind of offer that is sometimes made by insurance companies. As I say, I appreciate that there are those difficulties. Nevertheless, this seems to me to be an urgent and pressing problem about which steps must be taken in one way or another in the near future.
May I end by saying, perhaps somewhat unusually, that I bring forward this Bill with real regret. It is with regret because I have always been one of those who have sought to uphold the freedom of the Press and to maintain that freedom against unnecessary legal restraints. I believe, and always have believed, that with that freedom there must go some sense of responsibility. Unhappily, the recent occasions which I have indicated have shown

1213
that some parts of the Press have fallen somewhat short of the high standards that we, perhaps rightly, expect in this country. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Wigoder.)
Lord DAVIES of LEEK: My Lords, may I, as a layman, ask a question. The noble Lord has kept on using the word "Press". But what about the media and other methods of communication which might find it a viable proposition to pay somebody for information?
Lord WIGODER: My Lords, I am grateful for that observation. I kept using the word "Press" because I think that most recent instances have directly concerned the newspaper industry. However, my observations certainly should be taken to cover the media in general terms, and the Bill, whose Second Reading I am moving, is certainly not limited to the Press.
Lord DAVIES of LEEK: My Lords, I thank the noble Lord.
6.47 p.m.
Lord HARTWELL: My Lords, everybody will agree with the object of the Bill which has been moved by the noble Lord, Lord Wigoder. Speaking as a layman, the Bill seems to me to impose severe penalties on anyone who tampers with witnesses in criminal cases. The preliminary question, therefore, as to whether we should proceed with the Bill is whether the existing law is important and, if it is, whether a Private Members' Bill—introduced without consultation and, I was going to say, without knowing all the facts but having garbled some of the facts—is the right way to put it right. It is not for me to cross legal swords with the noble Lord, even though I am his target. All I can do is to seek independent legal advice for myself, and I have it here. There is a great deal of citation of cases and judgments, and I shall detain the House only with its final paragraph:
"With regard to Lord Wigoder's Bill, it will be seen that the existing criminal sanctions of contempt of court and of perverting the course of justice are quite adequate. They have in fact been frequently used in recent years. They have the advantage that they are common law offences, which means that they can be adapted by the
1214
judges to meet the needs of the times. It also means that the penalties are at large and entirely in the discretion of the judges".
Meanwhile, both the Attorney General in another place and the Lord Chancellor have been asked a question, and both have replied that they are inclined to wait for a considered recommendation from the Press Council before deciding whether action is required. However, the noble Lord has persisted with his Bill. Is it possible that its purpose is not to stop a legal loophole which has suddenly and indubitably been revealed, but to take the earliest opportunity to counter-attack those newspapers which are alleged to have hounded the fallen idol of the Liberal Party? Indeed, the noble Lord has indicated as much to me. With his customary courtesy he wrote to me the day following the First Reading of his Bill, giving me the longest possible notice of this debate.
In his letter he said that, while he would speak mostly about the future, others would speak a great deal about the past. It seems to me that he has himself talked a great deal about the past. So I am speaking early in the debate in order that before noble Lords deliver judgment upon what has passed they shall know exactly what did happen in the sphere of my responsibility—and it is not what has been said inside and outside the court room.
I am the editor-in-chief of the Sunday Telegraph and I take personal responsibility for what the Sunday Telegraph has done. It was mentioned in the contract that it was the Daily Telegraph Limited, which was quite true, but the Sunday Telegraph is a wholly-owned subsidiary of the Daily Telegraph and it is the Sunday Telegraph which is concerned. I take the personal responsibility, not in the heroic sense but because I personally knew and approved beforehand all the major steps which were taken by the newspaper. Before I come to that, the House may want to know why notorious trials cannot merely be reported—in extenso, if you like—and then finish with the observation of the judge, such as, "You leave this court without a stain on your character" or alternatively, "It was proper that this case should he brought and I do not award costs".

1215
If the Press were to confine itself to what is put in front of its nose there would be no need for its multiplicity. A single paper would be enough to duplicate the news agencies, but apart from every other aspect of news, when a case has attracted enormous and prolonged public interest—and I do not mean prurient interest—and which concerns people who have an important influence on public affairs, all the public, and I venture to include your Lordships, want to know what it is all about. So every newspaper, every television company and many radio stations regard it as routine to prepare for publication, as soon as a big case is over, what is described in the more sedate media as "background news" and in the more exciting media "early investigative journalism". In the event of an acquittal with honour the baffled investigative journalist may have to fall back on abusing the police for bringing the case in the first place.
The point I am making is that these investigations—call them what you will—have to be done in advance. Queueing up outside the court after the verdict would be a sterile option and of course they take time and money. In this particular case, I calculate that a total in excess of £300,000 was committed by the media in advance, mostly by TV and radio. There were agreed plans to transport and interview some of the witnesses. Very little of that has been used. Nor are media inquiries confined to something that they can publish after a court may have given them protection. The case we are talking about would never have taken place had it not been for some newspapers. It had been investigated by two police forces and finally dropped by the office of the DPP. Yet investigations by the London Evening News, the Daily Mirror and some other newspapers finally led to the case being reopened. At the Old Bailey it was admitted by counsel for one of the principal defendants and accepted by the judge that there had, after all, been a conspiracy to threaten murder.
The Sunday Telegraph did not play any such leading role. What it did was to buy Mr. Bessell's partly written memoires; what might have been called "My life and times in the parliamentary Liberal Party". That is the bald fact of the
1216
matter. The setting and sequence of events was (excluding names) as follows: A senior member of our staff happened to be introduced to Bessell in California. Bessell mentioned to him that he had begun work on a book which was to be his life story; it would embrace his early years, his years as a Liberal MP, his rise and fall as a businessman and, of course, his close association as a friend and colleague of Jeremy Thorpe—an association which, according to Bessell's account, had dominated his public life. A double check by a most experienced and trustworthy journalist showed that Bessell appeared to have a remarkable story to tell and had already done a good deal of work on the manuscript. Indeed, as the judge was to say later, he is a very articulate man.
Bessell's standing at this time, the autumn of last year, needs to be considered. He was known as a man who had served as a Liberal MP under Mr. Grimond and then under Mr. Thorpe, having won the Bodmin seat in 1964. He had incurred no public odium at Westminster and had left the House voluntarily in 1970. He did not contest Bodmin at that election because his business affairs were in disorder and he needed to spend most of his time in the United States attempting to save himself from financial disaster. In this he failed, but at the time we were in touch with him he had made a settlement with his creditors, was free to visit this country as he wished, without fear of action by his creditors and had never been accused (still less convicted) of any crime.
Here I should interpolate that political memoires, particularly those involving colleagues, are a normal art form, indulged in by many distinguished members of both Houses over the years. Their market price is influenced by their topicality. The negotiations with Bessell continued. The price which Bessell put on his book was £50,000. It was a high price, but not outstandingly high as topical newspaper serials go, given the expectation that much of the price would be recovered by reselling the material to newspapers and magazines in other countries.
Bessell conceded that there could very well be legal problems affecting the publication of his book. He said that it would

1217
be very frank and would put a number of political figures in a light that was embarrassing or even defamatory, according to the very stringent libel laws which we enjoy. Chief among these, naturally, was Thorpe, and if Thorpe would have been acquitted at the Old Bailey then a substantial section of the book would be unpublishable, he supposed, in Britain. After we had agreed in principle to buy his book, therefore, he proposed that if publication were to be frustrated on legal grounds then he would undertake to write some articles of an acceptable kind drawing upon his former close friendship and political collaboration with Thorpe and incorporating some material from his book, and for these he suggested that the fee should be reduced to £25,000.
The proposed deal raised two questions. One was the propriety of the financial terms. The other was the propriety of agreeing to any such deal with a prospective witness. As to the first, we consulted our own legal adviser, who said that in the circumstances he thought the terms were unexceptionable. Bessell consulted his own London solicitor, who gave him similar advice, but went significantly further. He spoke to a senior official of the Director of Public Prosecutions and explained to him the nature of the proposed agreement. "Would the DPPs department", he asked, "see anything objectionable in the precise financial terms outlined?" The answer was that the department would raise no objection and did not think it would prejudice the case.
Lord WIGODER: My Lords, if the noble Lord will forgive me, is that contained in a written communication from the Director of Public Prosecutions, or is that what Mr. Bessell has said?
Lord HARTWELL: No, my Lords, it is not what Mr. Bessell has said; it was his London solicitor, a man of standing, who, if necessary, is prepared to swear an affidavit to that effect. I know the name of the official, but I do not want to name him in this place.
After that, thus fortified, we had to consider the propriety of doing any deal with a prospective witness. The chief point of relevance here was that Bessell had already made full statements of his evidence to the police. The police officer in charge had visited Bessell in California for
1218
several days many months earlier, to take his statement in detail. Overall there were, finally, six Bessell statements on various points. On the basis of all this evidence, and that of the other prosecution witnesses who had also completed their statements to the police, Thorpe and the other three men had already been charged with conspiracy to murder, and in Thorpe's case with incitement to murder. The prosecution case rested upon that evidence, already set out in their depositions, which had been made available to the defence. They could not be altered in evidence without the defence swooping on it. Thus Mr. Justice Cantley said in his summing-up at the trial that Bessell's evidence had already crystallised before the contract was signed on October 13th 1978, and that because of that fact the contract could cease to have the significance it would otherwise have had.
That was a point very much in our minds, but we were not in any case buying Bessell's evidence. That would have been told twice already. We were buying the right to serialise his autobiography upon which he had already begun work and provided a part synopsis. In the nature of things, Thorpe and his troubles would loom large within it, but there was much more to it than that. It was to be a wide-ranging book of memoirs by one of a tiny band of Liberal MPs who had had unique opportunities to observe a section of political life over a number of years at close quarters.
The question then must be: Why, after this contract had been given this weight of legal sanction, did it attract hostile comment when the trial took place? The answer must lie in the manner in which the defence chose to conduct its case. Thorpe and two other of the accused declined to go into the witness box to deny the charges on oath; they preferred to remain silent throughout. In place of evidence for the defence their counsel relied upon a protracted process of destruction of the characters and credibility of the prosecution witnesses, including Bessell. The contract which he had signed for the publication of his book was employed as ammunition for this purpose.
The extraordinary or bizarre aspect of the trial was the relish with which the judge made himself the ally of the defence

1219
in this connection. Between them the judge and the defence counsel savaged the prosecution witnesses, including Bessell. His book contract was savaged in the process, the judge even giving it the unfair description of a "double-your-money arrangement", the point upon which this Bill has fastened. In view of this turn of events the contract has been made the subject of controversy and misrepresentation. Yet on any fairminded assessment of the circumstances in which it was entered into, and the exceptional precautions taken to obtain legal guidance in the matter, it was a proper arrangement for a responsible newspaper to enter into. In view of the unusual way in which the defence at the trial was conducted it was unfortunate that the contract was made, but at the time it was a reasonable step.
It was not for this reason that in the end we cancelled the contract. We did this at the Old Bailey, at the conclusion of Bessell's cross-examination in which he was broken down by defence counsel. Though he had maintained that everything he said relevant to the trial was true, he admitted that some of his past statements had been untrue. As what we would have published concerned that past, and was not a rehash of his trial evidence, we concluded that his historical narration and personal allusions could not be relied upon, irrespective of the verdict. We, therefore, before the final speeches and before the summing-up, decided to cancel the contract and advised Bessell's solicitor accordingly.
Finally, I must say that there is one aspect which eluded everyone until a fortnight ago, when the Lord Chancellor published his answer to an inquirer We thought we had been fair to the defence, but have we been fair to the prosecution? Even the office of the DPP had not thought of that one.
7.9 p.m.
Lord ELWYN-JONES: My Lords, the House will have listened with great attention to the speech of the noble Lord, Lord Hartwell. While noble Lords will appreciate the fact that he has come to make his statement, I doubt whether they will have appreciated his attack, first of all, upon the motivation of the noble and learned Lord, Lord Wigoder, suggesting
1220
that he has been motivated by a purely party political attempt to vindicate the reputation of Mr. Thorpe; and, secondly, the House may well wonder whether it was appropriate for him to make such a direct attack upon the learned judge who conducted this most difficult case, when he spoke of him as making himself "the ally of the defence" in the course of a long and careful summing up.
The debate tonight about this Bill is not confined to the discussion of the Sunday Telegraph contract with Mr. Bessell, but is concerned with a very serious question affecting the administration of justice in the criminal courts. I venture to think that the noble Lord, Lord Wigoder, for the second time within two weeks, has rendered a service in having a crucially important issue affecting the integrity, fairness, and effectiveness of the administration of justice—upon which so much of the rule of law depends—examined by the House.
I gathered from the beginning of the remarks of the noble Lord, Lord Hartwell, that he was against tampering with the administration of justice. One form of tampering is, of course, to influence witnesses in criminal proceedings. It is not the first time that this problem has arisen and I faced it in a very direct degree when I was Attorney-General and, indeed when I conducted the prosecution in the Moors Murders case. There the complaint was that the News of the World had carried out a series of interviews with a key witness for the prosecution, David Smith, who was present when the last of the murders was committed. In that case the News of the World entered into a contract with him to pay him £500—and an additional sum for resale of the material throughout the world—for his story of the events leading to the charge of murder against Brady and Hindley. He further agreed that he would sell the information to nobody else.
One of the advantages of a wealthy paper, of course, "buying-up" a witness is to withold any information he may have from any other rival in the publishing field. That is one of the elements and features of "cheque book journalism" as it used to be called. After that case the matter was naturally referred to me as Attorney-General, and the course that the Lord Chancellor of the day and I decided

1221
upon was to raise the matter with the Press Council. That we did and the noble Lord, Lord Wigoder, has read out what happened.
I make no apology for talking about the past—a matter which the noble Lord, Lord Hartwell, thought was an undesirable state of affairs. This threat to the administration of justice is not something new; it has happened before. The noble Lord, Lord Wigoder, read out the Declaration of Principle of the Press Council. I think it bears repetition. It said:
"No payment or offer of payment should be made by a newspaper to any person known or reasonably expected to be a witness in criminal proceedings already begun in exchange for any story or information in connection with the proceedings, until they have been concluded".
It could not be much clearer, could it?
"No payment or offer of payment should be made by a newspaper to any person known or reasonably expected to be a witness in criminal proceedings already begun in exchange for any … information".
It is very clear and specific. It goes on:
"No witness in committal proceedings should be questioned on behalf of any newspaper about the subject matter of his evidence until the trial has been concluded".
It is true, as the noble Lord, Lord Wigoder, has said, that there were some general words in the culmination of the statement, but I doubt whether Lord Hartwell would seek protection from those governing words.
The outcome of that Declaratoin of Principle was—so far as I know, at any rate—that there was no complaint in the intervening years about the activities of the media and I agree that this potential danger applies to television as well as journalism. But then the matter suddenly flared up in view of the sensational character of what the newspapers called "The trial of the century"—especially some of the newspapers that had entered into agreements of this sort.
The matter was considered, as the noble Lord, Lord Wigoder, has said, by the Phillimorc Committee. If I may say so, I think that he read rather hurriedly over the relevant passage, and I venture to think that we did not get the full sense of what the Phillimore Committee concluded. Paragraph 78 deals in particular with the offer of a contingent payment, to which I shall come in a moment.
1222
Indeed, the object of the Press in making the offer contingent would be to ensure that it did not buy a worthless asset. The Committee said:
"If in a criminal case, for example, the trial ended in an acquittal, the story could well be unpublishable for fear of defamation proceedings".
That is clearly so. It goes on:
"The purchaser would probably not intend to pervert the court of justice"—
and I do not think that the noble Lord, Lord Wigoder, has alleged that against the noble Lord, Lord Hartwell—
"nor even necessarily foresee this as a likely consequence (unless the offer was very large, in which case intention or foresight might legitimately be inferred)".
I think that one of the things that the learned judge at the trial also pointed out was that Bessell's income at the material time was £2,500 and an offer of £50,000 is not an inconsiderable inducement—that at any rate is what the judge seems to have thought. It goes on to say:
"but the offer could clearly have serious effects upon the way the witness gave his evidence and, if the position was revealed at the trial, upon the witness's credibility and the outcome of the trial".
The learned judge at the trial in dealing with the matter—and, of course, he had to depend upon the information that was available to him as given in evidence at the trial—described the contract that the Sunday Telegraph entered into as "a deplorable contract". The noble Lord is completely opposed to that assessment of it and is apparently totally unrepentant.
What I think would have been of interest to noble Lords would be to learn whether those who made this offer of £50,000 or £25,000 really regarded that as a contingent payment. This is how the learned judge dealt with the contract in his summing up. He said:
"It provides for the payment of £50,000 to Milbest Publications Incorporated"—
that was simply something set up by Bessell—
"for the exclusive world rights to publish up to six extracts not exceeding 30,000 words from a book … for immediate publication by weekly instalments as soon as the present criminal proceedings against Mr. Jeremy Thorpe and his co-defendants are completed".
The House will note that he had the courtesy to refer to "Mr." Jeremy Thorpe. However, paragraph 4 of the contract, which is then referred to, read as follows:

1223
"If on the advice of its legal advisers the Publisher"—
that is to say the Sunday Telegraph—
"is not able to publish the extracts then instead the Publisher will pay £25,000 for up to six special articles…".
Then the comment of the learned judge was:
"So, as Mr. Bessell said, he, or, if you like, Milbest Publications Incorporated get double for a conviction what they would get for an acquittal. It is not put that way, of course, but their legal adviser would have some strong advice to give about the publication of, no doubt, the original manuscript in the event of an acquittal. I cannot myself see, but you can consider if you like what other point there is in this double your money except to provide for the eventuality that the Publishers may not dare to publish the original manuscript".
That was his judgment. One would have liked a little more explanation from the noble Lord and a little less counter-attack in regard to that factor in the contract.
Lord HARTWELL: My Lords, the noble and learned Lord wants a further explanation. I have already explained that the reason we entered into the contract and thought that it was all right to do so was because our own legal advisers said that it was all right, as did the office of the Director of Public Prosecutions.
Lord ELWYN-JONES: My Lords, I do not want to cross-examine the noble Lord in the House. It is always a painful thing to have to undertake, but I still have not learned whether or not he thought that it was a contingent payment. However, the House will have heard what the noble Lord said, and no doubt in due course we shall hear some comment from the Director of Public Prosecutions about this statement that apparently he, or someone in his department, gave a fair wind to what was afoot. That is, indeed, a very remarkable state of affairs, about which it may well be that we shall hear more in due course. I make no further comment about it than that. But, at the end of the day, I think that the public of our country have a deep sense of unease about what has been done, not only in this matter but in the other instances to which the noble Lord, Lord Wigoder, referred. I think that this is a very serious matter which needs our careful concern.
1224
As I see it, the real difficulty is whether tampering with witnesses in a way which would lead them to say that which they might not otherwise have said but for the inducement, in a way which, when the contract is exposed, clearly causes grave damage to the prosecution case because it exposes what kind of people the witnesses were who were prepared to enter into such contracts, should be dealt with within the ambit of the law of contempt, or whether it should be dealt with separately as a criminal offence. So far as that issue is concerned, I confess that I do not find it an easy matter upon which to adjudicate.
The law of contempt is, of course, under constant attack, and it is right that we should again be re-examining it. I agree with what the noble Lord, Lord Wigoder, has said; we await with very great interest the outcome of the present Government's deliberations upon it. The outcome of the previous Government's deliberations are set out in the Green Paper. It will be interesting to see what emerges. I confess that I have a certain reluctance about creating new criminal offences if we can possibly deal with a public mischief in matters other than by criminal proceedings. But I have no doubt that this is a serious matter.
The Press Council itself has not yet adjudicated upon the whole of this affair, and the outcome of this debate may not take the matter very much further. As I have said, I do not see why the noble Lord, Lord Hartwell, should submit himself to cross-examination by me here or, indeed, whether that would be a desirable exercise for us to embark upon in the House. However, we await patiently the outcome of what the Press Council has to say. But that some statement by the Council needs to be issued is certain.
The fact is that the Declaration of Principle that was pronounced in 1966 is—in my view at any rate—something which became, alas! a dead letter during the currency of the recent Old Bailey trial. It is a deeply worrying matter. Once the fountain of justice is polluted by pressures upon witnesses from outside, first, the successful prosecution of criminal cases may founder; secondly, innocent men may gravely suffer, innocent men may he convicted by the tendency to embellish a little or, indeed, to maintain an original lie. Those are the perils.

1225
I confess that I am not totally convinced that because Mr. Bessell had already given a statement to the police, that concluded the matter from the point of view of the law of contempt. If that original statement was a lie, then the persistence in the lie, encouraged by the inducement of the contract, could effect a grave injustice to the accused. On the other hand, at the very least there would be a temptation to desperate men in financial difficulties to embellish their evidence to get the result that would give them £50,000. The dangers are so apparent. I confess that I am a little surprised that that did not become a little more apparent, and that the noble Lord did not show some concern in his speech about what has occurred.
But, as I say, this debate is on the serious question that we need to protect the integrity of what goes on in the criminal courts. If we fail to do so, the administration of justice in this country will embark upon very dangerous days. On the whole, my view at present is that perhaps the better course is to await what the Government propose in the area of contempt of court, and if the matter can be made as tight and as effective as it is hoped for dealing with this mischief, on the whole that may be the best way in which to proceed. In the meantime, I think that the House should be grateful to the noble Lord, Lord Wigoder, for introducing this Bill.
7.28 p.m.
The PARLIAMENTARY UNDER- SECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, the Government share the concern of the noble Lord, Lord Wigoder, about the issue with which the noble Lord's Bill attempts to deal. It would seem that there are three main grounds on which we may all properly be anxious about payments which are made to witnesses. The first is the possibility that the payment of any money to a witness, or a potential witness, whatever the circumstances, would influence the evidence which that person gives. By the payment he might be persuaded to say something that was untrue, or to embroider or exaggerate his evidence; or he might be persuaded to maintain an earlier statement which was untrue which, but for the payment, he would have had the good sense to withdraw when under
1226
oath. It goes without saying that for a witness to lie in order to receive a payment—whether or not this is known to the jury—is a practice which might be wholly contrary to the interests of justice.
There is, I think, a second ground for disquiet. If a payment to a witness becomes known it will affect the credibility of the witness and the standing of the case he represents. If somebody is known to have received a sum of money associated with his appearance in the witness box, then people generally and the jury in particular will be influenced by that knowledge in a way which may have nothing to do with the intrinsic quality of the evidence which will be given. Either the prosecution or the defence may be discredited in this way and the evidence concerned will lose, or will be thought to lose, credibility. The noble Lord, Lord Wigoder, and the noble and learned Lord Lord Elwyn-Jones, have explained both those grounds for disquiet.
My third reason for expressing disquiet about payments to witnesses is that they may bring the administration of justice into disrepute. It is that general objective with which this Bill is designed to deal. May I make it clear to your Lordships that the Government are determined to do whatever is necessary for their part to safeguard the good name of the administration of justice in our courts.
The Bill focuses, understandably, on contingent payments, but it is worth recalling that when the Press Council issued a declaration of principle on the matter in 1966 it did not draw such a distinction. In plain terms the Press Council said that payment, or offer of payment, to witnesses should be condemned.
Lord ELWYN-JONES: My Lords, may I intervene in order to explain one matter in this connection which I should have made clear; namely, there was no evidence in the News of the World incident of any contingent payment being involved in the approaches to David Smith. The criticism there was on the lines that the noble Lord is now speaking about. But I thought it right, and I owe it to the News of the World, to make that quite clear from my knowledge of what was contained in the contract and the interviews which the police had with the journalist concerned.
Lord BELSTEAD: My Lords, I am grateful to the noble and learned Lord for making that clear both to me and to your Lordships' House. So far as the Press Council declaration in 1966 was concerned, the noble and learned Lord read out the exact words of that declaration which amounted, as I have said, in plain terms to a condemnation of payments, or offer of payments, to witnesses, including witnesses in committal proceedings until the trial itself is over.
I am expressing sympathy for the objects of the Bill and also concern about events which have given rise to it. None the less, the Government have reservations about the wisdom of proceeding to legislate now on the basis of this Bill. Our concern springs from the answers to three questions which can be asked. Those questions are: How widespread is the abuse? Is it such as to require legislation, or is some other remedial action appropriate?
Thirdly, even if legislation is needed, is it needed now and will this Bill meet the case?
Would your Lordships bear with me for a moment while I try to answer those three questions in turn. While payments of this kind are deplorable when they occur, there is, I think, no evidence that they are widespread. Indeed, before this year the last occasion when the matter achieved notoriety was in the case of the Moors Murders when the noble and learned Lord was Attorney General. This led the Press Council to issue, after consulting newspaper editors, the declaration of principle to which the noble Lord, Lord Wigoder, and indeed the noble and learned Lord have referred. The Royal Commission on the Press examined the matter, and in its report in 1977 recorded that it found no evidence of the payments to witnesses, or potential witnesses, which had earlier caused such concern.
In case that sounds rather complacent, it may be that payments have been made in other cases. Indeed, I think it would be naive to claim that they have not. But there is no evidence of what, if your Lordships will forgive me saying so, I would call a major problem. Indeed, the immediate consequence of the recent case was to provoke a further Press Council inquiry; widespread expressions of concern in both Houses of Parliament and in the
1228
Press; and last, but not least, the noble Lord's Bill. That shows that this single instance is taken as being a very great problem in itself. I am sure, and very much trust, that Fleet Street will catch what I believe is the public mood and will not ignore these clear signs of disquiet.
In any event, is the abuse such that legislation is needed to stamp it out? The Government have noted that the Press Council has initiated an urgent examination of the ethical issues involved, and will, I hope, pay due regard to the views expressed by your Lordships in this debate today. The Press Council has also appealed publicly for help from prosecuting and defending lawyers in providing information and supporting evidence. The Government believe that in the first instance we should look to the Press to take the necessary action, and it is to be hoped that the Press Council will be able to give a clear lead on this matter.
We should not forget that, in certain circumstances, the criminal law may already be relevant, and both the noble Lord, Lord Wigoder, and the noble and learned Lord have referred to this. Payments which are intended to prejudice proceedings, whether by inducing the witnesses to lie, or by some other means, would almost certainly constitute an offence under the general law. Moreover, the courts' inherent powers of contempt may also be relevant. In certain circumstances payments to witnesses, particularly if substantial, might well amount to contempt, and even if a person did not intend to prejudice proceedings in the sense of setting out with that objective in mind, the payments might be so large as to make it obvious to any reasonable man that this was likely to be the consequence.
The Government are committed to bringing forward legislation on contempt of court, which I am afraid I cannot anticipate this evening. In its Report on Contempt, the Phillimore Committee specifically considered payments to witnesses, and concluded that they should not fall within the ambit of the law of contempt being proposed. Nonetheless, before considering legislation in this field we need to bear in mind that there are, and will continue to be, provisions

1229
which will bear at least on some of the activities that this Bill is concerned with. The noble Lord, Lord Wigoder, has asked me specifically whether forthcoming legislation or contempt will deal with this problem. We have also had a few words from the noble and learned Lord on the subject of contempt. If your Lordships will allow me, I should like to return again to the subject in a few moments before I finish speaking.
The third question which I asked, and which I think needs an answer, is: Does the noble Lord's Bill meet the case? It would be tedious in a debate of this kind to dwell at any length on drafting difficulties. However, I think that there is a problem about tackling the abuse at which this Bill is aimed if the legislation is to achieve the requisite precision. It is not unlikely that difficult cases could arise from payments, or offers made conditional on something such as the publication of a book which was, or which purported to be different from the outcome of the proceedings. The Bill does not provide very much guidance about how to handle such situations.
Because the offence is one of strict liability, as it has to be to deal with the abuse in question, and because the Bill is silent, again as it probably has to be, about what the payments are for, there is a risk that it would catch a number of innocent payments. Because it covers any witness, or potential witness, it would apply to payment to a defendant in a criminal case or to a party in civil proceedings. Thus, I think the Bill would probably have the effect of prohibiting the offering of a reward for the recovery of stolen property which is dependent on the conviction of the thief. It might make it an offence to offer to pay someone else's fine—which I am sure your Lordships would tell me is not a desirable thing, but it is not clear that it ought to constitute a criminal offence. Similarly, an agreement to settle out of court in civil proceedings might technically also be caught by this Bill.
There is also a real problem in being unsure which way to turn in drafting legislation on this subject. The noble Lord's Bill is limited to contingency payments, but the Phillimore Committee warned that this would create obvious difficulties of proof because the contin-
1230
gency aspect can be concealed. On the other hand, there is a case, apparently accepted by the Press Council in issuing its declaration of principle, for prohibiting all payments to witnesses, whether contingent or not. But if the Bill were to be amended in that way the likelihood of catching innocent payments becomes even greater. For example, a payment to a bona fide expert witness might be caught. I do not mention these—and I think there are some other difficulties—with any sense of satisfaction. We are all grateful to the noble Lord for bringing forward this Bill. Rather, my purpose is to demonstrate the truth of the proposition that, before we consider legislation on this difficult issue involving Press freedom, we need to take a longer look at the issues involved.
The issues which the noble Lord's Bill raises are therefore, in the Government's view, both urgent and important and are engaging urgently the attention of the Government. Both my learned friend the Attorney General and my noble and learned friend the Lord Chancellor have been in correspondence with the Press Council and each has expressed the view that though the matter clearly cannot be left as it is, it would be better to await the result of the Press Council's deliberations before taking any steps to deal with the matter by changes in the law or otherwise.
Nevertheless, if for any reason these approaches are found in the event not to be sufficient in themselves, we shall clearly have to think again. Fortunately, the Bill dealing with contempt of court which Her Majesty's Government are committed to introducing during the present Session, will form a convenient opportunity for the discussion of the matter again, either at the Second Reading or, with greater precision, at the Committee stage. I am authorised to say that the Government will carefully consider anything the noble Lord or other of your Lordships may wish to say on the Second Reading of that Bill or, in the event of their putting down any specific amendment or any amendment which the noble Lord or any of your Lordships may choose to move in Committee. I give the noble Lord and the House that undertaking. In the light of it, I would ask the noble Lord to consider whether he wishes to proceed to the Committee stage of his Bill.
7.42 p.m.
Lord WIGODER: My Lords, I am grateful to the noble and learned Lord, Lord Elwyn-Jones, for the powerful support he gave to my argument. I am grateful also to the noble Lord, Lord Hartwell, for having the courage to come forward today and participate in this debate. It would have been easy to stay away. It must have been much more difficult to come and put forward as he did, the spirited defence of the particular matter into which his newspaper entered. I know enough from life at the Bar to recognise skill and ability in putting forward a somewhat tenuous case when I see it, and I indeed respect the way in which that has been done.
I would only add that I am sure the noble Lord, Lord Hartwell, would want on reflection perhaps not to persist in his observations about the learned trial judge, particularly when he himself criticised the judge because of his observations about one of the witnesses called Mr. Bessell, and then the noble Lord himself said a little later that the Sunday Telegraph had decided to avoid the contract into which they had entered with Mr. Bessell because Mr Bessell had been so broken down in the course of his evidence by defence counsel. It is a little hard in the circumstances to blame the trial judge if he made a comment about that in due course.
I would add only two other observations in relation to what the noble Lord, Lord Hartwell, said. The first is to make it clear, as I do, that it has never been suggested that either his or any other paper that was involved in these matters intended to have the harmful effect on the administration of justice which cumulatively I believe all the papers did have. Secondly, the noble Lord put himself in the firing line this evening when there are in fact other papers, as I tried to indicate, involved very substantially; and I would not want it to be thought for one moment that if one was obliged to criticise what had happened in recent months, it was all to be directed towards the paper on which the noble Lord plays such an extremely distinguished part.
I am grateful for what the noble Lord, Lord Belstead, said on behalf of the Government. What it comes to, as I understand it, is really that the Govern-
1232
ment recognise that this is an urgent problem, that it is an important one and that they are prepared to look again at the problem after the Press Council has considered it in the context of a contempt Bill which the Government are already committed to introduce during this Session. In those circumstances, I agree particularly with what Lord Elwyn-Jones said, that it is undesirable to seek to create specific criminal offences if matters can be dealt with on another basis. It is undesirable to try to proceed in a piecemeal fashion if there is an opportunity for proceeding, in a more comprehensive way. In view of the very clear indication which the noble Lord, Lord Belstead, has given that the Government are prepared to look again most seriously at this problem in the very near future, I accept what the noble Lord said, that that is perhaps the most helpful and sensible way to proceed in dealing with this important matter. In those circumstances, I ask leave to withdraw the Bill.
Motion for Second Reading, by leave, withdrawn.
Bill, by leave, withdrawn.

INTELSAT (IMMUNITIES AND PRIVILEGES) ORDER 1979
7.46 p.m.
Lord TREFGARNE Lord TREFGARNE rose to move, That the draft order, laid before the House on 12th June, be approved. The noble Lord said: My Lords, with permission I will speak at the same time to the Oslo and Paris Commissions (Immunities and Privileges) Order 1979 and the International Oil Pollution Compensation Fund (Immunities and Privileges) Order 1979. These orders, which will be made under the International Organisations Act 1968, were laid before the House on 24th May and 9th July.
The first of these orders relates to the International Telecommunications Satellite Organisation and will revoke the order made in 1972 in respect of this organisation. It is required to give effect to the Protocol on INTELSAT Privileges, Exemptions and Immunities which was signed by the United Kingdom on 23rd August 1978 and laid before the House on 2nd November 1978.

1233
The United Kingdom has been associated with the development of satellite communications since the first experimental launchings of such a satellite in 1962. We were one of the founder members of the consortium which was set up in 1964 as an interim measure pending the conclusion in 1971 of an agreement establishing the International Telecommunication Satellite Organisation "Intelsat". One hundred and two States have now signed this agreement, which the United Kingdom ratified on 16th February 1972.
The purpose of INTELSAT is to continue the design, development, operation and maintenance of the satellites and associated systems which provide, on a commercial basis, a reliable, high quality international public telecommunications service to all areas of the world. The two essential elements in this service are, first, the space segment, which at the moment comprises 13 satellites in geostationary orbit at various locations over the Atlantic, Indian and Pacific Oceans at a height of some 22,240 miles; and, secondly, the ground segment, consisting of 160 earth stations located in 100 countries. The combined system of satellites and earth stations provides approximately 685 earth station-to-earth station communication channels.
Your Lordships may be interested to know that the Protocol on INTELSAT Privileges, Exemptions and Immunities is the first multilateral non-regional agreement on privileges and immunities to be concluded for some time. It was agreed upon at a conference held in May 1978 in Washington, where the organisation has its headquarters. The general trend of the conference was towards a limitation of the privileges and immunities to be accorded to INTELSAT, and persons connected with it, because of the semi-commercial nature of the organisation.
Accordingly, the order provides a more limited range of privileges and immunities than is customary for most international organisations of which the United Kingdom is a Member State. Thus, INTELSAT is to be exempted from taxation and from Customs duties, not on all of the items it imports or purchases for its official use, but only in respect of "the exempted items"; that is, communications
1234
satellites, and components and parts for them, which are to be put into orbit or carry out the organisation's main function. This means that, in respect of Customs and taxation exemptions, the draft order now before your Lordships is giving no more, and I would like to stress this, than is already being given to the organisation by the existing order which is now being revoked.
As regards the staff members of the organisation, the Protocol requires that they shall enjoy immunity from jurisdiction in respect of their official acts and, in member countries of which they are not nationals or permanent residents, exemption from income tax on their salaries and emoluments from INTELSAT. When taking up an appointment in another member country they are also to be granted exemption from Customs duties and taxes on the importation of their personal effects. These are the basic privileges and immunities which the United Kingdom has recognised as necessary and appropriate for the staff members of international organisations. The order accordingly gives effect to those provisions, but your Lordships will appreciate that we are unlikely to have to implement them in this country, since there is no proposal that INTELSAT should set up an office here.
The Protocol also requires that representatives of the contracting parties shall be granted immunity from suit only in respect of their official functions. A similar provision extends to the members of an arbitration tribunal which may be established under the provisions of the INTELSAT agreement or operating agreement to settle disputes arising between the organisation and contracting parties or between parties of signatories themselves. Thus, if such a tribunal were to be set up in this country, the arbitrators and witnesses participating in the arbitration proceedings would be accorded immunity, but again only in respect of their official functions. I should like to emphasise however, that for these persons, as also for the officials of the organisation, immunity does not extend to motor traffic offences or accidents. From what I have said, your Lordships will realise that the making of this order will not result in any significant extension of immunity from the jurisdiction of our courts; nor will

1235
its effect on the Exchequer be more than minimal.
May I now turn to the draft Oslo and Paris Commissions (Immunities and Privileges) Order 1979, which I shall move separately. This is required to give effect to the agreement relating to the commissions established by the Convention for the Prevention of Marine Pollution by Dumping from Ships and Aircraft 1972, and the Convention for the Prevention of Marine Pollution from Land-Based Sources 1974.
The Agreement was laid before the House on 10th May 1979. Happily, rather than use the full and very lengthy title of the agreement, the order refers to the shorter titles by which these two separate, but related, commissions are generally known.
The Oslo Convention has as its object the protection of the marine environment from dumping by ships and aircraft. The convention which now has 12 parties, resulted from a meeting of some North Sea States, convened in 1971 on the initiative of the United Kingdom. The convention came into force on 7th April 1974. It requires all dumping in the North Sea and North-East Atlantic (but excluding the Baltic and the Mediterranean) by ships and aircraft to be authorised by national authorities. It prohibits the dumping of certain substances such as compounds of heavy metals, organo-chlorines, and carcinogenic substances, and others which might find their way into the food chain. Specific permits are required for the dumping of other, less harmful, substances, and the convention has provisions regarding the characteristics of the waste, packing methods, and the location of the dumping site.
The Paris Convention, which concerns the prevention of marine pollution from land-based sources including rivers and estuaries, arose from a French initiative in 1973. It was welcomed as a much needed supplement to the Oslo Convention, covering, as it did, the same geographical area, and was closely modelled on that earlier convention. It came into force on 6th May 1978, and eight of the 14 signatories have so far ratified it. Parties to the Paris Convention undertake as a matter of urgency to eliminate pollution
1236
of the sea, from land-based sources by certain defined substances, to limit strictly pollution by other substances, to monitor marine pollution, and to co-operate in research.
Each of the conventions established a commission, composed of representatives from each contracting party, to oversee its operations. The Oslo Commission based its secretariat in London where it could maintain close liaison with the Inter-Governmental Maritime Consultative Organisation, which is the secretariat body for the London Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter. With the entry into force of the Paris Convention it was agreed between the two commissions that their affairs could be most economically handled by a single secretariat. Thus the joint secretariat came into being in London to act on behalf of both the Oslo and Paris Commissions.
The draft order confers legal personality on the commissions and exempts them from the payment of direct taxes. Unlike most orders of this kind, it does not confer any privileges or immunities upon representatives of Member States, since none were requested. The five staff members are to receive only such privileges and immunities as are necessary for this small joint secretariat to function effectively here. I hope that your Lordships will approve the draft order, thus confirming your support for the valuable work which is being carried out by the Oslo and Paris Commissions.
The last draft order before your Lordships is also connected with marine pollution, but in a rather different way. This order relates to the international fund set up to deal with the payment of compensation as a result of pollution damage caused by the escape or discharge of oil from ships.
The "Torrey Canyon" incident in 1967 demonstrated that there did not exist in international law adequate provision to enable those affected by marine oil pollution damage to recover the considerable cost of carrying out preventative measures, and in effecting cleaning-up operations. The United Kingdom Government therefore took the initiative in measures which led to an inter-govern-

1237
mental conference negotiating in 1969 the International Convention on Civil Liabilities for Oil Pollution Damage. This convention, which entered in to force in 1975, has now been accepted by 39 countries, including almost every significant maritime power. The major exception is the United States. While being a great step forward in making shipowners strictly liable for oil pollution damage caused by laden tankers, the limit of their liability at £9·5 million was still inadequate to cover a major disaster.
Accordingly, a further inter-governmental conference adopted in December 1971 the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage. This fund is financed by levies on imported oil which are paid by the oil companies of contracting States. The oil companies have no control over the disposal of monies from the fund. It makes compensation available to victims of oil pollution, when adequate compensation could not be obtained under the earlier convention from the shipowners concerned. Your Lordships will recognise that these provisions follow the "polluter pays" principle. The owner of a laden tanker that spills oil is liable to meet a first tranche of compensation under the Civil Liability Convention, with a second tranche being financed by the oil industry. The United Kingdom ratified the fund convention in 1976 and made an order to give effect to its provisions on privileges and immunities. The convention entered into force on 16th October 1978, and compensation from it is now obtainable up to a maximum of £29·3 million sterling per incident. The original maximum was £19·5 million sterling, but this amount was increased in April this year.
The presence in London of the Inter-Governmental Maritime Consultative Organisation, with which the fund requires to work in close collaboration, was one of the incentives which led the fund's members to accept Her Majesty's Government's invitation to establish its headquarters in London. When IMCO move in two or three years' time into the new building which is being constructed for them on the Albert Embankment, the fund will have its own offices in that building. At present it is housed in
1238
separate premises which IMCO have leased close to their existing headquarters. We have negotiated an agreement with the fund setting out the conditions under which its small staff will operate here. This agreement was laid before the House on 21st June. A new order is required to give effect to that agreement. It incorporates the fiscal reliefs provided by the earlier order, which it revokes, and accords the additional privileges and immunities which are specified in the agreement.
The scale of these privileges and immunities is comparable with that accorded to most of the other international organisations having their headquarters in London. However, a significant difference is that the fund's immunity from suit is more limited in certain respects. For example, action may be taken against the fund in the courts of this country in relation to the compensation provisions of the convention. I am sure that your Lordships will also recognise the additional benefits which will accrue to this country from the receipt of the levies paid to the fund by the oil companies. For these reasons, therefore, I ask your Lordships to endorse the important and useful work of this organisation by approving the draft order. I beg to move.
Moved, That the draft order, laid before the House on 12th June, be approved.—(Lord Trefgarne.)
8 p.m.
Lord GORONWY-ROBERTS: My Lords, I shall detain your Lordships for only a very few minutes because the Minister has most carefully and precisely defined the purport of these three orders, two of which are, of course, quite closely related. As to the first, dealing with Intelsat, this is an order conferring privileges and immunities on this organisation and certain of its representatives, and, as the Minister explained, it is in accordance with the agreement and protocol signed by the United Kingdom in, I think, August 1978. As such, the order flows from that agreement and that protocol, and it is therefore common form in that sense and, indeed, in content and purport. It does not, at least significantly, derogate from similar orders related to similar requirements. We note with satisfaction

1239
that the Joint Committee of both Houses on Delegated Legislation have reported that they see nothing in this order that they should specially bring to the attention of both Houses, and we are very glad to support the motion for the approval of this order.
As to the twins, the Oslo and Paris Commissions Order, they are of course closely related and they deal with an extremely important, and perhaps increasingly important, fact of modern international industrial life. I am sure that the Minister and the whole House (such as it is) would agree with me that we have not by any means solved this problem. In recent weeks we have had to consider new developments in this field, which has caused us great concern; but for the moment we are concerned with the order, and here again the Joint Committee which scrutinises these instruments has returned a clean bill of health in both cases. I would merely add here that the Oslo order, as I shall call it, certainly flows from an agreement which orginally was the subject of a British initiative. I think that to some extent that is true of the Paris order, which deals with land-based problems arising in this field. These two orders are in fact relatively common form, and we are glad to support the motion.
As to the third, relating to the International Oil Pollution Compensation Fund, this, too, is acceptable to us; and here again the Joint Committee on Delegated Legislation see no need to draw our attention to any particular feature of the order. I turn to my noble friend for adventitious technology. This, of course, limits immunity from suit, does it not? I think I heard the Minister make this point, and I was very glad to hear him make it because any limitation on immunities, so long as it does not impair the efficiency of the organisation concerned, is always most welcome to either or both Houses. I have my own views on this, as noble Lords know, but I am sure the House has heard with gratification that this is the case with this particular order. This flows from an agreement between this country and the fund, and I think it is very important to underline what the Minister has said about the fund as a separate entity. I was glad that he
1240
described how the fund was assembled, how the fund is funded, and the system of levies—the dual system of levies, in fact—which seems to be a fundamentally sound way of doing it.
Quite apart from the order, however, I am sure the House will feel that we shall have to look at the whole question of compensation again; but that does not concern this country only, and I shall not go down that path because it does not really relate to the requirements of the order which the House is asked to approve. The Minister reminded us that 39 States, I understand, have adhered to this, and I take it that they comprise most, if not all, of the major maritime States—with, however, a notable exception; that of the United States of America. This is not the time or place to go into the reasons why certain adherencies have not been forthcoming, even when it involves a country of the importance of the United States in this as in other matters; but it is encouraging to find that in both the East and the West, if I may put it like that, in both political areas of the world, there has been agreement about this fund. It is not confined to the Western democracies, if I may put it in that way, for I understand that there has been support and agreement for it from beyond the Curtain; and I also understand that countries to which we in the Community look with favour and anticipation as future members of the Community, such as Greece, have adhered to it. I think I am right on that, and perhaps the Minister will tell us. Greece has an extremely important role to play, as she always has had, in these matters.
So, my Lords, as the Minister, as he must, moves each order in turn we shall join with him in expressing, in response to each of the three motions when we come to it, our contentment with the purpose and content of these orders. Having taken a little time over the last two sentences so that the Greeks may arrive, I now invite the Minister to respond to the one or two small points that I have made.
Lord TREFGARNE: My Lords, the Greeks may not arrive during the course of our deliberations, I am sorry to say. I am very much obliged to the noble Lord, though, for his helpful and constructive approach to these orders. I do not think I really need to detain your Lordships for much longer, hut the interesting points which the

1241
noble Lord has raised I will deal with more effectively, perhaps, in correspondence. That being so, I hope your Lordships will agree to the first order standing in my name on the Order Paper.
Lord GORONYWY-ROBERTS: My Lords, before the Question is put, perhaps I should have said, not that the Greeks should arrive but that the marines should arrive.
On Question, Motion agreed to.

OSLO AND PARIS COMMISSIONS (IMMUNITIES AND PRIVILEGES) ORDER 1979
Lord TREFGARNE: My Lords, I beg to move that this order be approved.
Moved, That the draft order, laid before the House on 25th June be approved.—(Lord Trefgarne.)
On Question, Motion agreed to.

INTERNATIONAL OIL POLLUTION COMPENSATION FUND (IMMUNITIES AND PRIVILEGES) ORDER 1979
Lord TREFGARNE: My Lords, I beg to move that this order be approved.
Moved, That the draft order, laid before the House on 9th July, be approved.—(Lord Trefgarne.)
On Question, Motion agreed to.

INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) (NORTHERN IRELAND) ORDER 1979
8.10 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Elton): My Lords, I beg to move that the Inheritance (Provision for Family and Dependants) (Northern Ireland) Order 1979 be approved. Another order, the Capital Transfer Tax (Northern Ireland Consequential Amendment) Order 1979, is a minor consequential measure, and I shall move that order also after this debate. Your Lordships may,
1242
however, find it convenient to discuss both orders together and I shall therefore outline its purposes and effects briefly before I conclude introducing this order.
The Inheritance Order replaces the existing legislation on family provision in Northern Ireland. In the interests of equity, and to minimise avoidable distress, it enlarges the category of persons entitled to apply for financial provision out of the estate of a deceased person. In the case of a surviving spouse, it raises the standard of provision which can be made. In all major respects it thus brings the law of Northern Ireland on these matters into line with that of England and Wales as embodied in the Inheritance (Provision for Family and Dependants) Act 1975 which, your Lordships will recall, gave effect to the recommendations made by the Law Commission in 1974 and published in its Second Report on Family Property: Family Provision on Death.
The Order extends to 28 Articles. Article 1 sets out the title. Article 2 deals with interpretation. Articles 3 to 9 determine the powers of the court to order financial provision from the deceased's estate. Of these, Article 3 permits certain people who are not at present entitled to reasonable financial provision under the will of the deceased person or under the law of intestacy to apply to the court for an order making such provision. Article 2 provides that the term "reasonable financial provision" in the case of a surviving spouse means such provision as it would be reasonable for a husband or wife to receive—whether or not it is required for his or her maintenance. In the case of other applicants, it denotes such provision as it would be reasonable for the applicant to receive for the purpose of his or her maintenance.
This is a new and more generous criterion for measuring "reasonable financial provision" in the case of an application by a surviving spouse. It is intended to ensure that, so far as possible, a husband or wife whose marriage is ended by the death of their spouse is at least as favourably placed as, under the Matrimonial Causes (Northern Ireland) Order 1978, would be someone whose marriage ended in divorce. The list of those entitled to make applications is set out in Article 3. This includes all those categories of people at present covered

1243
by existing legislation. It also includes, as an innovation, some new categories, notably those of persons who were unrelated to the deceased but who, prior to his death, had been dependent upon him; and also children of the deceased who have achieved the age of 21 but are still in full time education.
Article 4 would give the court, provided it is satisfied that provision should be made for the benefit of an applicant, wider powers to make orders which would, in effect, alter the distribution of the deceased's estate from what would otherwise have taken place. The power of the court to order financial provision is discretionary, but in deciding whether or not it should be exercised, and, if so, how, it must have regard to the criteria set out in Article 5. These include the financial needs and resources of the applicant, and the needs and resources of other persons whose position might be prejudiced by the making of an order for the benefit of an applicant. The conduct of the interested parties is also a relevant consideration. Article 6 limits the time within which an application may be made.
Where an applicant is in immediate need of financial assistance and delay could cause hardship, Article 7 empowers the court to make interim orders for money payments to the applicant. If and when a final order is made, any sum paid to the applicant by way of an interim order may be taken into account. The remaining provisions of this order are technical in nature and detailed in presentation. I do not think your Lordships would wish me to catalogue them now. It is, however, open to any noble Lord to raise any matter pertaining to them in the course of this debate.
My Lords, I turn now, therefore, to the Capital Transfer Tax (Northern Ireland Consequential Amendment) Order 1979. If your Lordships agree to it, this minor consequential order will be made under Section 38(2) of the Northern Ireland Constitution Act 1973. It will ensure that the Finance Act 1976 will operate in relation to Northern Ireland court orders in the same way as it does in relation to court orders in England and Wales. Section 122 of the Finance Act 1976 ensures that the effect of a court order made under the Inheritance (Pro-
1244
vision for Family and Dependants) Act 1975 is followed for capital transfer tax purposes. Thus, for example, where the court orders that provision shall be made out of the deceased's estate for his surviving spouse, the effect of Section 122 is that the "Capital Transfer Tax Exemptions" shall apply. The Inheritance (Provision for Family and Dependants) Order will help therefore to relieve the financial hardship of people in distressing circumstances. I beg to move.
Moved, That the draft order laid before the House on 22nd March, be approved.—(Lord Elton.)
8.16 p.m.
Lord BLEASE: My Lords, I would wish to thank the Minister for the detailed, comprehensive, and explicit way in which he explained these two orders. The orders are generally helpful to the people of Northern Ireland and bring the provisions concerning inheritance and tax-related matters into line with the provisions at present pertaining to England and Wales. We, on this side of the House, support the orders. However, I think that, having stated my position for the present, I would wish to qualify my support for the orders by placing on record my opposition to the capital transfer tax system as it applies to the United Kingdom. I realise that this is neither the time nor the occasion on which to press my views on this subject, but I think that I should say that I believe that the capital transfer system is based on what is defined as the estate principle; that is, where the size of the gift or legacy is the only consideration in connection with the estate principle and transfer tax arrangements.
Other countries exact death duties and gift taxes on the inheritance principle as opposed to the estate principle. The United Kingdom transfer tax makes no distinction between giving £100,000 to a millionaire and a similar amount to a pauper. I believe that the system penalises workers and particularly, I think, manual workers who have invested in homes and in their personal savings. It is particularly harsh in Northern Ireland in the context of small farmers and small businesses. My view is that the inheritance tax principle is fair. It encourages savings and it upholds the concept and the values of

1245
a property-holding democracy. No doubt we shall return to this aspect at a later date. In the meantime, I should like to assure the noble Lord the Minister that we on this side of the House support the two orders at present before us.
Lord ELTON: My Lords, I am obliged to the noble Lord for his intervention. It is refreshing to hear from his side of the House arguments in support of a property-holding democracy. I see that we are going to have increasingly fruitful co-operation in a widening sphere of our activities. I accept that this is not the forum in which to debate the merits of the various forms of taxation. I am grateful to the noble Lord for his support of the order.
On Question, Motion agreed to.

CAPITAL TRANSFER TAX (NORTHERN IRELAND CONSEQUENTIAL AMENDMENT) ORDER 1979
Lord ELTON: My Lords, I beg to move.
Moved, That the draft order laid before the House on 22nd March be approved—(Lord Elton.)
On Question, Motion agreed to.

HM INSPECTORATE OF CONSTABULARY
8.22 p.m.
Lord INGLEWOOD Lord INGLEWOOD rose to ask Her Majesty's Government whether they will give a summary of the duties of Her Majesty's Inspectors of Constabulary and say how far it is normal routine when reporting to the Secretary of State on a police force under Section 28(2) of the Police Act 1964 to include a confidential report on the senior police officers in the force concerned and on the key members of the police authority, whose leadership must have an effect on the efficiency of that force. The noble Lord said: My Lords, I beg to move the Question standing in my name on the Order Paper. This order refers to Her Majesty's Inspectors of Constabulary who are a very important link between the Secretary of State, the Chairmen of Police Authorities and Chief Constables. Looked at one way, one can
1246
say that they are the eyes and ears of the Secretary of State, and I would submit that all too little is known about them and their function.
I touched on this question a year ago when we had a debate on the unhappy events in Lancashire. The debate was answered by the noble Lord, Lord Harris of Greenwich, at some length and it was very impressive to listen to it. But when I read his speech the next day I found no real replies to any of my questions about the part that HMIs had played in Lancashire. He told us that they were very distinguished men, former chief constables, which we all knew. But why should the Home Office be so secretive? I am hoping that this opportunity we are giving the Minister this evening will enable him to tell us and the country outside this Chamber a little more.
There is much that we could be told. We talk about the Post Office, health and defence; they all have their confidential sides. People talk about us—and we think it a good thing that they should. They even say that we should be abolished. When they say this we are not unduly upset because we have heard it before. Yet there are some people who represent that it is almost blasphemy to talk about the police in Parliament. I would claim, on the contrary, that there should be discussion about the police and that your Lordships' House is in the best place for intelligent discussion to take place. If there were more knowledge, there would be fewer articles in the Press, like the recent poisonous article in the Guardian with fashionable slanging of special patrol groups.
This next sentence is not relevant to the Question but I want to say it all the same. I have had the privilege of contacts with a special patrol group and have nothing but admiration what what I have seen. Until anyone produces evidence of serious criminal acts or wrong-doing—I do not mean just naming a scapegoat—my voice will be raised in their support, however small the minority.
Now I should like to suggest that we consider in more detail the duties of HMIs. First, why is the Metropolitan police treated exceptionally? It is the only force in this country which is not inspected independently. Most of us have some idea of how that grew up. Most of us

1247
would feel that it is outdated and it would greatly help the part-tarnished image of the Metropolitan Police CID if there were an inspection by independent HMIs rather than by their own officers.
All of us know that HMIs carry out formal inspections of provincial police forces after prior notice. I imagine there is a certain amount of button and boot polishing, and I understand that after the first formalities the chief constable sees that the HMI is guided round a safe route which he will find impressive. We know that the origin of these inspections was to ensure that the Home Office—that is, the central Government—got value for money for the big subsidy that it found towards the cost of maintaining provincial police forces. But we should like to know more. The Minister can correct me if I am wrong, but I have never heard of a case where an HMI turned up unannounced and in a friendly way said to the chief constable that he hoped he did not mind but he was going to stay with him through the day and see what happened.
I have heard recently that more staff officers have been appointed. I think that I can see the sort of duties that they can usefully carry out. I know that the assistant HMIs are not all police officers by profession. Are all the staff officers police officers or are some of them drawn from other walks of life? If not, why not? Surely the things they are looking into, such as skills in man management and administration, are not only to be found in police circles. The idea that only police officers can understand police problems is really a police and Home Office "con" which they have succeeded in putting across the country.
On the more confidential side, chief officers of police serve until they are 65, 10 years longer than major generals, who serve until they are 55; five years longer than ambassadors, who serve until they are 60. Of course, flesh and blood being what they are, it is too much to hope that nothing should ever go wrong. But when things do start going wrong, do the HMIs report in confidence to the Secretary of State, or do they turn a blind eye? If they make reports on these personal things, does the Home Office take any rapid action?
1248
Just to show that there are grounds for these misigvings, may I explain that I live in a county in the far North West of England. If you cross the boundary to the South you are in Lancashire where last year the chief constable was removed from office, but not thanks to anything an HMI or any senior police officer or anything that the police authority did. It was thanks to a detective sergeant who lodged a complaint, a detective sergeant who only had a few weeks left of his service before he retired. And now, after further inquiries which lasted a whole year, I saw in my newspaper over the weekend that summonses have been taken out against the late chairman of the Lancashire Police Authority; and since they are sub judice I shall say no more.
My Lords, if you cross our county boundary to the East, you will find yourselves in County Durham where recently the chairman of the police authority served a time in prison. If you go over our North-East boundary into the County of Northumberland, you will find that the head of one of the specialist squads was recently given a prison sentence, and there is an inquiry proceeding about the wrongdoings of some of his underlings. I shall not say any more and I shall not dig further into the past. But your Lordships will see that there that are reasons for misgivings. When a man at the top goes wrong, the harm that he does spreads downwards and can quickly have a devastating effect. Surely, it is very important that the HMIs should in fact be on the lookout for these things and help to check them before they have gone too far.
I find it incredible that the HMIs, all of them one time chief constables, have apparently been so ineffective in the instances that I have mentioned; and I do not put it down to what I have sometimes heard said, that it is really something of an "old boy" net, which would be dreadful.
Let us compare the police with the Army and the Foreign Service again. Senior officers in the Army and, I think, junior officers too—I see the noble Lord, Lord Mottistone, in his place; he can probably tell us whether it is the same in the Navy—are subject to regular confidential reports; and medical checks are routine. In many private businesses there are regular health checks of senior staff. Why are there no such checks for

1249
chief constables and other senior police officers who are operational all the time? I have heard that most county authorities, before appointing a chief constable, ask for a medical report; but I have also heard it said that those overweight police constables whom one sees standing in the street outside New Scotland Yard building, not so very far from here, have probably never had a medical check-up since they were accepted and joined the force a number of years ago.
Sixty-five may be too old for senior officers who are operational all the time. At any age over 60, I would submit that while some few men are still in superb order, most of us are slowing down physically. Even if we have no definite disability such as early signs of arthritis or emphysema, we are none the less slowing down physically. There may also be a slowing down mentally—lack of imagination is a well-known police short-coming—and we all can suffer from what I call, "running out of steam" sooner or later. Then there is another failing which is very widespread, particularly among many men of middle age; that is, excessive drinking. Noble Lords may say, "Speak for yourself"! Most of us at one time or another have had to consider whether or not we were drinking too much. It is a temptation that we all have to face; but it is a very unhappy situation when a man holding a senior appointment gets the reputation of drinking too much.
A year ago the noble Lord, Lord Harris of Greenwich, in a winding-up speech told us that the Home Office would be issuing a memorandum for discussing the procedures for dealing with allegations of misconduct by chief officers, which mercifully are very few. I have read the paper and am glad to see in it that, apart from references to criminal acts and obvious breaches of a disciplinary code, there is reference to another field where trouble can be found. They describe this as
"conduct likely to bring discredit on the office held; or fitness for the post".
Here I would submit that alcohol could play a big part. When a man gets the reputation of being a heavy drinker, it is not very long before it is widely known and before respect for him evaporates. A chief constable is locking up people every week for excessive drinking and he
1250
should not himself be exempt from an alchotest, however young the PC may be who finds him weaving on the road.
I also see in that Home Office memorandum that formal disciplinary proceedings have been brought only four times since 1964. That really is four times too many, but since human flesh has its weaknesses, should we say, "Three times too many"? I do not know how that figure would compare with those for generals or admirals, but I feel that it is disturbing.
Let us now look at chairmen of authorities. They are not elected: in practice they are appointed by a party caucus of the majority party in a county council—which I think is a pity—and in counties, rather more than in urban areas, the chairman can, or ought to be, a conspicuous figure prominent for public service in his area. However, I suspect that standards, taken over all England, are falling. A good chairman can be of immense help to a police force without intruding in any way on the chief constable's operational responsibilities. He is probably from a family that is well known in the county, whereas the chief constable can easily be a new boy. They should have complete confidence in one another, but, if too old for the job, if in poor health or if alcohol is playing a part, he should give way to others in the interests of the police and of the public he serves.
I think I have said enough to show that there are some grounds for misgivings, but I should like to end on this note. As many of you know, I have spent a lot of time with the police over recent years and the more time I have spent the greater my admiration has grown for them and their strong points—but also the more clearly one sees some of the weaknesses in the system. It is the duty of Parliament to use all influence possible to help repair their weaknesses and I shall listen with interest to the Minister's reply.
8.35 p.m.
Lord BOSTON of FAVERSHAM: My Lords, I am sure we are all grateful to the noble Lord, Lord Inglewood, for enabling us to discuss this subject tonight. He takes a close interest in police matters and has done so over a considerable period, not only in this country but also abroad.

1251
Indeed, it was the noble Lord who initiated what I believe was the last debate when Her Majesty's Inspectorate of Constabulary was discussed by your Lordships, although the debate itself was not about them specifically, on 26th July last year. The noble Lord, Lord Inglewood, has made one or two references to that debate tonight.
I intervene only very briefly and will detain your Lordships for only a few minutes. I would certainly agree with the noble Lord, Lord Inglewood, that in this sphere, as in others, the more it is possible to know, the better, and I look forward very much to hearing from the Minister the noble Lord, Lord Belstead, about the role of Her Majesty's Inspectors of Constabulary. But I would also emphasise—and I think this was implicit in what the noble Lord, Lord Inglewood, said—that there must be quite severe limits placed on what should be published about their work, for much of it must remain confidential by its very nature. Indeed, I believe it would be counterproductive and contrary to the public interest to go beyond such limits. As the Royal Commission on the Police said in its report—that is the Willinck Report of 1962—
… in general they"—
that is, the inspectors—
"achieve results by persuasion and goodwill rather than by making representations to the Secretaries of State—which is the only alternative means of inducing compliance with their recommendations".
I believe that if everything had to be strictly formalised, still less publicised, the changes they are able to bring about would be very much lessened. But, of course, where necessary, in cases of more serious shortcomings, representations do need to be made to the Secretary of State and sometimes more stringent steps still need to be taken, as we know. It is perhaps worth noting in passing here the very rigorous way in which the police have themselves rooted out those responsible within their own ranks on those rare occasions when serious shortcomings or corruption have come to light; and chief officers of police, such as the Commissioner of Police of the Metropolis, Sir David McNee, have been most outspoken about that.
1252
It is perhaps remarkable that as recently as 1962 that same report said:
"There has since 1945 been authority for the appointment of separate chief inspectors of constabulary for England and Wales and for Scotland, but no appointments have been made. We recommend that there be substituted a single post of Chief Inspector for Great Britain, and that this post be filled without delay".
It is really a reminder that the present system has not been with us for so long as we tend to think, although the office of inspector does date from 1856.
The system has, I believe, served us very well. Your Lordships have noted on other occasions the very high regard in which our police service is held abroad, and I think the same goes for our system of inspection too. No doubt it was partly a recognition of that that Her Majesty's Chief Inspector of Constabulary, Sir Colin Woods, a very distinguished officer, was appointed a couple of months ago to a new post in Australia. But it is essential to keep the system up-to-date, and that clearly is one of the prime purposes behind the Question put by the noble Lord, Lord Inglewood, tonight. In the last report of the chief inspector to be published—the one for 1977, which came out last July—Sir Colin referred to the Working Party on the Future and Structure of the Inspectorate, and gave an interim account of the consideration being given to it in the Home Office. I think that shows, in part at least, that the system is being kept under scrutiny. Perhaps we can look forward to a further account in the report for last year, which I think is due out quite soon.
There is one further point, when talking about that working party, which is sometimes made: that is that the Metropolitan Police, which of course does not come under inspections from the Inspectorate of Constabulary, should do so. It was, indeed, one of the recommendations of the working party that the Metropolitan Police should be formally inspected by the Inspectorate, along with the other police forces. In fact, the 1977 Report of Her Majesty's Chief Inspector of Constabulary contained the passage:
"The most significant of its recommendations"—
that is, the working party's recommendations"—
"was that the Metropolitan Police Force should be formally inspected by Her Majesty's Inspectorate of Constabulary. This matter arose with some regularity during my visits to forces. The

1253
report of my predecessor is of keen interest to provincial forces who strongly support the concept, as all are affected to some degree by events in the capital".
So that, certainly, was a matter which was considered by the working party.
But I feel, at the same time, that when one is considering a recommendation of that kind—and I believe that certain of your Lordships would go along with a recommendation like that—it is also important to bear in mind this reference in the report of the Commissioner of Police of the Metropolis for last year—his recent report—in which he said on page 4:
"On 12th December, I announced that a new Force Inspectorate had been established to begin its duties on 1st January, 1979. This was the culmination of discussions that I initiated with the Home Office, following my decision earlier in the year to increase the operational responsibility of the four area deputy Assistant Commissioners, who were at that time responsible for the inspection of the force. A deputy Assistant Commissioner, with supporting staff, was appointed as the new Inspector of the Metropolitan Police, under the direction of the Deputy Commissioner. The function of the Inspectorate is to provide a close and continuing assessment of the efficiency of all units of the force, including police branches at headquarters, in order to maintain the high standards required ".
It is important to bear in mind that observation, because it shows that the Metropolitan Police has given some evidence of its sensitivity on the question of the Inspectorate of the force, whether or not one goes along with the recommendation made by the working party.
These annual reports of Her Majesty's Chief Inspector of Constabulary are very useful and informative. I am sure that one big problem in compiling them is that there is far too much material, and that much has to be left out if they are to be kept to a reasonable size. So I hesitate to make any suggestion which would make them less manageable. However, I would not be averse, I must confess, to seeing certain sections in the report dealt with more fully than they are now and, indeed, in some cases, exhaustively.
In the last report, for instance, there was an interesting chapter, Chapter VII, on community relations and preventive policing. Only last Thursday we were debating in your Lordships' House aspects of that subject, arising from a Home Office circular on juveniles and the police and co-operation with other agencies.
1254
It might be useful if the Chief Inspector's report for this year contained an analysis of the response; and it will be interesting to see, too, whether the Inspectorate follows up any shortcomings in the response. There has been an enormous expansion in recent years of the work dealt with in that chapter on community relations and preventive policing; and it might be valuable, from time to time, to have an exhaustive analysis of an aspect like that, rather than just a very limited selective account of the highlights in particular force areas, useful though that is, so that we can see clearly which areas are taking action and which are not.
Again, at the end of 1976 the Home Office put out a circular on senior police appointments, stating criteria which the Home Secretary felt should be applied. It is a little early at present, perhaps, but a review of the way in which a new policy like that is working could be usefully included in a future report.
Her Majesty's Inspectorate of Constabulary is a sound instrument and there is certainly no sign of complacency within its ranks—quite the reverse; it demonstrates constantly that it wants to keep itself up to date. I believe it is part of our job to encourage it to do so, and that is one reason why a debate of this kind, initiated by the noble Lord, Lord Inglewood, is very welcome.
8.45 p.m.
Lord AVEBURY: My Lords, I too am very grateful to the noble Lord, Lord Inglewood, for having raised this matter and for having drawn my attention to the fact that it was to be discussed this evening. It is very opportune that we should have a debate on Her Majesty's Inspectorate at this moment, when the report for last year is about to be published, and when we can review some of the important matters which may be discussed in it, at a time when the Home Office is still considering the recommendations of the working party to which reference has been made.
The noble Lord said that Her Majesty's Inspectorate were the eyes and ears of the Secretary of State, but it has become clear, both from what he said and from what the noble Lord, Lord Boston, said, that they are not the eyes and ears of Parliament, because many of the matters

1255
that come within their ambit are not dealt with in the report, and there may be differences of opinion as to how far they can go in extending the information which they give to Parliament. I am not at all sure whether I agree with the tenor of the remark of the noble Lord, Lord Boston, that there should be severe limitations on what they can print, because I think that the limitations should be only those which are designed to secure that criminals are not given information which would facilitate their operations. Apart from that, the more information we can be given about the work of the Inspectors, the better, so that we can understand what it is that they are trying to do for the benefit of the police and for the community at large.
When one looks at the Police Act 1964, the functions of the Inspectorate are defined extremely vaguely. We see, not surprisingly, that their duty is to inspect, and to report on the efficiency of all police forces, except the Metropolitan Police. I suspect that this language is probably just a continuation of the wording that was used in the original County and Borough Police Act 1856, which initiated the Inspectorate, although I must confess that I did not look it up before coming to this debate. I would go so far as to say that many of the methods of operation of the Inspectorate may be hangovers from much earlier days. We have to begin by asking the blunt question: Why do we have an Inspectorate at all? I am not suggesting that there is anything positive to compel the opinion that they should be abolished, but merely that whenever we are discussing a body of this kind we should begin by seeing what their functions are, whether the arguments for carrying them out hold good from an earlier age, or whether there is some other way in which we could perform them better. That is one reason why an examination of this kind can be very useful.
The Inspectors report to the Secretary of State concerning forces which are nominally under the control of police committees. The Chief Inspector makes an annual report which could provide—and I think does provide—a very useful overview of police activity in their main concerns, if it was slightly fuller than it is
1256
and also did not appear so late, as the noble Lord, Lord Boston, remarked; and we still do not have the report for last year. It would have been helpful, perhaps, if we could have had it before this debate took place.
But the matters contained in it are entirely of a factual nature. It does not make any recommendations, and if there is anything which could be done to improve efficiency there does not seem to be a great deal of consciousness of it in the published report. That may be for the reasons which noble Lords have given, that some of these sensitive matters are properly dealt with in confidential reports to the Secretary of State, and that if they find any deficiencies, about which they must request the Secretary of State to take action, these are not matters of which we should like criminals to be made aware. That is the reason why most, if not all, of the recommendations have to be confidential.
I wonder, however, whether that is so in the case of some of the ways in which efficiency could be improved, apparently, and of which anybody who has looked at police work must be conscious. I am thinking of the enormous burden of clerical work on the police which occupies so much of their time and which might be made more efficient by the use of modern methods. I do not believe that the police forces of England and Wales have yet heard of word processers, yet one can think of many aspects of police operations which would be enormously facilitated by this new technology.
One would like to think that the Inspectors, if they are concerned with efficiency, had begun to suggest to police forces that they should examine the use of word processers, or that they themselves should conduct investigations into that subject. I am not quite sure whether they are intended to be management consultants who make recommendations on efficiency to individual police forces, or whether their role is of a much more general nature. Do they think of themselves as management services advisers, or is there an underlying idea that, although legally all of the police forces are autonomous, the Inspectors can exercise a kind of co-ordinatory function so that, unless there are very good reasons for doing

1257
otherwise, common practices are applied throughout the country? If the answer to that question is, yes, then, as both noble Lords have asked, why is it that the Chief Inspector is not also made responsible for the Metropolitan Police?
The noble Lord, Lord Boston of Faversham, has quoted the recommendation of the working party. I think it is time that we had a decision from the Home Office as to whether they will go ahead with that recommendation, or whether the announcement of 12th December of last year, to which the noble Lord, Lord Boston of Faversham, referred, means in effect that the Home Office have revised the arrangements for the inspection of the Metropolitan Police, although they intend to continue them as quite separate arrangements from those which are the responsibility of the Chief Inspector.
One notices that there are very considerable differences between the Metropolitan Police and other police forces. This is not the time to go into those differences in detail. However, to give one example, the basic recruits course in the Metropolitan Police is 15 weeks, while in the other forces there is mention of a 10 week initial training course. I do not know whether there is any solid reason for having a different period of initial training in the Metropolitan Police from that in the rest of England and Wales, but it is the kind of thing which the Chief Inspector could look at if he was covering both England and Wales and the Metropolitan Police.
In the case of the Metropolitan Police, there is the change, to which the noble Lord, Lord Boston of Faversham, referred relating to the strengthening of arrangements. It includes a provision for the Home Office to be consulted about the inspection programme and to call for particular matters to be examined. The Secretary of State is the person to whom the commissioner is responsible. In the exercise of his powers, he could, presumably, give to the Inspectors any terms of reference which he thought fit, whereas in the rest of England and Wales he is limited by the wording of the 1964 Act. However, Section 38(4) gives him the power to direct the form of a Chief Inspector's report. I should have thought that he could give directions under that
1258
section so as to bring the terms of reference of the Chief Inspector in England and Wales into conformity with the reply which he gave in another place on 12th December and which was repeated by the metropolitan commissioner, as quoted by the noble Lord, Lord Boston of Faversham.
I have mentioned training. With regard to this matter, the Chief Inspector emphasises the importance of developing an understanding of the attitudes and outlooks of the various groups which make up the community. The noble Lord, Lord Boston of Faversham, has referred to this matter and has said that he would have liked much more material on that subject. The commissioner does not specifically refer to it. In his report, under the heading of "Training", he devotes a chapter to the question of community relations. I know that in the discussions with the Metropolitan Police, reference to which is made in the commissioner's report, the Commission for Racial Equality had offered to help with training, and I have reason to believe that they would equally enthusiastically offer to help in the case of the police forces in the rest of England and Wales.
It must be apparent to all those who are concerned with these matters that relationships between black people and the police are not very good. This is not necessarily a function solely of training. However, I should have thought that if the Commission for Racial Equality is prepared to help, their offer should be wholeheartedly accepted, and that that should apply to the Metropolitan Police and to the other police forces in England and Wales as well.
One matter to which the commissioner devotes some attention but which is not mentioned in the Chief Inspector's report and which also has relevance to this subject is "sus"—Section 4 of the Vagrancy Act 1824. That may be because, in most cities other than London, the charge is practically unknown, whereas in Greater London it is very popular in certain divisions, although it is hardy used in others. If this offence ought to be repealed, as many black people's organisations have suggested, that would be a matter for the Secretary of State. In the meanwhile, however, if use of the offence affects police efficiency, then it would be a matter for the Chief Inspector. If large amounts of police time are taken up with,

1259
as I see it, harassing young blacks on the street, to say nothing of the effect on race relations, that is a matter which, I should have thought, ought to concern the Chief Inspector. At any rate, comparisons ought to be made between one police force and another to find out why the charge is so differentially used between different regions.
Finally, the noble Lord, Lord Boston of Faversham, said that he would have liked certain questions to be dealt with more fully; there was too much material to put it all into the report. I agree with the noble Lord that there are certain matters which warrant far more attention than they are given in the Chief Inspector's report. The one matter which I want to mention in particular is computing. It is quite extraordinary that the police national computer rates only a mention of five lines in a report extending to 109 pages. One can only hope that this is not a reflection of the importance which is attached to the subject by the Chief Inspector. I believe that computers could enormously facilitate the work of the police. They could help the police to detect crime and bring criminals to justice far more quickly, in many cases, than could be achieved by manual methods. I hope that in some future report the Chief Inspector will devote far more attention to the subject of computing than he has been able to do in the report which is under review.
I look forward to hearing what the Minister has to say. The principal point with which I should like him to deal is, as other noble Lords have said, whether or not, at the end of a period of 120-odd years since the Inspectors were first brought into existence, a unified system for the whole of England and Wales, including the metropolis, could at last be introduced.
8.59 p.m.
Lord MOTTISTONE: My Lords, I hope not to detain your Lordships for long. My noble friend Lord Inglewood, whom I thank for having put down this Unstarred Question, asked me to say a word or two about the Service aspect. If it is not out of order, it would have been very much better if Black Rod could have taken part in the debate, for not only did he leave the Services more recently than I but he is a general officer of dis-
1260
tinction, with particular knowledge of policing problems. Therefore, he would have been able to contribute to our debate in a very much better way than we can.
I should like to say that the two points which have been brought out, of reporting both on senior officers and on inspections, are very important indeed. In the Navy, just to make the comparison, these reports and the inspections are done by the immediate senior officer. I am happy to say that my last inspection and the last reports on me of any importance were made by the noble Lord, Lord Hill-Norton, who is not of course taking part in this debate. But the fact is that it is terribly important to have these inspections. The fact that they are done, as it were, locally, within the Navy rather spells out more the difference between that as a fighting force and the disciplined force of the police which is organised somewhat differently.
I should have thought that the concept of having an inspectorate is a good one for a force where people do not move about so much. In the Navy people tend to move from one appointment to another in a period of two years, or little more than two and a half years. Therefore, there is a permanent turn-round and one does not get a static situation over several years, as I suspect occurs in the police forces of the country. I am not criticising that, but it is because there is a different set-up that I think probably an inspectorate is a good thing.
I think that their reports should be on the same lines as Service reports. It would probably be insulting to the police to be told this, but it is quite a time now since we last had a conflict in which perhaps most of the senior police officers were involved and it could be that they could learn a great deal in the inspectorate from asking the Services what they do now, because life goes on and they might obtain several pieces of advice on the degree of inspection. The noble Lord, Lord Avebury, said that there were only five lines on computers. Perhaps that is ridiculous—I do not know—but the latest experience of the way in which inspections are conducted might be of value to the police, particularly with the rather horrifying information from the noble Lord, Lord Boston of Faversham, that between 1945 and 1962

1261
when there were powers to have an inspectorate, nobody did anything. That shows that there is a lack of enthusiasm for this process which is probably still reflected in us and I should suspect that the Inspectorate is having to fight a battle all the time. Did I misunderstand the noble Lord?
Lord BOSTON of FAVERSHAM: I think not, my Lords, but in case I did not put it clearly enough, what I was referring to during that period from 1945 to 1962 when the Willinck Report came out, as the noble Lord, Lord Mottistone, correctly said, was that, as the report indicated, there had not been any appointment of any chief inspectors of constabulary for England, or for Wales or for Scotland, but I think that is part of the point that the noble Lord was making.
Lord MOTTISTONE: My Lords, I think it is in line with what I am saying, if the detail is slightly off track. It is necessary to have this acceptance of the importance of an inspection system. That is the main point. I do not think there is a great deal to be said for having a United Kingdom-wide inspectorate. My thinking would be that it would be better to keep it more regionalised because of the differences that relate throughout the country. That is probably enough said about that.
As for the reports on senior officers, to take the particular point made by my noble friend as to whether admirals and generals were ever sacked for drinking too much, of course it would not be right for a retired naval captain to comment on his seniors directly in that respect, but on the whole I would say that it very rarely happens—if ever—in peacetime, although there is more likelihood of it happening in wartime, when perhaps one goes for somewhat different qualities. But the rigorousness with which people are selected for promotion to senior rank in all the three Services is such that, on the whole, it is unlikely that a heavy drinker would reach a senior rank and that is probably because of two other things. One is the faster turnover as between one rank and another. People spend less time in a rank compared with the police force, and it is partly because things are more likely to go wrong in that area when people are left in one place for too long.
1262
The great thing about the Services is that people are moved about a good deal more in them than they are in the police forces. I think it would be a good thing to move policemen about more, but then there would be great problems with their families not wanting to go, and houses not being available. It is an enormous administrative problem to have people thoroughly mobile, and therefore I should not think one could change that side of it very much, which lands one with people who are sitting around for too long. It is quite surprising that what must be a very active sort of job should permit people to serve on to such high ages as my noble friend was saying earlier. And I quite agree with him that medical inspections would be a good thing, and I am surprised also that they do not take place. It happens in industry to a large extent, quite apart from the Services, and I think that that point is something that is certainly worth looking at.
To return to the question of confidential reports on individuals, I am not frightfully enamoured of my noble friend's thought that somehow the confidential reports on individuals should be concurrent with the report on the particular section of the police force that is being—or did I get it wrong?
Lord INGLEWOOD: My Lords, it need not be concurrent provided that it happens, and happens fairly regularly.
Lord MOTTISTONE: Yes, my Lords, that is the point. In the Navy one is reported on every six months, and I think probably in a more static force once a year would do. It is not keyed to the inspection of one ship or unit, because of course time does not necessarily permit that. The reports on people are at stated intervals and the convenience of having a senior officer's inspection may not fit with that.
There is another point. It is quite a good plan to have these two separately because in one case you are giving your mind to a particular individual and in the other case you are giving your mind to the total unit for which he is responsible and those are best kept separate when making the report. So I think the recommendation would be that one should go out of one's way to keep them separate,

1263
and it would seem to me thoroughly right that there ought to be routine inspections on senior police officers to, perhaps, the Home Office; and on more junior ones to their own chief constables. It is a pity that that kind of system does not already exist. I shall be very interested to hear what my noble friend on the Front Bench has to say, and perhaps he can tell us a little about what is done on reporting of inspections and reporting on individuals.
9.9 p.m.
Lord BELSTEAD: My Lords, I am grateful to my noble friend Lord Inglewood for giving us an opportunity to discuss the role of Her Majesty's Inspectorate of Constabulary. It is timely because the report for last year comes out next Wednesday, and because the central task of the Inspectorate, that of promoting the efficiency of the Policy Service, has never been more relevant. Again I am particularly grateful to my noble friend for this short debate this evening. There has been a shortage in police establishment numbers for some years and the demands upon the police are such that, even with the encouraging improvement in recruitment which we are seeing, there are bound to be shortages for the foreseeable future. In addition, policing becomes an increasingly expensive operation and this must be so the more chief constables plan, as they are planning, for their police officers to concentrate closely upon community relations. Today the efficient use of resources, therefore, always important, assumes increasing significance.
The Inspectorate has two distinct but complementary functions. There is the traditional function of inspecting police forces, other than the Metropolitan Police, and reporting to the Home Secretary on their efficiency. The noble Lord, Lord Avebury, and the noble Lord, Lord Boston, and I think other noble Lords have referred to the Metropolitan Police. I think perhaps it is fair to remind the House that the original purpose for setting up the Inspectorate in the 19th century was to bring forces outside London up to the standard of the Metropolitan Police.
Of course, times have changed and high standards of professionalism are found
1264
in all parts of the country, but the geographical scope of the Inspectorate, it is perfectly true, has remained the same. However, I should like to confirm that this does not mean that the Metropolitan Police is not inspected. Arrangements have existed for many years, and at the end of last year the Commissioner introduced a new strengthened system of inspection, with a Deputy Assistant Commissioner designated Inspector of the Force and directly responsible to the Deputy Commissioner. I should also like to make it clear that the Home Office is consulted about the inspection programme and receives copies of inspection reports, and there is close co-operation between the new Inspectorate and Her Majesty's Inspectorate of Constabulary to enhance the development of common standards and procedures.
Your Lordships may say that this does not meet the points that have been made in the debates. The new arrangements have only been in force for about six months, but they seem to be working well. May I remind your Lordships that these new arrangements are designed to ensure that, as the police authority, my right honourable friend the Home Secretary is kept fully informed about the inspection of the force, because he is the police authority for the Metropolitan Police, and, of course, he in turn, and I on his behalf in this House, are answerable to Parliament.
The scope and nature of inspections have changed, but the notion of inspecting efficiency, if I may go back to that, has remained central to the process. Lord Avebury was absolutely right; the 1856 Act charged Inspectors to visit and inquire into the state and efficiency of the police. If I may say so, it is this function, the inspection for efficiency which, first of all, is particularly relevant to my noble friend Lord Inglewood's Question.
But the Inspectorate has a second and wider role, which was also mentioned by the noble Lord, Lord Avebury. That is to encourage the spread of new ideas and to seek to establish high standards throughout the country. The Inspectors are well placed, I would claim, to keep in touch with developments in policing through the office of the Chief Inspector and in other ways, and have the advantage

1265
of knowledge of the several forces which fall within their regions. My noble friend Lord Inglewood asked me a specific question: Are all the staff officers of the Inspectorate police officers? The answer to that is, Yes indeed they are, as are, of course, all the assistants to Her Majesty's Inspectors of Constabulary.
My noble friend asks in his Question for a summary of the Inspector's duties. The formal inspection of a police force takes place over a period of three to five days, but it really would be a mistake to assume that that is the whole story. The Inspector and his assistants will have kept in close touch with the force during the preceding year and will be aware, or they most certainly should be aware, of the matters which are giving rise to public comment locally in the Press and elsewhere. They will also have the chief constable's annual report to his police authority. They will have detailed inspection notes and returns prepared by the chief constable, giving essential statistics and a general account of the use of resources and of the activities of the force during the year. The inspector then endeavours to cover the whole range of police activities, and examines samples of the work of all branches to ensure that procedures are being properly followed and that resources are being sensibly used.
In the first place the Inspector will examine the work and functions of the headquarters departments, such as the CID, Traffic, Training and Communications Departments. He pays particular attention to the way in which complaints against the police are dealt with, and, as a matter of course, discusses this with the deputy chief constable. Then the Inspector will visit as many divisions as possible, and meet the representatives of the staff associations to discuss any matters of concern to them.
An important aspect of the inspection—certainly it is one about which my noble friend has expressed concern previously in your Lordships' House—is that any member of a force can, on request, have a special interview with the Inspector. That facility is used quite frequently, but normally to air views about such matters as promotion prospects and postings; but it also provides—let us make no mistake
1266
about it—an important channel by means of which an individual officer can draw attention to an unsatisfactory state of affairs within a force.
There is one further aspect of inspection which has grown in importance in recent years and has been encouraged by the present Chief Inspector of Constabulary. Responsibility for the efficiency of the police is shared between my right honourable friend and the local police authorities, and the Inspectorate has been and remains anxious to establish good working relations with authorities. In the course of his visit to the force the Inspector makes himself available for discussions with members of the police authority, and indeed is anxious that the chairman and members of the authority are present during his visit. This is a useful opportunity to exchange views about such matters as financial provision for the force and the general policing of the area, and is one which I know is welcomed by many police authorities.
At the conclusion of an inspection, the Inspector brings to the notice of the chief constable any points of an operational nature which need attention. He will make a full report in confidence to my right honourable friend the Home Secretary, and I am grateful to the noble Lord, Lord Boston of Faversham, for commending this confidentiality and to all your Lordships for understanding why that confidentiality is necessary at that step in the story. If the report revealed any major matter affecting the efficiency of the force—and this is really the last step in the story—a formal letter would be sent to the police authority drawing its attention to the matter. Obviously, such a letter could include points which have been raised by my noble friend in his speech—for example, physical fitness.
That, briefly, is the system. It concentrates, as I have tried to show, on the concept of efficiency. It cannot, by its very nature, be an exhaustive check of everything to do with police practice. But what it does do is to encourage good practice, to try to rectify bad practice where it comes to light and to provide my right honourable friend with an invaluable detailed account of the work of the Police Service, to enable him to discharge his statutory responsibilities.

1267
I have been impressed by the speeches which your Lordships have made this evening commending—I think that it was the noble Lord, Lord Boston, who did so first—the idea that Her Majesty's Inspectors' reports might concentrate on a particular subject in a particular report. I shall certainly draw my right honourable friend's attention to what has been said in this debate and, through him, to the Inspectorate who I know will read with interest what has been said.
Finally, I turn to the more specific part of my noble friend's Question, in which he asks whether the reports of the Inspectorate include confidential assessments of senior police officers and prominent members of police authorities. I shall deal first with senior police officers. As the House will be aware, my right honourable friend has certain statutory responsibilities in respect of appointments to posts at assistant chief constable level and above. Appointments are made by police authorities, subject to the approval of my right honourable friend—this was a matter which the noble Lord, Lord Boston, mentioned—and there is an informal arrangement under which my right honourable friend informs authorities, in confidence, and in advance of the short-listing and interviewing of candidates, whether there are any whose appointment to the most senior posts he would not be willing to approve. Advice is also given on the merits of the other candidates—in effect, whether any of them is particularly well qualified for appointment—and it is for the police authority then to follow the advice or not, as it thinks fit. The Secretary of State, incidentally, will not approve the appointment of a senior officer, who has served successively as assistant and then deputy chief constable, for the position of chief constable in the same force. That meets the point that was rightly made by my noble friend Lord Mottistone, about mobility within the Police Service.
In reaching a considered view on the merits of candidates for these most senior posts, my right honourable friend is able to draw on the professional advice of the Inspectorate, which has accumulated knowledge through the inspection process and through its other contacts with forces and senior officers. Her Majesty's Chief Inspector of Constabulary, as my right
1268
honourable friend's senior professional adviser on police matters, plays a major part in this process. Perhaps I can best meet my noble friend's point by assuring him that the Inspectorate is fully involved in consideration of the abilities and potential of senior officers, and that the inspection itself is only a part, albeit an important part, of that process.
I turn now to the point about the police authorities. I have mentioned the efforts which the Inspectorate makes to involve the members of authorities in the inspection process. The police authority and the Inspector have a common interest in the efficiency of the force, and the way in which the authority discharges its responsibility to provide an efficient force is obviously the very first concern of the Inspector. That is why I sought to place emphasis on the concept of efficiency at the beginning of this speech. The Inspector would be failing in his duty if he did not form a view on the authority's provision of resources and accommodation for the force, and on the state of relations between the authority and the senior officers of the force.
Equally, he is bound in his report to give the Home Secretary, in confidence, the benefit of any views he may have formed. That is not, however, to say that the inspector provides a systematic assessment of the personalities and capabilities of individual members of the police authorities, as my noble friend perhaps was possibly suggesting in his Question this evening. To do so would not be proper. The Inspector can, however, properly concern himself with anything that affects the efficiency of the force, and that includes the way in which the authority discharges its responsibility.
I am conscious of the fact that in replying to my noble friend's Question I have concentrated on the inspection process. But the duties of the Inspectorate are far wider than that. They have an important role to play in the fields of complaints and discipline. They are, as I have said, my right honourable friend's professional advisers—as my noble friend so graphically said, the eyes and ears of my right honourable friend—on a whole range of police matters, including the levels of establishments, appointments and the adequacy of buildings.

1269
The Royal Commission of 1962 recognised the advantages of the working partnership between local and central government in support of the work of the police. I believe that this partnership is a natural expression of so much that we have learned from our past in this country, and that police work draws strength from the relationship between each force and its police authority. But one only has to go into any police headquarter's control room to appreciate the tremendous advantages of the developments in science and technology, which nowadays make such a contribution to police work. Therefore, most of the Inspectorate's most valuable work is in promoting cooperation between forces, and ensuring that the results of research are properly distributed so that the forces can take full advantage of developments in science and technology. That, briefly, is a summary of the duties of Her Majesty's Inspectorate of Constabulary. Its work is indispensable to the modern police force. Its advice to my right honourable friend is valued greatly.

FELIXSTOWE DOCK AND RAILWAY BILL
Brought from the Commons; read 1a and referred to the Examiners.
  OFFSHORE OIL: POLICY REVIEW
  OFFSHORE OIL: POLICY REVIEW
  MULTILATERAL TRADE AGREEMENTS
  MULTILATERAL TRADE AGREEMENTS