Sitting of 24 July 1979

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  GREATER LONDON COUNCIL (MONEY) BILL (By Order)

    GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
    Orders for consideration, as amended, read.
    To be considered upon Thursday.

    CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
    Order for consideration, as amended, read.
    To be considered tomorrow.

ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    Community Homes
    Mr. Kilroy-Silkasked the Secretary of State for Social Services what steps he is taking to increase the resources available for community homes and schemes for the care of children in the community so that they will not have to be remanded to prisons.
    The Under-Secretary of State for Health and Social Security (Sir George Young): Expenditure on facilities for children remanded into care is the responsibilty of local authorities. It is for each local authority to decide, in the light of its own needs and priorities, how to deploy the resources available to it. We are continuing to make available in the current financial year £2 million for capital grants to local authorities for the provision of secure accommodation.
    Mr. Kilroy-Silk: Will the Minister say, first, when sufficient resources will have been provided both in community homes and in alternatives in the community so that we no longer have the despicable practice of remanding children to prison establishments? Secondly, will the hon. Gentleman accept that it is far more constructive and sensible to deal with difficult and recalcitrant children in the community or in community homes than to mess about with this nonsense of so-called short, sharp sentences?
    Sir G. Young: I share the hon. Gentleman's general view that it is better to try to deal with children in the community than in institutions. In response to his specific question I can tell him that at present there are 86 secure places available for boys on remand and that a further 108 places are under construction.
    Mr. Dubs: Does the Minister accept that his answer to my hon. Friend's original question will not bring much comfort to local authorities when they face enormous cuts in expenditure, and that it will be difficult for them to make the right sort of provision for these children?
    Sir G. Young: The Government's recent call for reduction in expenditure by local authorities means that they have to review their priorities. However, a recent circular has made clear the priority which we attach to law and order services, and we are prepared to regard secure accommodation and other facilities for children remanded into care or found guilty by the courts as an integral part of the national pattern of those services.

    National Health Service (Merseyside)
    Mr. Parryasked the Secretary of State for Social Services what is the estimated number of job losses on Merseyside following proposed spending cuts in the National Health Service.
    The Minister for Health (Dr. Gerard Vaughan): National Health Service expenditure in Merseyside is not being cut.
    Mr. Parry: Is the Minister aware of the strong concern and anger being felt

    325
    by trade unions about the proposed cuts? I am informed by union representatives that the proposed cuts will affect especially the training hospital which has been opened recently. Can the Minister assure the House that there will be no partial closures in local hospitals, particularly at the new Royal Liverpool hospital?
    Dr. Vaughan: Temporary closures are a matter for the local health authorities. An additional £5 million has been allocated to the Mersey regional health authority this year, but that is likely to be offset by the constraints on cash limits. I remind the hon. Gentleman that the decision not to fund in full the costs of additional pay settlements, for example, was taken by the previous Administration.
    Mr. Steen: Will my hon. Friend remember that when he creates changes in the National Health Service the professionals working in the Service should be involved in the decision-making process, and that it should not be left to the bureaucrats and administrators to do it on their own?
    Dr. Vaughan: We are well aware of this, and I remind my hon. Friend that this underlies the Conservative health policy, which is to reduce bureaucracy in a way which will allow the money available to be used to provide medical care for patients.
    Mr. Orme: How can the Minister say that there will be no cuts when Merseyside will have to take its share of the £100 million cuts proposed by the Government?
    Dr. Vaughan: Apparently the right hon. Gentleman has failed to understand the statement which I made just now. The Mersey region has been asked to meet £1·3 million of the excess costs of pay awards, but the region is getting £5 million of additional alocated resources. This money will offset the extra costs resulting from pay awards and value added tax.

    Regional and Area Health Authorities (Services)
    Mr. Raceasked the Secretary of State for Social Services if he will list the reductions in manpower and services to patients in each regional and area health
    326
    authority which will flow from the Government's refusal to finance the whole of the Clegg pay awards for ancillary staff and ambulancemen.
    The Secretary of State for Social Services (Mr. Patrick Jenkin): Since the Government have not refused to finance these Clegg awards, the question is misconceived.
    Mr. Race: Is it not true that the financing of the awards is to be reduced by the Government by £22 million even though they have said that they will implement the findings of the Clegg report for ancillary staff and ambulance men? Is it not also the case that this will form part of the £100 million shortfall in the cash limits, which will mean substantial reductions in the National Health Service in every area and regional health authority in the country? Did not the Chancellor of the Exchequer cynically and deliberately mislead the House when he said in his Budget Statement that there were to be no cuts in the National Health Service? When will the right hon. Gentleman, as a spending Minister, make clear to the mad monetarists at the Treasury that he is responsible for the National Health Service and needs more finance?
    Mr. Jenkin: On the funding of the Clegg awards, the Government are adhering precisely to the policy of their predecessors, on which the hon. Gentleman fought the last election.
    Mr. Paul Dean: Will my right hon. Friend do his utmost to ensure that this pay award and others in the future are firmly tied to no-strike agreements so that patients do not have to suffer the inconvenience and hardship that occurred last winter?
    Mr. Jenkin: I believe that all parties in the House and in the Health Service are as anxious as I am to avoid any repetition of the events that struck the Service last winter. These are matters for the Whitley Councils to come to terms with. I hope that when they embark upon negotiations in the next pay round it will be possible to make some advance in the direction that my hon. Friend wants.
    Mr. Ennals: Does the Secretary of State accept the conclusion of the letter

    327
    from the chairman of the South-West Thames regional health authority that the squeeze imposed by the Government as a result of their Budget may lead to a doubling or a trebling of waiting lists and the closure of wards and hospitals on a scale not seen before? Is the right hon. Gentleman aware that I have just come from the Westminster hospital, where I was told that 10 wards are due to close as a result of the squeeze imposed by him? When will he come clean with the House and the country?
    Mr. Jenkin: I have made clear that the policy of the Government is exactly the same as that of our predecessors, both on the funding of the Clegg awards and the offset of £23·4 million which the right hon. Gentleman announced before the election, and the fact that we were asking health authorities to abide by the cash limits laid down by the previous Government. As I said in the debate in the House recently, this will lead to a squeeze on cash limits overall of between £90 million and £100 million. This means that health authorities will need carefully to review their priorities in the current year. Neither the National Health Service nor any other part of the public sector can escape the logic of the proposition that the more that is taken out in pay, the less there is for everything else.
    Mr. Bruce-Gardyne: Now that the public service unions have embraced the principle of comparability as their byword, is it not time to point out to all those employed in the Health Service and elsewhere in the public sector that, as in the private sector, there must be some trade-off between the level of settlements and the scale of employment?
    Mr. Jenkin: My hon. Friend is absolutely right. This is a matter which I would expect the management side of the Whitley Councils to point out to the staff side during pay negotiations.
    Mr. Moyle: Is it not clear that the circular issued by my right hon. Friend the Member for Norwich, North (Mr. Ennals) on 11 April is a light age away from current circumstances in view of the heavy burdens that this Government, by their own decision, have placed on the Health Service in the last two or three months? Will the right hon. Gentleman
    328
    now give a clear undertaking that his Government will meet the pay rates of the Clegg award for the existing labour force? Otherwise, he will be laying a further burden on the National Health Service. The right hon. Gentleman is prepared to consider paying 35 per cent. extra to the doctors over the next few months. Why not treat the ambulance-men and the ancillary workers in the same way? Or are we to regard the Prime Minister's speech at Beeston on 18 April, when she promised to keep the National Health Service fully funded, as a cynical exercise in electioneering?
    Mr. Jenkin: It is interesting to recognise that the right hon. Gentleman's party would perhaps not have honoured the findings of the doctors and dentists review body to which, we understand, it had committed itself before the election. No doubt the medical profession will take note accordingly. I have made clear that additions to cash limits will be provided for the purpose of funding acceptable awards. The arrangements for this have been stated many times in the House.

    National Insurance Regulations
    Mr. George Robertsonasked the Secretary of State for Social Services if he is satisfied with the way in which national insurance regulations affect the pay of those in the hotel and catering industry.
    The Minister for Social Security (Mr. Reg Prentice): Yes, Sir. Employees in the industry are treated no differently from those in other industries who receive gratuities as well as wages. Their earnings are liable for class 1 national insurance contributions but gratuities distributed independently of the employer do not count as earnings for this purpose.
    Mr. Robertson: Is it not ironic and scandalous that by not applying the national insurance levy to gratuities earned by workers in the hotel and catering industry not only does the Exchequer lose many millions of pounds that would normally be contributed to it but some of the lowest paid workers in the community lose in the short term through a lack of entitlement to earnings related benefits in sickness and unemployment and lose at the end of their poorly paid working lives by a reduction in the occupational pension that they will have earned?
    Mr. Prentice: There is some merit in that argument. These are real problems. The practical difficulty is how to measure payments that the employer does not handle and does not distribute. I should have thought that if employees in these industries wanted a change their unions might want to negotiate a different method of payment that would make it easier for the national insurance system to accommodate the problem that has been mentioned.
    Sir Bernard Braine: Has my right hon. Friend's attention been drawn to the appalling story in today's Evening Standard about Italian drop-outs in London who are drawing full social security benefits but have no intention of working in the hotel, catering or any other industry, and who are openly boasting that they are permitted to cheat the system? What is my right hon. Friend doing to stop an abuse that is undermining the interests of genuine, legitimate workers in these industries?
    Mr. Prentice: I have noticed that report. The question before the House concerns contributory benefits, which would not be available to newcomers to this country. It is the intention of the Government to be much tougher in dealing with abuses of the system than has been the case in the past.
    Dr. McDonald: Since the Minister has expressed concern about abuse, what action will he take about the abuse perpetrated by employers in the hotel and catering industry, and in the construction industry, who either fail to pay national insurance contributions on behalf of their employees or do not pay enough?
    Mr. Prentice: It is an offence not to pay contributions, and the Department is constantly chasing up cases of people who fail to do so.
    Mr. Rooker: Is the Minister not aware that at least one worker in London—a former employee of Simpsons in the Strand—is losing unemployment benefit because that company, contrary to what it told the Inland Revenue, was not paying proper national insurance contributions and has told untruths to his Department, which is now investigating the matter. Is the right hon. Gentleman not aware of the consequences of what em-
    330
    ployers are doing in these rip-off industries, namely, depriving workers of future pension rights, unemployment rights and redundancy payment rights? He must be more positive about this problem.
    Mr. Prentice: I am aware of the case that the hon. Gentleman mentions. The matter is before the Secretary of State for what is in effect a quasi-judicial decision under the original legislation, and I cannot therefore comment on the matter in detail. If our consideration of that case and our decision on it help to point to a solution to some of the genuine problems that have been raised in questions today, we ought to reconsider this matter.

    Hypothermia
    Mr. Bowdenasked the Secretary of State for Social Services what steps he is taking to protect elderly people from the risk of suffering from hypothermia in the coming winter.
    Mr. Stallardasked the Secretary of State for Social Services what new steps he is taking to protect elderly people from the risk of suffering from hypothermia in the coming winter.
    The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker): Authorities and practitioners in all disciplines are well aware of the need to be alert to the possibility that some elderly people may suffer the effects of cold and to be ready to take appropriate action.
    Mr. Bowden: Is my hon. Friend aware of recent research which shows that up to 500,000 elderly people could be at risk this winter? Will she stress to the Secretary of State for Industry the importance of introducing a fuel discount scheme to include not only electricity, which was all that was provided by the previous Government, but solid fuels, gas and, above all, paraffin?
    Mrs. Chalker: I am grateful to my hon. Friend. We are aware of the research. However, there is at present no firm evidence that the incidence of hypothermia is high. We know that many people feel the cold intensely, and action must, therefore, be taken. The electricity discount scheme is a matter for my right hon. Friend the Secretary of State for Energy. I assure my hon. Friend that I

    331
    am in close touch with my right hon. Friend on all the matters that he mentioned.
    Mr. Stallard: Does the Under-Secretary of State agree that there is no substitute for an adequate living pension that will relieve pensioners of the fear, worry and indignity of this annual exercise? Is the hon. Lady aware that last year 600 death certificates gave hypothermia as a possible reason for death? That was an increase over previous years.
    In addition to taking the action recommended by the hon. Member for Brighton, Kemptown (Mr. Bowden), will the Under-Secretary of State recommend to the Cabinet the abolition of the standing charges on all heating and heating appliances for pensioners who live alone?
    Mrs. Chalker: The bitter winter led to hypothermia appearing as the underlying cause of death on 20 death certificates. It was mentioned as a subsidiary cause on about 600 further certificates. Last winter was one of the harshest for many years. In the uprating this year we have increased the heating addition for pensioners. I shall bring the hon. Member's comments to the notice of my colleagues.
    Mr. Maclennan: Will the Under-Secretary of State prevail upon her colleagues to reconsider the decontrol of the price of paraffin, which will ration paraffin by price and deprive the neediest members of our community of the fuel on which they will most rely this winter?
    Mrs. Chalker: This is a matter for the Department of Energy. All the effects of price increases in whatever fuel an elderly person uses are being carefully considered. I note what the hon. Member says.
    Mr. Freeson: Is the Under-Secretary of State aware that the House will not be satisfied with her rather generalised answers? The original question asked what steps the Secretary of State was taking. Is it not possible for the Government to take action under the Homes Insulation Act, which has been operating for 12 months? Is it not open to the Government to introduce a scheme of special assistance to elderly people who are suffering and who are at risk?
    Is it possible for the Government to take action on the report published by the Department of the Environment
    332
    entitled "An Exploratory Project on Heating for the Elderly", on which consultations were proceeding when the general election was called? That report described ways in which many elderly people could be assisted under the Homes Insulation Act. Why cannot action be taken before the winter?
    Mrs. Chalker: The Act enables local authorities to give grants towards the cost of home insulation. It limits the grant to 66 per cent. of the total cost and a maximum of £50. Obviously, there are other things that we must do to help the elderly. Local authorities are also able to provide help to elderly people who are in need. The Supplementary Benefits Commission is prepared to pay extra lump sums for heavier curtains and simple draughtproofing. We shall be examining what can be done further to help elderly people who may be in need because of the severity of the cold and the cost of fuel.
    Mr. Freeson: The hon. Lady has got the Act wrong. There is a scheme such as she described, but is she aware that the Act allows the Government, with parliamentary approval, to introduce new schemes of special assistance of a different kind? Will the Government take action on the report to which I referred?
    Mrs. Chalker: The right hon. Gentleman will be aware that the operation of that Act is a matter for the Department of the Environment. I accept that the right hon. Gentleman has more knowledge of this than I do, and I shall examine all that he has said. He may be assured that I shall not rest when it comes to a question of helping elderly people who may suffer from the cold this winter.

    Child Benefit
    Mr. Meacherasked the Secretary of State for Social Services when he expects next to increase the rate of child benefit.
    Mr. Patrick Jenkin: I must ask the hon. Member to await future announcements. I have no plans for making such an announcement in the immediate future.
    Mr. Meacher: Does the Secretary of State accept that the Government's failure to uprate child benefit, apart from the

    333
    puny 50p for one-parent families, will increase the disincentive to work and enlarge the biggest single group in poverty—poor families with children? Does the right hon. Gentleman accept that the utterly indefensible proposed public expenditure cuts will hit poor families hardest? Does he accept that it is his responsibility to resist those cuts and to fight to uprate regularly those benefits that will most reduce poverty?
    Mr. Jenkin: I share the hon. Gentleman's desire to help poor families with children. That is why, next November, there will be increases in the child additions for families, the heads of which are unable to work, those who are sick or unemployed and parents who are widowed or earning low wages. They will be helped by the uprating of the family incomes supplement. Lone-parent families will be helped by the 20 per cent. addition to the child benefit increase.
    In view of the warm welcome with which that increase was received by organisations representing lone parents, the hon. Gentleman's description of it as "puny" is a little unworthy.
    Sir Brandon Rhys Williams: Does my right hon. Friend agree that there are overwhelming advantages for the economy, as well as for the families concerned, of paying the same level of child benefit, as of right, to the children of those who are in full-time work as we pay to the children of families of which the head is an invalid or unemployed?
    Mr. Jenkin: As a statement of the ideal, I cannot fault what my hon. Friend said.
    Mr. George: Does the Secretary of State agree that many families will be delighted to receive the existing rate of child benefit, in view of the industrial dispute? Is he satisfied with the emergency payments system in his Department? Has there been any publicity about it? Will he have a word with the chairmen of the nationalised fuel industries and ask them to be gentle in their policy of cutting off supplies to parents who have not been receiving child benefit? Is he aware that child benefit not being paid can mean the difference between paying and not paying a bill?
    Mr. Jenkin: I am grateful for the hon. Member's recognition that the problems are due to the industrial dispute and are not, as one of his hon. Friends said, the result of a Scrooge computer, which seemed to be a strange concept.
    Mr. Heffer: It was operated by a Tory.
    Mr. Jenkin: The problems of the child benefit centre at Washington arose during the five-week strike which ended on 1 May. The computer was out of operation during that time. Since 20 June the staff have been operating a ban on overtime, which has prevented them from catching up on the backlog that arose from the strike.
    About 98 per cent. of the families who are entitled to child benefit are being provided with a full service, and the regular renewal of books is being carried out. However, I recognise that there is a backlog that has caused some families to wait for weeks and months. I am grateful to the hon. Member for Walsall, South (Mr. George) for his suggestion about the fuel industries.
    Mr. Peter Bottomley: At what times of the year is it possible to raise child benefit, and how much notice needs to be given to the staff?
    Mr. Jenkin: The question of the time of year for raising child benefit is a matter for my right hon. and learned Friend the Chancellor of the Exchequer, in conjunction with myself, and we have the matter under regular review.
    Mr. Orme: Does the Secretary of State realise that the story that he is giving from the Government Dispatch Box is very different from the one that he gave from this Box on the question of child benefit? Is he aware that millions of working families will be deprived of the 50p per child which the Labour Government had pledged before the last election? What will he do to overcome that? Is he aware that many of these families receive no benefit from tax cuts and that they will suffer from his Government's economic policies?
    Mr. Jenkin: The remarkable thing about the Labour Party's 50p is that no money at all was earmarked for it.

    Health Centres
    Mr. Michael Morrisasked the Secretary of State for Social Service if he proposes to review the policy on the provision of health centres.
    Dr. Vaughan: Health centres will continue to be built only where there is a clear wish locally. We are also exploring alternative ways of providing good general practice facilities.
    Mr. Morris: Is my hon. Friend aware that many general practitioners would like to buy an equity stake in a health centre, either through a long leasehold or through a freehold, and will he urgently consider sending revised instructions to the health authorities to make this possible?
    Dr. Vaughan: I am aware of that, and I have already met representatives of the General Practice Finance Corporation. My right hon. Friend is considering proposals which it has made for increasing the amount which it can lend from £25 million to £100 million and for a scheme which would permit purchase and lease back of newly built practice premises. If accepted, these changes will require legislation.
    Mr. Dobson: The Minister said that he would continue to permit health centres to be built where there was a local demand. Does that mean where there is a demand from local people or only where there is a demand from the local general practitioners? If the latter, they will be able to continue to obstruct the development of health centres.
    Dr. Vaughan: The hon. Gentleman does not seem to realise that it is not possible to run a health centre without the collaboration and joining in of the local general practitioners.

    Supplementary Benefit Payment (Chrysler Employees)
    Mr. Bruce-Gardyneasked the Secretary of State for Social Services what has been the aggregate cost to public funds to date of supplementary benefit payments made to those involved in the industrial dispute at Chrysler and to their dependants, respectively.
    Mrs. Chalker: Nothing up to last Tuesday, the latest date to which information is available.
    Mr. Bruce-Gardyne: I am relieved to hear that, but does my hon. Friend agree that it would be most undesirable for the taxpayer to be invited to subsidise an industrial dispute of this kind, where it has been made clear by Peugeot that it is not prepared to maintain employees regardless of performance, as Chrysler, perhaps, and Lord Lever were prepared to do in the past?
    Mrs. Chalker: The dispute has coincided with the holiday shutdown, and to date the requirements of those involved have been covered by final earnings and holiday pay. I understand also that the unions involved have not declared the dispute official, so they have made no strike payments. We shall watch what happens in this matter, but the question that we have to face is the need of the family. The situation has not changed from what pertained hitherto. The striker is not entitled to supplementary benefit.
    Mr. Flannery: Can the hon. Lady give the aggregate cost to public funds of the 100,000 workers who have just gone on the dole, and the aggregate cost to public funds of the 500,000 workers who will go on the dole as a result of the cuts which the Government now intend to impose on the British people?
    Mrs. Chalker: The answers that the hon. Gentleman seeks do not arise on this question, and without notice I cannot give him the detailed figures. If he cares to put down a detailed question he will be given the information.
    Mr. Dykes: Would it not be morally indefensible to take any action about the payment of supplementary benefit to strikers' families that would cause those families and the children to suffer in any way? Will my hon. Friend confirm that the Government have no intention of ever doing such a thing?
    Mrs. Chalker: I understand what my hon. Friend says. We shall not be taking any hasty decisions about what should happen, but clearly one of the possibilities is the deeming of strike pay, which we shall be examining in due time.
    Mr. John Evans: For the benefit of some of her hon. Friends, will the hon. Lady confirm that, in the period 1974 to 1978, 81 per cent. of strikes, official and unofficial, were settled within 12 working

    337
    days and therefore no supplementary benefits were involved?
    Mrs. Chalker: I am well aware that in many cases supplementary benefit is not paid because strikes are, one is thankful to note, settled very quickly. If the figure is 81 per cent. I am glad to hear it. I wish that it were even higher, because then we might have the opportunity of gaining the benefits from continuous productivity in our factories—a problem that has so bedevilled our situation hitherto.

    Blind Persons
    Mr. Ancramasked the Secretary of State for Social Services if he will make a statement on Government policy relating to the payment of a blindness allowance.
    Mr. Prentice: We have the greatest sympathy for blind people and the problems they face, but the resources are not at present available to finance new benefits.
    Mr. Ancram: Does my right hon. Friend realise that since 1948 blind people in this country have consistently fallen behind and that in comparison with Europe we are not even in the same league? Can he assure the House that, unlike the Labour Government, he regards the provision of help to blind people as a priority?
    Mr. Prentice: I think that the case for an income in the form of a blind allowance is unanswerable on its merits, but if it were administered at the present time at the rate of £10 a week it would cost about £80 million or £90 million a year. No Government, including the recent Labour Government, have been able to find those resources, and clearly in present circumstances we are not able to find them, either.
    Mr. Alfred Morris: Is the right hon. Gentleman, as Minister with responsibility for the disabled, in any way concerned that there was not a word about the disabled in the Queen's Speech? Does that mean that we shall have to wait at least until 1981 for even a Green Paper about a new general disablement benefit which will embrace blind people? Is it not utterly outrageous that disabled people should be made to wait after a Budget
    338
    that gave £1,400 million to the richest 5 per cent. of taxpayers in this country?
    Mr. Prentice: If it is outrageous that I cannot anounce a general disability income after 11 weeks in office, I wonder what is the appropriate adjective for the right hon. Gentleman, who held this job for five years.

    Autistic Children
    Mr. Hal Millerasked the Secretary of State for Social Services what representations he has received from parents of autistic children.
    Sir George Young: One, Sir, and a paper from the National Society for Autistic Children. I hope to meet the society in the near future to discuss its paper about services for autistic people.
    Mr. Miller: Is my hon. Friend aware of the distress caused to many parents of autistic children in that they are unable to leave any money in their wills or by other means to buy them a few creature comforts while they are in residential care after the death of their parents? Will he look into the possibility of exempting up to a certain small sum these would-be bequests from being paid into the kitty of the residential home?
    Sir G. Young: I understand the problems that my hon. Friend describes, and I shall be happy to raise the matter with my right hon. and learned Friend the Chancellor of the Exchequer.
    Mr. Edwin Wainwright: Will the Minister take into account that there are many disadvantaged persons in this country whose parents are going through quite a deal of trouble, trial and tribulation in an effort to provide for their children's future, but will he take into account also the position of grandparents who take over the responsibility of looking after their grandchildren when the mother has passed away and the father is not there to take on the responsibility? They receive no allowance if they do not have to be on social security benefit or supplementary benefit.
    Sir G. Young: I do not think that that arises directly out of the original question—
    Mr. Wainwright: It is a good question.
    Sir G. Young: —but I shall be happy to look into the issues that the hon. Gentleman raises.

    Giro Cheques
    Mrs. Knightasked the Secretary of State for Social Services how many Giro cheques issued by his departmental managers in local offices were lost or stolen in 1978; and what was the amount of public money paid twice over as a result of these losses.
    Mr. Patrick Jenkin: A total of 57 million Giro cheques were issued by my Department in 1978, of which 91,000 were reported missing. About one-third of these were replaced immediately on hardship grounds, but over half of these resulted in duplicate payments causing an estimated loss of £480,000. I am reviewing policy in this area.
    Mrs. Knight: Will my right hon. Friend take care not to fall into the trap of regarding this matter as one of small importance because it concerns a relatively small part of the total that is paid out? May I commend to him the theory that if he looks after the thousands the millions will take care of themselves? Will he take steps to take greater care of security at the payout point so that the money goes to the person whose name is on the Giro cheque?
    Mr. Jenkin: I am grateful to my hon. Friend for that suggestion. The review that has been carried out by my Department embodies a series of additional checks at the point of payout to reduce and, I hope, to minimise the amount of fraud that is carried out through the issue of Giro cheques. The issue is always one of balance. Undoubtedly there are cases of immediate hardship where immediate relief is required, and these have to be balanced against measures to check possible fraud.
    Mr. Cryer: Will the right hon. Gentleman resist attempts by his hon. Friends to attack those who claim supplementary benefit and to regard them as scroungers? Does he accept that we are all concerned that there should be no fraudulent use of supplementary benefit? Will he also accept that far greater sums go astray? For example, tax evasion amounts to several hundred million pounds a year, while the loss from supplementary
    340
    benefit payments is only about £3 million. Will he tell his Cabinet colleagues that, far from attacking the majority of decent ordinary people who are on supplementary benefit, they should pursue tax losses, which represent by far the greater amount?
    Mr. Jenkin: I have many varied responsibilities, but the pursuit of tax evasion is not one of them. I am happy to inform the hon. Gentleman that none of my right hon. or hon. Friends has ever described any legitimate claimant to supplementary benefit as a scrounger.

    Geriatric Services (Wandsworth)
    Mr. Thomas Coxasked the Secretary of State for Social Services if he is satisfied with the provision of geriatric services in the London borough of Wandsworth.
    Sir George Young: The Merton, Sutton and Wandsworth area health authority and the London borough of Wandsworth are primarily responsible for the care of the elderly in Wandsworth. I have no reason to suppose that these authorities do not provide adequate services.
    Mr. Cox: May I assure the Minister that many local practitioners and organisations that look after the elderly in Wandsworth are deeply concerned about the provision of services? Is the hon. Gentleman aware that in Wandsworth we, unfortunately, have the most reactionary Tory council in Britain, which is now deliberately cutting all social services, across the board, within the borough? As a matter of urgency, will he seek a meeting with the Wandsworth council social services department and local hospitals to make himself fully aware of the lack of provision for elderly geriatrics within the borough?
    Sir G. Young: No, Sir. I think that last year one of the biggest swings throughout the country took place in Wandsworth, in response to the previous regime.
    Mr. Adley: Where it is proposed to close old people's homes, be it in Wandsworth or at Everton Grange, in my constituency, will my hon. Friend do his best to ensure that the doctors concerned, especially those who are attending the old folk, are at least given the opportunity

    341
    to be consulted, rather than being treated as arrogantly as they have been in my constituency, where they have not had a chance to express their opinions.
    Sir G. Young: This is primarily a matter for the local authority, but I shall draw to its attention what my hon. Friend said.
    Mr. Christopher Price: Is the hon. Gentleman aware that it is being suggested that it will be necessary to discontinue pocket money payments to the elderly in old people's homes in local authorities throughout the country because of the Government's cuts? Does he support that suggestion, which comes from the Tory Association of County Councils?
    Sir G. Young: Regulations have been laid prescribing an increased personal allowance for residents of old people's homes from the date of the November uprating of the retirement pension.

    LADYWOOD
    Mr. Severasked the Prime Minister when she expects next to visit Lady-wood.
    The Prime Minister (Mrs. Margaret Thatcher): I have no plans to do so, but I visited Birmingham last Friday.
    Mr. Sever: Does the right hon. Lady agree that when she visited Birmingham on Friday it would have been in the better interests of the city if she had had consultations with public representatives, community leaders and others who are desperately concerned about the future of Birmingham's inner city partnership scheme, rather than swanning around presenting awards to press men and photographers?
    The Prime Minister: I happen to think that the press is a rather important part of a free society. I was pleased that the Lord Mayor of Birmingham was there, too.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Dubsasked the Prime Minister if she will list her official engagements for 24 July.
    The Prime Minister: In addition to duties in this House I shall have meetings with ministerial colleagues and others, including one with General Rogers, the new Supreme Allied Commander Europe.
    Mr. Dubs: Will the right hon. Lady find time today to consider answering a question that she has failed to answer three times in the House in recent weeks, namely, what comfort is there for the many thousands on housing waiting lists in the light of her Government's policy to encourage sales of council housing when those on the waiting lists cannot afford to buy the houses that might be on offer?
    The Prime Minister: I think that the hon. Gentleman is trying to find a connection between two things that are not connected. There are many, many people in council houses who will be tenants for life, who will never move, and who want to own the homes they will live in for the rest of their lives. They will be given an opportunity, which they would never have had under Labour, to purchase their homes.
    Mr. Alan Clark: Will my right hon. Friend find time today, or at the earliest opportunity, to deny categorically the reports that are becoming increasingly current that defence is also to have its expenditure cut?
    The Prime Minister: If I am to deny or confirm each and every question that is put to me on public expenditure, I shall be in considerable difficulty. We shall, of course, honour our NATO commitments.
    Mr. James Callaghan: On the question of the opportunity that is to be given to council house tenants to buy their houses, will the right hon. Lady deny the proposal made by one of her advisers that mortgage interest relief is to be disallowed for tax purposes?
    The Prime Minister: I am delighted to deny it. One's advisers are not always right, and I often tell them so.
    Mr. Dykes: Will my right hon. Friend have the opportunity this afternoon to check whether she has yet received a response from the Transport and General Workers Union to the enormous concern that was expressed in the House a week or more ago that several speakers at its

    343
    most recent conference who wanted to support the Government's proposals for trade union reform were denied the opportunity of going to the rostrum to speak? If my right hon. Friend has a chance to check to ascertain whether a response has been made, will she take up the matter further with the union? Is she confident that we shall get a fair hearing from trade union leaders, when that sort of thing goes on?
    The Prime Minister: I shall look into that later today. I am certain that we have the support of many members of the Transport and General Workers Union, and of other unions, in what we are trying to do to reform trade union law.
    Mr. Freud: Will the right hon. Lady consider with care the letter delivered to 10 Downing Street by representatives of 3,500 marchers of Equity, pointing out that the VAT rate of 15 per cent. and the annual contribution of 45p per head compare pretty miserably with £7·80 per head and zero rated VAT in other European countries for the living arts?
    The Prime Minister: I think the hon. Gentleman will accept that the substantial reductions in direct taxation will enable many private people to contribute to the arts who have not been able to do so before, and that that will be of great benefit to many in Equity.
    Mr. Bidwell: Will the right hon. Lady concede that she might have been badly advised about the contemplated changes in the immigration rules, and that if she goes ahead with them after the recess she may be brought before the European Court of Human Rights on the matter of women and families?
    The Prime Minister: Those changes in the immigration rules were set out in detail in the manifesto. We intend to bring them in after we return from the recess.
    Mr. Garel-Jonesasked the Prime Minister if she will list her official engagements for Tuesday 24 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave a moment ago.
    Mr. Garel-Jones: In the course of her busy day, will my right hon. Friend find time to ask her hon. Friend the Minister of State for Housing and Construction to
    344
    speed up the preparation of the housing Bill? More important, can she give an assurance that the right of council tenants to purchase will be enshrined in that Bill in such a way as to make it impossible for Labour-controlled authorities to deny tenants that right?
    The Prime Minister: That is most certainly our objective. We shall need to do that. Otherwise, many Labour authorities would deny tenants that right. We are determined that they shall have it.
    Mr. Alton: Will the right hon. Lady apply the same strictures to the Conservative-controlled authorities that may not wish to sell council houses, especially in the rural areas? Will she reconsider the Government's proposals to make the sale of council houses compulsory? Will she extend to the sale of council dwellings the same logic that she extended in the Education Bill to allowing local authorities the choice of making up their minds about whether they should continue with selective education?
    The Prime Minister: If one applied the reasoning behind the hon. Gentleman's question, there would be fundamental laws governing every citizen in the United Kingdom. If one applied his reasoning to education, we should not have a law about the school starting or leaving ages. Some things are so fundamental that they must apply to all citizens regardless of the local authority area in which they live. Others are matters for the local authorities. We believe that the right to buy council houses should belong to everyone, with one or two possible exceptions, such as some houses in national parks and tied houses. In general, the right should apply to everyone. That is the line that we shall follow in the legislation.
    Mr. William Hamilton: Will the Prime Minister reconsider the answer that she gave to the Leader of the Opposition about mortgage interest repayments? How does she square that answer on the favourable treatment given to those people and the slashing of housing subsidies to council houses, which will inevitably put up the rents by about £2 a week?
    The Prime Minister: As far as I remember, council house rents meet only about 43 per cent.—it might be a little more; it is well below 50 per cent.—of the cost of council houses.

    345
    As to mortgage relief, every time tax is reduced the mortgage costs more. The amount upon which the relief is given£25,000—has not been put up for five years.
    Mr. Chapman: As to Government spending cuts—announced, proposed, or the figment of many people's imaginations —will my right hon. Friend confirm that this year's total public expenditure will be no less than £11 billion more than it was last year? Should not these so-called cuts be seen for what they are—an attempt to cut back profligate Government spending?
    The Prime Minister: The level of planned expenditure of the previous Government would very rapidly have led us back to where we were in 1976 when the IMF had to be called in and when even the previous Government had to impose public expenditure cuts. It is important that we reduce public expenditure as a proportion of the total national income. Our task at the moment is to constrain it.
    Mr. James Callaghan: Is the right hon. Lady aware that what she said in the first part of her answer was totally untrue? As to the second part, does she not recognise that if there is no growth in the economy the burden of public expenditure will become greater? When will she apply her mind to the present absurdly high interest rates, which require industry to curb its investment and are dragging in foreign money, which itself increases the value of sterling and depresses exports? When will she get round to these fundamental problems of growth?
    The Prime Minister: In the autumn of 1976 the right hon. Gentleman said, on the question of cutting public expenditure, that it ought to be reduced over a period as a proportion of GDP. That is exactly what we are trying to do. It was reduced. The IMF comes in later. The IMF letter of intent said that
    "an essential element of the Government's strategy will be a continuing and substantial reduction over the next few years in the share of resources required for the public sector. It is also essential to reduce the public sector borrowing requirement",
    and so on. It lies ill in the right hon. Gentleman's mouth to criticise us for doing now what he had to do when the IMF was called in.
    Mr. Callaghan: Will the Prime Minister now answer my question? When will she deal with these absurdly high interest rates?
    The Prime Minister: I apologise to the right hon. Gentleman. I forgot the third part of his question.
    The right hon. Gentleman knows that interest rates will have to remain high while there is such a tremendous amount for borrowing from both the clearing and other banks. If by any chance it were let go it would have a bad effect on inflation next year. The previous Chancellor was much more of a monetarist than he now cares to admit. I am determined that we shall keep down inflation. Until demand is reduced we cannot reduce interest rates. We shall do so at the first opportunity.
    Mr. Callaghan: In view of the consequences of the foreign money now attracted to London by these high interest rates, and the consequential effect on the strength of sterling, how many bankruptcies does the right hon. Lady expect that there will be and how much unemployment must we see before she sees sense on this absurdly high level of interest rates?
    The Prime Minister: The level of interest rates is below the record achieved by the right hon. Gentleman in office.
    Mr. Callaghan: I realise that the right hon. Lady is having a difficult time about this matter, but will she undertake to ensure that the present level of interest rates will last no longer than the level of interest rates to which she referred under the Labour Government?
    The Prime Minister: The right hon. Gentleman knows that we can never, never, never give any undertaking on interest rates. If he were at this Dispatch Box he would say exactly the same.
    Mr. Callaghan: Why make the comparison?

    SCOTLAND (CONSTITUTIONAL PROPOSALS)
    Mr. Dalyellasked the Prime Minister if she will make a statement on the progress of the all-party talks on new constitutional proposals for Scotland.
    The Prime Minister: My right hon. Friend the Chancellor of the Duchy of Lancaster has had preliminary discussions about all-party talks with those parties represented in Scotland and hopes to put proposals about terms of reference to those concerned in the autumn.
    Mr. Dalyell: Which member of the Cabinet will be in charge of the talks on the Government side?
    The Prime Minister: The Leader of the House will be in charge, as he has been in charge of the all-party consultations.
    Mr. McQuarrie: When the talks reach an appropriate stage, will my right hon. Friend bear in mind that there is a considerable desire among the people of Scotland to listen to these talks in public? Will she take steps to ensure that they are so held? May we also make use of the buildings and grounds on which the crowd on the other side spent so many millions of pounds?
    The Prime Minister: I think that there might be an occasion for due reticence on this matter when the talks begin. But we hope to establish a Select Committee on Scottish affairs when we return from the recess.
    Mr. Robert Hughes: Will the right hon. Lady accept that any talks she may have in Scotland will be most unwelcome, given that she has now reneged entirely on the dispersal of Civil Service jobs? How can we trust the Government in any way at all?
    The Prime Minister: I hope that there will be a statement later in the week on on the dispersal of jobs. [Interruption.] What is on the tapes is not always accurate.
    Mr. Winnick: On a point of order, Mr. Speaker. I apologise for the fact that I did not give you warning of my intended point of order, but I was not to know what was to occur during exchanges at Question Time. As you may know, the press is full of reports that the Government have agreed to spending cuts in the region of £4,000 million. It was reported in The Daily Telegraph today that
    "The Cabinet did not feel that the situation justified making a statement to MPs before the Commons rises on Friday for the Summer Recess."
    348
    These cuts—if it is true that they are to be made—will affect adversely many of our constituents, and will undoubtedly cause a great deal of hardship. We are going into recess until late October. A number of people will obviously be given details of what is proposed, but not this House. I believe—hence my point of order—that the House is being treated with contempt by the Government in sending us away until late October without giving us details of what is being proposed.
    Mr. Speaker: That is not a matter for me but it is something that could be raised in the debate when we discuss the length of the Adjournment.
    Mr. Winnick: Further to the point of order, Mr. Speaker. If I may—
    Mr. Speaker: Order. It was not a point of order. If the hon. Gentleman has something entirely different to say, I shall listen to him, but that was not a point of order.
    Mr. Winnick: On a point of order, Mr. Speaker. I should like to make my point as briefly as I can, because I believe it to be of great importance. It is that on a matter which concerns our constituents, we are not to be given the information before we break up for the Summer Recess.
    Mr. Speaker: That is not a point of order for me, as the House understands.

    QUESTIONS TO MINISTERS
    Mr. Campbell-Savours: I should like to draw your attention, Mr. Speaker, to a question that was asked by the hon. Member for Lancaster (Mrs. Kellett-Bowman) yesterday, during questions to the Secretary of State for Industry referring to certain aspects of the British Steel Corporation's activities in my constituency. The hon. Member for Lancaster was asking that question in her capacity as a Member of the European Assembly. [HON. MEMBERS: "Oh."] I have no objection to the hon. Member for Lancaster wishing to know the answer, but I wonder, Mr. Speaker, whether you would tell the House whether it is in order for Members of the European Parliament to use their position in this Chamber by

    349
    asking questions which may not be helpful to hon. Members representing the domestic constituencies.
    I had given to the British Steel Corporation employees an assurance that I would not turn this issue into a political football. I feel that what happened yesterday did that very thing. It is for that reason, Mr. Speaker, that I seek your guidance.
    Mrs. Kellett-Bowman: Further to the point of order, Mr. Speaker—of which the hon. Member for Workington (Mr. Campbell-Savours) did not have the courtesy to give me notice. I would point out that if an hon. Member for a particular constituency is not present, as the hon. Member was not when the question of the Shotton steel closures arose—a question that intimately concerns his constituency and mine—it is up to somebody else to stick up for the people of Workington. That is what I was seeking to do.
    Mr. Campbell-Savours—
    Mr. Speaker: Order. I will give the hon. Member for Workington (Mr. Campbell-Savours) an opportunuity in a moment. I first want to give a ruling on a very important question. The wider constituencies belonging to the Assembly in Europe have no bearing at all upon us here. I treat every hon. Member here
    350
    as a Member for the constituency for which he or she was elected to this House.
    Mrs. Kellett-Bowman: Further to the point of order, Mr. Speaker. Is it not a breach of the conventions of this House for the hon. Member for Workington to table 17 written questions, which will cost the taxpayer £560 to answer, relating exclusively—[Interruption]—to my constituency, with which he has no concern whatever? [Interruption.] Does this not—
    Mr. Speaker: Order. The House must allow the hon. Lady to make her point.
    Mrs. Kellett-Bowman: The hon. Member for Workington last Tuesday night on the radio was asking for vastly increased sums for research facilities. If he is to use these sums for research into other hon. Members' constituencies, will not this be an abuse of the taxpayers' money?
    Mr. Speaker: Order. I listened to the hon. Member for Workington, who, I hope, will not pursue this private duel.
    Mr. Campbell-Savours: I want only to thank you, Mr. Speaker, for the courtesy that you have extended to me by explaining this highly important constitutional question. I was embarrassed by what happened, and I might add—for the benefit of the hon. Lady—that I was present at both of the debates to which she previously referred.

Post Office (Amendment)
3.37 p.m.
Mr. Neville Trotter: I beg to move,
That leave be given to bring in a Bill to end the exclusive privilege of the Post Office with respect to the conveyance etc. of letters.
You may well recall, Mr. Speaker, that my hon. Friend the Member for Eastbourne (Mr. Gow) endeavoured to introduce a similar Bill three and a half years ago. It was on 4 February 1976, the very first day on which you presided over our affairs.
Support on that occasion was given not only by half the present Government Front Bench but by the right hon. Gentleman the Leader of the Liberal Party and, I believe, all Members of the Liberal Party who voted on that occasion, and also by the right hon. Gentleman the Leader of the Scottish National Party. Coming, as he does, from the Western Isles, I should have thought that that would deal with any suggestion that there is satisfaction with the postal system at present in the remotest parts of Britain.
If we consider what has happened since the House last debated this matter three years ago, we see that the performance of the Post Office has continued to decline. The system has deteriorated, so that the same number of postmen as before now deliver billions fewer letters, and those take longer than ever to arrive.
The Carter report on the Post Office in 1977 pointed out that productivity had declined, despite the Post Office reducing its targets of service and despite mechanisation. At the same time, the Carter report referred to substantial increases in administrative costs. The service has got worse, and is now worse than it was 40 or 50 years ago, despite modern technology.
Apologists for the Post Office refer to the increasing spread of towns and the resulting additional distance, but that factor applied also between the wars, when productivity in the Post Office increased instead of declining.
On four occasions this year the Post Office has begged customers not to use its services. On one occasion five ladies at the same time refused to issue the bulk stock of stamps. That would certainly
352
seem to be one way of preventing the Post Office being bothered by letters.
It is surely ironic that one Post Office department actually issued printed letters asking its customers to be co-operative by keeping correspondence to it down to a minimum. Someone, somewhere, may indeed have been hoping for a letter, but it certainly was not the Post Office.
I base my arguments not so much on the recent highlighting of the postal services as on the unprecedented criticisms made of it by its watchdog, the Post Office Users National Council. Research has shown that every day over 1 million first-class letters arrive late and 1 million second-class letters cannot even reach their destination by the third day. One first-class letter in 10 is now late. With overseas mail there can be delays of weeks.
The combined result of the withdrawal of Sunday collections, and the extension of second-class mail from second- to third-day delivery, means that a second-class letter posted on Saturday afternoon or Sunday is not expected to reach its destination before the following Thursday, if all goes well—as it often does not. Naturally, the rural areas particularly suffer because of this deterioration in service. It is no wonder that the Post Office ignores the weekend when computing its official figures.
The Post Office wishes to reintroduce a second-day delivery for second-class mail and Sunday collections, worked by voluntary labour, but both have been prevented because of the attitude of the unions. In a recent report, the Post Office Users National Council chairman referred to
"the appalling and unacceptable quality of the postal service … and the apparent lack of initiative and effect by the management to secure staff agreement to changes that would benefit the customer and be in the long-term interest of the business."
The report is quite damning in its criticisms. It refers to the continuing decline in productivity and goes on:
"customers are entitled to expect value for money and what they want most of all is a reliable service. It cannot be said that they are getting either … even against the Post Office's reduced standards, there has been a serious deterioration … in the reliability and delivery performance has fallen lamentably short of targets."

353
The managing director has said that service has declined to an unacceptable level:
"It is the disastrous failure of working relationships between management and staff which has led to the unacceptable deterioration in the postal service. The customer is expected to pay more for less and to pick up the tab for the consequences of problems which it is the job of management and unions to resolve."
Those are very strident criticisms indeed from any watchdog body.
I remind the House that this is the industry into which the last Government saw fit to introduce an attempt at industrial democracy with worker directors. So much for the success of that experiment. The individual postman rightly remains as popular and well respected as ever. The public appreciate that the fault lies not with the postman but with the monolithic system. The Post Office and the unions between them have failed the postman as much as they have failed the customer. The Post Office chairman has admitted that he has been unable to convince union membership to accept change in return for the opportunity to get more pay. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) pointed out on 2 July that it would be possible to serve the public better, at lower cost and with better conditions for the postmen if there were cooperation to improve productivity. I believe that quite simple steps could lead to dramatic improvements.
The Post Office Users National Council is against breaking the Post Office monopoly but it must admit that its strident criticisms have proved quite ineffective in securing improvement. Of course, a monopoly has made sense in the past, but now we must doubt whether it remains in the public interest for the Post Office to have a monopoly. It was put in this way at page 71 of the Carter report:
"If the service became much worse than the public expects it would become impossible to defend the monopoly against those who might offer a better service."
That is the crux of the matter, and I believe that we have now reached that situation.
My right hon. Friend the Member for Leeds, North-East said, with regard to the Post Office, that it is unacceptable
354
for a nationalised industry to use its monopoly to cloak inefficiency. That is a view with which I entirely agree, and so, I believe, do the public—the customer. No discipline could be more satisfactory than that of competition. If the House supports the Bill this afternoon, I believe that such an expression of opinion could, of itself, provide the stimulus to improve working relationships within the Post Office. It could, indeed, in a short time lead to a dramatic improvement in service.
I therefore ask that leave be given for me to bring in this Bill in the best interests of the Post Office, its staff and, above all, its customers—the public.
Mr. Speaker: The right hon. Member for Manchester, Openshaw (Mr. Morris) gave me notice that he wished to oppose this application.
3.45 p.m.
Mr. Charles R. Morris: In opposing the Bill, it is my duty to declare an interest as a former member of the national executive of the Union of Post Office Workers. I listened very carefully to the speech made by the hon. Member for Tynemouth (Mr. Trotter). At the outset, I would say that I do not seek to defend the deterioration that has taken place in Post Office services in recent months. That is a matter of concern for my union, the Post Office management and myself.
The role of this House is not merely to identify a problem but at times to understand the problem. We cannot have an efficient Post Office service when there are vacancies which at present are touching 10,000. The Post Office is short of 7,000 postmen and 3,000 postmen higher grade. In contemporary Britain there is not a queue of people who want to get up at 4 o'clock in the morning to be at the Post Office sorting offices to sort out the mail and deliver it in all weathers. Given any sort of choice, people do not opt for that task.
As so many other people have done, the hon. Member for Tynemouth referred to the Mount Pleasant sorting office. It has been said that it is the largest postal sorting office in the world, which, indeed, it is. At present the staff establishment at that office is 3,500. Currently there are 900 vacancies. Because of the antisocial hours of attendance, great difficulty

355
is caused in recruiting staff to fill vacancies in the Post Office. This Bill, by breaching the monopoly, will not solve that problem.
I have rarely listened to such a superficial speech as that which we have just heard. Quite frankly, breaching the monopoly will do a number of things. It will allow the postal pirates to cream off the profitable areas of postal deliveries and leave the rural areas, the geographically isolated and unprofitable areas, to the Post Office. Those areas have already lost rail transport, are now losing buses, and would find that their postal services were at risk if this Bill were to go through.
Another consequence would be that postal rates would rocket and we would see a further deterioration in postal services. That is not fear or speculation. We need go back only to 1971 to see what happened when the Post Office monopoly was breached. I have here a copy of the London Evening News for 17 February 1971. Hon. Members will be able to see the headline from where they are sitting. It reads:
"London Storm as Pirate Post goes Haywire".
Under the heading it reads:
"Ex-public schoolboy Tim Randall admitted today that his pirate postal service had gone 'haywire.' Hundreds of complaints have poured into his Chelsea headquarters since he began his delivery service five weeks ago. Urgent letters posted to central London at the beginning of the month have still not arrived."
If anybody wants to know what happened when we introduced alternative mail services and breached the monopoly, he needs only to refer to the Daily Tele
graph of 12 March 1971. It was indicated there that private mail, at 15p a time, was unloaded back on to the Post Office. The report said:
"About 5,000 letters were dumped at Luton Post Office, Beds, yesterday by a man driving an unmarked van. Each carried the name Randall's Mail Service, Chelsea'."
When I said that the cost of the post would rocket, the charges then were from 15p to 75p. That would be the consequence of supporting this Bill.
Supporters of the Bill remind me of the Bourbons. They remember nothing and learn nothing. It amazes me that the hon. Gentleman had the temerity to quote from the reports of the Carter committee and the Post Office Users National Council. He did not point out that both had gone on record as opposing the break-up of the Post Office monopoly. He did not say that in 1967 the Select Committee on Nationalised Industries was equally firmly opposed to the break-up of the monopoly. Not only is POUNC opposed to the breaking of the monopoly, but so is the Post Office Board and the Council of Post Office Unions. The hon. Gentleman and those who support the Bill can delude themselves, but frankly they are not entitled to delude this great public service and the country. I totally oppose the Bill, and invite the House to oppose it.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business):—
The House divided:— Ayes 187, Noes 210.

Division No. 77]

AYES

[13.51 p.m.

Adley, Robert

Bruce-Gardyne, John

Dodsworth, Geoffrey

Alexander, Richard

Bryan, Sir Paul

Dorrell, Stephen

Ancram, Michael

Budgen, Nick

Douglas-Hamilton, Lord James

Aspinwall, Jack

Butcher, John

Dover, Denshore

Atkins, Robert (Preston North)

Cadbury, Jocelyn

Dunn, Robert (Dartford)

Atkinson, David (B'mouth East)

Carlisle, John (Luton West)

Durant, Tony

Baker, Nicholas (North Dorset)

Carlisle, Kenneth (Lincoln)

Edwards, Rt Hon N. (Pembroke)

Banks, Robert

Chalker, Mrs. Lynda

Eggar, Timothy

Beaumont-Dark, Anthony

Chapman, Sydney

Elliott, Sir William

Benyon, Thomas (Abingdon)

Clark, Hon Alan (Plymouth, Sutton)

Emery, Peter

Berry, Hon Anthony

Clark, William (Croydon South)

Fairbairn, Nicholas

Best, Keith

Clarke, Kenneth (Rushcliffe)

Fairgrieve, Russell

Bevan, David Gilroy

Cockeram, Eric

Faith, Mrs. Sheila

Biggs-Davison, John

Colvin, Michael

Farr, John

Blackburn, John

Cope, John

Fell, Anthony

Bonsor, Sir Nicholas

Cormack, Patrick

Fletcher, Alexander (Edinburgh N)

Boscawen, Hon Robert

Corrie, John

Fookes, Miss Janet

Bottomley, Peter (Woolwich West)

Costain, A. P.

Forman, Nigel

Braine, Sir Bernard

Cranborne, Viscount

Fraser, Peter (South Angus)

Bright, Graham

Crouch, David

Fry, Peter

Brown, Michael (Brigg & Sc'thorpe)

Dean, Paul (North Somerset)

Gardner, Edward (South Fylde)

Garel-Jones, Tristan

Mackay, John (Argyll)

Shepherd, Richard (Aldridge-Br'hills)

Glyn, Dr Alan

McNair-Wilson, Michael (Newbury)

Silvester, Fred

Goodhew, Victor

McQuarrie, Albert

Sims, Roger

Goodlad, Alastair

Major, John

Smith, Dudley (War. and Leam'ton)

Gow, Ian

Marland, Paul

Speller, Tony

Gower, Sir Raymond

Marlow, Antony

Spicer, Jim (West Dorset)

Grant, Anthony (Harrow C)

Marten, Neil (Banbury)

Spicer, Michael (S Worcestershire)

Greenway, Harry

Mather, Carol

Sproat, Iain

Grimond, Rt Hon J.

Maude, Rt Hon Angus

Squire, Robin

Grist, Ian

Mawby, Ray

Stainton, Keith

Grylls, Michael

Mawhinney, Dr Brian

Stanbrook, Ivor

Gummer, John Selwyn

Maxwell-Hyslop, Robin

Stevens, Martin

Hamilton, Michael (Salisbury)

Miller, Hal (Bromsgrove & Redditch)

Stewart, John (East Renfrewshire)

Hampson, Dr. Keith

Mills, Peter (West Devon)

Stokes, John

Hayhoe, Barney

Molyneaux, James

Stradling Thomas J.

Heddle, John

Morris, Michael (Northampton, Sth)

Thompson, Donald

Hicks, Robert

Morrison, Hon Peter (City of Chester)

Thorne, Neil (Ilford South)

Higgins, Terence L.

Myles, David

Thornton, George

Hill, James

Neale, Gerrard

Townend, John (Bridlington)

Hogg, Hon Douglas (Grantham)

Needham, Richard

Trippier, David

Holland, Philip (Carlton)

Nelson, Anthony

Trotter, Neville

Howell, Ralph (North Norfolk)

Newton, Tony

Vaughan, Dr Gerard

Hunt, David (Wirral)

Normanton, Tom

Viggers, Peter

Jessel, Toby

Osborn, John

Waddington, David

Jopling, Rt Hon. Michael

Page, John (Harrow, West)

Wainwright, Richard (Colne Valley)

Kellett-Bowman, Mrs Elaine

Page, Rt Hon R. Graham (Crosby)

Waldegrave, Hon William

Kilfedder, James A.

Parris, Matthew

Walker, Bill (Perth & E Perthshire)

Kimball, Marcus

Patten, Christopher (Bath)

Wall, Patrick

King, Rt Hon Tom

Patten, John (Oxford)

Waller, Gary

Kitson, Sir Timothy

Pawsey, James

Ward, John

Knight, Mrs Jill

Pollock, Alexander

Watson, John

Lang, Ian

Porter, George

Wells, John (Maidstone)

Langford-Holt, Sir John

Powell, Rt Hon J. Enoch (S Down)

Wells, P. Bowen (Hert'fd&Stev'nage)

Lawrence, Ivan

Prentice, Rt Hon Reg

Wheeler, John

Lee, John

Price, David (Eastleigh)

Whitelaw, Rt Hon William

Le Marchant, Spencer

Proctor, K. Harvey

Whitney, Raymond

Lennox-Boyd, Hon Mark

Rathbone, Tim

Wilkinson, John

Lloyd, Ian (Havant & Waterloo)

Rhodes James, Robert

Younger, Rt Hon George

Lloyd, Peter (Fareham)

Roberts, Michael (Cardiff NW)

McAdden, Sir Stephen

Robinson, Peter (Belfast East)

TELLERS FOR THE AYES:

McCrindle, Robert

Ross, Wm. (Londonderry)

Mr. George Gardiner and

Macfarlane, Neil

St. John-Stevas, Rt Hon Norman

Mr. Christopher Murphy.

MacGregor, John

Shaw, Michael (Scarborough)

NOES

Abse, Leo

Cryer, Bob

Garrett, W. E. (Wallsend)

Adams, Allen

Cunliffe, Lawrence

George, Bruce

Alton, David

Cunningham, George (Islington S)

Golding, John

Anderson, Donald

Cunningham, Dr John (Whitehaven)

Gourlay, Harry

Archer, Rt Hon Peter

Dalyell, Tam

Graham, Ted

Armstrong, Ernest

Davidson, Arthur

Grant, George (Morpeth)

Ashton, Joe

Davies, Rt Hon Denzil (Llanelli)

Hamilton, James (Bothwell)

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

Davies, E. Hudson (Caerphilly)

Hamilton, W. W. (Central Fife)

Bagier, Gordon A. T.

Davies, Ifor (Gower)

Harrison, Rt Hon Walter

Barnett, Guy (Greenwich)

Davis, Clinton (Hackney Central)

Hattersley, Rt. Hon Roy

Beith, A. J.

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

Haynes, David

Benn, Rt Hon Anthony Wedgwood

Dean, Joseph (Leeds West)

Heffer, Eric S.

Bennett, Andrew (Stockport N)

Dempsey, James

Hogg, Norman (E Dunbartonshire)

Bidwell, Sydney

Dixon, Donald

Holland, Stuart (L'beth, Vauxhall)

Booth, Rt Hon Albert

Dobson, Frank

Home Robertson, John

Boothroyd, Miss Betty

Dormand, J. D.

Homewood, William

Bottomley, Rt Hon Arthur (M'brough)

Dubs, Alfred

Hooley, Frank

Bray, Dr Jeremy

Duffy, A. E. P.

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

Brown, Hugh D. (Provan)

Dunn, James A. (Liverpool, Kirkdale)

Huckfield, Les

Brown, Robert C. (Newcastle W)

Eadie, Alex

Hughes, Robert (Aberdeen North)

Brown, Ron (Edinburgh, Leith)

Eastham, Ken

Janner, Hon Geville

Buchan, Norman

Edwards, Robert (Wolv SE)

Jay, Rt Hon Douglas

Callaghan, Jim (Middleton & P)

Ellis, Raymond (NE Derbyshire)

John, Brynmor

Campbell-Savours, Dale

Ellis, Tom (Wrexham)

Johnson, James (Hull West)

Cant, R. B.

English, Michael

Johnston, Russell (Inverness)

Carmichael, Neil

Ennals, Rt Hon David

Jones, Alec (Rhondda)

Carter-Jones, Lewis

Evans, Ioan (Aberdare)

Jones, Dan (Burnley)

Clark, Dr David (South Shields)

Evans, John (Newton)

Kerr, Russell

Cocks, Rt Hon Michael (Bristol S)

Faulds, Andrew

Kilroy-Silk, Robert

Cohen, Stanley

Field, Frank

Kinnock, Neil

Coleman, Donald

Flannery, Martin

Lambie, David

Concannon, Rt Hon J. D.

Fletcher, Ted (Darlington)

Lamborn, Harry

Conlan, Bernard

Foot, Rt Hon Michael

Lamond, James

Cook, Robin F.

Forrester, John

Leadbitter, Ted

Cowans, Harry

Foulkes, George

Leighton, Ronald

Cox, Tom (Wandsworth, Tooting)

Freeson, Rt Hon Reginald

Lestor, Miss Joan (Eton & Slough)

Craigen, J. M. (Glasgow, Maryhill)

Freud, Clement

Lewis, Ron (Carlisle)

Crowther, J. S.

Garrett, John (Norwich S)

Lofthouse, Geoffrey

358

359

Mabon, Rt Hon Dr J Dickson

Park, George

Straw, Jack

McCartney, Hugh

Parry, Robert

Summerskill, Hon Dr Shirley

McDonald, Dr Oonagh

Penhaligon, David

Taylor, Mrs Ann (Bolton West)

McElhone, Frank

Powell, Raymond (Ogmore)

Thomas, Dafydd (Merioneth)

McKay, Allen (Penistone)

Prescott, John

Thomas, Dr Roger (Carmarthen)

MacKenzie, Rt Hon Gregor

Price, Christopher (Lewisham West)

Thorne, Stan (Preston South)

Maclennan, Robert

Race, Reg

Tilley, John

McMahon, Andrew

Rees, Rt Hon Merlyn (Leeds South)

Tinn, James

McNally, Thomas

Richardson, Miss Jo

Torney, Tom

McNamara, Kevin

Roberts, Ernest (Hackney North)

Urwin, Rt Hon Tom

Marks, Kenneth

Robertson, George

Varley, Rt Hon Eric G.

Marshall, David (Gl'sgow,Shettles'n)

Rodgers, Rt Hon William

Wainwright, Edwin (Dearne Valley)

Marshall, Dr Edmund (Goole)

Rooker, J. w.

Walker, Harold (Doncaster)

Marshall, Jim (Leicester South)

Ross, Ernest (Dundee West)

Weetch, Ken

Martin, Michael (Gl'gow, Springb'n)

Ross, Stephen (Isle of Wight)

Wellbeloved, James

Maynard, Miss Joan

Rowlands, Ted

Welsh, Michael

Mellish, Rt Hon Robert

Sever, John

White, Frank R. (Bury & Radcliffe)

Millan, Rt Hon Bruce

Sheerman, Barry

Whitehead, Phillip

Miller, Dr M S (East Kilbride)

Sheldon, Rt Hon Robert (A'ton-u-L)

Whitlock, William

Mitchell, Austin (Grimsby)

Shore, Rt Hon Peter (Step and Pop)

Wigley, Dafydd

Mitchell, R. C. (Soton, Itchen)

Silkin, Rt Hon John (Deptford)

Willey, Rt Hon Frederick

Morris, Rt Hon Alfred (Wythenshawe)

Silkin, Rt Hon S. C. (Dulwich)

Williams, Rt Hon Alan (Swansea W>

Morris, Rt Hon Charles (Openshaw)

Silverman, Julius

Wilson, William (Coventry SE)

Morris, Rt Hon John (Aberavon)

Skinner, Dennis

Winnick, David

Morton, George

Smith, Cyril (Rochdale)

Woodall, Alec

Mulley, Rt Hon Frederick

Smith, Rt Hon J. (North Lanarkshire)

Woolmer, Kenneth

Newens, Stanley

Snape, Peter

Wrigglesworth, Ian

Oakes, Gordon

Soley, Clive

Wright, Miss Sheila

Ogden, Eric

Spriggs, Leslie

Young, David (Bolton East)

O'Halloran, Michael

Stallard, A. W.

O'Neill, Martin

Steel, Rt Hon David

TELLERS FOR THE NOES:

Orme, Rt Hon Stanley

Stoddart, David

Mr. Harry Ewing and

Owen, Rt Hon Dr David

Strang, Gavin

Mr. Roger Stott.

Palmer, Arthur

REGIONAL POLICY
Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
Mr. Arthur Lewis: On a point of order, Mr. Speaker. As one who does not intend even trying to catch your eye—I realise the hopelessness of that—may I ask whether we may have an assurance that if eight Privy Councillors on either side of the House are to be called, as they always are called, thus blocking out ordinary Back Benchers because of this tradition—and it is only a tradition to call Privy Councillors—which is very unfair on ordinary Back Benchers who try to catch your eye, this will not always be so?
Mr. Speaker: The hon. Gentleman has given me an opportunity to say that there there is a very long list indeed of right hon. and hon. Members who have indicated to me that they hope to catch my eye—
Mr. Lewis: They will.
Mr. Speaker:—and that six Privy Councillors on the Opposition Benches are hoping to catch my eye. I have followed the precedent of my immediate predecessor in the Chair, and I never call two Privy Councillors from the same party, one immediately after the other. I call a Back Bencher, who is not a Privy Councillor, in between them. I do not propose to change the time-hallowed custom of giving that precedence to Privy Councillors.
Mr. Lewis: I thank you, Mr. Speaker, for that comment—except for the last part, with respect. Perhaps I may suggest that it would be welcomed by hon. Members in all parts of the House—with the probable exception of a few Privy Councillors—if you were to consider that Privy Councillors should get together in their club and decide which of them should ask to be called, and should try to be a little fairer, just having one or two—which is sufficient—from either side, and not hogging the whole of a debate, as is always the custom.
Mr. Speaker: There is more than a germ of a good idea in what the hon. Gentleman has said. It would be helpful to the House if there were fewer Privy
362
Councillors in a given debate. But I do not wish to change the custom.
Allow me to say, before I call the Secretary of State to move the motion, that I believe that there is an obligation on those who know that they will be called to speak, because they are Privy Councillors, to be brief, so as to give a chance to others.
4.5 p.m.
The Secretary of State for Industry (Sir Keith Joseph): I beg to move,
That this House welcomes the changes which are being introduced by the Government in regional policy in order to concentrate assistance on areas most in need, to make it more cost effective, and to remove anomalies in assisted area gradings.
I believe that it is the wish of the House to debate, at the same time as the motion, item No. 2 on the Order Paper:
That the draft Regional Development Grants (Variation of Prescribed Percentages) Order 1979, which was laid before this House on 20 July, be approved.
Mr. Speaker: Does that course have the agreement of the House?
Hon. Members: Aye.
Mr. Speaker: Very well. The House will understand that I shall put the Questions on the two motions immediately after each other at the 10 o'clock Division.
Sir K. Joseph: I am grateful to the House and to you, Mr. Speaker.
I have to state that the Government replaced the original order on industrial development because of a possible technical error in it. The order on which the House will be asked to vote this evening is technically correct except that there is an error of 24 hours in the date on the back page. The date as printed will take from the grantees of regional development grants 24 hours' more money than is consistent with the statement that I made to the House. In order not to confuse today's debate, we shall be asking right hon. and hon. Members to vote on the order, and in the autumn the Government will table an order, subject to affirmative resolution, correcting by 24 hours the availability of regional development grant money so that those who are entitled to receive it will not suffer in any way.

363
The policy changes involved in the Government's regional policy proposals need to be summarised by me at the beginning of this debate, to remind the House.
First, the Government are retaining the three different sorts of areas of regional policy—the special development areas, the development areas and the intermediate areas. But the Government are proposing a change in the map, upgrading a few areas and downgrading many more. These proposals are embodied in an order that has been laid before the House—an order subject to negative resolution.
Secondly, the proportion of expenditure defrayed by grant has been changed, in the case of development areas, from 20 per cent. down to 15 per cent., and that is the subject of the statutory order to which I have just referred. After a transitional period, there is to be no grant available for buildings in intermediate areas. This is provided by discretion under the Industry Act 1972 and will be validated further by the Industry Bill that we propose to introduce this autumn.
The next change is that the threshold of expenditure that entitles an investor to development grant is being raised fivefold—from £100 and £1,000 respectively for plant and buildings to £500 and £5,000. This is being done under the discretion of the Secretary of State and will be embodied, again, in the Industry Bill this autumn.
The impact of industrial development certificates is being changed so that the threshold at which the control bites is raised to 50,000 sq. ft., and there is no need to apply for a certificate hereafter in intermediate areas. That is embodied in an order that has been laid under the Town and Country Planning Act.
There are three other changes that have to be announced. First, we propose that the building of factories will be more entrusted to private enterprise and less to the public sector. We are bringing in transitional arrangements so that the changes that I have announced will bite relatively slowly, in order to honour the commitment in the Conservative Party manifesto that no abrupt changes will be made.
We propose to toughen the criteria for the provision of regional selective assistance under section 7 of the 1972 Act,
364
and for assistance that is not attached to regions but covers the whole country under section 8. Those changes have the effect of concentrating assistance from the taxpayer on areas of highest unemployment and most need for improvement in economic structure. They will focus and concentrate the benefits of regional policy, and that may meet with the approval of the House as a whole.
Mr. Dan Jones: Is there any possibility of changes in the decisions made—for example, to upgrade an area to intermediate status, and from that progressively upwards? Are there provisions for that in the proposals being made to the House?
Sir K. Joseph: It is always open to the Government of the day to introduce changes when circumstances change. The Government have envisaged the possibility of upgrading, for instance, Shotton if in due course closure of the steelworks or part of the steelworks is decided on. It would be a different matter to correct a decision already made on existing circumstances. My colleagues at the Department of Industry and I will be willing to listen to evidence that we have misjudged circumstances in a particular area, but unless we have greatly misjudged them, I would be wrong to hold out hope of correction in the proposals announced.
Mr. Dan Jones: I knew that when I asked the question.
Mr. Dafydd Wigley: On that point, which deeply affects my constituency, will the Minister assure us that he will consider objective criteria such as unemployment not just on the current level but on anticipated future levels, where there are positive closures such as Shotton or the CEGB cold storage scheme, employing 2,000 men?
Sir K. Joseph: It is the job of Ministers under the relevant Act to consider future prospects as well as the present position. That does not mean, however, that we must anticipate the prospects; it means only that we must be aware of them.
At least half the purpose of regional policy is to transfer jobs from relatively prosperous to less relatively prosperous parts of the country. That has always been so. From its origin regional policy

365
has had social as well as economic functions. To a large extent it stems back to the depressed areas of the 1930s. To a limited extent there has been some apparent success in regional policy, judging by the disproportionate amount of the total investment—disproportionate in terms of the population concerned—that has taken place over recent years in the regions.
The main purpose of the policy is to encourage investment where it makes sense to the investors to go to assisted areas—areas where there is higher unemployment and a weaker economic structure. It is difficult to sort out the degree to which that purpose has been achieved. There are cases where investment was intended elsewhere and where, because of the availability of grants in the asisted area, it takes place there. To that extent there is a transfer of jobs.
There is a second group of cases where an investment project is so marginal that it becomes viable only with the help of grants available in the assisted areas. There is therefore a small class of investment projects that goes to the assisted areas, which probably would not have occurred anywhere else.
Then there is inward investment—mobile international investment that is attracted to the assisted areas by grants under section 7 or outside assisted areas by grants under section 8 of the 1972 Industry Act.
These inward investment projects are welcome to this country. They are of mutual benefit. We gain from the investment over and above that provided by our own economic resources, and it often provides higher productivity and innovative products and techniques. These projects also benefit the investor who decides to come here in his enlightened self-interest.
In addition to the investments that are induced to go to assisted areas—the marginal cases that go there because only there, thanks to the grant, will the investment be viable, and the inward investment cases—there is the marginal additional effect of the grant in improving the cash flow and profitability of companies that invest in assisted areas and thus have greater resources for expansion or investment elsewhere. I do not want to denigrate any of these, on the whole, bene-
366
ficial effects to the assisted areas, but I shall later explain the cost involved to the country.
Against the beneficial effects we have to offset certain other factors. Although we cannot be sure which they are, there are projects that have been inhibited from going ahead by the effect of the industrial development certificate barrier. Over the years many business men have not even applied for permission to develop because they feared the administrative tangle in which they would be involved, and, as they judged, the almost certain refusal. The country as a whole has possibly lost investment—
Mr. John Evans: Where is the evidence? The right hon. Gentleman is making an extremely important statement, which many Labour Members, and, I suspect, Conservative Members also, dispute. Will he prove us wrong by offering one shred of evidence to support the statement that he has just made?
Sir K. Joseph: It is largely anecdotal, but it is not to be dismissed. In the Midlands—and in particular in the West Midlands—there is a strong and widespread feeling that investment has been reduced. There is the much larger and certain class of investments in the assisted areas that would have gone ahead in those areas anyway without the policy of regional assistance.
Mr. Anthony Beaumont-Dark: The hon. Member for Newton (Mr. Evans) asked for one shred of evidence. I can quote Cadbury-Schweppes in March 1977.
Sir K. Joseph: I do not want the House to ignore my last point, that a substantial number of the investments in assisted areas would have gone ahead anyway because of the imperative of a company's market and existing location. From all these factors we can conclude that over the years there has been a net benefit to assisted areas from the regional policy.
Under section 7, the regional selective assistance that is provided at the discretion of Ministers to investment within the assisted areas, in addition to the automatic regional development grants, has been indiscriminate. There has been no attempt to provide that help at the expense of the taxpayer only to those cases

367
where without it the investment would not have gone ahead.
I think that the House will agree with the proposition that, in general, the assisted areas will thrive only if the economy as a whole thrives. It is intensely in the interests of the assisted areas that the economy as a whole should thrive. That is why the Government's policy of improving the economic climate to encourage decision-making, risk-taking and enterprise is so important to the assisted, as well as to the non-assisted, areas. I instance, as a familiar catalogue and as being directly relevant, the need to reduce Government spending so as to reduce borrowing, crowding out interest rates and direct taxation.
Mr. Jack Straw: I am interested in what the right hon. Gentleman said about public spending and I have been looking at his earlier pronouncements on the matter. Given his concern about public spending, can he explain why, in 1972, he issued a circular to social service authorities asking them to expand their social service departments over a 10-year period at a rate of 10 per cent. per annum in real terms?
Is not part of the problem that local authorities are facing from Government cuts due to the policies that the right hon. Gentleman was pursuing in 1972?
Sir K. Joseph: I am sure that the hon Gentleman will at least give credit to my heart, if not to my head, at that stage. I had not realised, as much as the history of recent years has taught me, the perverse effect of excessive Government spending. It is no good having the maximum of good intentions if, in seeking to carry out those good intentions, one overloads the economy and the taxpayer as we have done in recent years.
I put it to the House that the better the economic climate, the more likely it is that we shall get expansion in the assisted areas as well as in other areas. The tighter the labour market in non-assisted areas, the more will be the gain to the national economy by the use of labour available in assisted areas.
I know that although there is apparently high unemployment—and, indeed, high unemployment in some parts of the country—there are great labour shortages
368
in many parts, particularly in many of the non-assisted areas.
We are half-way between the position where labour is tight in the non-assisted areas and that where there is plenty of labour available in those areas. I repeat that when there is labour available in the assisted areas but not in the non-assisted areas there is a national gain when investment projects go to assisted areas.
The whole purpose of transfers between non-assisted and assisted areas makes sense only when the map dividing assisted from non-assisted areas is fair. Until now, the map has not been fair. There have been many non-assisted areas with a higher proportion of unemployed and a weaker economic structure than some assisted areas. That is why the Government's proposals to redraw the map, embodied in an order before the House, are an essential part of making sense of regional policy.
Mr. Cyril Smith: The right hon. Gentleman has talked about changing the map on which the grants apply. Can he give an assurance that grants already committed by Government Departments will be maintained? The right hon. Gentleman has referred to giving grants on assets created by a date in 1980. If a factory is, for example, half-
built by 1980, will grant be payable on the whole of the factory, some of which may be completed after 1980?
Sir K. Joseph: The answer to that question is an unqualified "No". Expenditure that will be grant-aided will be only that on plant and buildings that have been provided by the cut-off date. That is the only fair way to proceed. I have provided a long transitional period. The answer to the hon. Gentleman is therefore clear and negative.
I come to the corollary of what I have been saying. We as a country gain from inward investment in the various ways that I have described, but help to the assisted areas is paid for, to at least half its extent, by injury to non-assisted areas. That is inevitable, because the Government have no money. They can spend money only by raising it from the taxpayer or by borrowing. The money available in terms of subsidy has to be paid for.

369
There are a number of ways in which the projects that go to assisted areas—not inward investment projects—displace investment and jobs that occur in other ways. There is the sheer loss of investment and jobs that occurs as a result of the Government raising the money by extra taxes or extra borrowing to provide the grants. That loss of investment and jobs may occur anywhere in the country, including assisted areas.
Then there is the effect of the transfer of investment—and jobs—that would have occurred in the non-assisted areas but is induced, by reason of the grants, to move to assisted areas. That is a diversion of investment and jobs.
Then there is the displacement of investment and jobs that occurs when a project in an assisted area is subsidised and enabled to compete unfairly with a project anywhere in the country, including an assisted area, that is unsubsidised. That is a transfer of jobs and profits—and perhaps expansion and investment—from an unsubsidised project to a subsidised project.
There is also the displacement when a subsidised project is enabled to bid for scarce labour at the expense of a non-subsidised project. All those are offsets, sometimes in the assisted areas, but generally in the non-assisted areas, to the gain that, socially and economically, may make, to a large extent, good sense in the assisted areas. I explain that to the House only in order to illuminate the reality of the effect of the changes that are being proposed.
Labour Members are apt to speak of a huge loss in existing jobs as a result of changes in regional policy, but it is not like that under the Government's proposals. It may have been like that when the previous Government removed, at a fortnight's notice, £220 million of regional employment premium. That was a subsidy to jobs. I am not defending it, but its withdrawal may have damaged jobs in the assisted areas, though it may have done benefit to the economy and jobs as a whole.
We are reviewing and changing not an REP but the reduction, to some extent, of grants available to the initiation of projects and jobs rather than to the continuation of jobs. It is the removal, to
370
some extent, of help in order to reduce direct taxation. The money that is removed will not be destroyed, demolished or eliminated. It will be removed from one use and restored to the handbag or pocket of the citizen. There is no loss under the Government's proposals for existing jobs in the regions. There is some reduction—I will come to the quantity—in the new jobs that may go to the regions in future.
I shall explain briefly to the House what is familiar to many hon. Members. The best academic assessment that can be obtained of the total effect of regional policy up to date is that the net gain in jobs to the assisted areas, not only in manufacturing but in services, each year during the 1970s has been almost 20,000. I do not underestimate the scale of extra jobs. It is a net gain of jobs for the assisted areas.
Mr. Douglas Jay Mr. Douglas Jay (Battersea, North)
rose—
Sir K. Joseph: I should be grateful if could finish my explanation. I will then give way to the right hon. Gentleman.
Except to the extent of inward investment, the marginal cases that are viable only where there are grants and to the expansion that may result from the increased profitability and cash flow that results from grants, the net gain of jobs in the assisted areas is offset by the loss of jobs elsewhere in the economy—including, to some extent, in the assisted areas. Therefore, it is a net gain that is offset largely elsewhere by the job loss that is consequent upon raising the money to pay the grants by diversion and by the two forms of displacement that I have described.
I shall illustrate the argument at its most intense. After my recent statement, hon. Members have insisted that the loss of jobs from the withdrawal over three years of £230 million from regional policy spending will be savage. Extreme words have been used and I have seen newspaper articles, particularly outside the national newspapers, reflecting that judgment. The best assessment that can be made from the academic work that has been done on the matter is that the loss of potential jobs—not existing jobs—in the assisted areas by that withdrawal over a three-year transitional period of £230

371
million might be about 5,000 to 6,000 jobs in the assisted areas.
As the money is being used to reduce the direct taxes on the public and because the taxpayers will keep more spending money in their handbags and their pockets, I am advised that the £230 million in the taxpayers' pockets will probably create about 5,000 or 6,000 extra jobs over the same sort of period and all over the country. The House will recognise that that represents a transfer of spending power from the Government to the taxpayer.
Mr. Jay: In order to be clear about the figures if not about the theory, may I ask whether the right hon. Gentleman's reference to 20,000 and subsequently 5,000 jobs means per year or over the whole period of the 1970s?
Sir K. Joseph: I was referring to 20,000 jobs per year.
Mr. Edward Rowlands: Who is the author of this academic work?
Sir K. Joseph: The author from whom I draw the statistics, although I must be responsible for their use, is Mr. Moore—[HON. MEMBERS: "Old Moore's Almanack"?] He has a partner, whose name eludes me at the moment.
Mr. Michael Foot: Will the right hon. Gentleman guarantee that the document to which he has referred will be placed in the Library?
Sir K. Joseph: It is a published document and I shall adopt any convenient method by which to draw hon. Members' attention to it. Perhaps a written answer would be appropriate in this case.
The analysis, which I draw from independent sources, gives the lie to the totally misleading aggregates that were quoted by the right hon. Member for Dartford (Mr. Silkin) in his capacity as Shadow Industry Minister. Many of the assisted areas projects would have gone ahead, and will go ahead, even when the development grants are reduced. The gain in jobs in the assisted areas is to a large extent, though not totally, offset by a loss of jobs in the country.
Dr. Oonagh McDonald: If I may help the right hon. Gentleman, the source to which he was referring is Moore
372
and Rhodes. They claim that over a 16-year period 540,000 jobs resulted from regional aids of various kinds that were given to the assisted and development areas. That figure is rather higher than the one that was suggested by the right hon. Gentleman. That was an increase in jobs above what might otherwise have been expected.
Sir K. Joseph: I am grateful to the hon. Lady for the reference to Moore and Rhodes. That corrects my lapse of memory. However, I pointed out that the jobs to which I was referring represented the annual results in the 1970s. Alas, the country's performance in the 1970s was not as good on average as the performance during the 1950s and the 1960s. During the 1960s, the economy was more buoyant for at least part of the time.
Mr. T. W. Urwin: I should like to take up the point that the Minister has made at least twice during his speech. He claims that a large number of projects for extensions and expansions would still have gone to the development areas without the benefit of regional aid. In all sincerity, I suggest that the right hon. Gentleman should produce some evidence to support that argument. From my long experience of matters, I believe that by far the great majority, if not all, of the extensions would have taken place only with the benefit of regional aid. I suggest that he should begin to concentrate upon the planned projects which now will not go ahead in the areas which are deemed to be subjected to reclassification, including areas of high unemployment in South and South-West Durham.
Mr. Rowlands Mr. Rowlands rose—
Sir K. Joseph: I shall not give way to the hon. Gentleman.
There is ample evidence of projects that would have gone ahead anyway. As for the downgrading of some areas and the right hon. Gentleman's reference to projects that would not have gone ahead because of the reduction in grants available, I repeat that the areas have been down-graded only because on average their economic and employment position is better than that of assisted areas. I should be willing to study any circumstances that hon. Members bring to my

373
attention or to the attention of my Department. I cannot be fairer than that.
There is an obstinate gap in the economic vitality of different regions in the country. Earlier, I referred to the origin of the assisted areas. In nearly every case they were the depressed areas of the 1930s. In relative terms the gap has been narrowed, though because of the rise in the aggregate of unemployment the absolute difference between the unemployed in assisted and non-assisted areas has, alas, increased.
I repeat with all the emphasis at my command that redistributing taxpayers' money will not suffice in itself to eliminate the gap between the assisted and non-assisted areas. There has to be self-help in the assisted areas. There has to be enterprise, competitiveness, high productivity and a reputation for co-operation between management and the work force in the assisted areas if they are to reach the level of employment that we all want them to reach. We need more indigenous growth in the assisted areas. That is why the changes in climate and economic context which we have set ourselves to try to achieve are so relevant to the assisted as well as to the non-assisted areas.
I have a parallel announcement to make today on behalf of my right hon. Friend the Secretary of State for the Environment. The House will be aware that in the past there were set up a number of English regional economic planning councils. On these councils large numbers of thoroughly public-spirited and diligent people have served over the years. Their diligence and hard work have not always been rewarded by being heeded by Ministers, particularly in the Labour Government. It is a question whether it makes sense to ask these people to go on giving their services when they have no specific function and when their advice has all too often not been heeded.
I have to say that my right hon. Friend has decided, after careful consideration, that since these councils are not statutory and have no executive responsibility, it will be convenient for all concerned to disband them during the relatively inactive summer period, without waiting for the wider outcome of the Government's review of the public bodies to which
374
Ministers appoint members. My right hon. Friend the Secretary of State for the Environment has therefore decided to close them during the recess and is today telling all the chairmen.
Mr. Eric G. Varley: Shame.
Sir K. Joseph: The right hon. Member for Chesterfield (Mr. Varley), who was the Secretary of State for Industry, is now lamenting the death of bodies whose advice he did not much heed when they were around.
The regional planning boards of officials will continue in being under the chairmanship of Department of the Environment regional directors. In addition to their close working relationship with local authorities, the boards will maintain all other appropriate advisory contacts in the regions, by less formal means and with continued involvement of locally elected authorities. This decision reflects the inappropriate nature of these bodies and is in no way a criticism of the qualities of their members, to whom the Government are grateful for past services.
Mr. R. B. Cant: On a point of order, Mr. Deputy Speaker. Are there any constitutional precedents for announcements being made, and being referred to euphemistically as "parallel statements", on behalf of a Secretary of State for another Department? I cannot recall any precedent for this practice during my time in the House. Is this procedure acceptable? May we have your ruling? Will you consider requiring the Secretary of State for the Environment to attend the House to undertake this chopping exercise?
Mr. Deputy Speaker (Mr. Bernard Weatherill): The content of Ministers' speeches is not a matter for the Chair.
Sir K. Joseph: Further to that point of order, Mr. Deputy Speaker. I think that the House would have less reason to complain about being told this decision at the beginning of a debate than if this information had been given by my right hon. Friend the Secretary of State for the Environment, whose Minister of State is sitting beside me on the Front Bench, by means of a written answer, which he would have been entitled to do.
Mr. Kevin McNamara: Further to that point of order, Mr. Deputy Speaker. Is it not equally inappropriate to be given this information via a written answer, as occurred yesterday on two very important matters, as it is to be given it by means of a parallel statement made by a Minister who is not responsible for the matter in hand? Hon. Members are unable to question the accuracy of such a statement because we are unable to quiz the Secretary of State for the Environment about the purposes and ideas of some of the regional councils, which many people thought performed a useful function indeed in focusing Government attention on various matters, even if they did not heed the advice given.
Mr. Deputy Speaker: The Chair is not responsible for what a Secretary of State says. How he makes his announcements—by written answer, statement or speech—is a matter for the Minister.
Mr. Robert Hughes: Further to that point of order, Mr. Deputy Speaker. I had always understood that Mr. Speaker and the Deputy Speakers had some responsibility in protecting the rights of Back Benchers. Announcements made in this way are difficult to understand and to follow. Is the Secretary of State for Industry speaking only for the Secretary of State for the Environment, or is he also speaking for the Secretaries of State for Wales and Scotland? We should like to know where we are.
Mr. Deputy Speaker: It is for the Secretary of State to answer that question. I repeat that it is not a matter for the Chair.
Mr. Peter Hardy: Further to that point of order, Mr. Deputy Speaker. If several Government Departments sought to table statements on the same day, I think Mr. Speaker would deplore the practice. Since Mr. Speaker can deplore an excessive number of statements, surely the Chair can deplore the absence of any statement at all—and we have not had a statement today.
Would it not be appropriate for you, Mr. Deputy Speaker, or for Mr. Speaker to deplore the fact that, although reference has been made to the public-spiritedness of individuals who serve on
376
the regional planning councils, the Government do not share that public spiritedness to the point of ensuring that the relevant Minister will attend the House, or will authorise his Ministers of State to attend, to make a statement to this House to apologise for the decision which has been made? At least one or other Minister should offer a statement of gratitude to those concerned in the normal way.
Mr. Urwin: Further to that point of order, Mr. Deputy Speaker. In all seriousness, despite the laughter and smirking of the Secretary of State for Industry and some of his hon. Friends, did not the manner in which the statement was made constitute a grave discourtesy to the House of Commons? In those circumstances, is it not within the power of the Chair at least to draw to the attention of the Leader of the House the attitude adopted by the Secretary of State for Industry on behalf of his right hon. Friend the Secretary of State for the Environment?
Mr. Deputy Speaker: I have often heard it deplored when statements are not made to the House. It is not a matter for the Chair to rule when information should be given to the House. It is a matter for the Secretary of State how he does that.
Sir K. Joseph: I am offering to the House and to the country a combination of changed economic climate and a more concentrated set of assistance to the assisted areas. I believe that this is good news for the country as a whole and the assisted areas.
Mr. Robert Hughes: Further to the point of order, Mr. Deputy Speaker. In making a parallel statement to the House, the Secretary of State for Industry should tell the House on whose behalf he is making such a statement. What parallel is involved? Does it simply relate to England, England and Wales, or Scotland? We have a right to know what is happening.
Sir K. Joseph: England only.
Mr. Ioan Evans: Further to that point of order, Mr. Deputy Speaker. Is there to be any diminution of this function in Wales and Scotland? Are those countries to continue with their planning

377
councils? May we have a statement to clarify the position?
Sir K. Joseph: Further to the point of order, Mr. Deputy Speaker. I said specifically "England only".
Mr. Rowlands: As the Secretary of State for Wales is present, perhaps he will tell us the position in regard to the councils in Wales.
Sir K. Joseph: My right hon. Friend the Secretary of State for Scotland will confirm the position when he replies to the debate, but I did say "England only".
Mr. Rowlands: The point is that the Secretary of State for Wales is present in the Chamber. Will he tell the House whether this will apply to Wales?
Mr. Urwin: Further to that point of order, Mr. Deputy Speaker. What the Secretary of State for Industry has just said makes the whole situation even more intolerable. He is now making clear, as many of us have suggested over the years, that there is a good deal of discrimination against the English regions in the policies of successive Governments in institutionalising various organisations in Scotland and Wales. We are now being told, in a greatly discourteous manner, that the English regions are to be denuded of these planning councils but that such bodies will remain functioning in Scotland and Wales. That is quite disgraceful.
Mr. D. E. Thomas: Further to that point of order, Mr. Deputy Speaker. It is quite intolerable to Welsh Members that we are apparently having a statement by sleight of hand from the Secretary of State for Industry about the position of the economic planning councils in England, and that apparently we are to hear a statement at the end of the debate about regional planning councils in the context of Scotland, but that we are to have no statement from the Secretary of State for Wales about the position of the Welsh councils.
Mr. Deputy Speaker: These are matters to be taken up during the debate.
Mr. McNamara: On a point of order, Mr. Deputy Speaker. There is an important constitutional point at issue. There will be regional economic planning coun-
378 cils for Northern Ireland, for Scotland and for Wales, but all of those for the English regions will be abolished. We have not been given any explanation. In many of the English regions there are unemployment problems which future cutbacks will render far worse, yet all we have at the end of a rather dull speech by the Secretary of State is an odd sentence to the effect that the regional councils are going. That is not good enough. Will you, Mr. Deputy Speaker, protect us?
Mr. Deputy Speaker: I repeat that that is a question for debate. It is not a point of order. Certainly it is not a constitutional issue. It is a question of organisation.
4.52 p.m.
Mr. John Silkin: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof
"condemns the Government's proposals for large-scale cuts in regional aids to industry, deplores the inevitable reductions in industrial investment which will follow them, and places upon the Government the full responsibility for the resultant loss of employment and the other adverse social consequences of its reactionary policies".
The Treasury Bench owes the House more than an apology: it owes the House a statement. There is no doubt that the difference between the English position on economic planning councils—I had some responsibility for them some time ago, as the right hon. Gentleman knows—and the Welsh, Scottish and Northern Ireland economic planning councils requires some justification. I do not intend to make heavy weather of what appears to me to be another bungle by the Secretary of State with regard to the order. The right hon. Gentleman said that that order was merely out by one day and therefore it had to be corrected in the autumn. He always tells us that he and his fellow Ministers are capable of running the whole of this country's industry, yet the events of the past week indicate otherwise.
Sir Keith Joseph: The right hon. Gentleman is wrong. That may be what his party thinks. The Conservative Party does not presume to think that it can run industry. Our job is to create the conditions in which industry runs itself.
Mr. Silkin: The events referred to by the Government in this House during the past week are a fair indication of what the conditions will be like in the country as a whole once their policies get under way.
On Friday, the Financial Times quoted one of the right hon. Gentleman's senior officials as saying that he was rolling back the map of regional assistance. No one can object to changes in the map. The right hon. Gentleman is quite right. Areas of assistance need to be kept under review. The more successful policy is, the more changes will be required. There is no doubt about that. But it is not upon that basis that the Secretary of State is rolling back the map. He is doing that for one reason only. Reward, not even for the average taxpayer but for a small minority, is at the root of it. The changes in the higher rate of tax threshold and the rates themselves will cost £662 million in a full year. The Secretary of State is making his contribution, and he has decided that regional aid will bear £233 million of the sum required. It is in that context that he has shaped the new regional aid policy.
The rolling back of the map is a response to the demands of the Chancellor of the Exchequer. It is not a policy in its own right. The Secretary of State has pointed out that the assisted areas currently cover more than 40 per cent. of the employed population. He proposes to reduce that figure to around 25 per cent. in order, he says,
"to focus on the remaining assisted areas more effectively".—[Official Report, 17 July 1979; Vol. 970, c. 1302.]
It is possible to argue that such change provides a better use of resources in part, and that is what the Government argue in the motion. But it is arguable only if the amount of financial assistance as a whole is not cut. It will be cut by more than a third, and we already know where the cuts will come.
Special development areas in Wales, Scotland and the North-East are smashed. The creation of the new special development areas, so few in number, does not need to be considered seriously as an attempt to right the balance. We see the real effect of the Government's policy in the other changes. The whole of Lancashire and parts of Yorkshire lose their intermediate status.
Mrs. Elaine Kellett-Bowman: The right hon. Gentleman is mistaken. Very important parts of Lancashire, namely, Lancaster and Morecambe, do not lose it. Nor do the coastal regions whose fishing industries have suffered very badly.
Mr. Silkin: The hon. Lady, who speaks here and in other parts of the world, has her own view and her own constituency. I shall come to the constituencies of her hon. Friends in a moment. They are joined by a wholesale downgrading of development areas, which after the transitional period will not be eligible for regional assistance at all. The hon. Lady cannot deny that, nor can it be denied that in many cases it is that assistance alone that has enabled British industry to survive at all, faced with a massive growth in foreign imports. Our footwear, textile and clothing industries are to be the victims of the Chancellor's generosity to that small minority of taxpayers who are already in a far better financial position than the rest of the community.
These changes have been made not to update but to bolster a socially divisive policy of the Government. They will be resisted root and branch by the Opposition. The more that Government supporters learn about the effects in their own constituencies, the more trouble they will become. It will be a case of general approval in public and individual deputations in private as each of them tries to get the axe removed from his own area.
Under these proposals there will not be much joy in getting back intermediate status. The 20 per cent. rate of grant on new building and works will have disappeared in 1982. It is impossible to discover from anything that the Secretary of State told us what advantages will remain. Those hon. Members who breathed a sigh of relief when they learnt that their constituencies still enjoyed development area status may have escaped beheading but they have not escaped major cuts, since the rate of grant drops by a quarter to 15 per cent.
The effects of these changes will soon be felt. I challenged the Secretary of State the other day to tell the House what numbers of unemployed his advisers had told him would be likely to result from the cuts and what number of expected jobs would now not be created. He

381
told me that he had not felt the need to get such advice because the whole of the regional aid policy provided net only 10,000 new jobs a year. I did not accept those figures.
Sir Keith Joseph: Manufacturing jobs.
Mr. Silkin: The right hon. Gentleman did not say that at the time.
Sir K. Joseph: I referred to the net gain of manufacturing jobs in the assisted areas. My figure today was the net gain of manufacturing and service jobs.
Mr. Silkin: I am glad that the right hon. Gentleman, having made that statement, has corrected it now. I make no point about that. He obviously had manufacturing jobs in his mind. Having looked at the figures supplied by the Cambridge Department of Applied Economics, the Secretary of State has passed on to us its figure of 20,000.
My hon. Friend the Member for Thurrock (Dr. McDonald) raised an important point because she took it over a much larger time scale. That is important, because we are projecting into the future. But suppose that the figure was only 20.000 net jobs a year, 20,000 families in work. Is that figure really of such insignificance that a man who has proclaimed that the family must be the centre of our thinking looks upon it now as something that can be so curtly rejected?
The Secretary of State rested his case on two fallacies. The first is that regional policy does not work. But an examination of the relevant facts and figures shows the opposite. Thanks to a strong regional policy, the economies of the less prosperous regions have consistently grown at a faster rate than the national average. Unemployment in the assisted areas, because of regional policy, has risen much less rapidly than in the rest of the country since the onset of the world recession. In other words, aid to the regions has helped them to weather the economic storm. By no means least important, regional policy has saved jobs and has created new ones.
The Secretary of State's second fallacy is that there is a precedent for a slashing reduction in regional aid. The right hon. Gentleman says that the Labour Government did not hesitate to abolish
382
the regional employment premium. That is true. The regional employment premium was withdrawn by the Labour Government. But the Secretary of State neglected to point out that the regions directly benefited from major increases in expenditure or other programmes to compensate for the withdrawal of the regional employment premium.
Various categories of regional aid, such as section 7 assistance, were increased by more than £160 million over the following two years. By this time, too, expenditure on section 8 assistance and the special employment and training schemes, initiated by the Labour Government, had increased by over £300 million, much of which went to the assisted areas.
An effective regional policy must have an effective carrot in the grant system. But there must also be the stick of refusal for certain projects in other areas. That is the basis of the IDC system. I shall not disguise from the House that such a policy has its strains and its difficulties. The hon. Member for St. Marylebone (Mr. Baker), who has notified me that he could not be present after I warned him that I might mention him, suggested recently that the whole of my constituency of Deptford was clamouring for the abolition of IDCs. Deptford,—indeed, most of inner London and inner Birmingham—wants new industry. But before hon. Members representing constituencies in these areas cheer too loudly at the relaxation of IDC control, I would point out that this step will not help to ease their employment problems.
The new limit will mean that factories between 12,500 sq ft and 50,000 sq ft will no longer come to the attention of the Department of Industry for steering to the inner areas. Instead, factories will spring up where they find the environment more congenial, not in inner areas but in commuter land or on the coast. So the inner city will not benefit from these changes in IDC control. We shall have to wait and see whether the inner city programme, started by the Labour Government, is continued or falls victim to the next lot of Tory cuts.
The 50,000 sq ft IDC limt will dramatically cut the number of jobs created in the assisted areas. It is estimated that IDC policy alone—the Secretary of State did not spend much time dealing with this

383
matter—created about 100,000 jobs in the regions in the 1960s. The new limit will make the whole policy redundant. From now on, a factory employing about 200 people will escape the IDC net. Moreover, administrative practice, as the Secretary of State well knows, is normally to allow an extension at least as large as the IDC threshold. Effectively, factories of up to 100,000 sq ft, capable of employing up to 500 workers, would be lost to the regions.
The regions have also benefited from the National Enterprise Board. The Midlands, in particular, gained work from the NEB. By his own admission, the Secretary of State cannot totally kill that goose, although he proposes to flog off some of its golden eggs. As the right hon. Gentleman himself says,
"… it will take time to restore the full vitality of the private sector."—[Official Report, 18 July 1979; Vol. 970, c. 2005.]
The Secretary of State accepts, in theory at least, that an element of regional policy lies with the NEB, namely, that the NEB should continue to exercise an investment role in the North and in the North-West and with small firms. But the right hon. Gentleman goes a strange way about it. His proposals are not so much a policy or a succession of cuts but the flogging off of £100 million worth of national assets.
Neither of these plans is likely to give much assistance to the regions or to the small firms that the Secretary of State consistently tells us are the keystone of industrial success. Small firms in the regions are dealt a body blow by raising dramatically the minimum values at which RDGs are payable.
The truth is that there is no coherent policy behind the Secretary of State's proposals. A full-blooded Selsdon approach would have cut off the regions from any assistance whatever. As the Secretary of State said only a year ago,
"In aggregate, we believe that these subsidies and grants do more harm than good … Anyway, these grants and subsidies may rescue some jobs but only at the cost of other jobs."—[Official Report, 4 July 1978; Vol. 953, c. 255–56.]
The right hon. Gentleman was back on that theme today, but he had modified it somewhat. What has made him change his mind is a small dose of reality. Faced with the power to make the decision, he
384
has faltered and drawn back from the brink. We take some comfort from this backtracking but not much. What is needed is a positive policy, not a negative reluctant drift.
Our business as citizens, said Bernard Shaw,
"is navigation. Learn it and live, or leave it and be damned."
The Secretary of State has chosen to leave it and be damned. Yet there are changes that he could have made. In so doing, he would have had to throw away the half-baked ideas that he has culled from a dozen volumes of out-of-date theory and accept that regional policy is not just an act of rescue in a moment of charity but a vital necessity to the industrial well-being of our country.
There are many lessons to be learnt from our membership of the EEC, for good or ill. We all have different ideas about them. One of them that all of us know is that market forces, left unfettered, created the golden triangle in mainland Europe at the expense of the outer regions of the Community. The resulting social pressures and divisions are the direct result of the operation of these market forces.
A real regional policy will reduce social divisions by creating jobs where they are most needed. Here, as Shaw said, it is navigation that we need. That is why the NEB is so important in the regional and other contexts. It can help channel investment to the regions. It can assist small and medium firms, but to do this it needs more resources. The answer lies in increasing its funds, not in cutting them; in increasing its powers, not curbing them; and in ensuring that initiative in industry can draw upon public sector funds to promote jobs for the future when the private sector, as so often, fails to do so.
There is no evidence that the Secretary of State is assisting in any other way the small firms in the regions. I have referred to the increase in minimum values for RDGs. The right hon. Gentleman has no plans to give these firms any greater assistance. Indeed, the downgrading of so many areas will be a death blow to many of the small firms. It could be argued that the system of aid might be further refined. I agree. The larger companies should have to prove that they

385
will create new jobs and that the money they receive in grant will not merely be an addition to profits with no social return. In general, the Government should be seeking to give more help to the regions, not less, and ensuring that those resources are given selectively rather than automatically.
The Government motion promises that regional aid will be made more cost-effective. In Opposition the Tories made a great fuss about the huge amounts of Government money that were helping to finance capital-intensive projects by chemical and petrochemical firms.
Once in office, did the Secretary of State stand firm on his principles and make such projects ineligible for RDGs? No, he did not. A little arm-twisting from the CBI and from the firms involved and the Secretary of State caved in, as, in the end, he always will.
No serious observer of British industry would try to deny that we need to build up the industries of the future while ensuring the ordered contraction of a number of industries whose future is limited. The Secretary of State's approach will certainly result in the contraction of our basic industries. However, where are the new jobs to come from now that he has emasculated the NEB and cut aid to industry? How will he alleviate the real suffering in the areas most affected by restructuring if, at the same time, he insists on slashing financial assistance to the regions?
Industrial restructuring must mean a more powerful regional policy, not a much reduced one. The Secretary of State for Employment understands that well. He fears the return of a two-nation Britain if something is not done to help the poorer regions.
Earlier this month, in a speech to the Tory Reform Group, the Secretary of State for Employment referred to the gap between the prosperous South and the poorer North. He said:
"Inequalities of the kind we now see in Britain simply cannot be tolerated. They represent a serious threat to the fabric of society."
The Secretary of State for Industry not only tolerates these inequalities but by his regional aid policies he seems determined to make them worse.
386
That is why only three months after the general election people are already asking the one relevant question "What will the next Labour Government do?" They are beginning to realise just how disastrous the Secretary of State's policies are. I shall answer the question.
Sir Timothy Kitson (Richmond, Yorks): What about Grimsby?
Mr. Silkin: If the hon. Member for Richmond, Yorks (Sir T. Kitson) wants to have a private conversation, I hope that he will wait until I have finished my speech.
Sir T. Kitson: I remind the right hon. Gentleman that parts of the North-East, of which my constituency forms a part, were taken out of the North-Eastern development area just before the Grimsby by-election. Has the right hon. Gentleman forgotten that?
Mr. Silkin: My complaint was not that the hon. Gentleman made an intervention but that he made it across the Floor of the House and was not addressing me. I regard that as a gross discourtesy to the House. Changes in the map are bound to occur from time to time. There is nothing wrong with that. I was saying that the Secretary of State's reasons for making the changes now are wrong.
Mrs. Kellett-Bowman: Will the right hon. Gentleman give way?
Mr. Silkin: The hon. Lady's mouth is full of questions.
Mrs. Kellett-Bowman: The right hon. Gentleman says that there must be changes in the map. Is he aware that only the week before the Government made Grimsby a development area the Minister said that there could be no changes in Lancaster where the unemployment rate and unemployment vacancy ratio was higher than in Grimsby? On the eve of the by-election, Grimsby was made a development area even though its unemployment rate was better.
Mr. Silkin: I said earlier that of course the map should be changed from time to time. The hon. Lady is wrong to think that unemployment is the only factor to be considered.
I know why we won the Grimsby by-election. We won it because we had a fishing policy and the Conservatives gave

387
the fish away. If the Under-Secretary of State doubts that, he should examine what happened in Grimsby at the general election.
Mr. Straw: The hon. Member for Lancaster (Mrs. Kellett-Bowman) suggested that there was a political motive behind the granting of development area status to Grimsby. Does my right hon. Friend agree that this Government have allowed Blackpool to be an assisted area and left Blackburn out, in spite of Blackburn's higher rate of unemployment? What explanation can there be other than that one area is Conservative-controlled and the other Labour-controlled?
Mr. Silkin: I have no doubt that my hon. Friends, in public and in the House, and the Secretary of State, in private in the Department, will make good constituency points, many of which are political. However, if I had gone through that list my speech would have lasted 46 hours.
What would a Labour Government do? It would be easy to say that we would repeal this or that measure and go back to what it was like before. However, life is not as easy as that. While the Secretary of State continues his present policies we are likely to encounter an economic disaster. That means that we shall have to look carefully at all our policies. The next Labour Government's approach to the regions will certainly contain a number of elements which I shall describe.
First, there must be more resources for the regions, not less, as proposed by the Secretary of State. Second, the resources will be made available selectively rather than automatically. Third, we shall have a system of planning agreements. They will help to maximise the effectiveness of regional policy. They will enable the Government to examine company plans as a whole at an early stage rather than piecemeal and at the last moment. They will mean that the carrot of public money and the stick of IDC control will be used together. Fourth, we shall increase the funds available to the NEB.
One of the most commendable of the Secretary of State's qualities is his total intellectual honesty. As the years go by, he never spares himself—or us—from the baring of his soul. He makes no excuses.
388
He indulges in no prevarication. He simply gives us the benefit of each successive discovery that the whole of his previous policy was wrong. The strength of his previous convictions—and they are strong at the time—are as putty compared with the strength of his conversions when the time comes.
There could have been no more forceful a Minister for housing. I made my maiden speech when he was Minister for housing. He pushed his policy through relentlessly. Today he tells us—not without pride—that he was utterly mistaken.
I recall the days in Committee when we attacked the right hon. Gentleman's reorganisation of the Health Service. We said that it was bureaucratic, undemocratic and cumbersome. He brushed our objections aside. He knew—well, he knew at that time—that he was right. In addition, he had what Disraeli called "the best repartee"—a majority. Now he beams happily while his hon. Friends attack the Health Service that he created and confesses that his policy was totally wrong.
So it will be with the right hon. Gentleman's regional proposals. The years will go by. The damage will be done. Investment, particularly in the areas where it is most needed and where it can do the most good, will fall. The dole queues, which are already too long, will lengthen further.
When at last another Labour Government comes back to deal with the neglect of years, there standing at the head of the queue attacking the neglect will be the right hon. Gentleman. In the meantime, much needless suffering will be caused.
We attack these proposals, conscious that they form not so much a policy of action but a policy of drift. Shaw said that if navigation is our business it should not be entrusted to a drunken skipper. He said:
"It is the man who lies drinking in his bunk and trusts to Providence that I call the drunken skipper, though he drank nothing but the waters of the River Jordan."
There could hardly be a more apt description of the leaders of the present Government. What our country needs now is not drift but navigation. In failing to provide that navigation the Government have failed the nation. I call upon the House to support the amendment in the Lobby tonight.
5.21 p.m.
Mr. John Patten: I am grateful to be called, though I am conscious that the time is never right to make one's maiden speech and I know that this afternoon, when so many others wish to speak, that must be especially so. One of my noble predecessors as Member for Oxford, Viscount Valentia, clearly thought that the time was not right to make his maiden speech for a very long time. He took his seat in 1895 and uttered his first words in the House 11 years later in 1906. I decided that in my case 11 weeks or so is about the right length of time to leave it.
I am honoured to have many noble predecessors in Oxford, and one, my noble Friend the Lord Chancellor, once described the city and constituency of Oxford as nothing but the Latin quarter of Cowley. There is more than a grain of truth in what my noble Friend said, for, great university though it contains, and a notable polytechnic, amidst an urban landscape that makes it one of the most beautiful cities not only in this country but in Western Europe, it depends for a great deal of its prosperity, not only in the city but in the region around, on the prosperity of the British Leyland plant at Cowley.
I am extremely glad that in recent months—indeed, for about the past year—the people who work at the BL plant at Cowley have shown such splended increases in productivity and splendid increases in the quality of the motor cars which they have been producing. At a meeting I had this morning with the chairman of British Leyland, Sir Michael Edwardes, he was pleased to make that point.
My right hon. Friend the Secretary of State for Industry, in reply to a question after his statement last week on the future of the National Enterprise Board, said that he praised the management of BL for the changes in attitude that they had been able to bring about in that company. I am sure that my right hon. Friend will recognise also that those changes in attitude are possible only with the full-hearted co-operation of all who work at Cowley and at other BL plants, and I am glad to see that that has been as forthcoming as Goverment support has been forthcoming.
390
If there is a financial burden on the Government and a practical burden on management, there also must be a strong moral burden on trade union leaders, in my constituency and elsewhere, to make sure that in a company such as BL—which has had more than its fair share of troubles—increases in productivity, changes in manning procedures and de-manning happen all the more easily.
Both the university element of Oxford, the university, the polytechnic and the great teaching hospitals—the gown side—and the motor industry side—the town side—have been extremely fortunate in those who have represented them in the House. I wish to refer not only to my immediate predecessor but to his predecessor, my old friend and mentor Monty Woodhouse. He worked hard on behalf of Oxford, as did his successor, Mr. Evan Luard. Their epic battles for victory in Oxford in the general elections of the 1960s and 1970s may have resulted in something that sounded rather like a football score—Woodhouse three, Luard two. I should like to reassure Mr. Luard that, although he may have won fewer general election victories over the past 20 years than did Mr. Woodhouse, his services are greatly appreciated by all those in Oxford who were his constituents, including myself, over the past 10 to 15 years.
Oxford has never been, and I hope that it will never be, an assisted area. In that sense, it is an extremely fortunate part of the country. It has never had any assisted area status, although I freely recognise that BL has had considerable direct Government assistance. Oxford has a low rate of unemployment compared to many of the constituencies represented by other hon. Members.
Oxford is approximately in the middle of England, and that location allows me to look north and south rather more dispassionately than can some hon. Members on either side of the House. I shall restrict my remarks on regional policy to England, as I do not feel that I have the experience to comment on other parts of Britain.
It is interesting to speculate on what might have happened to the regions and to regional development in England had the Special Areas (Development and

391
Improvement) Act 1934, and the legislation that followed it, not taken place. The preamble to the 1934 Act—I am speaking only from memory—talks not only about economic development but about social improvement. It is critical to today's debate that we look not only to economic development but also to social improvement.
Looking back at that Act is a fairly gloomy experience, because the first schedule to it, which lists all those places in England and other parts of Britain which were to receive regional aid, demostrates how clearly our regional policy over the past 45 years has failed. The present list of areas receiving assistance in one form or another from the Government is, with a few notable additions such as Merseyside, more or less the same.
Therefore, whatever else we may say about our regional policy over the past half-century, it can hardly be said to have been especially successful in all its ramifications. If we stand back from it, we can see that we are dealing with a historic problem and we will have to use historic solutions to try to solve it. It would be hopeless to think that we could solve it in a very short time.
Looking at the history and geography of England and the rest of the United Kingdom, we see that the sort of regional problems that we are dealing with have a historical inevitability all their own. Throughout the history of England, it has always been in the southern part of the country that the majority of people, for better or worse, have preferred to locate most of their economic activities, except for that brief period in the late eighteenth and nineteenth centuries and the early twentieth century, when coal was king and the whole axis of development turned north-south.
What we are discussing in the debate and trying to deal with in the Government's regional policy is picking up the tabs from the legacy of that movement. If we stand back from the history of regional development, looking not at last year's changes or at whether regional employment premium was put on or taken off or whatever but at the problem in its total historical and geographical context, that must be seen to be true.
We shall, I think, see the northernmost regions of England, in particular, remain-
392
ing in need of substantial assistance from Governments of whatever colour for a substantial time, just as they have needed it for most of the last half-century. Conscious as I am of the need in a maiden speech not to be controversial, I say at once that I do not thereby belittle for one moment the continuing economic, social and cultural benefits that flow from those regions. But we must take a long-term view of those most depressed areas, especially in the northern, north-eastern and north-western parts of England, while, I suggest, using an entirely different strategy for other parts of England—and, I dare say, other parts of the United Kingdom—which have less deep-seated economic and social problems. In the strategy that my right hon. Friend the Secretary of State for Industry has begun to unveil, I can see a much more sensitive attitude towards and identification of the true nature of the problems and, therefore, of their solutions.
I was delighted to hear my right hon. Friend in his introductory remarks point to the importance in regional policy of taking into account not only economic but social desiderata, just as the preamble to the 1934 Act had it. In that respect he is exactly right. He is only too well aware of the effects that changes in policy have upon the economy and the society of the regions that are affected. He has it exactly right in loading such help as is available on the regions that need it most. That is economically sensible and it strikes me as being extremely socially correct.
That is the sort of attitude that we have learnt to expect from my right hon. Friend. I risk praising someone on the Government Front Bench in my maiden speech as I know that it will be the only time that I shall be able to do so without Labour Members shouting "Give him a job."
I believe that my right hon. Friend is a most compassionate man. The elements of regional policy that he is outlining are economically correct and socially compassionate. We need to look long and hard at the real problems of regions and regional development and not imagine that they will be solved merely by an endless amoeba-like growth of assisted areas.
There are different problems in different parts of the country. There are the really

393
depressed regions and other regions that have more disparate problems. I agree that assisted area strategy is economically and socially correct for the areas that have the deepest-set problems, but for other areas—for example, the areas from which the Government are withdrawing—I suggest that other types of aid under the Industry Act 1972 and other forms of Government assistance are much more applicable. It may be that we shall see regional policies taking off in two separate directions, each fitted to suit the problems more than some ideology or idea.
The right hon. Member for Deptford (Mr. Silkin) concluded his remarks by quoting my right hon. Friend the Member for Lowestoft (Mr. Prior). In a recent speech my right hon. Friend said that we must not create two nations in the United Kingdom. I entirely agree with my right hon. Friend and with the right hon. Gentleman. It strikes me that the way of preventing the two-nation concept becoming not merely a threat but a reality is to load such help as we can offer from entirely limited national resources, in an economy which for the moment is growing but slowly, on the areas that need help the most.
5.32 p.m.
Mr. Tony Benn: It falls to me to congratulate the hon. Member for Oxford (Mr. Patten) on making his maiden speech, which he did without a note, with great confidence, good will and an absence of controversy. My right hon. and hon. Friends will appreciate the hon. Gentleman's kind reference to Evan Luard and will remember Mr. Woodhouse who preceded him, and even the present Lord Chancellor who once represented Oxford.
I leave the hon. Gentleman with one paradox on which he might like to reflect. In Oxford there are two great industries—the university and the motor works. The motor works have to fight in the hard and harsh world of competition. The university, like all universities, is exempt from anyone asking it whether anything it does brings any return to anyone. Yet it is the professors who live in a secure atmosphere free from market forces who are usually the most forward in telling everybody else to face the harsh realities
394
of life. If some of the professors in our universities, who have never been asked to justify any of the work that they do in economic terms, and who are quite properly maintained because what they do is worth while, were to appreciate the necessity of maintaining manufacturing industry even during the difficult years when market forces tend to contraction, we might have less of the two intellectual worlds in the United Kingdom that we now have.
Those remarks take me on to what I wish to say in the debate. My contribution will be brief because I appreciate that there are many hon. Members who want to speak about their constituencies. However, having twice been the Minister responsible for regional policy, I wish to make one or two comments.
The honesty of the Secretary of State for Industry is often commented upon. We have heard his analysis on an endless number of occasions. In the past 40 days we have had an opportunity to understand what his policy really means to the British people. The regions are not exempt from general policy decisions. The significant events that will take place in areas of high unemployment as a result of the first two months of the Government's policy will flow not only from the changes in the boundaries but from the cuts that will be made in public services and that are still being argued about in the Cabinet.
Significant events will flow from the raising of the minimum lending rate, which will have a bad effect on businesses in development areas. They will flow from the terminal grants for shipbuilding—two years and then withdrawal. Shipbuilding, like mining and parts of the steel industry, has always operated mainly in areas of high unemployment. The end of exchange control and the dismantling of controls over international industry, in so far as they existed, will have the effect of accelerating branch factory closures that many development areas have experienced so seriously in the past.
The failure of the Secretary of State, who is an attractive lecturer to the House on his own philosophy, is that he failed to make clear that the policies to which he is attached are to be implemented at a moment when the Western industrialised world is probably dipping from recession

395
into a slump that many world economists believe will continue throughout the first part of the 1980s.
Why does the House imagine that President Carter is so worried about the oil situation? He is worried not only about oil supplies but about the impact that the present situation will have on the United States dollar. OPEC deficits will build up again as a result of the increase in the oil price. There will be the influence of the IMF in forcing countries to cut public expenditure. These factors will tip the world back into a severe recession. As we know very well, the parts of Britain most affected when the country is in recession are the development areas. At this moment a policy that was born out of the 1930s slump is to be whittled away, if not dropped, as we enter a serious world situation made worse by the fact that Britain and British industry have suffered from underinvestment over a long period. When profits were high, companies said that they did not need to invest. When profits were low, they said that they could not afford to invest.
As a result of the clutch of policies announced since 3 May we shall witness substantially higher unemployment. I wish that the Secretary of State, who is so keen about eliminating waste, would take account of the loss of production due to even our present levels of unemployment, which runs to about £10 billion worth a year. I wish that he would consider the cost of unemployment pay and redundancy pay, which comes to about £4 billion a year. If the forecasts are right—they are quite cautious ones—and there are 2 million unemployed in 1980, the public sector borrowing requirement will have to take account of even higher increases arising from unemployment.
The contraction of British manufacturing industry will be made worse by the cuts in support that have been announced, by lower public expenditure, by higher imports that are coming in as a result of the oil revenues and by keeping the pound high. Hon. Members, especially those representing development areas, are bound to be concerned because if there is a world recovery so much damage will have been done to our manufacturing industry that when British industry tries to re-equip there will be a flood of imports and a short fevered
396
boom followed by a balance of payments crisis that will blank off British recovery at the moment when the recovery of some of our major competitors can go ahead.
It would be wrong for this debate to continue without this being plainly said. When our manufacturing industry has been cut back in a way that is inevitably going to follow present Government policy, including regional policy, and we must re-enter the world oil market when oil will be $60 a barrel, we shall not have the money to pay for it. This country will be confronted, as were other countries in the past, with emigration of our skilled people as the only way in which we may manage. The whole of development area policy was designed to check as far as possible the emigration of people from Scotland, the North-East and the North-West to the South of England. There will be an accelerated export of capital, for the Government have carefully said that they want profitable industry at home with no restraint on the export of that profit as a result of lifting exchange controls.
The House would be foolish if it did not look one stage ahead at what can happen when unemployment levels reach the levels we may experience, on the basis of present policies, before the 1980s are out. Anyone who thinks that unemployment does not matter any more—as there is neither starvation nor destitution as there was in the 1930s—misunderstands the disruptive effect of unemployment, even in a society that has minimum levels of unemployment pay. It is divisive, it creates bitterness and it is destructive of business confidence. If business men see the social disruption that will inevitably follow from the Government's divisive policies, they will not invest in the regions of this country. They will seek greater security elsewhere.
We should be foolish not to consider the possibility that if the Government's industrial policy has the effect that is widely expected we might end up, in some respects, in a law and order situation. Anyone who looks at Northern Ireland, where there are a sectarian dispute and high levels of unemployment, can see what social disruption does to an area that is deprived of hope, employment for its youngsters, and a perspective for its people.

397
The policy will fail economically, industrially and morally. Many people—I am one of them—believe that high public expenditure is a moral obligation on a society and not just something that must be justified by its economic return. Some people believe that maintaining proper standards of education, health, housing and the environment is what a civilised society owes to its own people. If there is a scaling down, as is expected, of the levels of public provision, which over several generations people have been led to expect, and if there is a withdrawal of the Government from the economy on the basis that market forces will necessarily benefit the community as a whole, the opposition to the Government's policy will be much more formidable than they imagine.
Perhaps the Government are dreaming of a danger, as they see it, of a re-run of the 1970–74 confrontation. It will be much more than that. The people of this country are entitled to expect that the Government that they elect, whatever their political philosophy may be, will see it as their job to try to maintain full employment. They expect the Government to ensure that areas adversely affected by market forces—which may affect the prospects of an industry but for which there is no moral responsibility on those who work in those industries—are given a perspective of growth and development comparable to that in areas where, perhaps for other reasons, market forces are working better. People are entitled to expect that the benefits that flow from those areas of the country where industry is successful shall be deployed, in part, in maintaining and expanding public provision in other parts of the country.
Indeed, if we consider the 1930s, to which I referred on a previous occasion, it was massive public expenditure, in the form of rearmament, that ended the slump. Nobody wants to return to that solution. However, the Government, at exactly the wrong moment in our history, have decided to cut back on public expenditure which alone can bring our own people back to employment in the whole country and especially in the development areas. The Government are setting us on a course that will deepen the depression. shut out the hopes for young
398
people leaving school, make it harder to develop the new technology, and reduce the quality of life.
In the end the mandate argument will not be sufficient to overcome that criticism, for a mandate is a wasting asset. No one disputes the outcome on 3 May. The Secretary of State for Industry, as the main architect of this policy, is trying to reverse a consensus around which many generations of Ministers have been working to improve the lot of our people. The niggling, mean policy of scaling down regional aid will cost him dear when he and the Government have to account to the people who elected them.
5.46 p.m.
Mr. Michael Colvin: Thank you, Mr. Deputy Speaker, for calling me in this important debate.
I begin by adding my congratulations to my hon. Friend the Member for Oxford (Mr. Patten) on his excellent maiden speech. I am glad to have postponed my maiden speech until now as it has given me the opportunity to make many new friends on both sides of the House and to appreciate that probably 90 per cent. of us in this place agree on 90 per cent. of what we are trying to do. There is much common ground and great willingness to be kind and helpful to new Members like myself that we all greatly appreciate.
This evening is a far cry from my first day in the House when we assembled, with the dust of the hustings in the air, to re-elect Mr. Speaker to preside over us with his Welsh wizardry and humour. On that first day I looked at the members of the Opposition who were uncomfortably seated, wearing red ties, glum expressions and revolutionary looks. I was shocked to realise that part of what I said about them in the election was probably true. However, I realise that to achieve anything in this place it is important to see the other side's point of view. I travelled by a tortuous route to the opposite Gallery and viewed the Government side of the House. What I saw was rather worse—row upon row of navy blue suits. I am glad to say that we have now all regained something of our original individuality.
It is hardly surprising that on that first day, when the Chaplain arrived to take his place before the Chair, he first looked

399
at the assembled Members and then prayed for the nation.
It is for the good of the nation that we debate this evening. Although this is a debate on regional industrial policy, it is more than anything a debate about people. Regional policy is a carrot-and-stick business. I applaud the way in which the Government concentrated the carrots in those areas of the kingdom in most need and, at the same time, reduced the stick with which they can deny industrial investors, by means of industrial development certificates, the freedom to go elsewhere.
The second part of the policy will cause the flags to be hung out on 6 August in the great and historic city of Bristol, whose electors have sent my hon. Friend the Member for Bristol, West (Mr. Waldegrave) and myself to join the three other distinguished right hon. and hon. Gentlemen who also represent Bristol constituencies.
I am about as different from my predecessor, Mr. Ron Thomas, as he was from Martin McLaren, who preceded him, but one thing upon which we are all agreed is the dictum of an earlier Member of Bristol, Edmund Burke, who said that he wanted to be a Member of Parliament, to have his share in doing good and resisting evil. Ron Thomas's methods may have been a little different from my own, but I believe that his heart was absolutely in the right place. He certainly did his best to continue the unparalleled standard of constituency service of his predecessor, Martin McLaren, for whom the people of Bristol, North-West have a lasting devotion and affection, quite irrespective of the way in which they usually voted. I am sure that all Members of this House, Mr. Deputy Speaker, will join me in wishing Martin McLaren a very speedy recovery from the most serious illness which now besets him.
For many years the city of Bristol has enjoyed a balanced economy, but over the last decade there has been a growth in the proportion of commercial and service jobs, at the expense of manufacturing. Unemployment, having been traditionally about half the national level in Bristol, has grown to around the national average. I believe that this is due in part to the need to clear the IDC hurdle, with its 15,000
400
sq. ft. exemption limit. That limit is now to be raised to 50,000 sq. ft., which will enable the wealth-creating industries, which the country needs so desperately, to come to our area if they so wish.
Bristol is typical of many other cities in the land which can act as pump primers for our economic recovery—provided that the Government will first create the climate of confidence in which investors are encouraged to take the risks involved in all new business. It is worth recalling that still by far the greatest proportion of new investment in industry is found from retained profits. If there are no profits, there is no new investment and therefore there are no new jobs.
I believe that the nation's ability to finance support for those remaining assisted areas in our country will depend largely on the wealth that we generate elsewhere. In the past, by restricting new development in the non-assisted areas, we have been cutting off our noses to spite our faces.
Bristol is a city which enjoys great advantages of position, communications, environment and attitude to work. We have an excellent industrial relations record, a highly skilled work force, and a tradition of technical and technological advance and free enterprise, all now waiting for the green light which is soon to come.
The leading industries in my constituency of Bristol, North-West are aerospace and agricultural manufacturing, which, together with the Avonmouth docks and the chemical companies in Avonmouth, employ nearly 20,000 people. Nearby, at Filton, we have the most comprehensive aerospace complex in the world, with facilities for research, development and manufacture of aircraft, rockets, missiles and engines, together with the flight testing facilities which came to us not long ago from Fairford nearby.
The measures proposed by my right hon. Friend the Secretary of State for Industry, though very welcome in our city, are probably not so welcome—at any rate initially—in the Principality across the water from us, or in some of the other assisted areas which may be demoted by my right hon. Friend's plans for, quite rightly, concentrating the help where it can do most good.
It is the nature of this help that I should like to question this evening. It is based on

401
regional development grants of various percentages on capital expenditure incurred for the provision of new plant and machinery, buildings and works. I question whether capital expenditure should be the only basis for grant aid. An objective of my right hon. Friend's regional selective assistance policy is
"To provide more productive and more secure jobs".
In the long term, I am absolutely certain that this is what will happen. But perhaps my right hon. Friend could, in his ongoing reviews of the Government's regional industrial policy, look once more at the concept of employment grants. We are giving aid in order to provide work in the assisted areas, but today, as industry enters a second industrial revolution, no less dramatic than the first, investment will be in plant and machinery that is largely automated rather than in people. Yet it is workpeople whom the aid is intended to help.
There are still many labour-intensive industries in existence. Surely they are the companies which could be encouraged to go to the assisted areas. Many are already there, and there are many small businesses which could start up and expand if grants were based more on the number of people they were to employ rather than on the amount of capital invested.
My right hon. Friend might like to consider, as an alternative to capital grants tied to the investment in plant, machinery and buildings, that grants might be based on the average number of people employed, in order to encourage labour-intensive industries.
We have in the past tried the selective employment tax refunds and the premiums. These were followed by the regional employment premium, which was scrapped by the Labour Government in 1977. Both were payroll subsidies, but in some cases I know that there were industrialists who used the cash to subsidise plant investment. But this often, in turn, reduced the number of jobs that were to be made available. It cannot be beyond the capabilities of the Department of Industry to devise a formula which would enable more help to go to labour-intensive industries than to those that were largely automated.
402
Such a policy would, I submit, first help to win the co-operation of the trade union movement, without which it will be very difficult to achieve the removal of restrictive practices, and the mobility between trades that is required to increase productivity. Second, it would help to avoid the skills shortage that is so often experienced by capital-intensive industries which go to the assisted areas, when such industries would be better located, dare I say it, in cities such as Bristol, where technology already flourishes and skilled labour is perhaps more readily available.
The structural change in employment to which I have referred will gather momentum. Modern industry will continue to replace workers with machines wherever possible, in factories and in offices. This decline in jobs comes at a time when the number of people who want to work, especially women, is steadily rising. The problem of unemployment among the under-25s, particularly school leavers, is acute. No number of job creation schemes, work experience programmes or community projects can satisfactorily replace work by which a young person can earn a living. That is what young people want to do when they leave school—to earn money, to be independent, and not to be in receipt of State handouts.
I thank the House for the patient way in which it has listened to me this evening. This time last year, I was in a shipyard on Merseyside and I saw chalked on the wall the words "Cheer up, things could be worse." I did cheer up, Mr. Deputy Speaker, and things got very much worse. After a winter of discontent, we now have a new Government and a nation that has the opportunity for a new beginning. There is hope where previously there was gloom. There is a world recession and a shortage of energy. But we have an abundance of the finest resource of all—a patriotic and determined workpeople, waiting for resolute leadership and the opportunity to put their talents to work for the benefit of themselves, their families and the nation. That is why I believe that any regional policy, if it is to succeed, must be designed to release those talents. Nothing less will do.
6 p.m.
Mr. A. E. P. Duffy: It is a pleasure to follow the

403
hon. Member for Bristol, North-West (Mr. Colvin). I compliment him on his maiden speech, which, in its preliminaries, was humorous and generous. The House will have welcomed the hon. Gentleman's kind references to Ron Thomas and Martin McLaren. Both gentlemen are well remembered by their colleagues. If the present hon. Member for Bristol, North-West serves the House and his own party as actively and effectively as they both did, he will serve his constituency well.
The speech of the hon. Member for Bristol, North-West was lucid and informed and doubtless, like the speech of his hon. Friend the Member for Oxford (Mr. Patten), it will be seen as an important contribution to the debate. Both speeches, despite the closing passage of that by the hon. Member for Bristol, North-West, were suitably irreverent for maiden speeches—certainly for our taste. I know that they will both be read with great interest by the Secretary of State. Finally, the speech of the hon. Member for Bristol, North-West was fitting for a Member from a city that returned Edmund Burke.
Yorkshire Labour Members were quite clear in the early seventies that the problem with, and potential of, Yorkshire and Humberside could be summed up under three headings: low wages, environmental problems and geographical position. The root cause of the region's economic weakness was a lack of growth industry, aggravated by an outdated industrial structure. It was vitally necessary to bring to Yorkshire more growth industries, particularly those generating employment.
Whilst confidence in the basic industries of coal, steel and textiles remained, they needed to be reinforced by new industry if job opportunities were to be preserved. Such industry could be attracted to Yorkshire only if the environment was improved through tackling dereliction, and road communications were extended across the country to Hull.
The Conservative Government of that time believed that Yorkshire could sustain its level of economic activity without placing much reliance on mobile industries moving in from outside. I am glad to see that some of the Yorkshire group of Labour Members of Parliament are
404
here, because we all worked on a project that eventually led to a debate in this House, the first held on any region and one that gave rise to a three-line Whip of my own party. We look back on that debate as a milestone in the history of the House.
We were in no doubt at that time that the then Government's analysis was wrong in general. Regional economic policy must be based on the planned and induced relocation of industry. Nevertheless, those same Yorkshire Labour Members of Parliament recognised that the new Industry Act of 1972 might provide a framework within which self-help policies would receive the necessary Government support to arrest an ominous decline in industrial activity and job opportunity.
That some progress has been made can be seen from the latest figures for gross domestic product per head—the percentage change for 1976–77—that makes it possible to construct a growth league for Britain. The latest figures confirm that the Yorkshire region has continued its steady movement up the regional ladder since 1971. We know that we could have done better if certain parts of our region had been awarded justifiable development area status.
Labour Members of Parliament were repeatedly frustrated in their representations by a level of unemployment in Yorkshire that was misleading and appeared to compare less unfavourably with other assisted regions. What was never sufficiently appreciated was that Yorkshire's unemployment figures were determined less by frictional or deficient demand factors than by structural change in our basic industries. Moreover, the resultant unemployment level would have been much higher but for migration from the region.
There was a need for a new blend of job opportunities. There was a deficiency in white collar executive and administrative employment. That is why every Yorkshire Member of Parliament on the Opposition Benches attaches great importance to an affirmation by the Government—preferably this week—that the headquarters of the Manpower Services Commission will be relocated in South Yorkshire. South Yorkshire Members and the South Yorkshire county council,

405
though welcoming a recognition of the severity of the problems of the Mexborough/Goldthorpe and Rotherham areas through the granting of development area status, view the weakening of regional policy generally, and the treatment of the rest of South Yorkshire, with the gravest concern.
While Doncaster and Barnsley remain intermediate areas, the benefits of this have been much reduced. These areas still exhibit many of the classic symptoms of declining industrial and mining areas. Both areas suffer from an unduly high proportion of unemployment in coal mining, which is in serious decline in the Barnsley area. Unemployment is high in both areas. My right hon. Friend the Member for Doncaster (Mr. Walker) has asked me to remind the House that in Doncaster the level of unemployment is 7·7 per cent.—higher than in some proposed development areas. Indeed, the rate in Doncaster has frequently exceeded that in the adjacent area of Rotherham which is now proposed as a development area. I hope that my hon. Friend the Member for Rotherham (Mr. Crowther) will not object to my saying that.
Barnsley and the Don Valley also contain small areas with very high unemployment rates. One example is Wombwell, where 10·9 per cent. of the population is unemployed and the situation of which is identical to that of the adjacent Mexborough development area. Even more striking illustrations of local pockets of very high unemployment in the Yorkshire coalfield can be seen in areas such as Hemsworth and South Elmsall. My hon. Friend the Member for Hemsworth (Mr. Woodall) asked me to stress that, like Wombwell, these two parts of his constituency lack the capacity for self-generating growth.
The loss of intermediate area status for Sheffield means that, as well as losing its eligibility for a regional development grant from 1980, it would, from 1982, cease to be eligible for selective industrial assistance under section 7 of the Industry Act 1972, as well as European regional development fund grants. European Investment Bank loans, basic service grants under section 7 of the Local Employment Act 1972, Government advance factories, assistance under the employment
406
transfer and job search schemes and 100 per cent. derelict land clearance grants.
My right hon. Friend the Member for Sheffield, Park (Mr. Mulley), who is my neighbour, knows that we have problems. They are not just inner city problems. They are problems of intense dereliction and deprivation that we cannot imagine can be effectively tackled without the aid of some of the devices I have mentioned, all of which are to be scaled down and eventually removed from us.
Although it is true that Sheffield's unemployment rate has been slightly below the national average in recent years, it has masked structural decline and migration, as I indicated. Moreover, there has been a relative deterioration recently. There were almost 15,000 unemployed in the city last month. The chairman of the city's careers advisory committee wrote to me yesterday expressing concern at the seriously worsening employment position facing school leavers and other young people in the city.
I have already mentioned that the unemployment rate in Sheffield has been kept down by migration from the area. Projections suggest further losses of 15,000 people between 1976 and 1986. To the extent that greater employment losses have been averted by above-average industrial performance, prospects locally must be affected by the removal of assistance. For example, the local economy is disproportionately dependent on steel manufacturing. This industry is passing through a very difficult time. With private sector steel suffering from an average of 30 per cent. spare capacity, poor profitability, import penetration and a United Kingdom demand that is not likely to return to 1973 levels before 1985, rationalisation is inevitable.
This is a process that has cost 5,000 jobs over the past five years and the closure of Swift Levick's steel department only last year. A fierce takeover battle has just been concluded between Edgar Allen, Balfour and Aurora Holdings in my constituency, which the workers fear must result in more job loss. They fear that the Stock Exchange down here is about to fill the labour exchange up there. This takeover represents a significant step in the history of the city's special steel industry, with a major amalgamation in the bars sector. Other sectors—alloy

407
forgings, super alloy steels and low alloy billets—have been substantially reorganised, with Johnson Firth Brown, the country's biggest special steelmaker, playing a big part. Johnson Firth Brown took over part of Hatfields, another of our local firms, earlier this year, resulting in yet further job losses with more threatened.
The House appreciates that the Secretary of State has stayed throughout the debate so far, when there is a great temptation to leave, as so many of his predecessors have done, as I know only too well. I am grateful to the right hon. Gentleman for having sat through the debate thus far. I want to ask him whether he is really sure that this is an appropriate time to remove assisted area status from Sheffield. It is not only Sheffield that is seriously affected, for these sweeping Government changes in regional aid could plunge South Yorkshire into economic warfare. Sheffield will lose all aid. Rotherham and Mexborough will get more, and I am glad. Barnsley and Doncaster will retain some of the help that they already get. Therefore, by 1982, when Sheffield loses its intermediate area status, geography will be all important.
A factory coming to South Yorkshire can site itself in Sheffield and get nothing, or move a few miles up the motorway into the Barnsley area and get a chance of selective assistance under the Industry Act. Alternatively, it could move to Rotherham and Mexborough and qualify for cash grants towards the cost of the new factory and equipping that factory, as well as Industry Act aid. Both towns can also apply for the small firms employment subsidy until March 1980.
As the Secretary of State must know, employers, in time with the unions, are distinctly lukewarm towards his proposals. As my own local employers see it, the danger is that in the present economic recession aid will be cut before a reasonable level of profitability returns. If it is, trade, industry and employment prospects in South Yorkshire will be damaged.
The present structure for regional aid has given rise to many anomalies, as the Secretary of State reminded us. No hon. Member can deny that. The Secretary of State represents a Yorkshire constituency. He is therefore familiar with the problem of Yorkshire and Humberside. I appeal
408
to him to reconsider his proposals and to seek ways of tailoring them to the treatment that the area needs, which is more in keeping wih the problems from which it suffers. They are the problems of a region that the right hon. Gentleman knows only too well.
6.14 p.m.
Mr. Gerry Neale: I thank you, Mr. Deputy Speaker, for this chance of inflicting a third maiden speech on the House. I hope that I may also be forgiven for admitting how much I treasure this opportunity to make my first contribution to parliamentary debate. It is the consummation of many years' involvement in various activities that I have always believed could result in gaining election to this House.
In stating that I represent Cornwall, North, I am well aware that I am known immediately as the victor over John Pardoe rather than as Gerry Neale. My contribution to the debate on regional policy gives me an opportunity to show my respect for my predecessor, who represented the constituency for 13 years. It also allows me to express my own deep concern for the well-being of Cornwall.
John Pardoe championed the cause of Cornwall in a way that won him respect from even his political opponents. In his role as deputy leader of the Liberal Party, and in his spirited espousal of Liberal causes, he left none doubting his resources of energy and determination. Having campaigned against him twice in five years, and having disagreed with him fundamentally on certain issues, I could not bring myself to dislike him or disrespect him. He was as magnanimous in defeat in May of this year as he was considerate in his victory over me in October 1974. I wish to thank him for that, and on behalf of Cornwall, North I thank him for his service to the constituency since 1966. His defeat is undoubtedly a sad loss for the Liberal leader, for whom I feel a little sympathy but to whom I make no apology.
In the context of this debate, it is just as important for the Government to understand why, in my view, Cornwall, North now has a Conservative Member after 13 years of Liberal representation. Cornwall, North may be concerned about the standards of education, law and order and trade union power, but what has

409
increasingly dominated opinion in the constituency has been the economic performance of the country under the Labour Administration. Opposition centred on three aspects—on the level of personal taxation, the extent of Government expenditure and interference and on the level of unemployment. With that opposition came the realisation that the Liberal Party could do nothing to bring about the much-needed change in political direction and leadership. It was the sudden and unexpected support by the Liberal Party for the Labour Government in the spring of 1977 that in my view sounded the death knell for Liberalism in the constituency.
North Cornwall may have all the appearances of a relaxed area of scenic beauty, in which nearly every hon. Member at some time seems to have spent a holiday. But, despite appearances, it is made up of people who thirst after strong leadership and clearer direction. At the same time, they expect greater freedom for private enterprise. Without large-scale employers and excessive trade union representation, its economy depends on small businesses, be they farmers, hoteliers, small factories, shopkeepers, scientists or craftsmen. There is below-average pay and above-average unemployment, although there are shortages of labour in some skills.
For my part, I have known of, and become increasingly involved in, Cornwall's affairs over the past 15 years. I speak as a solicitor who started, and has been involved in, the current expansion of two businesses, one professional and one industrial. I have had the good fortune to have served on a planning committee for the new city of Milton Keynes—an area as different from North Cornwall as one could find. Compared with the wealth of experience in this House, I am aware of my own shortcomings. If I err into controversial areas, I hope that it is not judged as a discourtesy but more as a sincerity of view on this subject.
I am led to the conclusion that the Government, no matter how caring or spendthrift, can do very little to create industrial jobs in any real number. They are limited merely to saving jobs, all too often in industries that are no longer relevant to today's needs. Those jobs are allowed to linger on, soaking up the
410
energy that ought to be applied to encouraging alternative sources of employment. By the very nature of things, some large-scale industries become redundant and obsolete in that their products or services are no longer required by the market. It is rarely even practicable to plan for the immediate replacement of one large-scale employer by another. That is a painful political admission. To indulge in financial inducements to industry is to strike it with an economic flaw that politicians seem too ready to ignore. Governments can only designate development areas, assisted areas, intermediate areas, travel-to-work areas and any other form of area. They cannot make industries develop.
Any form of development area, so-called, in my view, first needs businesses willing to relocate to it, and it has to be remembered that there are many non-assisted areas in this country, with public projects such as new towns and private projects of industrial development, all competing to obtain these prospective employers for their area. What all these areas have discovered—assisted and non-assisted alike—is that there are all too few companies in total actually wishing to relocate; that these companies initially considered assisted and non-assisted areas irrespective of grants; and that these companies very often ignore the carrot of grants, plump for non-assisted areas and then become infuriated by development certificates bureaucracy.
But worst of all, as my hon. Friend the Member for Bristol, North-West (Mr. Colvin) indicated, is that the companies, by the very act of relocation and the installation of increased technology, actually need fewer employees to obtain a higher output.
A wise business judges the merits of any geographical location in terms of the viability of its investment and prospective trade. Can it really make sense, then, to offer financial inducements out of hard-earned taxpayers' money to encourage that business to throw its wisdom out of the window and go to an area which it has already dismissed? On the other hand, if a business can only find a viable future based on State grants and regional aid, can it be wise, on behalf of the taxpayer, in effect to invest in that company?
I cannot take as lenient a view as my right hon. Friend the Secretary of State.

411
In my view, industries, large and small, entrepreneurs and small business men, become established, they expand job opportunities, and they prosper, and they even fail, in spite of rather than as a result of Government grants and central Government and local government planning policies.
For those reasons, I welcome, though not with a full heart, the direction which is now being given to the regional industrial policy by the Secretary of State for Industry. If I were to criticise it, I would say that the cuts are not bold enough. In addition, I am suspicious of the fact that the machinery for regional aid is left intact. It may be thought that I would have been expected to welcome increased aid to Cornwall. I do not. This may surprise my West Country colleagues, but I cannot deceive myself into believing that it is Government aid which will reverse the tide on jobs in Cornwall.
I arrived in this House as concerned as anyone about the levels of unemployment. With that concern I carry a sense of frustration that jobs could so easily become available. To make them available, I believe that the Government must concentrate far less on policies of regional and industrial aid and much more on those relating to employment and planning law. To pursue regional inducements in Cornwall will serve only to distort the Cornish economy still further. But, worse than that, I feel that it will offer the very escape route which serves local planners most and local unemployment least. With grants available and industrial space and zones available, but no prospective tenants, those planners can then blame the short-sightedness of industrialists rather than their own.
Cornwall, like any other region, has to face its own set of economic facts of life. In the meantime, the Government must concentrate more on the continued reduction of bureaucracy surrounding employment and on the inhibiting provisions of the Employment Protection Acts. These hit small businesses. Their relaxation would clear a log-jam of available jobs in my constituency. The National Farmers Union states that there are many such potential jobs in agriculture.
On planning powers for local authorities, Government statements offer a far cheaper and healthier way than regional
412
aid for curing the worst effects of unemployment. The reduction of these powers would enable Cornwall's economy to flourish. The principal planning authority in North Cornwall has succeeded in each of the past three years in reducing the percentage of applications which it approves. It currently processes only one in five applications within an eight-week statutory time limit. But an industry exists which could in large part hold the key to Cornwall's economic future. Tourism offers immense prospects for the county on jobs, yet it is the planners, and not regional aid, that prevent their realisation. Many tourist ventures are able to sustain large staffs all through the winter, yet there are too many examples of applications being refused. No Government money is required, Private enterprise has it available and ready to invest.
In Newquay there are businesses wishing to expand on their own land and premises but they are refused consent. Yet at one and the same time factory space is being constructed by public money and remains vacant for much of its life. The previous Labour Administration distinguished themselves in North Cornwall by presiding over such expenditure, on the one hand, and by witnessing one person losing his job in the constituency for each single working day that they were in office, with another job even disappearing each weekend.
Surely there is a need not to ask whether the regional aid was enough but to ask whether it has any effect at all, because it is so insensitive to local resources and requirements.
The Conservative Party fought its election campaign on individual responsibility and the need to devolve power back to the individual from central Government as well as local government. I am able to stand in this Chamber because a substantial majority in North Cornwall shared that conviction. That majority want their parliamentary representative and their councillors—county and district—to face the fact that Cornwall wishes to do, and believes that it can do, much more for itself. It wants to be taxed less—and, mercifully, the present Government have done that. It wants to be governed less—and, thankfully, the present Government have promised that. But most of all it wants to be subsidised less. Subsidies do not give value for

413
money. They brand Cornwall as an area lacking in enterprise and lacking in local employment opportunities, and neither image is true.
North Cornwall is one of the most beautiful areas of Britain, and I am honoured to represent it. Of course, I do not wish to see it stripped of its charm and beauty. While I support the motion, I urge the Government to be more courageous, and to set a programme to phase out this smothering mantle of regionalism and trust the people. Let them challenge the local authorities to service enterprise in their areas rather than to restrict or contain it. Then stand back and watch Cornwall as an example.
The apparent need for subsidies would dissolve, unemployment would fall and the well-being of these so-called deprived areas would then become a matter of pride to those who live in them and represent them.
6.27 p.m.
Mr. Frederick Mulley: It is a great pleasure to congratulate the hon. Member for Cornwall, North (Mr. Neale) on his maiden speech. The hon. Members for Oxford (Mr. Patten) and Bristol, North-West (Mr. Colvin) are also to be congratulated on their maiden speeches.
I am sure that the House will have heard with great interest and sympathy the very generous remarks of the hon. Member for Cornwall, North about his predecessor, John Pardoe. It is not for me to get involved in the arguments that the hon. Member evidently had as to whether the Liberal Party should have supported the Labour Party, but I ask him to reflect on whether he would be so confident of his return here if an election were held now, less than three months after the recent campaign.
I do not feel in any sense that the hon. Member for Cornwall, North was in breach of the non-controversial rule, because it is quite proper that hon. Members should criticise their own Front Bench. I rather admired the hon. Member's courage in turning away possible financial assistance to his constituency, rather more, perhaps, than his political judgment in so doing. But that is a matter about which no doubt he will learn as time passes.
414
What worries me as much as the content of the regional policy before us is the way in which it has been presented. We had problems last week when the Secretary of State had to rely on his Under-Secretary to bring in copies of the written answer to a question in which the guts of the statement was contained. I was very surprised, on reading that, to find that it said that an explanatory note was available in the Library. I went to the Library. The staff there had no knowledge of any such explanatory note. It took several hours for them to procure one from the Department of Industry. To my great surprise, when one was procured, it was marked "Confidential" although its purpose was to explain the scheme and how to apply for grants.
I say that in a light-hearted manner, but it goes to the heart of the matter. The Department has not properly gone into detail in making these proposals. No one would question the passionate sincerity of the Secretary of State in pursuing the cause that he is espousing at the time but one can question his administrative competence. The presentation of the case is indicative of the way that the matter has been handled in the Department, which has not properly gone into the merits of the proposals before the House.
I wonder how long it will be before the Secretary of State changes his mind. As an honourable man, he may resign if he has to do the U-turn that was forced on one of his predecessors whose recent death we all greatly regret. We all remember the brave words of 1970 about lame ducks and the Industry Act that followed in 1972. We hope that such a U-turn will shortly come in the present Government's policy. If they believe that we need a revival of British industry, their economic policy is quite disastrous.
I read in The Daily Telegraph today that the Government are to cut defence expenditure. When I was Secretary of State for Defence, Conservative Members said that I should spend twice as much as I was spending, and when I hear of these cuts I wonder whether the Government have any grip on their manifesto policies or the nation's finances.
In order to be brief, I shall not enlarge on the broad perspective already covered

415
by my right hon. and hon. Friends but will mention briefly the way that these proposals will affect my constituency in the city of Sheffield. Under them we have lost our intermediate status. In his statement last week the Secretary of State said that we needed local initiative in all our cities and counties, so that is particularly ironic. I challenge any party in the country to produce a more active joint operation than that of the city council, the trade unions and chambers of commerce and trade in Sheffield. No one could have done more to promote employment by seeking job opportunities for Sheffield from all over the world. The reward for that enterprise is to lose our intermediate status.
Taking the crude figures, it seems that Sheffield has been harshly treated. The proper criteria for regional aid should be a projected structural change in the employment situation of a city, such as we suffer in Sheffield, with a decline in the manpower requirements of heavy engineering—steel and general metal industries—and where there is a substantial element of migration. Neither of these factors has been taken into account in the current proposals. From the example that I gave of the way that the Secretary of State's written answer was supplied to this House and the Library was given the explanatory memorandum, it is possible that some civil servants merely took a cursory look through crude statistics and decided that one part of the country should be upgraded and another should lose its status.
The published unemployment rates give an unfair picture of the state of affairs in Sheffield. The number of people unemployed in the Sheffield travel-to-work area was 14,788 in June. That area comprises 40 per cent. of South Yorkshire, yet parts of the region have been uprated, others have retained their intermediate status and other areas, principally Sheffield, have had that status taken away.
Relatively speaking, in Sheffield we have a greater problem in finding jobs. We have pockets of unemployment that are larger than Mexborough or Rotherham, whose status has been enhanced—not that I would wish them to lose that. In the inner city of Sheffield in six wards with a population of 100,000, which is
416
larger than the Dearne Valley area, there is an unemployment rate of 8·9 per cent. In a wider area of 10 wards there is still an unemployment rate of 7·9 per cent., which is equivalent to that in the Rotherham travel-to-work area, and Rotherham has been upgraded from intermediate to development area status.
Mr. Stan Crowther: My right hon. Friend is the second Member from Sheffield who has apparently exhibited a little green-eyed jealousy about the fact that Rotherham and Mexborough are keeping their assisted area status. Twenty-six thousand people travel every day from the borough of Rotherham to the city of Sheffield to work. Surely it will greatly assist the area as a whole if some of those people are able to stay in the Rotherham area to work. That would create more employment opportunities in Sheffield.
Mr. Mulley: I make it absolutely clear to my hon. Friend that in no way do I wish to see Mexborough and Rotherham lose their enhanced status, but it makes complete nonsense to pick out little areas in South Yorkshire when the whole region should be planned as an economic entity. Sheffield is the natural centre of South Yorkshire, and to deprive it of its status will not attract the industry that we need. It would be advantageous if the people from Rotherham who come to Sheffield to work did not do so and my constituents were able to take their jobs, and I should be happy to learn of any steps that my hon. Friend proposes to take to that end.
In Sheffield 15 per cent. of the population consists of retired people. That adds to costs that have to be met from local resources. Also of great concern is the fact that 3,700 school leavers are unlikely to find jobs. In view of the Manpower Services Commission's planned reduction, we shall have over 4,000 young people with poor prospects of obtaining employment. In theory we have a three-year transitional period, but in practice the assistance we have had from our intermediate status disappears. Very little can be done within a year, and it is unrealistic to imagine that a firm can come to the area and establish itself within that time. With the competitive grants available in other areas, we shall not be able to sustain our progress in bringing in new jobs to replace those lost

417
by recession and technological change in our metal industries.
While Sheffield has had intermediate area status, we have enjoyed about £10½ million of regional development grants for building purposes. A total of 33 firms have benefited and about one-half of the 70 firms that have come to local authority leased sites have had some aid from the fund. When trying to get a firm to move into an area, it is important to have available the selective assistance that covers removal costs and so on, and we calculate that about £8 million has come to the city in that way.
In theory, industrial development certificates will be freely available to non-assisted areas, but that will be a bar in practice, particularly to foreign firms, because they are rightly suspicious of the lengthy bureaucratic processes of Whitehall. We cannot give those firms the assurance that they will get a certificate. We could give that assurance if Sheffield were to remain an intermediate area.
In addition, the whole EEC regional programme is tied in with the fact that a project is receiving some aid from the national Government concerned. A number of schemes that would have qualified for European aid will not be able to receive it if Sheffield loses its status. It is impossible to quantify how much money may be involved, but I think that all hon. Members agree that we do not get a return from the EEC which compares with our contribution to Community funds. The fact that we are to be denied EEC aid for a number of social as well as economic and employment projects is probably as important as the fact that we shall lose grants from the Government.
There is an enormous backlog of derelict industrial land in Sheffield going right back to the Industrial Revolution. Sheffield has been trying, with some success, to clear up that land, but if we lose our intermediate area status we shall lose access to the grants under section 8 of the Local Employment Act 1972 which are made available for derelict industrial land clearance.
I am glad that the Under-Secretary who is responsible for small businesses is on the Government Front Bench, because
418
I am greatly concerned about the impact that Sheffield's loss of intermediate area status may have on small firms. I understand that a recent survey has suggested that Sheffield is second only to Birmingham in the number of small firms within its boundaries. If we lose assisted status, the small firms employment subsidy, which has been valuable to a number of firms in Sheffield, will also be lost because it is restricted to development and special development areas.
In assessing the impact of the proposals on my constituency, I must look wider than the immediate impact of the loss of grants for building and to the ancillary consequences, not least for small firms, and the loss of European regional aid.
The Secretary of State said that he would listen to evidence as to why some decisions should be reconsidered. I hope that the Minister who is to reply to the debate will make clear that there is the possibility of a review before the damage is done and that credit will be given to places such as Sheffield that have tried to help themselves—a philosophy which is surely not unwelcome to Conservatives. If the city of Sheffield makes a submission on those points, I hope that its case will be looked at again.
The Under-Secretary of State for Industry (Mr. David Mitchell): I can assure the right hon. Gentleman that if there are any special factors that we have not appreciated in drawing up the arrangements, we shall be happy to receive him, or a deputation from the city of Sheffield, in order to examine details that, it is felt, should be brought to our attention.
Mr. Mulley: I am grateful to the Minister, who is, as always, extremely courteous. I shall seek advice and I think that we may wish to take advantage of his offer. One has the impression that the package has been put together with the same level of skill as that with which it was presented to the House, which, everyone agrees, was less than the desirable standard.
6.46 p.m.
Mr. Kenneth Carlisle: There is no doubt in my mind that the time has arrived to subject regional policy to a rigorous scrutiny. After all, the purpose of the aid is to be selective and

419
to pick out those areas of the country that are genuinely in need of help. Now that about 40 per cent. of Britain is covered by selective assistance, what was meant to be selective has become common-place. In the words of Gilbert,
"When everyone is somebodee, then no one's anybody."
The existing schemes have become riddled with anomalies and absurdities. Perhaps that can best be shown by a practical example. My constituency is not an assisted area, but is surrounded on three sides by intermediate areas—Horncastle, Louth and Gainsborough. The current level of unemployment in Horn-castle is 5·3 per cent., at Louth it is 5·4 per cent., but in Lincoln it is 7·2 per cent.—way above the East Midlands average of about 5 per cent. Our unemployment is exceeded only by that of Gainsborough. Even Grimsby, which is a development area and not an intermediate area, has an unemployment rate of only 6 per cent.
Despite its higher unemployment, Lincoln is not assisted. Because of that fact, industries have been discouraged from coming to the city. We have suffered under the shadow cast by the surrounding intermediate areas. Until May, the only course open to us was to apply for intermediate status. The city council and industry in the city urged me to do so, and I did so. Had Labour won the election, I would have continued to fight for intermediate status for Lincoln. Why should Lincoln suffer unfair competition in the drive for new jobs?
If Lincoln had won intermediate status, who would have doubted that in a matter of months Sleaford to the south would have applied for similar status, and then Stamford further to the south and then Peterborough? Where would the movement south have stopped? It would have been just like the advance of the last ice age which reached its climax 12,000 years ago when all but the very South of Britain was covered by ice. Even the South was a barren tundra inhabited only by mosquitoes and gnats.
Fortunately, the advancing tide of assisted areas has been reversed and the anomaly of Lincoln and other such places has been relieved. I believe that such a reversal will not cost jobs. It will certainly save money.
420
The assisted areas have been reduced to about 25 per cent. of the area of the country. Those parts with harsh unemployment problems, such as Merseyside and Clydeside, have been made that much more attractive, relatively, to new jobs. Surely, if we are to have selective assistance, such a move is sensible. It must be right to give help to those areas in greatest need and to keep it to them.
The areas of the country that have lost their assisted area status this time have two years to adapt to the change in status. I am glad that section 8 of the 1972 Act has been made available to attract international projects and companies to the United Kingdom.
Altogether, the reforms are far from being dogmatic. They are pragmatic and sensible. For parts of the country such as Lincolnshire they are a boon. I recommend the review and its pragmatic results to the House.
6.50 p.m.
Mr. Donald Stewart: I apologise to the House for my unavoidable absence during the opening part of the speech by the Secretary of State for Industry.
I associate myself with the tributes that have been paid to the maiden speakers, the hon. Members for Cornwall, North (Mr. Neale), for Bristol, North-West (Mr. Colvin) and for Oxford (Mr. Patten). They put their arguments forward with considerable fluency and I was surprised at their self-restraint in postponing their maiden speeches until today.
I take issue with the view of the hon. Member for Oxford that regional policy has failed. All hon. Members should consider what the state of the United Kingdom would have been today if those policies had not been tried. The policies were devised to prevent the concentration of industry in one small sector of the United Kingdom—the South-East corner of England. They gave the right to all areas to share in the prosperity of the country.
The Secretary of State for Industry has dished out impressive medicine during the last two weeks. Considering what he told us last week, it is surprising that he did not tiptoe into the Chamber, drop the statement on the Table and make for the hills. However, he had to come to the

421
Chamber and make his speech to the House, and we heard something about that matter yesterday.
The last Administration took away the regional employment premium, and that resulted in a severe loss of jobs to Scotland. Therefore, both Labour and Conservative Governments are responsible for the increase in unemployment in Scotland. The alteration in the status of development areas must be an unpleasant surprise for hon. Members from areas such as Aberdeen and Edinburgh, particularly the new Conservative Members. I am sure that their voters would not have supported that move. However, if that is the kind of government that they wanted, it is certainly the kind of government that they are getting.
I believe that there should be an increase in the funds for the Scottish Development Agency and a change in the way in which the agency is permitted or not permitted to make its decisions. We lost the Mostek development to the Republic of Ireland which represents 1,000 jobs in a few years' time. An article in the Electronics Times states that the Scottish Development Agency is
"more than a little angry … not with the success of its Irish counterpart but with the Department of Industry. … The Irish Development Authority had one advantage that must have been very important. They have, as we do not, the authority to act as a single agent and the right to make decisions for industrial investment."
Assistance is vital for the declining industrial sectors. Within the last few days there has been notification of the measures that will affect these areas—the shipyards, the steelworks and so on. Something must be done about the inevitable unemployment that will follow the implementing of these measures. They come at the worst possible moment, tied up with the worldwide recession. The Government could not have acted in a more irresponsible way.
I hope that when the Secretary of State for Scotland replies, he will be able to tell us the effect that will be felt upon the Highlands and Islands Development Board. I hope that he will also refer to the regional aid that the EEC councillors have proposed in my constituency. That aid is dependent upon a sum of money coming from the Treasury. Many people in Scotland, not only in my party, believe
422
that funds allocated by the EEC have been pocketed by the Treasury and deducted from funds that would have gone to the areas.
The Conservatives are taking a panic-stricken approach to these aids, Civil Service jobs and so on. Within the next few weeks it will be realised that the Conservatives are engaged on the destruction of these jobs in Scotland. The status of the development areas must be reinstated and each area should be allowed the chance to survive. In the devolution debates it was charged against my party that we were aiming for the break-up of the United Kingdom. This Government are now dividing the United Kingdom into two nations in a way unknown since Disraeli made that remark.
The Opposition amendment that refers to the "reactionary policies" of the Government is entirely accurate, and my hon. Friends and I will support it tonight.
6.56 p.m.
Mrs. Elaine Kellett-Bowman: I congratulate my hon. Friends the Members for Bristol, North-West (Mr. Colvin), Cornwall, North (Mr. Neale) and Oxford (Mr. Patten) on their excellent maiden speeches.
One of the great weaknesses in regional policy in the past has been the appalling waste of public money that poured funds into politically sensitive areas which could not, on any objective criteria, be said to need it. Alternatively, money was given for projects in needy areas which would have gone there in any event. I am glad that my right hon. Friend's proposals will prevent either of those alternatives from taking place in the future.
The proper function of regional policy should be to encourage the creation of permanent productive jobs in depressed rather than affluent areas. The Secretary of State's intention to provide the funds only if without them the project would not go ahead in an assisted area makes sound common sense. However, I feel that he may need the assistance of a lie detector to be certain of achieving that.
The money that is saved can be used where it will really help to provide more jobs. On behalf of the citizens of Lancaster, I thank my right hon. Friend for listening to our pleas and removing the bias against us that has prevented us for

423
years from overcoming the scourge of unemployment. It is the first time that we have had the occasion to thank a Minister from the Department of Industry since the days of my hon. Friend the Member for Harrow, Central (Mr. Grant), who gave us our intermediate area status. He took the trouble to come and see our difficulties for himself.
In a Government survey of two years ago, North Lancashire, Morecambe and Lancaster, was described as
"relatively isolated with a small and vulnerable employment base and high unemployment".
Unfortunately, the description was only too accurate. However, the Socialist Government did nothing about that and any successes that we have achieved in keeping the rate in Lancaster down below the present abysmal total are a result of local council initiative and superb co-operation within industry. The first almost fatal blow to our industrial prospects for jobs came in 1968. The Labour Government's regional policy at that time left us out of account. Our main employer, Nairn Williamson, took a large part of its work force to Scotland, where massive grants were available.
From that time on, blow succeeded blow. The Post Office savings bank was transferred to Durham with the loss of 290 jobs and British Rail Carnforth cut its work force by 70 per cent. In 1952, ICI employed 2,000 people. That figure has now been reduced by 75 per cent. The Shell refinery closed down and in the years up to 1976 500 shore-based and 250 sea-going jobs were lost by British Rail at Heysham. We have indeed endured industrial death by a thousand cuts.
Despite a strongly argued case, backed by solid evidence, that was put forward to various Ministers, no help was provided. The only help that was provided came from our status as an intermediate area, but that was gradually whittled away by the increasing aid that was given to development and special development areas. Now for the first time we shall be on level pegging with the areas around us.
I wish to refer to the tremendous amount of help which has been given to this country by the regional fund of the EEC and to us in Lancaster and Morecambe in particular where the European regional committee came to see our prob-
424
lems for itself. This country has complained for a long time that the EEC budget is out of balance and that too much money goes to agriculture. If we can tilt the balance the other way so that less goes to agriculture and more to regional development, I believe that we shall do a great service to our country.
Many people, when they consider aid from the regional fund, think of it only in terms of the inner city areas. But there are many areas in the uplands, such as Cumbria and Lancashire, which are becoming almost fossilised. Sometimes we tend to overlook the seriousness of the problems produced by an ageing population and population drift. I do not wish to see these areas becoming dead parts of our nation or regarded as antiquated museums. The Cumbrian NFU has brought forward a most imaginative and useful scheme, the "East Fellside Project", to try to assess the potential of the hills and uplands and to develop this potential and keep them as vital living communities. This is the kind of scheme for which the regional and social funds and the guidance fund of the EEC could be made available. But they are eligible for such help only if the area concerned maintains some form of assisted area status or if the regional fund regulations are changed, as they must be changed in 18 months, to allow for this factor.
There are schemes in other parts of the intermediate areas which would also suffer if this umbrella status were removed from them. Some time ago the delegation from the regional policy committee of the EEC was kind enough to visit the intermediate area of Lancashire and a visit was made to an area containing a vast old colliery site of 91 acres known as the Rowley tip. That site at present is an eyesore, but it has now been proposed by the Lancashire county council for a complete transformation. It is to be used as a regional gathering ground for the processing of industrial waste. In addition, the scheme provides for a lovely lake and recreation area, which will be of great benefit to the surrounding district. This is an imaginative project, but it will not be eligible for regional fund aid unless the area retains some form of assisted area status or unless the regulations are amended in

425
order to take advantage of regional fund aid for such schemes.
I beg my right hon. Friend the Secretary of State for Industry to keep this point very much in mind so that we shall not lose the benefits which we can obtain from the EEC if we play our cards right.
7.3 p.m.
Mr. Cyril Smith: I, too, wish to congratulate the hon. Members for Oxford (Mr. Patten), Bristol, North-West (Mr. Colvin) and Cornwall, North (Mr. Neale). We have seen a great change in the representation of Cornwall, North when we remember the speeches of the former Member and compare it with the speech we heard today from its new representative. However, that is a matter for the electors of Cornwall, North to decide. Certainly we would have had a very different speech this afternoon if it had been delivered by the previous representative of that constituency. He would have argued for more help for his area rather than less help, which was the case put forward by the present incumbent. However, I hope that we shall have many contributions from the constituency's new representative, even if only for the lifetime of this Parliament.
There are one or two matters which require clarification from the Minister this evening. I am glad to see the Secretary of State for Industry in the Chamber to hear me put these points. The Secretary of State for Industry, in answer to an intervention, mentioned the case of a company in an area which is to lose its status. I understand that such a company will not receive Government financial assistance for a project if that project is not completed by an agreed date in 1980. In other words, the Government do not intend to honour their financial commitment. I hope that this point can be elucidated in the Minister's reply.
I have received a letter from the North-West Industrial Development Association expressing concern on this point. The letter makes the point that certain companies are already committed to expenditure on projects for which grant applications have already been made and approved. However, grant will not be paid if projects are not completed by 1 August 1980. The letter makes
426
clear that this could well affect certain factory building projects.
If the Government take the view that even though companies have been promised grants they will not receive them if the projects are not completed by the due date, I hope that they will think again. If this is their view, the Government are, in effect, introducing restrospective legislation. We all know that it takes 12 months or more to build a factory and to equip it. If a company has set out on a project believing that it will receive grant, it is most unfair if it suddenly discovers that a proportion of money promised when the scheme was capitalised will not now be made available. I hope that the Government will reconsider the implications of their decision.
There are one or two other matters which require clarification. The hon. Member for Lancaster (Mrs. Kellet-Bowman) has cleared the first item relating to EEC grants. I hope that the Government will assure the House in the reply to this debate that when the Minister meets his ministerial colleagues in the EEC he will press for changes in EEC legislation to enable the EEC to give assistance to areas even though they do not enjoy assisted area status. I accept that, as things now stand, such assistance may not be available, but I hope the Minister will assure the House that the Government will press for changes in EEC legislation at the appropriate time.
I should like to ask whether grants under the regulations on tourism will be made available in non-assisted areas and whether the 100 per cent. dereliction grant will continue to be made available to local authorities in such areas. Those are my queries, and I hope that the Minister will answer them.
I wish to refer to a recent written answer which makes clear that intermediate area grants will be stopped by use of ministerial discretion. I understand that eventually legislation will be enacted to vary the provisions of the Industry Act. I hope that the Minister in his reply will clarify the use of ministerial discretion.
Over the past few days we have had all sorts of Government announcements affecting industry. I remember that at one stage in my short political career I was accused of behaving like a bull in a

427
china shop. I must say that the Government's actions over the past few days affecting industry and the encouragement of industry have led me to the conclusion that the present Secretary of State has a tendency to behave in exactly the same way.
The Government's action surprises me. As I have interpreted the scenario painted by the Government, certainly in terms of employment, in which I also have an interest, the policy appears to be to withdraw money from public expenditure, which means that, temporarily, there will be an increase in unemployment when people are declared redundant as a consequence and, ultimately, those people will be taken up by private industry because that is where the growth is to come. That, as I understand it, is to be the scenario over the next two or three years. In other words, we have to be patient and we have to understand that inflation will rise again temporarily and that there will be an increase in unemployment but that all this will be taken care of once the economy turns round and private industry begins to grow.
Bearing that in mind, the Government's attitude towards private industry seems very strange. It is incompatible with the desire to see the growth of private industry to withdraw from the financial encouragement to private industry more than £230 million which previously was used from Government sources to encourage it.
There are many areas in the North of England, from where I am proud to come, which are deeply concerned about and distressed by the Government's treatment of them, bearing in mind the policy which is to be adopted. I do not want to argue a constituency matter at any great length, but even my own constituency of Rochdale is no longer to have assisted area status. What none of us is sure about is exactly the criterion which was used in deciding which areas should have assisted area status and which should not. Was the criterion merely the level of unemployment, the future prospects of unemployment, the ability of the area to attract industry, the desirability of attracting industry to an area or the depopulation of areas? What was the criterion which decided which areas were to have assisted area status and which were not?
428
Rochdale is a constituency which until a few years ago relied for as much as 60 per cent. of its employment on the textile industry. We have seen the industry almost bleed to death over the past few years under successive Governments. I make no party political point when I say that. The textile industry has gone down and down, and places such as Rochdale have had to fight very hard to try to attract new industry to replace the textile industry.
But the story does not stop there. Even now a proportion of our textile industry in Rochdale is involved in such activities as the manufacture of fabrics for the tyre industry. We all know that the importing of tyres for cars and lorries is on the increase. We are importing more cars, and they come in with tyres on them which, obviously, are foreign made. What is more, anyone who has a foreign car tends to buy a foreign tyre to replace one which has worn. There is a considerable increase in imported tyres, and that trade, too, is likely to affect the level of employment in my constituency.
The conservation of energy may not be thought to have any connection with employment, but it has in Rochdale. It is now established that my part of the world, including Rochdale and Heywood and Royton, is very much in the centre of the country in terms of distribution. That is why we have been able to attract firms such as Woolworth and many other similar companies which use our area as the centre of distribution for their goods. It is in the centre of a motorway complex, with connections to various parts of the country. If we want to encourage a decrease in the volume of petrol used, we have to attract industries, especially distribution industries, to the centre of the country in order to distribute their goods. I suggest that that is another reason why we should be encouraging industry to come to places such as Rochdale.
I return to what I said earlier about my constituency. What was the criterion used by the Government? How have they decided that one area should have assisted status and another should not? I hope that we shall get some indication from the Government about what has been their policy and, what is more important, what is to be their policy in determining which areas have assisted status and which do not.
Mr. Dan Jones: Is the hon. Gentleman aware of any commission of any kind attached to the Department ever visiting Rochdale to establish the facts so as to be able to advise the Secretary of State? If he is, the hon. Gentleman is very fortunate, because no such research has been carried out in my own constituency.
Mr. Smith: The hon. Gentleman's experience is the same as my own. Tories do not come to Rochdale. There are no Tories in Rochdale for them to visit. To be fair, I would not have expected such a visit to every area involved. But certainly Rochdale has had no visit from a Minister. It might have been better if such a visit had taken place.
In my view, regional grants help industry and attract it. For many years before coming to this House, I was chairman of a committee in my constituency which was concerned to attract industry to the area. I know from experience that the existence of grants in one area as opposed to another has an effect in determining where a company places its business. Therefore, I believe that it is wrong to reverse the regional aid being given by the Government, and it is a reversal if a Government reduce the amount of help available by more than £230 million.
It is likely that the companies affected by this change of policy will be new companies and small companies. When he was in Opposition, the Under-Secretary of State was given the special responsibility of speaking on behalf of small businesses. What is more, I remember how, during the general election or shortly before it, the Secretary of State appeared on television and received a tremendous ovation from a meeting of the self-employed or the proprietors of small businesses somewhere in the South of England. His party declared its aim of assisting small businesses. The Government appear to be assisting them by withdrawing from them £230 million of aid which they received from the previous Administration. That seems to be a very strange way of assisting small companies.
What is more, it is often the small companies which have occupied industrial units. Today, we hear that those units are to be reduced in number and transferred to local authorities. Local authorities have not enough money to do the job which they are trying to do at the
430
moment because of the Government's policy of taking money away from them. In other words, the Government are taking money away from local authorities and saying at the same time that if they want advance factories they must build them. I suspect that the net result will be that they are not built.
These small factory units have encouraged and helped many small businesses to be started in the past 15 years. If this policy attracts any section of industry more than another, it is the small business. For that reason if for no other, the Government's policy must be opposed.
Even if it were correct to withdraw help to industry to get it going, to start it and to attract it to various areas, surely the policy is ill-timed. Industry is facing very high interest rates. Earlier today the Prime Minister refused to give the Leader of the Opposition any indication of an easement in interest rates. She refused even to indicate that she would not continue them for any longer period than the right hon. Gentleman's own Government did.
At a time of high interest rates, everything is moving against industry investing in new plant and machinery and in building. The cost of borrowing money is astronomic. But this is the very moment at which the Government decide to announce that they intend to reduce grants to small businesses by £230 million. One can argue that this is not a matter of aid but a question of regional policy. It may be regional policy. But, in the end, it boils down to the fact that industry will receive £230 million less aid a year under this policy than it received under previous policies. For that reason, my colleagues and I will go into the Lobby with the official Opposition.
7.21 p.m.
Mr. Iain Sproat: Before giving my own view on the changes in regional policy announced recently by my right hon. Friend the Secretary of State for Industry, which he has expanded and clarified today, I should like to comment on the speech of the right hon. Member for Western Isles (Mr. Stewart), who has now left the Chamber, although no doubt temporarily. His speech was uncharacteristically ungenerous and carping. It was more typical of the whining note we were accustomed to hearing from

431
Scottish National Party Members in the last Parliament.
The right hon. Gentleman made no mention whatever of the striking tribute to the success of our regional policy, including some of the regional policies of the last Government, shown by the fact that another 1,300 jobs, we read today, are to be located at the semiconductor plant at Greenock. This must be one of the biggest boosts to Scottish employment, tragic though the jobless figures are, for a long time. In one sense, all the criticisms that my right hon. Friend the Secretary of State for Scotland had to take over the new regional policies have been wiped aside by the fact that 1,300 new jobs are to be located in Scotland under the new conditions. We have the proof of the pudding this very day.
Mr. Robert Hughes: The hon. Gentleman might contrast with those new jobs the singular failure to persuade the Government to bring Civil Service jobs to Scotland. I gather that 6,000 were due to move, but only 600 are actually coming.
Mr. Sproat: The hon. Gentleman must wait and see what we get. Under the last Government, we were promised that a lot of civil servants would be dispersed under the Hardman report but none came. If the figure is only 600 under this Government, it will at least be 600 more than under the Labour Government. I shall be grateful for that.
I want to direct my relatively brief remarks first to the way that the changes in regional policy affect Scotland in general and then to deal with the situation in Aberdeen. I strongly welcome the overall package that my right hon. Friend has presented to the House. The old system had to go. My right hon. Friend was right to change a system under which we had laboured for too long in Scotland. The system was not fair and it was not working.
Examples have been given, mainly from the Labour Benches, of the unfairness of the old system. We were told that Rotherham was getting something but not Doncaster, that Sheffield was getting something but not Mexborough. An example of the ridiculous unfairness of the system, as it affected the region that I represent and the wider oil-related
432
region, is the fact that oil companies were getting Government grants for locating themselves in places where they would have gone without the giving of any grant. The oil companies, which did not need the money, were benefiting whereas other traditional companies in my constituency, for example, the fishing industry, were not getting the help that many of us would have liked to see.
There can be no argument: the old system was not fair. Also the old system was not working. One cannot say that any system was working sensibly when there was a doubling of unemployment in the country, as happened in Scotland. No one can defend the old system as being other than unfair and ineffective.
Another reason why I welcome the overall package that my right hon. Friend has presented to the House is that it concentrates the greatest aid on the worst hit parts of Scotland. I can say this in a spirit of political altruism. My constituency is not included, but the West of Scotland, which needs the help most, will get it. We heard a statement yesterday by my hon. Friend the Minister of State, Department of Industry on the future of the shipbuilding industry. We recognise, with sadness but realism, that contraction of the industry had to come and that such contraction will hit the West of Scotland. It is therefore appropriate that aid should be concentrated on an area that will be fairly swiftly hit by contraction.
Scotland now gets a higher percentage of development grants than it got under the Labour Government. While that is welcome in percentage terms, it is well to realise, particularly as far as the West of Scotland is concerned, that it is not just a question of a higher percentage. In actual cash terms, the worst hit areas of the West of Scotland will get more money. I understand that the increase is likely to be from £70 million to £90 million a year. I hope that all those political people in Scotland who, according to one Scottish newspaper, reacted with fury to the proposals of my right hon. Friend will think again when they realise that more money, not just a higher percentage for Scotland as a whole, will be directed to the worst hit area of the West of Scotland.
Mr. Dan Jones: The hon. Gentleman is very lucky.
Mr. Sproat: I am glad that the hon. Gentleman recognises the benefits that my right hon. Friend is conferring on Scotland. It is always pleasant to have those benefits recognised by the Opposition. I hope that the same sentiments will be expressed from the Opposition Front Bench in the winding-up speech tonight. I look forward to that speech, but I am astonished that the Shadow Secretary of State for Scotland, after all the so-called fury that was supposed to exist in Scotland, is not speaking for the Opposition. My right hon. Friend the Secretary of State for Scotland is winding up for the Government. The Opposition clearly realise that the package that the Conservative Government are putting forward is better for Scotland than the position that existed under the last Labour Government.
We are glad that my right hon. Friend is to phase in these changes with relative slowness. We all remember the all-too-brief notice of the withdrawal of the regional employment premium, a sum about equal to that now being cut by my right hon. Friend. At least, we are to have a period of phasing in. Every business man in Scotland trying to plan for the future will be glad to see that practical change of attitude.
I have explained why I welcome the package which my right hon. Friend has presented. I shall now be more specific about Aberdeen. Aberdeen is my constituency. I mention it not because of that but because it illustrates a general principle of which I hope to convincè my right hon. Friend.
I can understand why he suggests that the Aberdeen travel-to-work area should be demoted and should cease to be an intermediate area in three years' time. I do not agree with his suggestion. I do not know why the hon. Member for Aberdeen, North (Mr. Hughes) laughs. He may find that we are successful in persuading the Secretary of State for Industry and the Secretary of State for Scotland. We have three years in which to make our persuasive arguments before the axe can fall.
I can see that the Government have taken into account our low rate of unemployment. It now stands at about 3·3 per cent., which is less than half what it is for Scotland as a whole. The glossy veneer of prosperity which North Sea oil
434
has provided creates the aura of a boom city. That impression does not tell the whole truth. Beneath that glossy veneer are other aspects which are not as rosy and glossy as in the oil-related industries.
I tried to persuade the Labour Government. I took delegations to meet them and tabled questions. I tried to put the truth before them. I tried to convince them that employment statistics are too blunt an instrument by themselves to judge exactly the prosperity of an area. They did not accept my argument. They did not accept that the statistics masked the true position in Aberdeen.
I am pleased that the Secretary of State for Scotland has recognised that statistics which show that unemployment is low in Aberdeen do not reveal the whole truth. That is why my right hon. Friend has set up a committee to review the impact of oil on the North-East of Scotland. That shows that the Government are determined to look beneath the surface.
If the Government did not do that, I should fear a major recession in the North-East of Scotland in the next 10 to 15 years. I fear that there will be a major recession unless the Government, before the status of Aberdeen is changed, take long-term economic steps to maintain and, if necessary, restore the area's economic strength.
Mr. Dan Jones: Does the hon. Member agree that his argument about unemployment statistics applies equally to other parts of the country?
Mr. Sproat: I agree. I was going to deal with that.
I fear that Aberdeen will change from a boom city to a ghost city within the next 15 years. We must avoid that. Traditionally, the indigenous industries of Aberdeen have one disadvantage and one advantage. The disadvantage is the geography of the city. Aberdeen is a long way from the main consumer centres. The industrial competitive advantage of Aberdeen is that wage rates are lower than the national average. That may not be an advantage to the individuals receiving wages, but it is an advantage in terms of selling goods.
Before oil came to Aberdeen, wage rates were about 10 per cent. below the national average. Since the development

435
of North Sea oil, the traditional industries have retained the disadvantage of distance from the main consumer centres, but the oil industry wage rates have pushed up the rates in traditional industries. The wage rates in Aberdeen are now between 10 per cent. and 15 per cent. above the national average. Overall, oil has indeed been a boon to Aberdeen—but it has not been a boon and a blessing for the traditional industries. It could prove to be a disaster for Aberdeen unless the Secretaries of State for Industry and Scotland examine the long-term implications of North Sea oil.
I hope that the promised oil review will turn up the evidence to prove that Aberdeen should not lose its status at the end of three years. That is what I shall seek to prove. I do not know why Opposition Members laugh. They should hang their heads in shame because they did nothing. They would not even set up a review.
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): Where are all the Scottish Opposition Members?
Mr. Sproat: I also wonder where they are and why they are not attending this vital debate.
Mr. Robert Hughes: Will the hon. Member give way?
Mr. Sproat: I have already given way. I am just concluding my speech.
I want to see Aberdeen thrive because it is my constituency. However, it is not a question of that alone. Aberdeen is a typical example of a general situation. I seek to persuade the House of a general principle in relation not only to the subject of today's debate but to the dispersal of civil servants. It is essential for the social and economic health of our country that prosperity and job opportunity be spread as widely as possible. That is why it is essential to keep the prosperity which North Sea oil has brought to Aberdeen after the oil has run out.
I dislike any socially unhealthy concentration of prosperity or economic opportunity in the South of England or anywhere else. Prosperity should be spread as widely as possible. That is why I shall fight on this issue and why I am fighting on the Civil Service job dispersal issue. It is why I welcome the bold
436
beginning which the Government have made to provide us with a strong regional policy.
7.39 p.m.
Mr. Alan Williams: I apologise to my hon. Friends for intruding in this debate. I was the Minister responsible for regional policy in the past three years and the Minister who, in 1967, took through ministerial committee the proposition to establish the SDAs, many of which have been downgraded. In 1969, with my right hon. Friend the Secretary of State for Economic Affairs, I set up the Hunt committee to look into the problems of the grey areas which, in Lancashire and Yorkshire, were condemned to becoming grey yet again because of Tory Party decisions. It is, therefore, appropriate for me to comment. I shall try not to speak for too long.
After three years of listening to the Secretary of State agonising on the Opposition Benches about the merits and demerits of selective aid and non-selective aid, it is fascinating to see the typically and uniquely logical solution he seems to have arrived at. He has come to the conclusion that regional development grants are not good because they are not selective, and he has equally reached the conclusion that section 7 and section 8 grants are not good because they are selective. It seems to me that the absurdities that we heard from him when in Opposition have now been tragically turned into policies for which many areas of this country will suffer in the next few years.
The right hon. Gentleman dismissed previous regional policy against the criterion of net job creation. That never has been a criterion against which regional policy has been determined. In his opening speech today he said that regional policy is especially about the transference of jobs, about the movement of job opportunity, about the diversification of industry in the traditional areas.
Indeed, in a time of recession, it would have been astonishing if regional policy had been able to pass the net job creation criterion or yardstick that the right hon. Gentleman set out. In a time of recession, regional policy is defensive. It is about keeping as many as possible of the jobs that one has and, if possible, if there is mobile industry, securing a reasonable

437
share of that industry. That is something that the right hon. Gentleman overlooked with his criterion.
Over a 10-year period 400,000 jobs were lost in Wales, the North of England and Scotland in three industries alone—in coal, steel and shipbuilding. So let no one listen to this nonsense of net job creation. It is an irrelevancy to justify an axe decision that the right hon. Gentleman has taken.
Regional policy has never been about employment alone. It is about social factors as well. We inherit a population pattern which reflects the energy availability and energy resources of the nineteenth century, but in that population pattern we have the cumulative social capital—our schools, universities and hospitals—and it is an absurdity to think in terms of allowing a drift away from traditional areas of employment, a drift down to London and the South, forced there because that will be the only place where jobs will be available but where the existing social capital is already under congestion. The roads are congested, there is excessive utilisation of school facilities, hospitals and so on.
Let us not assume that regional policy is only in the interests of Wales, the North, Lancashire and the other assisted areas. It is essentially also in the interests of the prosperous areas of this country.
Last week's announcement was not the only attack that has been made upon the assisted areas. It follows others. It follows the cuts in finance for the Scottish Development Agency and the Welsh Development Agency and the abandonment of the office development permit system. Fascinatingly, it should also have followed the announcement of Government policy on dispersal of Government jobs. I wonder what innocent motive the Government have for failing to issue a statement today, before this debate, on what they intend to do about the dispersal policies that were announced by the previous Administration. They did not care to come to the House after such an announcement and hold this debate today.
In addition, we have had a major change in the industrial development certificate system, and we must not underestimate the significance of that change. It is massive in its impact. It means that
438
in future only the largest projects need be vulnerable to regional policy, because, with a 50,000 sq ft initial factory that can employ between 200 and 300 people, an automatic second phase is granted, with another 200 to 300 people employed. Then there is a rooted, large factory. It is well within the wit of most business men to so phase their development that if they might exceed the 50,000 sq ft—other than in very extreme cases—they will ensure that they build in two phases and so escape the regional net.
We shall see an even lower share of mobile industry coming to the assisted areas. This is where these proposals represent a major and massive swing in favour of the South of England and the Midlands. Only yesterday, in The Guardian, one of the right hon. Gentleman's hon. Friends, the Member for Chippenham (Mr. Needham), said:
"In some parts of the country, particularly in the south, the pressure on wages will come not only from union claims but from real shortages of labour of all types."
In his opening speech today, the Secretary of State referred to the shortages of labour that are already appearing in the South and the Midlands. Yet at this very time the Government increase fourfold the size of factories that can be built without any control by the Government at all. Clearly, they believe that they can leave it to market forces. But they left it to market forces in the 1950s. My maiden debate as a Minister in 1967 was on regional policy, when my hon. Friend the Member for Ealing, Southall (Mr. Bidwell) pointed out that at that time in London there were 11 vacancies for every unemployed person on the register. That was the result of leaving it to market forces. Everyone leaves it to someone else to carry out regional policy.
Let no one think that regional policy can be left to the local authorities, as the CBI suggests, on the ground that local authorities are already involved in planning. Some officials not very far from where I am standing at this moment will recollect that last year there was an occasion when a certain local authority came to see me and said that it hoped that I would be sympathetic to a project for a smelter that it would be putting forward in the near future. It was to be inland, in a densely populated area. When I asked what sort of smelter, I was told

439
that it would be a lead smelter. I pointed out that not many people liked lead smelters and asked "Do you think you will get it through in your area and have the approval of your constituents?" Back came the reply "Do not worry. The winds are westerly, we will bung the site on the extreme east of our area, and all the pollution will go into the next local authority area." That is an absolutely true story. That is the sort of logic of the obsession with getting rateable value. We cannot expect regional policy to be administered by local authorities. It is not their job to do it.
Now, as a result of the changes in the industrial development certificate policy, there is a danger of regional policy being substantially eroded. At this time, surely, the logic is that the loss of the stick should be counterbalanced by increasing the persuasive value of incentives. Yet, again, the opposite has been done. At the very time when it will cost more to persuade a business man to leave the comfort and security of the South, the regional development grant is to be removed from intermediate areas and cut in the development areas.
The right hon. Gentleman said that these areas must look more to self-help. At the same time, the Government have taken the regional development grant away, effectively, from very small companies by the way in which they have raised the threshold at which it applies, because in small companies a larger proportion of their total investment is made up of relatively small investment units.
We are told that selective finance is to be increased under section 7. Having lost the support of the IDC system and having seen the regional development grant incentive reduced, surely selective incentives should be increased. Indeed, they need to be increased. Regional development grant as a percentage of total cost is inevitably index-linked. Its value increases as the cost of machinery increases. There is no such linkage under section 7. Therefore, one would expect the Government to try to sustain the real value of selective assistance. That would mean an increase of at least 10 per cent., and 30 per cent. by next spring, to retain the administrative ceilings that were introduced only a little while ago. In fact, actual and real values will diminish under section 7.
440
As the right hon. Gentleman indicates, and as we all recognise, Britain, especially the regions, depends on inward investment. At present, 20 per cent. of manufacturing industry is overseas-owned. My colleagues in Lancashire and in assisted areas in Scotland know what a high proportion of industry in those areas comes from abroad. The right hon. Gentleman said that we gain from inward investment, yet the cuts in regional development grants and section 7 assistance mean that we cannot reach the ceilings for financial assistance that are permissible under the EEC regulations. Therefore, France, Germany, Belgium and our other Common Market colleagues will be offering packages of incentives that we shall not administratively be able to match because of the changes that the Government have made.
We shall be disadvantaged in obtaining internationally mobile industry at a time when there will be the minimum of domestic mobile industry. Two years ago private sector investment was increasing by 13 per cent. in British manufacturing industry. Last year it was increasing by 14 per cent. This year, under the Labour Government, it was expected to increase by 4 per cent. We now find in the Red Book that investment will not give us growth. We shall see a fallback of ½ per cent. in private investment and 4½ per cent. in public investment. As others have said, that is probably a grave understatement.
There will not be domestic growth and there will not be domestic mobile industry. The Government's decisions have cut us off from much of the internationally mobile industry. All that has happened at a time when the world is moving into a deepening recession. At this stage the Government choose to cut £1,000 million over a five-year period from the assisted areas.
The right hon. Gentleman gave us a load of economic claptrap about the effect of raising finance on alternative industry. The £233 million is ½p on the standard rate of tax. According to the right hon. Gentleman, that ½p would be a major debilitation for industry. Until the middle of February the Labour Government, under section 8 of the Industry Act, offered £385 million worth of Government assistance, the equivalent of 1p on the standard rate of tax for a year.

441
That generated £2,400 million worth of investment projects. Does anyone genuinely believe that 1p off the standard rate of tax for one year could have achieved the same result? That demonstrates the nonsense of the argument advanced by the Government.
We have seen a cut in regional aid. We have seen a change in the industrial development certificate system. Within the assisted areas we shall see bitterness and contention. That is already beginning to emerge from the contributions made by my right hon. and hon. Friends. It will arise because of a descheduling and downgrading of various areas. The Government treat these matters with the utmost cynicism. In an interview a year ago, it was reported in the Financial Times that the then Opposition saw as a logical step the need to redraw assisted area boundaries. They stated that there was no intention to undertake that exercise before a general election because it would be seen more as a matter of administration than of principle. Over 300 names appear on the list of areas that have been downgraded. Is that mere administration? It is certainly policy for every area.
Would the Conservatives have won Nelson and Colne and Rossendale if they had had the guts to tell people in those areas and elsewhere in Lancashire, Yorkshire and Wales what they intended to do about the incentives that are so essential to their survival?
As a result of the changed IDC policy, we have a new policy. It does not involve steering non-assisted areas into assisted areas. The result will be that Merseyside and the SDAs of the North will draw the industry that may have gone to Yorkshire and Lancashire. The South will continue to be largely free of industry loss and we shall have a regional policy based on areas of need having to subsidise neighbouring areas of even greater need. That is what the Government advance as a regional policy.
We have been through all this before. The Secretary of State will say complacently that his policy will work. In 1970 I well recollect standing on almost this same spot and trying to persuade the then Conservative Government not to abolish the old investment grants. They had introduced tax cuts and they cut
442
regional policy. What happened? Investment in manufacturing industry when the Conservative Government took office had been running at £4,200 million a year. Two years later, under their tax-cutting policy, it had fallen to £3,500 million. It never recovered. What did that mean to the regions? As I have already said, investment, according to the Red Book, will fall again in the next 12 months.
The consequence of the previous Conservative Government's policies was that in development areas and SDAs between 1969–70 and 1971–72 we saw a fall of 50 per cent. in the amount of new industry entering those areas. It fell from 28 million sq ft to 14 million sq ft. Wales suffered even more grievously. It saw a decline from 8·1 million sq ft to 2·9 million sq ft.
We have been through these cuts in regional policy before. As it was obvious that there would be no time and no opportunity for many Welsh Members to participate in the debate, nor Scots Members—I appreciate that every region is having difficulty getting its voice heard—I asked the Secretary of State for Wales a week ago to arrange a sitting of the Welsh Grand Committee before the Summer Recess so that Welsh Members could debate the cuts that will be made in Wales. The same could have been done for Scotland.
As unemployment moves inevitably towards the 2 million mark, the assisted areas will have to carry more than their share, especially those that have been downgraded. The tragedy is, having been through all this before, that too late will the South and the Midlands realise that what is bad for Wales, Scotland, Lancashire, Yorkshire and the North generally is also bad for the South. As I say, that realisation will come too late.
Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. I rise to refer to the statement on page 481 of the current Order Paper relating to the draft Regional Development Grants (Variation of Prescribed Percentages) Order 1979. The following words appear:
"The Instrument has not yet been considered by the Joint Committee on Statutory Instruments."
As Chairman of the Joint Committee, I must tell you that this afternoon the Committee considered the order, which

443
was finally laid, and reported it to the House. Copies of the extract of the fourth report of the Joint Committee, which refers to the order, are now available in the Vote Office.
The Committee indicated that, in its view, the order could be withdrawn and a new corrected draft made. There is a defect in the order which I understood was referred to in the opening speech of the Secretary of State for Industry.
In the view of the Committee, the proposed procedure is less than satisfactory. I hope to catch your eye, Mr. Deputy Speaker, to elaborate briefly on the views of the Committee as, quite clearly, they are important and relevant to the decision that will be taken later.
Mr. Deputy Speaker (Mr. Richard Crawshaw): I was alerted to the fact that the hon. Gentleman intended to raise this point of order. If he seeks to catch my eye, he may have the opportunity of elaborating on that point.
8.2 p.m.
Mr. Robert Hicks: I have always believed that the primary purpose of, indeed the justification for, our having an elaborate regional policy was assistance in the attainment of an economic and social structure in the United Kingdom whereby each region contributed to and shared in the nation's prosperity.
It is often argued by those who are opposed to State intervention of this kind that the most effective regional policy is a fast-growing national economy. Even if there is an element of truth in that viewpoint, it does not alter the position that regional disparities still remain. Thus the nation as a whole has an obligation to try to improve the level of economic activity in the less prosperous parts of our country. In addition, in this age of rapidly changing technology and patterns of demand, there is the problem of our declining industries, especially key industries in an area's economy. Here again I believe that the nation has an obligation to those regions, although not necessarily to any industry.
Therefore, for those brief reasons, I am an unashamed supporter of the principle of regional policies. Indeed, I was one of the Government supporters who, to put it at its best, were somewhat apprehensive in advance of the Secretary
444
of State's announcement last Tuesday. In practice, in general terms, I was rather relieved at some of its contents. However, some parts of my right hon. Friend's statement this afternoon gave me cause to worry.
I accept that regional policies, in their own right, do not create jobs. Regional policies influence the location of investment in this country. In turn, that investment, wherever it is made, we hope, creates jobs. To justify this significant reduction in the amount of money that is to be made available, my right hon. Friend said that regional policies had created only 20,000 jobs per annum on average over the past few years. With respect, that misses the fundamental point.
Regional policies are essentially a defence mechanism. They help to preserve the status quo. We cannot quantify the numbers of jobs that are saved as a consequence of having regional policies at any time. It would be impossible to quantify the number of jobs that would have been lost had we not had effective regional policies. Furthermore, I take the view that without regional policies we should have seen an even more pronounced drift—a movement of people and economic activity—from the North, the West and the South-West to London, the Home Counties and the Midlands. That is the justification for positive regional policies.
I agree that my right hon. Friend was right to try to sharpen the differential between the development areas of the United Kingdom and the non-assisted parts. I was somewhat relieved by the fact that where there is to be a loss of status it will be spread over three years. At least my right hon. Friend has learnt of the experience of Members on both sides of the House of the difficulty and problems that arise as a result of abrupt change.
Another point in my right hon. Friend's statement that I commend to the House is the fact that he refrained from changing the basic structures of our regional policy. The Industry Act 1972 remains. There has been an intended change in the level of grant, but the principle of the regional development grant still remains. Sections 7 and 8 of the Act remain. As one who spoke in the

445
Second Reading debate in 1972 and served on the Committee, I am at least relieved that this is one area where we remain consistent and have not given in to current trends that may be popular at present.
One wider aspect that concerns me is the fact that, even at the end of 1982, if everything proceeds according to plan, we shall still be spending almost £400 million on regional policies. It is right to ask ourselves how we shall use the most effective means of achieving regional regeneration and holding the level of economic activity in the regions, especially at a time of world recession.
Hon Members on both sides have said that over the past few years regional disparities in the United Kingdom have been reduced. But, sadly, in my part of the United Kingdom, the far South-West, that has not happened. Whatever criterion we choose—whether it be unemployment or the level of average incomes—we find that the disparity has increased. Whether we compare average unemployment in our region with that of the rest of the United Kingdom or average income in Cornwall with the national average, we find that the gap has widened.
Therefore, in that context, I suggest the concept of some form of South-West development agency, with an agreed budget, whereby the region could sell itself in the national or international market. That is the self-help that my right hon. Friend mentioned earlier this afternoon. Would not it be a good idea if the South-West had its own development agency so that we could go out into the market and attract suitable economic activity to our region? I put that idea forward. It might be a more than worthwhile experiment. Such an agency would have the responsibility for encouraging the indigenous economic activities within the region.
In the South-West we do not have a Scottish Development Agency; we do not have a Highlands and Islands Board; we do not have a Welsh Development Agency; we do not have a Development Board for Rural Wales. The only assistance through an agency that we have is through the Development Commission
446
which serves all the English rural regions. When we look at the average assistance that the South-West region obtains, compared with its counterparts in Scotland or Wales, we find that the budgets in Scotland and Wales for the development agencies, plus the regional development structure, are very considerable indeed compared with our receipts.
This may be the reason, or one of the reasons, why we have an unemployment problem in the South-West at a higher percentage now, compared with the national average, than the figure of five or 10 years ago. That is why average earnings in Cornwall are the lowest of any part of the United Kingdom, namely, 83·8 per cent. of the national average income.
I find myself in a difficulty this evening. As one who has always supported the concept of an active, strong and effective regional policy, I dislike these significant cuts of one-third, yet I find myself in the ironic position that whereas before last Tuesday seven-eighths of my constituency was in a development area and one-eighth in an intermediate area, now the whole lot comes within a development area.
I want to see a meaningful and vigorous regional policy. I am relieved that there has been no dismantling of the structures. Circumstances may change over the next three years, but it is incumbent upon us all that we have a cost-effective regional policy.
One or two speakers have mentioned during the debate the dangers of a divided Britain, with the more prosperous South-East and Midlands and the less prosperous North and West and my own South-West. I believe that this is the greatest single economic and social problem facing the country. The distribution of seats at the last general election tended—sadly, in my view—to catalyse this division politically.
I therefore ask my right hon. Friend to remember that the decisions that he and his colleagues make in respect of regional policies will, in both the short term and the long term, have a real influence on whether we have a divided nation. I hope that nothing that he does will contribute to the emergence of a divided Britain over the next decade.
8.13 p.m.
Mr. Bob Cryer: I am grateful to you, Mr. Deputy Speaker, for calling me. I know that many of my colleagues are pressing to enter the debate. I shall, therefore, be brief. I believe that my contribution is both relevant and important, in that in addition to the motion we are debating a statutory instrument. The House has established a Statutory Instruments Committee, the purpose of which is to examine those instruments to see whether there is, for example, an abuse of power, an unusual use of power, an unusual use of public expenditure, whether the instrument is ambiguous, and so on. We take those responsibilities seriously.
I think, therefore, that where an instrument is being debated, it is relevant and important that the House should be reminded for three or four minutes of the reasons why the Joint Committee on Statutory Instruments should, out of the hundreds of orders that we have to examine, report to the House the draft Regional Development Grant (Variation of Prescribed Percentages) Order. An extract from the report relating to this instrument is in the Vote Office.
The brief background is that the original statutory instrument that was laid was described to us by one of our counsel as ultra vires because of defective drafting, with the result that the amendment to the table in the original Act would have been done in such a manner as to be outside the powers allotted to the Secretary of State for that purpose.
When this was drawn to the attention of the Department, and we asked for witnesses from the Department to come to the Select Committee, the Department, presumably being apprised of that fact, then withdrew the original instrument and laid a fresh instrument before the House. We were therefore in the position of having witnesses available, and we chose to examine the witnesses, because during the course of examination of the fresh instrument we learned that it was also defective.
It might seem to be a relatively trivial defect. The Secretary of State has power to name the date, but he had named the date that was relevant in his speech of 17 July and it did not match up with the date adumbrated in the new, amended, replacement instrument. We therefore
448
thought that the Department was not exactly shining at producing instruments that were clear and without fault. We addressed these questions to the witnesses so that they could say what they proposed to do. I understand that the Secretary of State referred to this in his opening remarks and said that the Department proposed to put down an amending instrument to alter the date in the replacement instrument from 17 July to 18 July.
As this is an affirmative instrument, it can be debated by the House for an hour and a half. If hon. Members chose to exercise their debating rights in regard to the instrument, they would be debating the narrow point whether the date in one of the articles should be 17 July or 18 July. Clearly, in my view and in the view of the Committee, it would be a waste of parliamentary time to argue for one and a half hours when there are much more important and urgent matters to be brought before Parliament, but that is the position.
The Committee, therefore, in its report has suggested that the instrument, rather than being pursued tonight, could be withdrawn and that an amending instrument, which is complete and comprehensive—one hopes that the Department will be lucky on the third occasion and get it right—could be placed before the House and put through before the recess. The report points out that officials have indicated that an amending draft order will be laid to correct the mistake and that the motion to approve it will be taken after the Summer Recess. The Committee considers this to be a most unsatisfactory course. It points out that the present draft order could be withdrawn and that a new corrected draft could be laid, and that approval could be sought to it before Parliament rises for the recess. The regional issues having been discused tonight, there is no reason, in the Committee's view, why this could not be done.
Mr. Graham Page: I support the hon. Member for Keighley (Mr. Cryer) in what he is saying to the House. Does he not think that it would be a complete farce for us to approve a draft order tonight, knowing perfectly well that it is wrong, for another place to approve it tomorrow night knowing perfectly well that it is wrong, and for the order to be

449
made the following day, everybody knowing perfectly well that it is wrong, and to have an amending order in three months' time? It would be quite possible to withdraw what is before us tonight, to amend it in ink, put it on the Table, and lay it tomorrow. I am sure that both sides of the House would allow it to go through without further debate.
Mr. Cryer: I am grateful to the right hon. Member for Crosby (Mr. Page). As a former Chairman of the Joint Committee on Statutory Instruments, obviously his remarks are relevant and to the point. We understand this process, because it occasionally occurs. People outside would regard it as plainly daft to pass an order which is defective, knowing that an amending order will be processed in three months' time. In addition, the people affected by the order may well find that they have been given misleading guidance by the order and be discouraged from making application for regional grants which they are perfectly entitled to do, grants which hon. Members have indicated tonight are relevant and important.
If that is so, it seems to me quite wrong for the House to put through an order which could be misleading, discouraging and which we know full well will be corrected at the end of the recess. Therefore, I urge the Secretary of State to withdraw the order and substitute a full and proper order, so that the House is not brought into disrepute and its legislative processes can be seen for what they are—clear and unambiguous.
Sir Keith Joseph: On a point of order, Mr. Deputy Speaker. I do not wish to dispute one word of what the hon. Member for Keighley (Mr. Cryer) said or what my right hon. Friend the Member for Crosby (Mr. Page) said. The responsibility is mine. There was a defect in the second order by 24 hours. As the hon. Member for Keighley has acknowledged—I do not think that he was present but I explained this in my opening statement—the House agreed to the proposition that we should take the motion and the order at the same time. Therefore, according to the decision of the Chair, there may be two or three votes at the end of today's proceedings. In order to change that and do what the hon. Mem-
450
ber for Keighley and my right hon. Friend the Member for Crosby suggest, the Government would have to withdraw this order. The question is whether that would not make the intervening few months more uncertain than if we were to go ahead, as the Government propose, and vote tonight on the understanding that before the House rises for the recess an order will be tabled revising the date by 24 hours. Everyone in the business community will then have clear warning of the correct date.
By its decision the House has already opted not to spend an hour and a half debating the order separately tonight. It is true that the amending order, as it is subject to an affirmative resolution, can be debated after the recess. Whether it is debated will be for the House to decide. It may be that the House will decide not to debate it, in which case no time will have been wasted. If the House decides to debate the order, it will be one and a half hours then instead of tonight.
Mr. Graham Page: Surely it is possible to withdraw the draft order which is before the House at present and to lay the corrected draft order tonight, before 10 o'clock. It could then be voted on tomorrow, when I would hope that the Opposition would allow it through, having debated the whole subject fully today, without a further one and a half hours being necessary.
Mr. Cryer: The interjection by the Secretary of State was less than satisfactory. I was not here for the opening of the debate, simply because the Committee was sitting and hearing evidence from Department of Industry witnesses. The Committee considers—we made it quite clear in our report—that to proceed as the right hon. Gentleman suggests would be unsatisfactory. It would be simpler for this order either to be withdrawn and another order laid, or an amending order laid in conjunction with this order, so that we did not have the daft situation of a three-months gap.
As I said in my earlier remarks, it is simple for us to understand, but our legislative process affects millions and we should strive, where it is within our ability, to make things as simple and clear and as easily understood as possible. The process that the Secretary of State

451
is suggesting will not do that. The process that the Committee is recommending can be got through. The debate has been held. The amended order can be placed before the House and it will be up to the House to decide what to do with it. But the House would at last have one correct order. That is the procedure that I believe we should follow.
Sir Keith Joseph Sir Keith Joseph rose—
Mr. Deputy Speaker: I feel, with the greatest respect, that we should proceed with the debate.
Sir K. Joseph: On a point of order, Mr. Deputy Speaker. A new proposition has been suggested to the House. Obviously I want to co-operate with the Committee, but I am advised that there is a problem about the amount of notice that is necessary before an amended order can be voted upon. I should like to have a few minutes to consult to see whether what the hon. Member for Keighley suggests is, or is not, practical. If I may, I shall intervene again later.
Mr. Les Huckfield: Further to that point of order, Mr. Deputy Speaker. Though I take note of what the Secretary of State said about the House having agreed to consider the order and the debate at the same time, he will recall that when he said that it would be convenient for the House and asked the leave of the House, we had not heard his statement on what he proposed to do to the order. By our silence we assented to taking the two issues together before we heard the right hon. Gentleman's explanation. Having heard his explanation, I place great weight on what was said by my hon. Friend the Member for Keighley (Mr. Cryer), who is the Chairman of the Committee. On behalf of my right hon. and hon. Friends, I can say that we certainly take very much to heart what my hon. Friend the Member for Keighley said.
8.27 p.m.
Mr. Fred Silvester: My hon. Friend the Member for Bodmin (Mr. Hicks) and I must share the distinction of being among those on the Government Benches most favourably disposed towards regional policy. Therefore, it is of some interest how we approach the present proposals of the Government.
452
I take the view that regional policy is not a temporary matter. As my hon. Friend the Member for Oxford (Mr. Patten) said clearly earlier today, regional policy is something which will, and should, continue. It arises because there is a fundamental imbalance between various parts of the country, and the natural pull and economic advantage of the South-East is not something that will go away. The fact that the capital remains here makes that inevitable. An active and effective regional policy is not a palliative for the regions of the country but a permanent and everlasting policy for a country which is as highly centralised as ours.
Having said that, I think that we must judge how we approach the present proposals. I have no difficulty regarding the present proposals. The Secretary of State has disappeared to consult on the procedural point, but it may come as a surprise, in view of our previous battles on these matters, that I compliment him on his present proposals.
The man who tackles the question of the boundaries is, I believe, a brave man indeed. It is inevitable that whatever one does there will be people who have particular axes to grind or particular local interests. Manchester will disappear altogether from the assisted area list. No doubt that will cause me a great deal of local aggravation. Nevertheless, it is true that the map had become wholly indefensible. It is therefore important, if one is redrawing it, to try to do so in such a way as to give the basis of fairness between one region and another. To do it on the basis of the unemployment statistics, together with some understanding of what is likely to develop in the near future, is the best way of going about it.
Therefore, I compliment my right hon. Friend on tackling this problem. But, as T. S. Eliot said,
"The last temptation is the greatest treason: To do the right deed for the wrong reason."
I would share the disquiet of some of my hon. Friends if I thought that changes were made not because the map had become unfair but because it was desirable to produce a quick £200 million out of the regional assistance budget. I say that because I do not think that people generally understand the extent to which there is a considerable bias in public expenditure in favour of the South-East. It is

453
generally overlooked—my right hon. Friend showed this again today—since regional aid is so easily identified as something that can go into one region or another, that a lot of other public expenditure is heavily biased towards the South-East and London, not least the salaries of civil servants and others. Therefore, one must be careful when one talks about the need to prop up the regions by giving them extra public expenditure, especially when they may he doing nothing other than trying to equate their share.
For example, my right hon. Friend talked about one of the effects of the cost of regional policy as imposing taxes upon other businesses. I suspect that he would not do that with other forms of tax cost. It is rather like supposing, as is sometimes argued with the car tax, that there is a discreet industrial fund. It is to argue that the money that has been spent out of the general tax pool for the North-West or the North is somehow a burden upon industry, whereas taxation for the purpose of roads, hospitals and so on is not. I do not believe that argument to be tenable. It is, therefore, not one that I hope my party will advance too often.
Nevertheless, to those of us who support some kind of active regional policy, it is of great importance not to try to do it on the basis of maintaining the sacred cows and vested interests or the barnacles that have become encrusted on the whole structure. I was delighted to hear about the end of the economic planning councils. I could suggest a few other bodies that could well be axed. In the process of trying to get industries into these areas an enormous industry has developed, and it is about time that there was some pruning there in order to get back to the nitty-gritty—the spending of money on the provision of jobs rather than spending it on talking about the provision of jobs and the setting up of yet more conferences and plans to do so.
We are therefore faced with the opportunity as well as the difficulty. I have no doubt that it is right that regional policy, like every other part of public expenditure, should bear its fair share of the burden that has arisen because of the enormous increases in wage costs within the public sector. I understand that these
454
are likely to run at about £4½ billion. They are large and additional sums. It is, therefore, inevitable that all areas of public expenditure should play a part, including regional policy.
However, we should not forget that there are areas that are not labelled "regional policy" that do not come under the Department of Industry's Vote and that are of immense importance. I refer particularly to those areas which come within the sphere of local government and concern various forms of infrastructure improvement. We in the North-West, like many other areas, are faced with essential problems that bear as heavily on industrial development as anything else. For instance, Manchester is faced with a rate burden and a diminishing rate base that makes it extremely difficult for small companies and other new companies to make a rational decision to go into the centre of the city. The rate burden is enormous, partly because of the way in which the council runs its policies, but also inevitably because of the drift of people from the city centre.
Similarly, we have whole areas of backlog to be cleared up. I cite local examples because I know them best—but they will be duplicated in other parts of the country—such as the sewer system, which is totally collapsing. If that is a matter which has to be borne by the local community, and a community which has a smaller industrial base and a weaker rate base, it will be very difficult for them to do it.
Therefore, I hope that in looking to making savings in public expenditure, the Government will nevertheless remember that there is a real necessity on the part of any Government, Conservative or otherwise, to make a continuing commitment to the recycling of some of the resources of the country back to the regions to make up for the inevitable drift to the South-East. That may well be better done by spending money on infrastructure changes and matters that come under the rates rather than by the regional development grants about which we have been talking today.
8.36 p.m.
Mr. D. E. Thomas: This is probably the most important debate affecting Wales and other regions in

455
England and the national region of Scotland that we have had in this Parliament. The effect on both my constituency and on the whole of Wales is potentially disastrous. The Blaenau Ffestiniog special development area in my constituency is downgraded to a development area. The Llangollen travel-to-work area becomes an intermediate area. Barmouth, Machynlleth and Towyn move from being development areas to being completely non-assisted areas.
I have received a letter on this subject from the director of one of the three remaining slate quarries in the constituency—hardly a mobile kind of industry—and it is typical of the comments that I have had from employers. It states:
"The consequences of such action would be disastrous for our company, as its future capital expenditure will naturally he drastically reduced."
These days we are continually hearing in the media, as we have since before the general election, about the self-styled philosophy of the Secretary of State for Industry. It appears to me—I think that this was confirmed today—that his philosophy is none other than a very simplistic ideology, based on a very inadequate economic analysis—on the reliance on market forces.
As someone who represents a less-developed region, I know that we have been on the receiving end of the operation of market forces for many years. Regional imbalance in the case of Wales and of the other regions, as the hon. Member for Manchester, Withington (Mr. Silvester) has pointed out, is not a geographical accident. It is not a natural tendency. It is a factor in the very economic system in the countries of Britain. It results from the domination of peripheral areas by central areas. It is a geographical inequality, a horizontal inequality, which compares with the vertical class inequality. I think that the Secretary of State for Industry, in all his speeches, exhibits his devotion to the maintenance of both.
We have an uneven development in the concentration of capital in the South-East and the Midlands which affects adversely the development of new jobs in the regions, not only in Wales but in the other regions of the United Kingdom.
456
There is a dependent economy which has been created in Wales and the other regions by the centralisation of capital. Local development is inhibited by lack of local capital. There is a lack of infrastructure for diversified manufacturing, and the peripheral regions become narrowly specialised. They become export economies. Our most valuable exports are not only Labour Members to serve English constituencies from the Opposition Benches but also young technologists, who are still exported. Indeed, over 500,000 of our working population, throughout this century, have been exported from the economy of Wales to serve in the central areas.
From what we have heard this evening, it seems that the Secretary of State for Industry, with his euphemisms about the mobility of labour and a labour shortfall in the overdeveloped or more developed areas of the economy, tends to perpetuate and, indeed, to intensify that very system.
We have had quotations from George Bernard Shaw and T. S. Eliot. I hope that I shall have the forgiveness of the House for quoting Marx:
"The territorial division of labour … confines special branches of production to special districts of a country".
That is not merely a Marxist quotation from "Das Kapital", but it is appropriate to the economic system from which Wales and the other regions of this country suffer. I do not expect the Secretary of State to accept that analysis for a moment, but at least he ought to look at it and realise that regional policy is an attempt to intervene in the centralisation, in the centrifugal forces of capital accumulation. Indeed, the whole history of regional policy, inadequate as it has been over the years in its effect on Wales, teaches us that we cannot leave the location of jobs entirely to market forces.
The hon. Member for Vauxhall (Mr. Holland) has writteen a major book on the theme, "Capital versus the Regions", which I recommend to all civil servants in the Department of Industry. The analysis stresses that if the market system is to be adequate for correcting regional disparity and for creating new investment,
"the investment opportunities in the less developed region will have to be greater than those in the more developed region if a re-entry of

457
savings and a cumulative growth process are to be started by the free working of the market"
in the less developed areas. He goes on to stress that
"there is no once-and-for-all element in a successful regional policy. For even if the productive structure and regional competitiveness of a less developed region is improved to the point at which it can be said to be 'aligned' with a more developed region, then the free working of the market will initiate further cumulative imbalance unless monitored and offset by government policy."
Clearly, by their withdrawal of regional aid the Government are determined not to offset the operation of market forces.
In the 16 years from 1960 to 1976 the net benefit to Wales of regional policy was the creation of 76,000 new jobs. That did not offset job losses in basic industries, and those losses will be increased by the decision of the Secretary of State for Industry to axe steel making in part of my county of Clwyd, at Shotton.
The Secretary of State partly quoted from the study of Barry Moore, John Rhodes and Peter Tyler on the impact of regional policy in the 1970s. That study indicated that the total effect on Wales was that increase of 76,000 jobs, and I am therefore appalled to see the Secretary of State for Wales so warmly associated with the package that is before us today. He is clearly presiding over a further disastrous collapse in the Welsh economy, and I am not surprised that he is not prepared for us to discuss these cuts in the Welsh Grand Committee and he chickened out of making a statement on the issue.
The Labour Benches are not free from criticism. The right hon. Member for Swansea, West (Mr. Williams) earlier appeared as a major defender of regional policy, but there has been a progressive weakening of regional policy throughout the 1970s under Tory and Labour Governments. The strength of IDC policy has declined by about half during the 1970s. Even if the withdrawal of REP was forced on the Government by European policy, the fact remains that about £30 million was lost in specific investment in the Welsh economy through that withdrawal.
It is not good enough for the Secretary of State to pretend that the fact that 40 per cent. of the United Kingdom is now an assisted area—the so-called plateau effect—prevented the regional policy from
458
being effective. The major factor preventing that is that the strength of the policy has been withdrawn and its bite has declined under both Labour and Tory Administrations.
If the Secretary of State can quote Moore, Rhodes and Tyler, so can I, and I shall get my figures right this time. The projected estimated total loss of manufacturing jobs as a result of the cut in regional employment policy in the assisted areas from 1976 to 1980 is between 23,000 and 45,000. There are also jobs lost indirectly through unemployment. We are therefore facing not only the effect of the cut in REP but this further reduction in regional policy.
The link between regional policy and taxation has been clearly exhibited in these proposals. What is regional policy if not transfer payments to the less developed regions out of the income of the richer classes in the more developed regions? That is the aspect which angers me most. The Government's decision on regional assistance is part of their whole policy of favouring their supporters and blatantly favouring the class that they represent. The working people of Wales are taking note of what the Government, for whom we did not vote, are doing to the Welsh economy.
Several Hon. Members Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Barry Henderson.
Mr. Robert Hughes: On a point of order. Mr. Deputy Speaker. I regret having to raise this matter, because I appreciate the great difficulty of the Chair in calling speakers in such a major and serious debate. However, I wish to put on record my strong concern that no Labour Back Bencher from Scotland or the North of England has been called. We have had two Conservative Members from Scotland, one right hon. Member representing a minority party in Scotland and one hon. Member representing a minority party in Wales. Of course, they are entitled to their point of view, but the major Opposition party is also entitled to a proper share of the debate.
Mr. Robert C. Brown: Further to that point of order, Mr. Deputy Speaker. I am a member of the Northern group of Labour MPs and, with four of my colleagues,

459
I have been in the Chamber all day waiting to be called. I take a dim view of the fact that not one hon. Member from the Northern region—including the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott), who came in earlier prepared to make a speech—has had an opportunity of contributing.
We have seen the spectacle of the hon. Member for Manchester, Withington (Mr. Silvester) being called to speak just after walking in from the cold and sitting down. You have now called another hon. Member who has not been in the Chamber for more than 10 minutes. It is monstrous that five hon. Members from the North of England have sat here all day and you, Mr. Deputy Speaker, have not seen fit to call any one of us—not even my right hon. Friend the Member for Durham, North-West (Mr. Armstrong), who is a Privy Councillor.
Mr. Deputy Speaker: We still have 25 minutes before the winding-up speeches begin. If hon. Members exercise control over their eloquence, it is conceivable that we may be able to fit in all hon. Members from the remaining areas.
Mr. Dan Jones: Further to that point of order, Mr. Deputy Speaker. I join the complaints of my good friends from the North-East and Scotland. I represent an area in which the textile industry has been decimated, but no Labour Member from that area has been called to speak in the debate.
8.48 p.m.
Mr. Barry Henderson: I shall seek to be brief, but I should point out that I have been in the Chamber all afternoon except for a period of about one hour.
I could prove to the hon. Member for Merioneth (Mr. Thomas) that the Government's proposals are not politically inspired, as was all too often thought to be the case under the previous Government. I warmly welcome the general principles underlying the redistribution of the development areas. The redrawing of the map was long overdue, as was the need to get better value for taxpayers' money.
Scotland as a whole benefits substantially from the changes, but my constituency suffers more than most. Indeed, it is the only constituency in the kingdom of
460
Fife that has had its development area status reduced.
It is in the context of general approval of the measures that I should like to raise a number of points that I hope my right hon. Friend the Secretary of State for Scotland will answer or at least bear in mind for future consideration. They emerge from the desire to improve the selectivity of the regional development measures and to avoid abrupt changes.
In the context of avoiding abrupt changes, I envisage the following problem. A major capital project may have received stage payments before 18 July 1979 for goods which will not finally be delivered until after 1 August 1980. Many people outside the House are anxious to know how that problem will be handled. What happens when a genuine project has already been submitted to the Government for consideration, say two months ago, under the energy-saving scheme, which could have been initiated before 18 July 1979 but for the time taken in consideration in Government Departments? Will the contribution from regional development aid be given to those people when even an order that is placed today could not physically be delivered within the period of a year? If delivery is genuinely and reasonably expected to be made before 1 August 1980 but that delivery is not met through no fault of the purchaser, for example, because of an industrial dispute on the supplier's premises, what will happen? That important point should be considered.
I believe that my right hon. Friend the Secretary of State for Industry should acquire powers to be able to deal with anomalies of the sort that I have mentioned, where everything is done genuinely and in good faith and yet, for one reason or another, ground may be lost, thereby losing substantial sums of money to major capital projects. I hope to see greater selectivity exercised in the matter.
Several areas in my constituency have been reduced from development area status to intermediate status and some have moved to non-assisted status. One has moved from special development status to development status. The Cupar employment office area is geographically large but it is sparsely populated. I accept that, on the broad principles by

461
which the Minister may be guided, it is probably correct that the whole area could not reasonably be considered to maintain development area status. However, within that substantial geographical area there are serious pockets of deep unemployment. I draw my right hon. Friend's attention particularly to the town of Newburgh, which is many miles away from any other significant centre of population. It is unfortunate for the town that it is on the extreme periphery of the Cupar employment office area. It is also on the periphery of another area. Yet it is a town which has seen the catastrophic failure of the major employer within the past two or three years. There is severe unemployment in the town and it is not part of the general economic activity of what in bureaucratic terms is referred to as the Cupar employment office area. I hope that it will be recognised that that is too broad a bureaucratic brush with which to work and that my right hon. Friend will hold out some hope that special cases of individual towns in isolation within the area will be given some consideration.
The Scottish Development Agency is scheduled to build an advance factory before the end of this year. I should like an assurance that that project will still go ahead. In addition, there has been a substantial amount of private enterprise activity to build up what is, in effect, a private enterprise industrial estate on a tiny scale, which so far has cost no public money. I believe that that effort needs especial encouragement of the type provided by these selective measures.
The next area on a selective basis comes within the St. Andrews employment office area which will lose its development area status. The town of Guard Bridge is on the periphery of that employment office area, one mile from the border of the special development area based on the Dundee employment office area. One company engaged in the production of paper employs a third of the working population of Guard Bridge. That is a cyclical industry which has faced particular problems. That company, with the aid of able management and great co-operation from an efficient work force, has managed to survive the rigours of the past five years because of its own efforts. I hope that those efforts
462
will not by stymied at this stage by a lack of sensitivity in selectivity and the placing of development area boundaries.
The last area to which I should like to draw attention is that of Levenmouth. The area embraces both Leven, which is in my constituency, and Methil, which is in the constituency of the hon. Member for Kirkcaldy (Mr. Gourlay). I am surprised that the area has been reduced from special development area status to development area status, because it is next door to Glenrothes new town, which has substantial advantages in attracting industry and retains special development area status. I look forward to discussing with my right hon. Friend whether an injustice might have been inflicted in changing the status of Levenmouth.
In short, the employment office areas, seem to be a bureaucratic, blunt instrument in the more sparsely populated areas. It is not the inhabitants' fault that they must travel so far to reach an employment office. I hope that my right hon. Friend will take serious note of these points in seeking to help a constituency which, because of the efforts of its people and the activities of small businesses, has done very well for itself. It recognises that in broad terms the general trend of Government policy is right but that it will be made more effective if more selective measures are employed in some instances.
8.58 p.m.
Dr. Oonagh McDonald: I listened with interest to the statements which were made last week by the Secretary of State for Industry on regional policy and the National Enterprise Board. I also listened with care to his opening speech in this debate. Comments have been made about the right hon. Gentleman's passionate commitment to market forces, yet we find when we examine his statements that his commitment turns out to be not so real after all. If one is committed to a belief in free market forces, one would surely scrap regional policy entirely.
However, the right hon. Gentleman has allowed the basic structure of regional policy to remain. He has not taken the opportunity to carry out a thorough review of regional policy. Instead, the withdrawal of regional assistance from various areas has been carried out haphazardly, and this will result in increased

463
unemployment. The right hon. Gentleman has not taken the opportunity to examine changes in the structure of employment or changes in the industrial geography of the United Kingdom, following the discovery of North Sea oil and its implications.
That means that the sharp cut in regional aid will lead to increased unemployment. It also means that many companies which are already likely to face severe financial difficulties in the coming months will find that those difficulties have been increased by Government action. Indeed, we will find over the next two or three years, when regional aid is finally withdrawn from many companies, that they will suffer greatly as a result. The Secretary of State has not helped the traditional development areas, nor has he done anything to help other non-assisted areas such as London and the South-East.
The Secretary of State has made play of withdrawing IDCs, but, contrary to what some of my hon. Friends have said today, those policies have been weakened greatly over the past two to three years. In London and the South-East, in 1977 only two applications for areas up to 50,000 sq. ft. were refused, in 1978 seven were refused, and in the opening months of 1979 only two were refused. That means that there are areas in London and the South-East that are urgently in need of assistance. The inner urban areas have been mentioned already by my right hon. Friend the Member for Deptford (Mr. Silkin). There is a tendancy to look particularly at inner urban areas.
However, I remind the Secretary of State that there are other areas such as my constituency of Thurrock which have had unemployment levels of between 7 per cent. and 8 per cent. over the last few years. The relaxation of the IDC policy over those two to three years has not helped Thurrock.
Unemployment in Thurrock is due to structural changes—the closure of old industries such as quarrying, and the decline of employment in the docks. Thurrock is in need of replacements for those old industries and new opportunities for employment. The right hon. Gentleman's review of regional policy has done nothing to help pockets of high unemployment in regions where the overall level of un-
464
employment has been low and frequently lower than the national average.
If the Secretary of State is seriously concerned about regional policy and wants to continue with it, he should look at the way in which it has been operating and make the necessary changes. Instead, he has allowed the automatic grants to continue. Very often they go to large companies and are in turn invested in capital-intensive industries. Those grants therefore do not provide an adequate number of jobs. Often that money is wasted entirely and is given to petrochemical industries which would have to be situated in Scotland or the North-East, and therefore that is money down the drain.
I am curious because I believe there is some Question of withdrawing aid from the petrochemical industries, and it is only in response to pressure from some of the major companies that that aid continues to be available. Perhaps the Secretary of State will comment on that. The bias of the regional policy with which the Secretary of State has presented us is towards the large companies, some of which do not need it. That bias is directed away from small and medium firms. He has raised the minimum qualifying levels for grants and allowances and, therefore, many small industries which could provide jobs will not receive assistance. Those small and medium firms are firms of the kind to which the Secretary of State claimed to be so committed during the Government's period of Opposition and during their election campaign. It is those firms that supply important jobs that can provide a spread of employment with different kinds of employment opportunities for people in a developing region. It is those firms that will go to the wall, despite the protestations of the Tories, both in Opposition and in Government, that small is beautiful and that small should be helped.
The Secretary of State has also failed to link regional aid with the number of jobs provided. The cost of present regional aid in terms of providing jobs can often be extremely high. The jobs that it produces are few in number. Why has no criterion been introduced? It is used in other countries and should be used here. As in other countries, the criterion shoud be to make sure that the projects to which aid is given are ones

465
that fit in with planning for a region as a whole. The Secretary of State's policy fails to meet that criterion.
Any regional policy undertaken by a future Labour Government should take features such as that into account and their regional policy should conform to that criterion. It should look first at the various agencies that are concerned with regional development and make sure that they work together, are integrated and are not competing foolishly against each other. This has happened with many promotion agencies—for example, Milton Keynes and Peterborough competing against each other in a wasteful fashion. It should not be confined to stimulating manufacturing industry in the regions but should also look at the possibility of stimulating service industries. These industries can widen the range of job opportunities and perhaps provide employment opportunities for women. They have an important income impact on the regions and can perhaps lead to the payment of higher wages.
Small service industries may not only fulfil these functions but, unlike large companies, may draw on other small suppliers in the area. They will not have their own subsidiaries to supply their needs. They will not have their own manufacturing companies to supply their needs. They will therefore draw on other small businesses in the area. In that way, employment opportunities can expand.
The pattern operating in France and Germany is flexible and related to the needs of an area which is tested in terms of employment and lack of employment, in terms of average income, and in terms of the level of infrastructure. The policy is not automatic. In France, tax concessions and local rate concessions are granted only if the project fits in with official regional development priorities. The project has to accord with the plans for the region as a whole. A more flexible policy of this kind, which looks again and again at various criteria and tries to fit in a project with plans for the region as a whole, can provide jobs more effectively even than our regional policy has done in the past.
If the Secretary of State is serious about reviewing regional policy, that is the kind
466
of policy he should have produced instead of merely slashing away at the assisted areas, slashing the amount of money given, increasing unemployment, increasing the depression and poverty in many parts of the country and failing to look at other areas of need. If he had followed the course I have outlined, we might have found what he produced acceptable. Instead, we know that the whole country will have to wait until the Secretary of State's period of office comes to an end and a Labour Government produce a regional policy that will provide jobs and raise the level of income throughout the depressed regions of the country.
9.8 p.m.
Mr. Les Huckfield: I am sure that hon. Members have found this an interesting debate. Many hon. Members wished to speak. I should like to preface my remarks by congratulating those hon. Members who made their maiden speeches. It was 12 years ago in this House that I made my maiden speech on regional policy. I know how those hon. Members feel. The hon. Members for Oxford (Mr. Patten), for Bristol, North-West (Mr. Colvin) and for Cornwall, North (Mr. Neale) have one factor in common. Either their constituents already benefit from the National Enterprise Board or they would like to benefit from the National Enterprise Board.
I am sure that the hon. Member for Oxford realises that 30,000 jobs in the Cowley area are dependent upon British Leyland plants. The hon. Member for Bristol, North-West will be one of the beneficiaries from the siting of the Inmos technology centre in Bristol and I am sure that the hon. Member for Cornwall. North realises that Cornwall county council was recently making strong pleas to have Inmos sited in its area. There is a common interest in preserving the NEB. I hope that hon. Members will press that upon the Secretary of State.
I wish that the hon. Member for Cornwall, North had mentioned regional development grants for tin mining, which is important to his area. There was a change of policy under the previous Government, but some of my right hon. and hon. Friends believe that the issue should be reconsidered.
Many hon. Members wished to take part in the debate. For example, my right

467
hon. Friend the Member for Durham, North-West (Mr. Armstrong) wanted to mention the Courtaulds closure at Spennymoor, about which he has been anxious. My hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown) wanted to mention the Vickers Scotswood threatened redundancies and the Tress redundancies with which he has been involved, as I have. My hon. Friend wanted to ask the Secretary of State whether the type of assistance which the Labour Government were prepared to make available will be available under this Government. I am sorry that my hon. Friend was not able to urge the Secretary of State on that matter.
My hon. Friend the Member for Thurrock (Dr. McDonald) made some valid points about the interconnection between service jobs and jobs in other industries.
One of the most refreshing and realistic approaches was adopted by the hon. Member for Bodmin (Mr. Hicks). His speech was more realistic than that made by the hon. Member for Aberdeen, South (Mr. Sproat), who lavishly praised the Secretary of State's statement and then said that under that policy Aberdeen could become a ghost town. It was an illogical speech. I am sorry that he has drifted away.
The most devastating criticism of the policy was made by my right hon. Friend the Member for Swansea, West (Mr. Williams), who was in charge of the administration of regional policy under the previous Government. He was particularly telling when he rubbed home the point that we are depriving ourselves of the opportunity to invest to the limits to which other members of the EEC still permit themselves. I am sure that in the short time that they have been in office the Government have realised that we must be internationally competitive when bidding for multinationals to invest in Britain.
Perhaps the most fascinating aspect of the debate has been to watch the public wrestling match on the Government side of the House. I am talking particularly of the Secretary of State, who has been wrestling with his own conscience. He cannot see how his theoretical beliefs, which oblige him to say that we should not have any subsidies, can be squared
468
with the need for a regional policy. I am not sure whether the right hon. Gentlemans' conscience or his contact with reality won.
The Secretary of State tried to justify assistance for marginal investment and agreed that in some circumstances such assistance can be justified. In the next breath he said it may be better if the workers move out of the assisted areas to the non-assisted areas. The Secretary of State is being illogical. I am sure that he realises that one cannot operate both those policies at the same time.
The Secretary of State said that he had tried to make the map more fair. What is fair about downgrading an area such as West Cumbria when the rate of unemployment is still increasing and the consequences of the Secretary of State's shipbuilding statement are still to come? What is fair about downgrading an area like that? What is fair about upgrading Blackpool and downgrading Blackburn?
Mrs. Kellett-Bowman: They have not. The hon. Member for Blackburn (Mr. Straw) got his facts wrong.
Mr. Huckfield: What is fair about some of the policy decisions that the right hon. Gentleman announced in that answer which he seemed eager at some stages the other day to want to conceal from the House?
Mr. Hardy: Would my hon. Friend consider the situation fair where in my constituency I have a development area, an intermediate area and an area from which all assistance is to be removed? Would he consider it fair that the area from which all assistance is to be removed has much higher unemployment than the intermediate area, which has slightly higher unemployment than the development area, although I accept that the development area itself will have rather less aid than it had before? Does he not consider that the people of Rother Valley are justified in seeking a reconsideration of this absurd and bewildering state of affairs?
Mr. Huckfield: The more we come across examples such as those that my hon. Friend has given, the more we realise how ridiculous some of the redrawing of these boundary lines will be. All I can say is that it seems that if one

469
voted Conservative at the last election one has a better chance of one's constituency being upgraded.
Mrs. Kellett-Bowman: That is rubbish.
Mr. Huckfield: I knew that that would provoke the hon. Lady. I only hope that in future she will make the right speech in the right Parliament.
If the right hon. Gentleman is trying to be fair, how is it that he predicts, from the policy that he has announced, a job loss of around 5,000 or 6,000 a year? How is it that he predicts that sort of job loss when even the Conservative campaign guide for 1977 was saying that in 1973–74 our regional policies had created 72,000 net jobs? Again, the Conservative campaign guide says that between 1974 and 1975 regional policies had created 87,000 net jobs. That calculation—and I take the words from the Conservative campaign guide of 1977—was excluding the effects of service industry grants and excluding the multiplier effects.
I hope that the right hon. Gentleman believes his own party propaganda. He ought to come to the House with a more accurate and better prepared set of facts and figures instead of making them up as he appears to have done in connection with his series of statements.
Again, my right hon. Friend the Member for Swansea, West made the point that we ought to have had an overall calculation, a total calculation, of the effects on certain areas of the right hon. Gentleman's steel statement, his shipbuilding statement, his NEB statement, his regional statement and the statement on dispersal of jobs in the Civil Service that is still to come. It is lamentable that with each statement that we have had from the Government, whether it be on steel, regional policy or shipbuilding, they cannot give a precise estimate of the number of jobs that are to be lost.
I know that the right hon. Gentleman has had a great wrestling match with his conscience. He even had to get his Minister of State to make the shipbuilding policy statement the other day because he was too squeamish to face the consequences of the job losses. With each of these statements we ought to have a precise indication from the Government of
470
the consequences in terms of job losses, because we on the Opposition Benches see every job lost as a real job lost.
The right hon. Gentleman went into the realms of Moore, Rhodes and Tyler. My hon. Friend the Member for Thurrock referred to this, and I think that if the right hon. Gentleman wishes to quote outside sources he ought to get them right. His so-called Moore, Rhodes and Tyler estimates were not correct. The right hon. Gentleman quite rightly said that there was an estimate of some 20,000 jobs a year, and he went on to make his own subtraction from that total for jobs that he deciphered would be lost in other regions as a result of that regional policy. In other words, he presented the Moore, Rhodes and Tyler figures and went on to make the subtractions that he thought should be made. However, if he reads the paper he will learn that the subtractions have already been made. Page 73 states:
"It is important to point out that this estimate"—
I am talking about the estimate to which the right hon. Gentleman referred this afternoon—
"represents net employment creation and automatically allows for any changes in the number of manufacturing job losses arising directly from regional policy."
If the right hon. Gentleman is to quote from the Department of Applied Economics in Cambridge and if he is to give us some independent estimates, let him quote them correctly. Moore, Rhodes and Tyler estimate that from 1960 to 1976, if we take the calculation across from the four development areas to the other development areas, if we include the estimates from shipbuilding policies and include the multiplier effect that must be associated, regional policy between 1960 and 1976 has created some 540,000 jobs.
I understand why the right hon. Gentleman was anxious to misquote the facts and figures. However, if he accepts that the facts and figures that I have stated are the results of regional policy, how can he try to undermine that policy? How can he try to downgrade it as he has been trying to do in his statements?
If the right hon. Gentleman does not accept the Moore, Rhodes and Tyler estimates, let him accept the estimates that have come from the eighth report of the Expenditure Committee. The Committee

471
refers to the creation of 56,000 new jobs and the safeguarding of a further 35,000 jobs in 1976–77. Paragraph 15 states:
"If this is achieved, at the past average outlay of £1,000–£1,200 per job, it will not make spectacular inroads into total unemployment".
Nobody is claiming that. The paragraph continues:
"but it will be a modestly useful contribution and may perhaps be regarded as good value for money."
I hope that the right hon. Gentleman will accept that the Expenditure Committee is fairly independent and will accept its comments on the effects of regional policies.
If the right hon. Gentleman does not trust the Expenditure Committee—I hope that he will, because it went into the issue pretty thoroughly—I ask him to read his Department's annual report on the Industry Act. The right hon. Gentleman's Department is required to submit an annual report to Parliament under the 1972 legislation which the previous Conservative Administration introduced. The most recent report was printed in August 1978. His Department believes that between 1974 and 1978, as a result of section 7 and various regional policies administered under that legislation, there was a total of about 366,000 jobs either saved or created. However, the right hon. Gentleman still comes to the House to say that he does not have any real estimates of the number of jobs that might be created or might be lost.
If the right hon. Gentleman does not accept the evidence prepared by his Department—I hope that he will, because he has some good civil servants working for him—I ask him to accept the comments of the Industrial Development Advisory Board. As my hon. Friend the Member for Keighley (Mr. Cryer) has said, the board does not exactly have a Tribune Group majority on it. In page 17 of the annual report it is stated:
"The Board welcomed this evidence of a growing level of employment-related investment in Assisted Areas; in particular, the fact that 54 of these projects were for the modernisation of existing facilities where employment would otherwise be jeopardised, showed an encouraging response to the availability of assistance to this type of investment."
That is precisely the type of investment that will be cut back under the policies that the right hon. Gentleman has announced.
472
Every industrial development board annual report and commentary gives testimony to the efficacy of section 7 policies in the regions. However, when my hon. Friend the Member for Thurrock asked the right hon. Gentleman at a recent Question Time what would become of the industrial development boards, it was evident from the expression on his face that he did not know that they existed. However, they have the responsibility of assessing projects for their viability. They speak volumes in praise of the policies that they have been asked to carry out under existing legislation and the efficacy of those policies in generating new employment.
The largest number of areas that we shall have in the category of assisted areas will be the intermediate areas. In view of the cutback in regional development grants, does the right hon. Gentleman think it is worth while having intermediate area status? Between 1972 and 1978, £137 million was given in regional development grants to intermediate areas. Even last year, for example, £32 million in regional development grants was given to intermediate areas. Under the policy, intermediate areas will receive no such grants.
However, the situation is more worrying than that. There will be an absence of regional development grants for building. The regional selective financial assistance for which those areas will compete will be much reduced. In terms of the percentage of the total offers and payments made, intermediate areas receive about one-quarter of the offers and a quarter of the payments made to all assisted areas. I quote rough figures. If the Minister disagrees, I hope that he will say so.
When the new areas with intermediate area status come into being there will be, according to the estimates that I have seen, only about £61 million in total for section 7 assistance. If the intermediate areas are to maintain their same portion—that is, one-quarter of all the offers and a quarter of the payments made under section 7—they will be talking in terms of section 7 assistance by the time that the map has been redrawn of a mere £15 million worth of regional selective financial assistance. Even that will be subjected to the enhanced criterion of additionality.

473
Whereas under regional development grants and the previous section 7 assistance intermediate areas received a grand total of about £50 million, by 1982–83 a much larger number of intermediate areas will compete for a much reduced total of £15 million. Formerly the figure was £50 million. In future it will be £15 million. Any area classified as intermediate will have a much reduced status. It will be much reduced in its ability to obtain the diminishing amount that will be available. There will be in fact a much bigger reduction than the Minister would have us believe.
Apart from the demotion of areas from intermediate area status to nothing, I am concerned about the downgrading of the regional effects of the National Enterprise Board, to which the Minister made vague allusions. He did not seem to realise that the National Enterprise Board, under the previous Government, was becoming an important instrument of regional policy. As a Minister in the previous Government, I received deputations and letters from Tory Members of Parliament and Tory-controlled local authorities because they wanted the Inmos production centres in their constituencies. They knew that the National Enterprise Board had 12 locations in Scotland, five in Wales, six in the Eastern region, 42 in the South-East, seven in the East Midlands, five in Yorkshire, 16 in the West Midlands and 20 in the North-West. Those figures show that under the previous Government the National Enterprise Board was starting to become—I accept that it could happen much quicker—a critical instrument of regional policy.
With the cutbacks to which the NEB will be subjected, it will not be able to carry out anything like the kind of regional role that it was starting to develop under the last Government. The right hon. Gentleman prefers to downgrade the activities and the role of the NEB, and he still does not tell us anything about the effect on inner city policies of raising the IDC limit.
In Greater London over the period from 1961 to 1971 there has been a loss of about 540,000 manufacturing jobs. How are we to be able to do anything about this, with any kind of inner city
474
policies, when throughout the South-East and throughout the West Midlands it will be very easy indeed to put up a plant, employing ultimately up to 600 people, and still stay below the new IDC limit?
The right hon. Gentleman, in raising the IDC limit, has totally undermined the effects of all the inner city work that the last Government had started to put into practice. If my hon. Friends who represent inner city areas of London, Birmingham, Manchester and Newcastle where hoping for anything under the last Government's inner city policies, they will know from what has been said so far by the Conservative Government that these policies will be very much undermined.
My right hon. Friend the Member for Deptford (Mr. Silkin) said that the next Labour Government would need to be more selective and more comprehensive in its approach. I can testify to that. I do not want to be caught again with the lack of powers to deal with one case after another. I want to be able to ensure that we can get the Vickers Scotswood investment in Newcastle. I want to be able to ensure that we can still have a rubber tyre manufacturing capacity in this country. I want to be able to ensure that we can have the capacity in this country to deal with the Chrysler type of case, where the Labour Government found that, in the face of a foreign multinational takeover, they did not have powers to deal with it.
I hope that the next Labour Government, on the basis of planning agreements, of extending their powers of selectivity, and enabling the NEB to take equity stakes in certain industries and expand its role, will ensure that we shall not simply have assisted areas, development grants, powers under section 7 and section 8, and so on. I hope that, through an extension of public ownership and of planning agreements, we can make our policy work on the ground.
The right hon. Gentleman seems to think that it all depends on entrepreneurs. I quote from a speech that he made to the Federation of Conservative Students at the Collegiate Theatre, London, on Saturday 30 October 1976. I am sure that he remembers it well. In that speech he said:
"Our competitors abroad foster and encourage their entrepreneurs. They turn them loose upon the world like sleek, well-fed, but still hungry tigers."

475
I have met a few of them. I have had to deal with a few of them up and down the country and some of them have come to see me in deputations. If the right hon. Gentleman thinks that there are tigers in some of those cages waiting to be let out, I am sorry to tell him that when he actually comes face to face with reality he will find quite a few tired, old, shabby tabby cats. The Secretary of State's whole theory seems to be based upon the view that if we can turn entrepreneurs loose, in some weird way investment and jobs will appear. I am sorry to say that elsewhere in this country where that has been tried it certainly has not proved to be so.
When the right hon. Gentleman comes out with statements such as he has, telling us that we cannot save Peter without sacking Paul, and possibly Paul's assistant as well, and that several Peters go on the dole for every Paul kept in a protective job, I want to know how someone with a philosophy such as that can possibly support any kind of regional policy. What the Secretary of State has really said, and what he was trying to say in previous statements he made—including those he made to the House tonight—is that, according to his theory, it is completely illogical to have a subsidy of any kind because subsidies distort the kind of policy he wants to see carried out. I hope that the right hon. Gentleman will eventually have the courage to tell us that he does not believe in regional policy. Much of what he said seemed to underline that. The Act under which we have been administering this grant policy is the Industry Act 1972, which represented a dramatic U-turn for the Conservative Party. That Act was based on the Industrial Expansion Act 1968, which was enacted by a Labour Government.
The Prime Minister is a very determined lady. I certainly would not expect her to draw the Secretary of State's attention to the U-turn that had to take place in 1972. On behalf of my right hon. and hon. Friends whose constituencies are vitally affected, and on behalf of the country, I hope that the Prime Minister will ask the Secretary of State to read the history books to see what happened between 1970 and 1972 before it is too late.
9.37 p.m.
The Secretary of State for Scotland (Mr. George Younger): First, I should like to congratulate most warmly the three excellent maiden speakers we have had in the debate. My hon. Friend the Member for Oxford (Mr. Patten) made an impressive speech and will, I believe, be an admirable successor to his distinguished predecessors, some of whom he named, including my noble Friend the Lord Chancellor and, indeed, Mr. Evan Luard, whom he replaced. My hon. Friend the Member for Bristol, North-West (Mr. Colvin) made an extremely interesting speech, particularly raising the point about whether the right basis for a regional policy should be capital expenditure rather than employment. We shall look very carefully at what my hon. Friend so cogently said in his speech, but I think that the soundest way to support future investment is by capital investment, which usually produces sound and lasting jobs when investment is completed.
We also had a very forthright and most interesting speech from my hon. Friend the Member for Cornwall, North (Mr. Neale). No one who heard him can be in any doubt that he will be a most effective representative for his constituents in this Parliament.
We have had a most interesting evening and have heard the interesting advice of Opposition Members on the subject of regional policy. I found it particularly interesting because it seemed to me that, in a way that is becoming rather a pattern in this Parliament, a number of right hon. and hon. Gentlemen were suffering from severe bouts of amnesia, following 3 May.
Listening to the advice offered by the Opposition regarding all sorts of matters, such as spending money on various projects all over the country, one would hardly think that we were hearing advice from the very people who so ruined the economy of the country that there will be the gravest difficulty finding the money to keep many of the services going in the way we should like. I thought that some of the speeches were, in that context, very interesting.
Mr. Giles Radice Mr. Giles Radice (Chester-le-Street) rose—
Hon. Members: Give way.
Mr. Younger: I am sorry, but I have very little time. The hon. Member for Nuneaton (Mr. Huckfield) made an interesting speech, but ate into my time. I should therefore like to continue.
The right hon. Member for Deptford (Mr. Silkin), who also made an interesting speech, does not seem to have got into his stride as Opposition spokesman on these matters. At least, I do not think that his hon. Friend the Member for Nuneaton quite appreciated what his right hon. Friend was on about. His description of his right hon. Friend's programmes was truly remarkable. Apparently, the new regional policy of the Labour Party, if ever it is again in Government, is to be both more selective and more comprehensive. That seems to be a marvellous prescription for hitting every target at once with the same bullet. I do not think that the hon. Gentleman did justice to what his right hon. Friend had in mind.
But even his right hon. Friend puzzled me. As I understood him, he made three suggestions. The first was that regional assistance ought not to be automatic but ought to be more selective. That seemed to be a suggestion that there should be less emphasis on regional development grants and more on selective assistance. I do not know whether that was what the right hon. Gentleman meant, but it is almost precisely what is involved in the changes that we are presently discussing. He also said something which must have amused many hon. Members on both sides of the House—that one of the keystones of the new regional policy was to be planning agreements. What a tremendous boost that will be. Planning agreements have been rolling around the rafters of this place for live years. I may not be well informed, but so far as I know only one planning agreement has been concluded, and that was with Chrysler. There may have been others. But if that is the right hon. Gentleman's solution to regional problems—a rate of one agreement in five years—it seems to be slightly slow progress. I hope that he will do better than that.
Under section 21 of the Industry Act 1975 anyone who signed a planning agreement would get regional development grants for all that he did in that area. But it is interesting that that carrot
478
has not been taken up by one firm during the time that it has been on the statute book. That is eloquent testimony to the hopelessness of that part of Labour's policy. Planning agreements as a policy are not lame ducks. Frankly, they are dead ducks, and it is time that the right hon. Gentleman recognised that.
Apart from the truly remarkable quotation that I have just given, the hon. Member for Nuneaton also said that every job lost was a real job. I wonder what he thinks of the doubling of unemployment during the period of the Labour Government. Were they all real jobs? I imagine that they were. I was also in some doubt as to whether he really understood what regional policy was all about.
Mr. Radice Mr. Radice rose—
Mr. Younger: The hon. Member for Nuneaton kept saying that regional policy creates jobs. With great respect, regional policy may do many things, but it does not create jobs in itself; it shifts jobs. It makes jobs occur in places that they might not otherwise do. I shall return to that in a moment.
Mr. James Hamilton Mr. James Hamilton (Bothwell) rose—
Mr. Younger: It is not true, as the right hon. Member for Deptford suggested, that only the cuts are important in these changes in regional policy and that there would be no significant improvement in coverage. For instance, the special development area in West Central Scotland has been significantly improved, bringing in a further 4 per cent. of manufacturing employees. This means that Scotland will now have 37 per cent. of the SDAs in the country, compared with 30 per cent, before. With respect to Labour Members, it is a pity that none of those who represent the area of that SDA said how pleased they were that it was getting a stronger pool of help.
The worst areas have been fully protected. For instance, West Central Scotland and Dundee retain SDA status, as do the five Scottish new towns. In Wales, Wrexham has been upgraded to a special development area, and we have undertaken to consider the situation of Shotton.
Mr. Gordon Wilson Mr. Gordon Wilson (Dundee, East) rose—
Mr. Younger: The changes mean that 80 per cent.—
Mr. Wilson Mr. Wilson rose—
Mr. Speaker: Order. It is clear that the Minister is not giving way, and he must be allowed to proceed.
Mr. John Silkin: Will the right hon. Gentleman give way?
Mr. Younger: I am sorry, but I do not have time.
Mr. Silkin: Will the right hon. Gentleman tell us how many—[Interruption.] The right hon. Gentleman and I have a private basis of discussion with one another. Will the right hon. Gentleman tell us how many development areas have risen to the status of special development area and how many have been downgraded?
Mr. Younger: All the information on that is published.
Mr. Cryer: Tell us in numbers.
Mr. John Silkin Mr. John Silkin rose—
Hon. Members: Order.
Mr. Speaker: Order. We cannot have two right hon. Gentlemen addressing the House at the same time, and I think that the Minister is not giving way.
Mr. Gordon Wilson Mr. Gordon Wilson rose—
Mr. Younger: The right hon. Gentleman—
Mr. John Silkin Mr. John Silkin rose—
Hon. Members: Order.
Mr. Younger: I think it is generally agreed that it is my turn to speak now.
Mr. Silkin Mr. Silkin rose—
Mr. Speaker: Order. Quite clearly, the Minister is not giving way.
Mr. Younger: I hope that the right hon. Gentleman will not treat me as though I were one of his ex-colleagues in the Common Market.
These changes mean that 80 per cent. of manufacturing employment in Scotland will remain within the development areas or special development areas, and the result of this relatively favourable position is that we estimate that the maxi-
480
mum saving likely to occur in Scotland by the end of the transitional period will be less than one-third, whereas in the rest of the United Kingdom, in the country as a whole, it is over one-third.
My right hon. Friend the Secretary of State for Industry promised that I would say something about the future of the Scottish and Welsh equivalents of the economic planning councils which have been mentioned. I shall fulfil that undertaking.
In Wales there is not an economic planning council, but my right hon. Friend has already announced in the House that he is considering the future of the Welsh Council, which has different functions, and he will be making a statement in due course to the House on that point.
As for the Scottish Economic Council, which is the equivalent in Scotland, that body is quite different from any of the English planning councils and the Welsh Council. It sits under the chairmanship of the Secretary of State. That distinguishes it from all the others. So there can be no question but that its views are listened to by the Minister concerned as he is present at its meetings. I have not yet met the council, but I look forward very much to doing so at its next meeting, which is planned for the autumn.
Mr. Gordon Wilson: Will the right hon. Gentleman give way?
Mr. Younger: No, I have no time. [HON. MEMBERS: "Give way."] No. I am sorry.
Mr. Radice Mr. Radice rose—
Mr. Younger: No. My time, Mr. Speaker, has been eaten into a great deal. I shall not have time to answer any points unless I press on.
One thing that has stood out in the debate is that there is a considerable misunderstanding among right hon. and hon. Members about what regional policy is really all about. It is not about the general stimulation of the economy or specific aids to particular industries as such. There are many ways of doing that, and the present Government have already embarked on some of them. For instance, cutting personal taxation removes a dead hand from the incentive of both workers and management and will

481
open up a new spirit of enterprise leading to higher productivity and the creation of new jobs. Then there is the removal of administrative and legislative burdens from small businesses. If we introduce safeguards against unfair competition from direct labour departments, ease company law and unfair employment legislation, we can release much energy and drive among small businesses, which I believe can have a dramatic effect on the sagging industrial performance which has been the hallmark and is the lasting legacy which the Labour Party has left to the British economy.
If each one of these small firms were to take on only one extra person, our unemployment problems would be very largely dealt with.
All this is very desirable and necessary, but it is nothing to do with regional policy as such. Regional policy is not about the general stimulation of the economy. It is about the placing of special aids in areas of special difficulty. Judged against these criteria, regional policy has achieved a measure of success in many parts of the country, as my right hon. Friend the Secretary of State said earlier.
Perhaps I may take one or two examples. The overall level of unemployment in Scotland that at times in the past approached twice that of the United Kingdom has in recent years been only about one-third greater, and that still represents a serious problem that we have to tackle. On any analysis, however, it is a measurable improvement. Levels of income and output that for many years lagged seriously behind the United Kingdom have caught up. There has been new investment, much of it from overseas, and these companies have in many cases prospered.
As a result, we must face the fact that the position has been reached where some parts of the country can simply no longer justify maintenance of the regional aid that they have had in the past. That leaves us to concentrate the available resources on those areas where performance has not improved and which continue to need help. Against that background, it is absurd that we have allowed regional assistance to cover as much as 40 per cent. of the population area of Great Britain. Nobody can say that coverage
482
like that is concentrating aid. Moreover, the reluctance of the Labour Government to make changes in regional policy has left many anomalies, many of which have been mentioned today by right hon. and hon. Gentlemen.
Many unassisted areas have higher levels of unemployment than areas that receive regional aid, and the reverse is also true. Unemployment levels are not the only criterion for deciding development area status but they are an important factor. There can be little doubt that the Labour Government, by their failure to face up to the anomalies that have become increasingly absurd, have damaged confidence in regional policy in many areas.
Mr. Robert C. Brown Mr. Robert C. Brown rose—
Mr. Spencer: Order. It is clear that the Minister is not giving way.
Mr. Younger: It is always a sure sign when Labour Members get to the stage that they do not want to hear what is being said that they know when they are on a bad point.
Mr. Robert C. Brown: On a point of order, Mr. Speaker. Will the right hon. Gentleman withdraw the statement that he has just made? I have been sitting here throughout the debate.
Mr. YoungerI apologise if I have offended the hon. Gentleman but I thought that I was saying something that was self-evident. If one wishes to hear what a speaker is saying, it does not help to shout. Perhaps that is too complicated a concept for Labour Members.
It makes total sense to concentrate regional aid on areas with the greatest need. That is precisely what the change of policy does. It concentrates help in about 25 per cent. of the population area of Britain where the need is greatest. A prime example of that is the redefinition of the boundaries of SDAs. A number of areas in England, Wales and Scotland are being downgraded and new SDAs are to be created at, for example, Wrexham, in the South-West of England and in West Central Scotland. Development area status has similarly been adjusted with important upgradings for places like Wigan, Rotherham, Plymouth and Rhyl.

483
Understandably, concern has been expressed during the debate about areas whose status is being downgraded. Here I must emphasise the generous nature of the transitional arrangements that the Government are making. No area will lose its assisted area status for three years, and before that happens there will be a further review. The various aids now in payment will continue to be available for one year at their present levels so that transition can be as gradual as possible. That contrasts sharply with the experience of industry in the assisted regions when the previous Government decided to end regional employment premiums. That removed £216 million from the economy almost literally over-night.
Mr. Harry Ewing: Will the right hon. Gentleman give way?
Mr. Younger: No. That cut—
Mr. Ewing: Will the Secretary of State give way?
Mr. Speaker: Order. It is clear that the Minister is not giving way.
Mr. Ewing: Will the right hon. Gentleman give way?
Mr. Younger: No. I always trust the—
Mr. Ewing: Give way.
Mr. Speaker: Order. I appeal to the House. It has been made clear that the Minister is not giving way. He has the Floor. He has been called to speak and he is entitled to be heard.
Mr. Younger: I think that—
Mr. Ewing Mr. Ewing rose—
Mr. Speaker: Order. I must request the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) not to try to intervene again.
Mr. Younger: The hon. Gentleman must be frustrated at not being able to address the House. The Labour Party criticises us for our change in regional policy, but the previous Labour Government's withdrawal of REP removed £216 million from the economy almost literally overnight.
Mr. Ewing: Will the right hon. Gentleman give way on that point?
Mr. Younger: No. There was no safe-guard in the previous Government's action for special development areas. The cut in Scotland was £79 million, which is well over twice as much in real terms as the £45 million which we estimate to be the maximum likely saving in Scotland in 1982–83 as a result of our policy changes.
While the regional debate is raging and Labour Members are criticising a sensible and practical move to ensure that regional aid is better concentrated in the areas that need it greatest, events outside have moved on. The answer to the criticisms of Labour Members—
Mr. Ewing: On a point of order, Mr. Speaker. Is it in order for the Secretary of State to mislead the House by quoting figures about the withdrawal of REP without saying that the premium was replaced by the temporary employment subsidy, which—
Mr. Speaker: Order. The hon. Gentleman knows that he is advancing an argument.
Mr. Younger: I was being exceptionally kind to the hon. Gentleman because I did not update the figures to take account of inflation as I could have done.
Yesterday we had the announcement that answers the criticisms of Labour Members. The major new development in Greenock of National Semiconductors will produce 1,300 new jobs in a critical area of high unemployment. If that firm had been as doubtful as are Labour Members about the effectiveness of regional policy, it would not have fulfilled its undertaking to come here. That is the answer to Labour Members and that is why I believe that the country will see that we have made a sensible change and a long overdue improvement in the distribution of regional aid.
Mr. James Hamilton: Will the right hon. Gentleman give way?
Mr. Younger: No. This is a subject which affects many hon. Members and their constituencies. I should like to have answered many of the detailed points put by a number of hon. Members. I undertake to write to those hon. Members with the answers to their questions.
Mr. Cyril Smith: This is a disgraceful speech.
Mr. Younger: I hope that the hon. Member for Rochdale (Mr. Smith) will accept that I would willingly have answered his questions if other hon. Members had not interrupted so much.
Our change in regional policy is overdue. It was courageous of the Govern-
ment to decide to concentrate aid where it is most needed. If the Labour Government had had the courage to do so some time ago, there might have been a great deal less unemployment than that which they left behind.
Question put, That the amendment be made:—
The House divided: Ayes 256, Noes 317.

Division No. 78]

AYES

[10.00 p.m.

Abse, Leo

Eastham, Ken

Lewis, Ron (Carlisle)

Adams, Allen

Edwards, Robert (Wolv SE)

Lofthouse, Geoffrey

Allaun, Frank

Ellis, Raymond (NE Derbyshire)

Lyon, Alexander (York)

Alton, David

Ellis, Tom (Wrexham)

Lyons, Edward (Bradford West)

Anderson, Donald

English, Michael

Mabon, Rt Hon Dr J Dickson

Archer, Rt Hon Peter

Ennals, Rt Hon David

McCartney, Hugh

Armstrong, Ernest

Evans, loan (Aberdare)

McDonald, Dr Oonagh

Ashton, Joe

Ewing, Harry

McElhone, Frank

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

Faulds, Andrew

McKay, Allen (Penistone)

Bagier, Gordon A. T.

Field, Frank

MacKenzle, Rt Hon Gregor

Barnett, Guy (Greenwich)

Fitt, Gerard

Maclennan, Robert

Barnett, Rt Hon Joel (Heywood)

Flannery, Martin

McMillan, Tom (Glasgow, Central)

Beith, A. J.

Fletcher, L. R. (Ilkeston)

McNally, Thomas

Benn, Rt Hon Anthony Wedgwood

Fletcher, Ted (Darlington)

McNamara, Kevin

Bennett, Andrew (Stockport N)

Foot, Rt Hon Michael

Magee, Bryan

Bidwell, Sydney

Ford, Ben

Marks, Kenneth

Booth, Rt Hon Albert

Forrester, John

Marshall, David (Gl'sgow,Shettles'n)

Boothroyd, Miss Betty

Foulkes, George

Marshall, Dr Edmund (Goole)

Bottomley, Rt Hon Arthur (M'brough)

Fraser, John (Lambeth, Norwood)

Marshall, Jim (Leicester South)

Bradley, Tom

Freeson, Rt Hon Reginald

Martin, Michael (Gl'gow, Springb'n)

Brown, Hugh D. (Provan)

Freud, Clement

Mason, Rt Hon Roy

Brown, Robert C. (Newcastle W)

Garrett, John (Norwich S)

Maxton, John

Brown, Ronald W. (Hackney S)

Garrett, W. E. (Wallsend)

Maynard, Miss Joan

Brown, Ron (Edinburgh, Leith)

George, Bruce

Meacher, Michael

Buchan, Norman

Gilbert, Rt Hon Dr John

Mellish, Rt Hon Robert

Callaghan, Rt Hon J. (Cardiff SE)

Ginsburg, David

Mikardo, Ian

Callaghan, Jim (Middleton & P)

Golding, John

Millan, Rt Hon Bruce

Campbell-Savours, Dale

Gourlay, Harry

Miller, Dr M S (East Kilbride)

Cant, R. B.

Graham, Ted

Mitchell, Austin (Grimsby)

Carmichael, Neil

Grant, George (Morpeth)

Mitchell, R. C. (Soton, Itchen)

Carter-Jones, Lewis

Grant, John (Islington C)

Morris, Rt Hon Alfred (Wythenshawe)

Cartwright, John

Grimond, Rt Hon J.

Morris, Rt Hon Charles (Openshaw)

Clark, David (South Shields)

Hamilton, W. W. (Central Fife)

Morris, Rt Hon John (Aberavon)

Cocks, Rt Hon Michael (Bristol S)

Hardy, Peter

Morton, George

Cohen, Stanley

Harrison, Rt Hon Walter

Moyle, Rt Hon Roland

Coleman, Donald

Hart, Rt Hon Judith

Mulley, Rt Hon Frederick

Concannon, Rt Hon J. D.

Haynes, David

Newens, Stanley

Conlan, Bernard

Healey, Rt. Hon Denis

Oakes, Gordon

Cook, Robin F.

Heffer, Eric S.

Ogden, Eric

Cowans, Harry

Hogg, Norman (E Dunbartonshire)

O'Halloran, Michael

Cox, Tom (Wandsworth, Tooting)

Holland, Stuart (L'beth, Vauxhall)

O' Neill, Martin

Craigen, J. M. (Glasgow, Maryhill)

Home Robertson John

Orme, Rt Hon Stanley

Crowther, J. S.

Homewood, William

Palmer, Arthur

Cryer, Bob

Hooley, Frank

Park, George

Parker, John

Cunliffe, Lawrence

Horam, John

Parry, Robert

Cunningham, George (Islington S)

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

Cunningham, Dr John (Whltehavan)

Huckfield, Les

Pendry, Tom

Dalyell, Tam

Penhaligon, David

Davidson, Arthur

Hughes, Mark (Durham)

Powell, Raymond (Ogmore)

Davies, Rt Hon Denzil (Llanelli)

Hughes, Robert (Aberdeen North)

Prescott, John

Davies, E. Hudson (Caerphilly)

Janner, Hon Gieville

Price, Christopher (Lewisham West)

Davies, Ifor (Gower)

Jay, Rt Hon Douglas

Race, Reg

Davis, Clinton (Hackney Central)

John, Brynmor

Radice, Giles

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

Johnson, James (Hull West)

Rees, Rt Hon Merlyn (Leeds South)

Deakins, Eric

Johnson, Walter (Derby South)

Richardson, Miss Jo

Dean, Joseph (Leeds West)

Johnston, Russell (Inverness)

Roberts, Albert (Normanton)

Dempsey, James

Jones, Alec (Rhondda)

Roberts, Ernest (Hackney North)

Dixon, Donald

Jones, Dan (Burnley)

Roberts, Gwilym (Cannock)

Dobson, Frank

Kiroy-Silk, Robert

Robertson, George

Dormand, J. D.

Kinnock, Nell

Robinson, Geoffrey (Coventry NW)

Douglas-Mann, Bruce

Lambie, David

Rodgers, Rt Hon William

Dubs, Alfred

La inborn, Harry

Rooker, J. W.

Duffy, A. E. P.

Lamond, James

Roper, John

Dunn, James A. (Liverpool, Kirkdale)

Leadbitter, Ted

Ross, Ernest (Dundee West)

Dunnett, Jack

Leighton, Ronald

Ross, Stephen (Isle of Wight)

Dunwoody, Mrs Gwyneth

Lestor, Miss Joan (Eton & Slough)

Rowlands, Ted

Eadie, Alex

Lewis, Arthur (Newham North West)

Ryman, John

Sandelson, Neville

Strang, Gavin

White, Frank R. (Bury & Radcliffe)

Sever, John

Straw, Jack

Whitehead, Phillip

Sheerman, Barry

Summerskill, Hon Dr Shirley

Whitlock, William

Sheldon, Rt Hon Robert (A'ton-u-L)

Taylor, Mrs Ann (Bolton West)

Wigley, Dafydd

Shore, Rt Hon Peter (Step and Pop)

Thomas, Dafydd (Merioneth)

Willey, Rt Hon Frederick

Short, Mrs. Renée

Thomas, Jeffrey (Abertillery)

Williams, Rt Hon Alan (Swansea W)

Silkin, Rt Hon John (Deptford)

Thomas, Mike (Newcastle East)

Williams, Sir Thomas (Warrington)

Silkin, Rt Hon S. C. (Dulwich)

Thomas, Dr Roger (Carmarthen)

Wilson, Gordon (Dundee East)

Silverman, Julius

Thorne, Stan (Preston South)

Wilson, Rt Hon Sir Harold (Huyton)

Skinner, Dennis

Tilley, John

Wilson, William (Coventry SE)

Smith, Cyril (Rochdale)

Tinn, James

Winnick, David

Smith, Rt Hon J. (North Lanarkshire)

Torney, Tom

Woodall, Alec

Snape, Peter

Urwin, Rt Hon Tom

Woolmer, Kenneth

Soley, Clive

Varley, Rt Hon Eric G.

Wrigglesworth, Ian

Spriggs, Leslie

Wainwright, Edwin (Dearne Valley)

Wright, Miss Sheila

Stallard, A. W.

Wainwright, Richard (Colne Valley)

Young, David (Bolton East)

Steel, Rt Hon David

Walker, Harold (Doncaster)

Stewart, Rt Hon Donald (W Isles)

Weetch, Ken

TELLERS FOR THE AYES:

Stoddart, David

Wellbeloved, James

Mr. James Hamilton and

Stott, Roger

Welsh, Michael

Mr. John Evans.

NOES

Adley, Robert

Cormack, Patrick

Hannam, John

Aitken, Jonathan

Corrie, John

Haselhurst, Alan

Alexander, Richard

Costain, A. P.

Hastings, Stephen

Alison, Michael

Cranborne, Viscount

Havers, Rt Hon Sir Michael

Amery, Rt Hon Julian

Critchley, Julian

Hawkins, Paul

Ancram, Michael

Crouch, David

Hawksley, Warren

Arnold, Tom

Dean, Paul (North Somerset)

Hayhoe, Barney

Aspinwall, Jack

Dickens, Geoffrey

Heath, Rt Hon Edward

Atkins, Rt Hon H. (Spelthorne)

Dodsworth, Geoffrey

Heddle, John

Atkins, Robert (Preston North)

Dorrell, Stephen

Henderson, Barry

Atkinson, David (B'mouth East)

Douglas-Hamilton, Lord James

Heseltine, Rt Hon Michael

Baker, Kenneth (St. Marylebone)

Dover, Denshore

Hicks, Robert

Baker, Nicholas (North Dorset)

du Cann, Rt Hon Edward

Higgins, Terence L.

Banks, Robert

Dunn, Robert (Dartford)

Hill, James

Beaumont-Dark, Anthony

Durant, Tony

Hogg, Hon Douglas (Grantham)

Bell, Ronald

Dykes, Hugh

Holland, Philip (Carlton)

Bendall, Vivian

Eden, Rt Hon Sir John

Hordern, Peter

Benyon, Thomas (Abingdon)

Edwards, Rt Hon N. (Pembroke)

Howell, Rt Hon David (Guildford)

Benyon, W. (Buckingham)

Eggar, Timothy

Howell, Ralph (North Norfolk)

Best, Keith

Elliott, Sir William

Hunt, David (Wirral)

Bevan, David Gilroy

Emery, Peter

Hunt, John (Ravensbourne)

Biffen, Rt Hon John

Eyre, Reginald

Hurd, Hon Douglas

Biggs-Davison, John

Fairbairn, Nicholas

Irving, Charles (Cheltenham)

Blackburn, John

Fairgrieve, Russell

Jenkin, Rt Hon Patrick

Blaker, Peter

Faith, Mrs. Sheila

Jessel, Toby

Body, Richard

Farr, John

Johnson Smith, Geoffrey

Bonsor, Sir Nicholas

Fell, Anthony

Jopling, Rt Hon. Michael

Boscawen, Hon Robert

Fenner, Mrs. Peggy

Joseph, Rt Hon Sir Keith

Bottomley, Peter (Woolwich West)

Finsberg, Geoffrey

Kaberry, Sir Donald

Bowden, Andrew

Fisher, Sir Nigel

Kellett-Bowman, Mrs Elaine

Boyson, Dr Rhodes

Fletcher, Alexander (Edinburgh N)

Kershaw, Anthony

Braine, Sir Bernard

Fletcher-Cooke, Charles

Kilfedder, James A.

Bright, Graham

Fookes, Miss Janet

Kimball, Marcus

Brinton, Timothy

Forman, Nigel

King, Rt Hon Tom

Brocklebank-Fowler, Christopher

Fox, Marcus

Kitson, Sir Timothy

Brooke, Hon Peter

Fraser, Rt non H. (Stafford & St

Knight, Mrs Jill

Brown, Michael (Brigg & Sc'thorpe)

Fraser, Peter (South Angus)

Knox, David

Browne, John (Winchester)

Fry, Peter Galbraith, Hon T.G.D

Lamont, Norman

Bruce-Gardyne, John

Gardiner, George (Reigate)

Lang, Ian

Bryan, Sir Paul

Gardner, Edward (South Fylde)

Langford-Holt, Sir John

Buchanan-Smith, Hon Alick

Garel-Jones, Tristan

Lawrence, Ivan

Buck, Antony

Lawson, Nigel

Budgen, Nick

Glyn, Dr Alan

Lennox-Boyd, Hon Mark

Bulmer, Esmond

Goodhart, Philip

Lester, Jim (Beeston)

Butcher, John

Goodhew, Victor

Lewis, Kenneth (Rutland)

Butler, Hon Adam

Goodlad, Alastair

Lloyd, Ian (Havant & Waterloo)

Cadbury, Jocelyn

Gorst, John

Lloyd, Peter (Fareham)

Carlisle, John (Luton West)

Gow, Ian

Loveridge, John

Carlisle, Kenneth (Lincoln)

Gower, Sir Raymond

Luce, Richard

Carlisle, Rt Hon Mark (Runcorn)

Grant, Anthony (Harrow C)

Lyell, Nicholas

Chalker, Mrs. Lynda

Gray, Hamish

McAdden, Sir Stephen

Channon, Paul

Greenway, Harry

McCrindle, Robert

Chapman, Sydney

Grieve, Percy

Macfarlane, Nell

Churchill, W. S.

Griffiths, Eldon (Bury St Edmunds)

MacGregor, John

Clark, Hon Alan (Plymouth, Sutton)

Griffiths, Peter (Portsmouth N)

Mackay, John (Argyll)

Clark, William (Croydon South)

Grist, Ian

Macmillan, Rt Hon M. (Farnham)

Clarke, Kenneth (Rushcliffe)

Grylls, Michael

McNair-Wilson, Michael (Newbury)

Clegg, Walter

Gummer, John Selwyn

McNair-Wilson, Patrick (New Forest)

Cockeram, Eric

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

McQuarrie, Albert

Colvin, Michael

Hamilton, Michael (Salisbury)

Madel, David

Cope, John

Hampson, Dr. Keith

Major, John

488

489

Marland, Paul

Pink, R. Bonner

Stokes, John

Marlow, Antony

Pollock, Alexander

Stradling Thomas J.

Marshall, Michael (Arundel)

Porter, George

Tapsell, Peter

Marten, Neil (Banbury)

Prentice, Rt Hon Reg

Taylor, Robert (Croydon NW)

Mates, Michael

Price, David (Eastleigh)

Tebbit, Norman

Mather, Carol

Prior, Rt Hon James

Temple-Morris, Peter

Maude, Rt Hon Angus

Proctor, K. Harvey

Thatcher, Rt Hon Mrs Margaret

Mawby, Ray

Pym, Rt Hon Francis

Thompson, Donald

Mawhinney, Dr Brian

Rathbone, Tim

Thorne, Neil (Ilford South)

Maxwell-Hyslop, Robin

Rees, Peter (Dover and Deal)

Thornton, George

Mayhew, Patrick

Rees-Davies, W. R.

Townend, John (Bridlington)

Mellor, David

Renton, Tim

Townsend, Cyril D. (Bexleyheath)

Meyer, Sir Anthony

Rhodes James, Robert

Trippier, David

Miller, Hal (Bromsgrove & Redditch)

Rhys Williams, Sir Brandon

Trotter, Neville

Mills, Iain (Meriden)

Ridsdale, Julian

van Straubenzee, W. R.

Mills, Peter (West Devon)

Rifkind, Malcolm

Vaughan, Dr Gerard

Miscampbell, Norman

Rippon, Rt Hon Geoffrey

Viggers, Peter

Mitchell, David (Basingstoke)

Roberts, Michael (Cardiff NW)

Waddington, David

Moate, Roger

Rost, Peter

Wakeham, John

Monro, Hector

Royle, Sir Anthony

Waldegrave, Hon William

Montgomery, Fergus

Sainsbury, Hon Timothy

Walker, Rt Hon Peter (Worcester)

Moore, John

St. John-Stevas, Rt Hon Norman

Walker, Bill (Perth & E Perthshire)

Morris, Michael (Northampton, Sth)

Scott, Nicholas

Walker-Smith, Rt Hon Sir Derek

Morrison, Hon Charles (Devizes)

Shaw, Michael (Scarborough)

Wall, Patrick

Morrison, Hon Peter (City of Chester)

Shelton, William (Streatham)

Waller, Gary

Murphy, Christopher

Shepherd, Colin (Hereford)

Walters, Dennis

Myles, David

Shepherd, Richard (Aldridge-Br'hills)

Ward, John

Neale, Gerrard

Shersby, Michael

Warren, Kenneth

Needham, Richard

Silvester, Fred

Watson, John

Nelson, Anthony

Sims, Roger

Wells, John (Maidstone)

Neubert, Michael

Skeet, T. H. H.

Wells, P. Bowen (Hert'fd&Stev'nage)

Newton, Tony

Smith, Dudley (War. and Leam'ton)

Wheeler, John

Normanton, Tom

Speed, Keith

Whitelaw, Rt Hon William

Nott, Rt Hon John

Speller, Tony

Whitney, Raymond

Onslow, Cranley

Spence, John

Wickenden, Keith

Oppenheim, Rt Hon Mrs Sally

Spicer, Jim (West Dorset)

Wiggin, Jerry

Osborn, John

Spicer, Michael (S Worcestershire)

Wilkinson, John

Page, John (Harrow, West)

Sproat, Iain

Winterton, Nicholas

Page, Rt Hon R. Graham (Crosby)

Squire, Robin

Wolfson, Mark

Parris, Matthew

Stainton, Keith

Young, Sir George (Acton)

Patten, Christopher (Bath)

Stanbrook, Ivor

Younger, Rt Hon George

Patten, John (Oxford)

Stanley, John

Pattie, Geoffrey

Steen, Anthony

TELLERS FOR THE NOES:

Pawsey, James

Steward, Ian (Hitchin)

Mr. Spencer le Marchant and

Percival, Sir Ian

Stewart, John (East Renfrewshire)

Mr. Anthony Berry.

Peyton, Rt Hon John

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That this House welcomes the changes which are being introduced by the Government in regional policy in order to concentrate assistance on areas most in need, to make it more cost effective, and to remove anomalies in Assisted Area gradings.

BUSINESS OF THE HOUSE
10.14 p.m.
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): On
490
a point of order, Mr. Speaker. With permission, I wish to inform the House that the draft Regional Development Grants (Variation of Prescribed Percentages) Order will not be moved this evening. A revised draft as proposed by the Joint Committee on Statutory Instruments has been laid tonight, and it will be debated tomorrow.
Mr. Michael Foot: Further to that point or order, Mr. Speaker. I thank the right hon. Gentleman for his statement. Does he think that there is an outside chance that the Government will have got it right tomorrow?

EMPLOYMENT PROTECTION
10.16 p.m.
Mr. Speaker: Mr. Patrick Mayhew.
Hon. Members: Where is he?
Mr. Speaker: Anyone can move the order.
Mr. Spencer Le Marchant (Comptroller of Her Majesty's Household)Mr. Spencer Le Marchant (Comptroller of Her Majesty's Household) rose—
Hon. Members: Resign.
Mr. Michael Foot: On a point of order, Mr. Speaker. If there is no Minister here, I do not think it is possible to proceed with the business. I should have thought that the best course would be for the House to adjourn.
Mr. Speaker: Order. I called the Minister, but any Minister is able to move the order.
Mr. Le Marchant: I beg to move.
Hon. Members: Resign.
Mr. Speaker: The Question is—[Interruption.] Order. I will formally propose the Question—
10.18 p.m.
The Secretary of State for Employment (Mr. James Prior): Unaccustomed as I am to having this great audience on such an order, I beg to move,
That the draft Employment Protection (Handling of Redundancies) Variation Order 1979, which was laid before this House on 10 July, be approved.
This order reduces the time for notifications of redundancies for firms where there is a redundancy of 100 people or less, between 10 and 100 to 30 days instead of 90 days. [Interruption.] As hon. Members will realise, this is a very important order and one that should be discussed seriously in the House. That is what I am intending to do and what I am prepared to do. The sort of response that we are getting from the Opposition does not improve the situation.
Mr. Ernie Roberts: On a point of order, Mr. Speaker. May I ask the right hon. Gentleman—
Mr. Speaker: Order. The hon. Gentleman is able only to raise a point of order with me.
Mr. Prior: I refer to the purpose of the order. Under sections 99 and 100, two things are required of the employer: first, consultation with the appropriate recognised unions, and, secondly, notification of the proposal to the Secretary of State for Employment.
Mr. Norman Atkinson: On a point of order, Mr. Speaker.
Mr. Prior: I thought that hon. Members wanted to listen.
Mr. Atkinson: The Minister is quoting the wrong order. He is talking about 90 days when he should be referring to 60 days.
Mr. Speaker: The Minister is responsible for his own speech. I am not responsible.
Mr. Bob Cryer: The Secretary of State should apologise for not being here earlier.
Mr. Prior: The hon. Member for Tottenham (Mr. Atkinson) should listen. We are dealing with the order about redundancy, not unfair dismissal. That is what I have been talking about.
The purpose of the requirements is sensible. Consultation is required so that the union can discuss the employer's plans to see whether there are ways of reducing redundancies or mitigating their effects.
Notification is required so that the Manpower Services Commission—[HON. MEMBERS: "Apologise."] I thought that hon. Members were interested in this subject. Just because they think that they have caught out the Government, they are not prepared to listen to the arguments. They do not even know which order we are discussing.
Mr. Cryer: Apologise.
Mr. Prior: I suggest that hon. Members listen.
Mr. Speaker: Order. There is no need for the House to be as excited as this. We must hear the Minister, and then there will be an opportunity for a reply.
Mr. Harry Ewing: On a point of order, Mr. Speaker. This subject affects human

493
beings. It should not be treated in the cavalier manner in which the Secretary of State and his junior Minister have treated it.
Mr. Speaker: The Secretary of State is moving the order. Afterwards I presume that an Opposition Front Bench spokesman will wish to reply.
Mr. Prior: I am being asked from seated positions to apologise to the House. I always apologise to the House if I believe that it is necessary—as I do in this case. I was not in my place at the right time, but I am now trying to make a sensible and reasonable speech about an important matter to which I hope the House will listen.
Mr. James Callaghan: I am grateful to the Secretary of State for saying that he apologises to the House. He would have had a better hearing if he had not come into the Chamber in such a brazen and contemptible way. [HON. MEMBERS: "Hear, hear."] I do not know what the Secretary of State thinks is so funny about not being in his place, coming into the Chamber without any notes, reading the order to us and then gracelessly apologising.
He had better behave in the House as hon. Members expect him to behave. [HON. MEMBERS: "Sit down."] I warn Government Members that they had better keep quiet. It is the duty of Government Members to keep quiet and to take it. [HON. MEMBERS: "Sit down."] The sooner they learn that, the more likely they are to get their business through and to have their mistakes forgiven. If they go on making mistakes at the rate that they made them in the last week, they will not get any business through.
Mr. Prior: The Leader of the Opposition has been in the House long enough to know that these things happen. Many of us were under the impression that there was to be another order to be debated first. We were standing outside waiting to come into the Chamber.
Most reasonable and honourable Gentlemen will accept that as a full explanation of what happened. Instead of trying to create as much of a row as possible, hon. Members should discuss the two important orders with the seriousness which
494
they deserve. Now that the right hon. Gentleman has had his say on the matter, I hope that he and his right hon. and hon. Friends will attend to the debate and will react accordingly. As I have already said—
Mr. Norman Atkinson: The Secretary of State was quick to try to correct my point of order, but when he began to speak about the two orders to which he has now referred he was speaking about the 90 days and their substitution. What he should be talking about on the orders is either 26 weeks or 60 days. Now will he have the grace to admit to the House that he was wrong in talking about 90 days?
Mr. Prior: On the contrary. The hon. Gentleman is totally wrong. He has not got the order right. I am talking about the order which deals with redundancies, and he ought to listen to what I say. If he had done that, perhaps he would owe me an apology, as would some of his hon. Friends, too.
May I now continue my speech? The Act lays down certain time limits affecting consultation, and it is these and the effecting of notification that the order is about. The Act provides that consultation must start at the earliest opportunity, and there is no change there, but for medium-scale redundancies, where between 10 and 99 people are made redundant within 30 days or less, the Act goes on to provide that the employer must begin the consultation process at least 60 days before the first dismissal is due to take place. Where the number whom the employer proposes to make redundant is 100 or more, the employer must allow 90 days for the consultation process before the first dismissal takes effect. Where the number is under 10, no specific time lapse after the beginning of consultation is laid down.
I turn now to notification. The pattern here is the same. For proposed redundancies of 10 to 99, 60 days must elapse between the date of notification and the date when the first dismissal takes effect. Where the number is 100 or more, it is 90 days. Where fewer than 10 are to be made redundant, there is no obligation to notify the Secretary of State.
What all this adds up to is that, under the present law, when an employer finds that he has to lay off employees, perhaps

495
because business has suddenly turned down, he may, if the numbers are between 10 and 99, be required to keep them all on his payroll for a maximum of 60 days after he has begun to consult the union and for a maximum of 60 days after he has notified the Secretary of State.
The Government believe that length of time to be damagingly onerous for small businesses in particular, and by the order we propose in each instance to reduce the period to 30 days.
The 90-day rule for large-scale redundancies we leave untouched. However, the 60-day rule is deterring smaller businesses in significant numbers from creating more jobs and taking on more workers. The reason is simple. As they have frequently complained, smaller business men often cannot fulfil their present obligations. They cannot afford to keep people on their payroll for 60 days after it has become plain that they must become redundant.
For many small businesses visibility does not stretch ahead as far as 60 days. It is to the small businesses that we must look in the main if jobs are to be created in future. The consequence is that small firms are driven either to delay redundancies at heavy financial cost or to introduce redundancies without the proper notice. When the latter course is taken, a union may complain to an industrial tribunal and an employer may find that a protective award has been made against him, which may amount to remuneration of up to 60 days. The order will reduce the maximum to 30 days.
It is true that an employer may claim to excuse himself by showing that there were special circumstances, but that means making representations to the industrial tribunal. The burden of proof is on the employer. Parliament has not made these problems crystal clear for the layman or even for the lawyer. In the present circumstances I doubt whether I am making them plain to the House.
On account of the effect of the present time limits on employment, there is a strong case for reducing the limits affecting medium-scale redundancies. That will principally be proposed by small business. However, their reduction would not be justified if it led to proper consultation
496
with the unions not being possible, or to the placing and training services of the Manpower Services Commission not being able to be brought adequately to bear.
We have considered these matters carefully. We are satisfied that neither result would come about if such a measure were implemented. I am advised that within the reduced time scale the Manpower Services Commission will be able to provide its services as effectively and helpfully as at present. As for consultation, we are fortified by the knowledge that 30 days will still be within the requirement of the EEC directive on collective redundancies and will not put us out of step with other European countries. Furthermore, it is a change that the Labour Government specifically envisaged. In section 106 they provided that 30 days is the shortest delaying period that may be introduced by amending order.
Mr. Ted Leadbitter: The right hon. Gentleman has made it clear that in his view there is an economic case for the assumptions that he is making. However, he has not made out that case. Will he tell the House what consultations he had with the trade union movement before introducing the order? What consultations has he had with the CBI? What conclusions has he drawn from the comments that have been made to him?
Mr. Prior: I am grateful to the hon. Gentleman for making that intervention. I believe that one of the effects of employment protection legislation over the past few years has been to deter a number of businesses, especially small businesses, from employing additional labour. Therefore, we in the House have a duty at a time of high unemployment to do all that we can to reduce those number of matters that in the eyes of small employers deter them from taking on additional labour. On that basis we consulted a wide range of institutions and people before coming to a decision.
The hon. Gentleman asks me whether the Government have consulted the TUC and the CBI. The answer is that we have consulted much wider than merely the TUC and the CBI. The TUC, unfortunately, felt that no change should be made. The CBI and nearly all the other interests that we consulted took the view that we were quite right to make the change. I can assure the hon. Gentleman that there

497
has been widespread consultation on a personal basis and as a result of letters that we have sent to a number of interested parties.
I can be no more certain than Labour Members that what we are doing will help small businesses, especially to employ more people. All I know is that employment protection legislation as it now operates is considered by many small employers and other employers to be a deterrent to taking on additional labour. I also know that the 90-day rule has not been adhered to as strictly as it should have been. There have been numerous cases where the 90-day rule has been broken. It is not unreasonable that 30 days should, in these cases, be the time for notice. If the 90-day rule has not been adhered to, and if it is more reasonable to have 30 days than 90 days, it should help the psychology of small businesses to reduce it from 90 days to 30 days. That is the main point of the remarks that I wish to make.
We art not talking here about a specific point. We are talking about trying to create an atmosphere in which small business, and the Employment Protection Act in its main parts, may operate without the psychological effect of people, particularly employers, thinking that it is a bad Act. That is why we are seeking to make the changes contained in the order.
What is at issue is not the right to redundancy payments, the duty to consult with the unions, or the duty to notify the Department. What is at issue is solely the length of time which under the law must elapse before certain medium-scale redundancies which are proposed can be implemented.
In laying this order and the next one that we are to discuss, the Government are pressing on with the programme that they were elected to carry out, by changing employment protection law where it is damaging the ability of businesses to function.
I think that I was wrong in not making clear that we are changing from 60 days to 30 days. I am sorry that I did not make that plain in the course of my speech. The change will help small businesses by its psychological effect.
498
Opposition Members, before voting against the order—which I presume is their intention—should heed this warning. We are concerned here with employment. We are concerned with the effects that the legislation has had on small businesses in particular. It is generally recognised—I am sure that Labour Members will have found this, just as much as any of my hon. Friends—that over the past four years the Employment Protection Act has been built up as an ogre that is damaging the prospects of employment. [Interruption.] It is suggested that we built up that ogre. If this House could have that effect on small businesses, we might be able to get another impression going.
The truth is that all the evidence supports the fact—as I think Harold Lever recognised—that in many respects the Employment Protection Act has become a deterrent to the employment of more labour. That is what we are trying to get home in the order, and that is why I ask Opposition Members, despite all that has happened this evening, to listen to the argument and to recognise that in the order the Government are not only accepting what is reasonable in respect of redundancies on the scale that I have mentioned but are also doing something that is psychologically of great importance for small businesses and the employment of additional labour.
It is on that basis that I commend the order to the House.
10.39 p.m.
Mr. Harold Walker: I doubt whether the Secretary of State has ever been as glad to resume his seat. I did not think that he could make such a shambles of the Department of Employment within 90 days of taking office. As has been said, what we have had is a recitation of what the order contains and virtually no case whatever made out for it.
We should be clear from the outset that the orders before us tonight are only the beginning of the Government's attack on the statutory protections and safeguards that Parliament—belatedly but rightly—has granted to workers in recent years. They are safeguards that not only the British Parliament but also Parliaments in Western Europe generally have thought it proper to provide in one form or another.

499
In addition to the two orders, there are further inroads into worker protection contained in the so-called "working papers"—one might have said "working medicine"—put out by the Secretary of State a couple of weeks ago. The House should be under no illusion that the proposals in those papers will exhaust the zeal of the Government to weaken the position of workers vis-a-vis their employers or diminish their eagerness to weaken the role and strength of the trade unions.
I mention these other matters because the orders, despicable as they are in themselves, must be seen as part of a yet more serious array of changes in employment legislation. Under review are the maternity provisions, guaranteed pay provisions, the provision for appointment of workers' safety representatives, the role of ACAS and a whole range of other matters. I ask the Secretary of State to come clean on them before the House rises for the recess.
The right hon. Gentleman said that he had been in correspondence with the TUC. It is fair to point out that he published these orders on the same day as he wrote to the TUC.
Mr. Prior: That is not the case.
Mr. Walker: The right hon. Gentleman says that that is not the case. I accept that, but there must have been very little in it.
Mr. Prior: I should like to make it absolutely plain that we wrote to the TUC, the CBI and many other organisations long before we published the orders and laid them before Parliament. In fact, from memory, I would say that it was at least three weeks before. Therefore, it is not true to say that we consulted on the same day as we published the orders.
Mr. Walker: I point to the fact that the right hon. Gentleman replied to the TUC on 10 July, which was the day on which the orders were laid. It is worth repeating the view of the TUC. It said:
"These changes represent a significant deterioration in the existing legal rights of many workers".
I turn to the orders themselves. The right hon. Gentleman seemed to base his case on the surveys that had been carried out. With the exception of the TUC, and the possible exception of the Conservative
500
Party Central Office small business bureau, only employers' organisations were consulted. Therefore, the reaction was entirely predictable. Understandably, an employer will resist and oppose anything that diminishes his freedom. It is, of course, true that they have objected to the Employment Protection Act. However, if I carried out a survey of workers and told the right hon. Gentleman that they were overwhelmingly in support of employment protection legislation, I am sure that his reply would be along the lines of Mandy Rice-Davies' comment "Of course, they would, wouldn't they".
When we were in Government and received criticism of the employment protection legislation, we sought to carry out some objective and impartial surveys. It is perhaps worth referring to what they said, in the light of the right hon. Gentleman's comments. One was a study carried out by the Policy Studies Institute. I hope that the right hon. Gentleman is not sneering and suggesting that that is anything other than an impartial and objective body. It is a highly respectable body which surveyed firms employing between 50 and 5,000 people. The right hon. Gentleman talked about the way in which the Employment Protection Act had become an ogre for small businesses. The institute said:
"In discussing the nature of the effects of employment protection legislation, whether these are beneficial or not to management, and the variations in effect, there is a danger of giving an exaggerated impression of the impact of the legislation. As we said at the start of these conclusions the main finding to emerge from our study was really how modest had been the influence of an apparently major package of employment legislation. Many employers had developed policies and practices which were in advance of the minimum standards specified in the legislation.
Many employers had developed policies and practices which were in advance of the minimum standards specified in the legislation".
On the specific issue before the house, the institute said:
"only a quarter of the managers interviewed in our survey of 301 plants said that requirements on redundancy procedure had influenced them at all; and only 3 per cent. said that they had been a major influence."
It went on to say:
"There was very little sign in our findings that employment protection legislation was inhibiting industrial recovery or contributing to the high levels of unemployment by discouraging employers from taking on new people."

501
That is a direct refutation of what the right hon. Gentleman said from an impartial and independent source. I quote further from the report:
"Indeed we can unequivocally reject the crude form of that criticism … when we talked to managers where there was a rising demand for products but where they were not recruiting … they rarely cited any aspect of employment legislation as a reason for not increasing their work force … When we put the suggestion to employers that employment protection legislation did inhibit the recruitment of new labour directly to a sub-sample of our respondents to whom it was more likely to apply, the majority rejected it."
I apologise for inflicting those lengthy quotations on the House but it is right to do so because they directly refute the right hon. Gentleman's case.
I am sure that right hon. and hon. Gentlemen are desperately anxious to point out that the PSI study was of the larger firms with a minimum of 50 employees. There was also a survey of small firms carried out, again by an independent body, the Opinion Research Centre. The right hon. Gentleman referred to that when he wrote to the TUC, and said of the employers interviewed:
"as many as 6 per cent. mentioned employment legislation as among their main difficulties."
Why did the right hon. Gentleman not say "as few as 6 per cent."? He might also have pointed out that employment legislation was ranked twelfth in the difficulties facing employers. They attached a much higher priority to the burden of VAT, and that was when it was only 8 per cent. If the Government want to please small employers, they should chop VAT.
Only 2 per cent. of the employers questioned by the Opinion Research Centre mentioned employment legislation when asked about the main difficulties that they faced in running their business, and only 7 per cent. referred to it when specifically asked whether any Government measures had caused difficulties. Many months ago officials in the Department of Employment provided me with the figures that I have quoted, and I am surprised that the right hon. Gentleman was not given them.
Mr. Prior: Will the right hon. Gentleman explain why Mr. Harold Lever—now Lord Lever—said:
502
"We must be careful that the EPA is not turned into an Employment Destruction Act. If something is to be done for the pool of a million and a half unemployed, then small businesses are one of our best hopes."?
Mr. Walker: Will the right hon. Gentleman bear in mind that Lord Lever also said that he did not advocate any changes in the Employment Protection Act?
The right hon. Gentleman has sought to give the impression that he has been generous and could have treated the provisions with more severity, but he has exploited the statute to the maximum without having to introduce primary legislation.
The right hon. Gentleman gave the impression in his letter to the TUC that perhaps the only purpose of the 60 days' notice being given to his Department was to enable the MSC to mount training and retraining exercises. But that is far from the case that we argued when we introduced the provisions in 1975. The right hon. Gentleman should remember that. The notification does not go to the MSC; it goes to the Secretary of State. As we found, that provides an invaluable period during which the Department of Employment can examine a host of possibilities, often in conjunction with other Departments, to render advice and assist-Industry, to enable, if possible, the enterprise to avoid having to make workers redundant and, in conjunction with other Departments to render advice and assistance to enable the firm to avoid the loss of jobs. That is a proper role for the Department of Employment.
If that proves impossible, the time gap will also enable the MSC to do what it can, not just in terms of training and retraining but by the swiftest use of the employment placement services so that it can help people find new jobs wherever possible.
The Secretary of State should know that if an employer finds the 60 days' notice provision an intolerable requirement, for commercial or other reasons, he can find relief in section 100(6) of the Act, which provides:
"If in any case there are special circumstances rendering it not reasonably practicable for the employer to comply with any of the requirements of subsections (1) to (5) above, he shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances."

503
There is the answer for the employer who finds himself in difficulty. Why does the Secretary of State need the order? Many employers have exercised the option available in that section of the Act.
A similar provision qualifies the requirement to give prior notification to unions. No employer can plead that he is subject to an intolerable and inescapable statutory obligation. The prior notice for unions, which is affected by the order, has often been of great value to many companies. Frequently, in order to save the jobs of its members, the union will take an initiative that may lead to the introduction of changed working practices that benefit the company and improve its efficiency.
I ask again what benefit the Secretary of State believes will flow from the order. What is his purpose in introducing a measure which flows completely against the tide of employment protection developments in Europe and Scandinavia? It goes completely against the developing practice in the United States, where, on a visit last year, I learnt that lengthy prior notice is increasingly becoming a condition of labour contracts.
Mr. Nicholas Scott: Can the right hon. Gentleman confirm that the order is precisely in line with the EEC directive of 1975 on the notification of redundancies?
Mr. Walker: The trend in Europe is towards greater protection for workers and longer prior notification of mass dismissals, but the Secretary of State is turning our tide the opposite way.
Mr. Harry Ewing: Does my right hon. Friend agree that the provisions in the order are in line with the minimum requirements of the EEC and that the Government are interested only in minimum standards and not in giving real protection to workers?
Mr. Walker: I do not wish to do the hon. Member for Chelsea (Mr. Scott) an injustice, but if he consults the unions in Europe he will learn that they are seeking to extend prior notice requirements to come up to our standards. The Government want to cut them back.
The Secretary of State and the Government have shown not the slightest recognition of the hardship, misery and suffering that is endured by workers and
504
their families when they are confronted with redundancies. The Government's approach to such deep human problems owes more to callous, cynical political opportunism pandering, in the run-up to the election, to an irrational prejudice which they did so much to provoke.
The Government give the impression of being completely indifferent to the effect that the issues before us and their wider strategy will have on industrial relations generally. To that extent, they seem to have learnt little if anything from the bitter lessons of the former Conservative Government. Perhaps they hope that, by dribbling out their proposals a little at a time, they will not have the same impact as would a comprehensive declaration of Tory policy. I tell them that it will not work.
Not only will it not work, but working people will see the kind of measure that we have before us as part of a wider attack on them and their standards. I pray that we shall not endure the kind of confrontation that the Conservative Government provoked. The policies we now see oozing daily from the Government, not only in industrial relations, seem deliberately calculated needlessly to arouse the conflict and the strife that we could well do without and that we could avoid.
The Conservative Party seems intent on dismantling the decent, modest and humane basic protections for ordinary workers that we have introduced over the past five years. I give the Government notice now that not only will we repair the damage that they are seeking to do but we shall build in future on what we have achieved so far.
10.56 p.m.
Mr. David Madel: I do not think that it came as any surprise to the right hon. Member for Doncaster (Mr. Walker) that when we returned to office we would be making one or two alterations to the Employment Protection Act. The order embodies one of the arguments we put in Committee on the Bill almost four years ago to the day.
When the right hon. Gentleman was answering our points then, he was in nothing like the bellicose mood that he is in tonight. I want to point out how conditions have changed since then

505
because I think that, on reflection, he will agree that what we are trying to do is in line with what we were putting forward in 1975, which did not arouse the intense hostility of the Labour Government. Indeed, on many occasions then the Labour Government bent over backwards to try to meet us on our amendments.
Two things at least have changed considerably. First, the number of people who have been made redundant has increased substantially. That is regrettable. Secondly, the Manpower Services Commission is four years older and has acquired much more expertise in handling these situations where there is notification of redundancies.
The right hon. Gentleman mentioned the report by the Policy Studies' Institute in June 1978. He did not quote some of the more relevant parts of it. For example, it said:
"legislation on redundancy procedures had had little general impact because the bulk of employers had developed effective ways of avoiding and dealing with redundancy before their introduction. Voluntary redundancy schemes, in whose development trade union influence had been substantial, played a major part in such policies."
That underlines what we were saying in 1975, namely, that much of the Act would bring employers and unions closer together, given the worsening economic situation then, and would certainly result in more refined measures in carrying out redundancy procedures.
But before the Labour Government put forward their plans in the Bill they introduced a consultative document. In paragraph 66 of the document, dealing with the question whether the period should be 60 or 30 days, they said that the minimum period of warning might be two months; they were not absolutely certain. I stress again that the alteration that the order will bring about does not in any way affect section 99 of the Act. Section 99(5)(e) provides
"the proposed method of carrying out the dismissals, with due regard to an agreed procedure, including the period over which the dismissals will take effect."
Therefore, in no way can it be said that the order is an attack on the trade unions or a dramatic attempt to undermine big sections of the 1975 Act.
I remind the right hon. Gentleman of two things that he said when we were
506
discussing our amendment four years ago. First, he said:
"On many occasions 30 days will be adequate, but it is not difficult to envisage occasions when it will not be adequate".
Agreed, but the point is that he was uncertain whether the then Government had it right. When he replied to the debate on the amendment he said:
"I remind the Committee that the Secretary of State has power under Clause 95(5) to vary the periods here in question. If experience showed that, either generally or in particular cases, the 60 days might be varied in the way suggested"—
which was to come down to 30 days—
"and that it might be helpful and construe-five to vary it from 60 days to, say, 30 days, we would seek to do that. But I think that for the time being we have it right, and ought to proceed on the basis as we have it in the Bill."—[Official Report, Standing Committee F, 13 July 1975; c. 1437–41.]
The hon. Gentleman said then that
"for the time being we have it right".
What we are saying is that because unemployment has risen in the past four years, and because there is plenty of evidence that the present drafting is a deterrent to small businesses to take on additional people, the very least the Opposition can do is to let us have a shot at changing the figure to 30 and see how we get on. If we get into difficulties, and if it proves unsatisfactory, I am sure that my right hon. Friend the Secretary of State will use his powers under the 1975 Act to alter the period again.
I ask the right hon. Gentleman at least meet the spirit of his words in 1975 by not dividing the House tonight. He knows very well that huge sections of the 1975 Act went through with our support and approval. The Government of the day welcomed many of our amendments. I hope that the Opposition will at least give us a chance tonight to make an alteration that we think will help employment.
11.2 p.m.
Mr. Cyril Smith: My right hon. and hon. Friends and I will support the order and the order that we are to debate afterwards.
Mr. Cryer: Terrible.
Mr. Smith: Some of us served on the Standing Committee that considered the Employment Protection Act.
Mr. Cryer: So did I.
Mr. Smith: And some of us have had practical experience of the working of the Act.
Mr. Cryer: From the employers' side.
Mr. Smith: Some of us have practical experience of the workers' side.
I have never taken the view that the Act was a serious deterrent to employers taking on workers, but I believe that it is part, though only part, of a whole area of bureaucratic control of employers, which in total prevents employers risking taking on more employees. I think that that applies to both orders, though to neither in isolation.
The fact that I do not accept that the Act itself has been a serious deterrent does not mean that we cannot pass amendments to improve it. If some of the amendments suggested by the right hon. Member for Doncaster (Mr. Walker), leading for the Opposition tonight, were proposed by the Government—on matters such as maintenance, maternity leave and so on—I for one should be in the Lobby against them. But it seems to me to be good common sense to make amendments which in practical terms have proved to be necessary.
I declare an interest as someone with a small business. Small businesses are sick and tired of legislation that has been imposed on them, of regulations that they have to follow for the slightest trivialities. They have a feeling that the law is never on their side but is always on the side of the employees.
Mr. Cryer: Rubbish.
Mr. Smith: Whether the hon. Gentleman likes it or not, it is a fact that that is how employers feel. They think that the dice are loaded against them. The orders will help to load the dice slightly the other way.
It is for these reasons that my right hon. and hon. Friends and I will be supporting the Government on both orders.
11.5 p.m.
Mr. Selwyn Gummer: I shall not detain the House for long. I believe that it is important for those of us who have had experience in dealing with small businesses to relate something of that
508
experience to Members on the Opposition Front Bench, none of whom has been in the position of implementing the Act and, therefore, none of whom has any understanding of dealing with the problem. The right hon. Member for Doncaster (Mr. Walker) did not give way to any of my right hon. or hon. Friends who would have been able to help him by passing on experience of dealing with the Act instead of the theory which is constantly spouted by those who do not have to make it work.
We want to create a society in which businesses want to take on more employees instead of feeling constantly that the Government and the law make it difficult and complicated for them to do so. The right hon. Gentleman is an intelligent man, and we know that from the speed with which he was able to put forward his views. Many of those working in small businesses are concerned in the running of their own show and they are not experienced in the details of the law and the Acts which have been laid around their shoulders. They want a simple and clear way of taking on employees and they want to feel that the Government are encouraging them in that.
The problem with the Employment Protection Act is that it asked of the small business man a length of notice which it was not possible to give within the normal capital requirements and availabilities of small firms. The small business man had the deep feeling that the Government were concerned to make employment so difficult that it was better not to expand than to take on extra people. We have to deal with our unemployment problem, and that means making small businesses feel that it is worth their while taking on people and that they will not be laden with all sorts of extra requirements which make their position impossible.
The right hon. Member for Doncaster did not provide the opportunity for any Conservative Member to ask him about the matter. He gave way only to his right hon. Friend the Member for Ebbw Vale (Mr. Foot).
Mr. Foot: My right hon. Friend gave way to the hon. Member for Chelsea (Mr. Scott).
Mr. Gummer: When he gave way to my hon. Friend the Member for Chelsea (Mr. Scott), the right hon. Gentleman did not answer the question.
Mr. Cryer: What does the hon. Gentleman know about the matter?
Mr. Gummer: The hon. Member for Keighley (Mr. Cryer) has never run a business in his life.
Mr. Cryer: I should correct the hon. Gentleman. I helped to run a taxi business which helped to see my way through university because I received no grant from the local authority. The hon. Gentleman says that the Government desperately want to help small businesses. What will be said to the small businesses in intermediate areas which no longer have the small firms employment subsidy? What will be said to the 64 small businesses in my constituency that took advantage of that subsidy, which was phased out within a few days by the hon. Gentleman's colleagues on the Government Front Bench?
Mr. Gummer: I am sure that the hon. Gentleman is perfectly able to tell small business men in his constituency what they may do in the circumstances. That has nothing to do with the order that we are discussing. Labour Members know perfectly well that it is a reasonable order and that it will be accepted by reasonable people. The sad thing about the right hon. Gentleman's speech is that it was a doctrinaire speech, written by someone who is concerned only to make party political points instead of saving jobs. We are concerned about the unemployed, not about theoretical arguments on the basis of a theoretical Government.
Mr. Giles Radice: If the issue of the small business is so important, why does the order not apply to the small business alone?
Mr. Gummer: It is clear to me that it is not only a question of small businesses in present circumstances. It is necessary for all businesses to react much more quickly to the changing economic climate. If the hon. Gentleman suggests that we can make some firm distinction between small and medium businesses, again I suggest that he has never run a business
510
in his life. This is the problem with the Opposition. It is extremely difficult, looking through the lists of names that made up the last Cabinet and that make up the putative Cabinet, to find anyone who has had any experience in business.
The main virtue of the order is that it puts forward a suggestion which comes from experience, following negotiation with those who are concerned to make it operate. Therefore, I believe that it is necessary—
Mr. Harold Walker Mr. Harold Walker rose
Mr. Gummer: If the right hon. Member wishes me to give way to him, I shall gladly do so, even though he would not give way to me.
Mr. Walker: I wanted the hon. Gentleman to give way to me because a few moments ago he made some rather personal references to me. Before making them, I think that he might have checked to discover how valid they were. I realise that I may not be able to remove his anxiety totally, but I must tell him that before I became a Member I spent several years in middle management in a medium engineering firm.
Mr. Gummer: I am very pleased to hear that from the right hon. Gentleman. I also hope that he will take note of the fact that I gave way to him because I felt he might have something to contribute to my knowledge. I believe that debates in this House are intended to contribute to the knowledge of right hon. and hon. Members on both sides. I am only sorry that he did not extend the same courtesy to me.
The fact is that this is a reasonable measure, and I am sure that when the right hon. Gentleman was in middle management he, too, would have liked to have this precise order in being. He would have liked to be working with a 30-day period rather than with a 60-day period. Therefore, I suggest that all reasonable people running ordinary businesses would find the proposal in the order an acceptable period of notice. I suggest also that the right lion. Gentleman knows that most trade unions and most other groups in society would agree that this is not an unreasonable period of notice to lay upon the shoulders of the owners of small businesses.

511
All our employment protection legislation should be concerned with increasing employment opportunities. I believe that this order will do that and that to reject it would make employment more difficult to obtain rather than easier.
11.12 p.m.
Mr. Harry Ewing: It is appropriate that we are discussing this order on the very day on which unemployment in Great Britain has increased by 110,000.
I remind the hon. Member for Eye (Mr. Gummer) that those of my right hon. and hon. Friends whom he denigrates for not having any managerial experience succeeded in every month of this year from January to May in reducing unemployment, while his right hon. and hon. Friends who have had all the managerial experience have succeeded in the past two months in increasing the level of unemployment by more than a quarter of a million—[HON. MEMBERS: "Labour doubled it."] I hope that we shall have no more lectures about managerial experience from those who have added a quarter of a million people to the ranks of the unemployed since they came to power on 3 May this year.
As the hon. Member for Rochdale (Mr. Smith) said, the orders on the Order Paper have nothing to do with encouraging small businesses to take on more employees. They have everything to do with making it easier for both small and large businesses to dispense with the services of employees at much shorter notice. I am astonished by the suggestion of the Liberal Party spokesman, the hon. Member for Rochdale, that he and his right hon. and hon. Friends will go into the Division Lobby to support a measure which will make it easier for employers to dismiss employees at shorter notice than hitherto has been the case.
Since the Act was introduced in 1975, I have received only one letter on this subject from all the industries in my constituency, which is the most highly industrialised constituency in Scotland. That letter was from what I would call a Victorian employer complaining about the 1975 Act and the protection that it gave to his employees. He was saying not that the Act made it more difficult for him to take on more employees but that it made it difficult for him to dis-
512
pense with the services of employees at a minute's notice.
The order is a step along the road in the Conservative Party's philosophy. I hand it to the Secretary of State that he did not do too badly as a reluctant debutante thrown into the breach when the Under-Secretary failed to turn up for an important debate. But the right hon. Gentleman, in his unexpected speech, did not make the point that this is the first step along the road to switching what the Tories call the balance of power between the trade union movement and employers. That is what the order is about. It has nothing to do with the ability of industry or business, small and large, to take on additional employees.
Since 1975, when my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), assisted by my right hon. Friend the Member for Doncaster (Mr. Walker), introduced the legislation, there have been many occasions when the 60-day notice has provided sufficient time for management and unions of industries that would have gone out of existence to combine in an effort to save the industries. I can quote examples in my constituency where notice has been given that a firm was in difficulty, but the firm has got out of difficulty due to the joint effort of management and trade union. I can quote examples where redundancy notices have been issued and then withdrawn. There have even been cases where redundancy notices were not only withdrawn but the firm concerned was able to take on additional employees.
I hope that the House is under no illusions. I plead with the hon. Member for Rochdale not to be misled by what the Secretary of State has said. The orders have nothing to do with the ability of small business or large industry to take on additional employees. They have everything to do with making it easier for industries, both large and small, to dispense with the services of employees at much shorter notice. In the process, such industries will be put in greater jeopardy and greater risk because the time available to save them will be shorter.
The orders are totally misguided. We are talking about human beings. Conservative Members talk of redundancies as if they did not mean anything. One

513
redundancy is a tragedy to the family that it affects. Although the Minister has apologised to the House for his late arrival, it is an insult to those families that he was not in his place when the order should have been moved. If I listen to the Under-Secretary with less respect than normal, I am sure that he will understand my feelings. I share the feelings of many of the people I represent that the orders will put them in a state of anxiety. Whenever employees see their firm drifting into trouble, they will know that the 60-day period has been cut in half by the Government.
The EEC insists that 30 days be the minimum standard. Tonight the Government propose that we adopt that standard—the lowest possible standard. Be it on their head. Working people and modern, enlightened employers will not thank them for it.
11.20 p.m.
Mr. Nicholas Scott: We must become used to Satan denouncing sin. To hear a Minister in the Labour Government, with the nodding encouragement of the right hon. Member for Ebbw Vale (Mr. Foot), denouncing the present Government for their unemployment record when his Government presided over a doubling in unemployment beggars the mind.
It has been said that the difference between the parties is in their attitudes to unemployment. It certainly is. I agree that it is appropriate to discuss this order on the day when unemployment was found to have increased by 120,000. That increase is almost entirely due to school leavers coming on to the unemployment register.
My view, and that of employers and, privately, of many others, is that school leavers have suffered most from the restrictive effects of the Employment Protection Act. Employers have been reluctant to take on young people because of the impact of that Act on the work forces. The passage of the order will offer hope and encouragement to young people entering the job market.
Mr. Harry Ewing: Does the hon. Member accept that 50,000 of those who make up the increase in unemployment have nothing to do with school leaving? In Scotland, not only has unemployment
514
increased but the number of job vacancies has decreased. That is a direct result of the Conservative Government's policies.
Mr. Scott: The majority of those who have joined the register of unemployed are school leavers. Seasonally adjusted, the unemployment figures still show a downward trend.
Mr. Greville Janner: Can the hon. Gentleman explain why he considers it to be good management for business, large or small, to be free to make young or old people redundant without sufficient warning?
Mr. Scott: I shall deal with that matter.
The Employment Protection Act formed part of the bargain between the previous Government and the trade union movement, wrapped in the cocoon of the social contract. The trade union movement is anxious to protect employment. Trade union members are employed. The unemployed are not members of unions. It is understandable that the trade unions should be more anxious to protect those who are employed and who pay their union dues than to look after the rights of the unemployed. The figures demonstrate that the Labour Government failed the unemployed.
I come now to what was said by the right hon. Member for Doncaster (Mr. Walker). I must say that I am glad that he is not dyslexic, since anybody who could read at that speed deserves a prize in the House. He quoted at immense length from the PSI survey as though in direct rebuttal of the point that my right hon. Friend the Secretary of State made about the impact of the employment protection legislation on small firms. Eventually he admitted—although at that point he was reading so rapidly that it was difficult to pick it up—that the survey covered no firms with fewer than 50 people.
It is precisely firms with fewer than 50 employees that we are talking about and which have suffered most from the impact of the employment protection legislation. It is all right for ICI and the giants to be able to cope with the intricacies of the legislation. It is very difficult for small firms to do so.
I shall give the right hon. Gentleman two figures before I sit down. There are

515
1·5 million people unemployed in this country, and about the same number of small firms. If we relieved them of the burden of the Employment Protection Act and made it possible for each of them to take on one extra person, or gave them the encouragement to take on one extra person, that might very well make a bigger hole in the unemployment figures than anything else that the Government could do.
I urge the House to support the order.
11.26 p.m.
Mr. Eric G. Varley: In rising to speak at this stage, I apologise to those of my hon. Friends who are trying to catch the eye of the Chair, but I dare say that they will have an opportunity on the next order to make some of the points that they were hoping to make in the present debate.
We found the explanation given by the Secretary of State, when he read out the Under-Secretary's speech, totally unacceptable and unconvincing. To limit the period of advance consultation and notification to 30 days in respect of fewer than 100 redundancies is a move in the wrong direction, as my right hon. Friend the Member for Doncaster (Mr. Walker) said, and certainly a move in the wrong direction in relation to Europe. When the hon. Member for Chelsea (Mr. Scott), the professional Young Conservative, intervened to refer to Europe, he plainly misunderstood the position in Europe. All Europe is moving in the kind of direction that we have been moving over the past few years. I shall show in a moment how a bad employer can make use of these changes.
We have two main objections to the changes made in the order. The notification arrangements currently in operation have been extremely valuable to workers for facilitating detailed discussions with a view to trying to avoid redundancies, finding means to avoid redundancies. We have many examples of that, for instance, when the temporary employment subsidy was in operation and when we were to proceed with the short-time working compensation scheme. That is a factor that the Secretary of State and other Ministers in the Department of Employment have not understood.
Second, when redundancies have been inevitable, as sometimes they are, the 60-
516
day notification period has allowed for proper discussions about the level of compensation, which have helped the Manpower Services Commission. It has certainly given the Commission the opportunity to talk about training, retraining and all the other measures which could be put into operation to mitigate the hardship.
One of the main arguments which has been used by the Manpower Services Commission when redundancies have occurred has been that it should have adequate time to assist. [Interruption.] I do not know whether the hon. Member for Staffordshire, South-West (Mr. Cormack) wants to continue in this vein, interrupting and having chats. If he has something to contribute, perhaps he will do so. If he has nothing to contribute, perhaps he will keep his trap shut.
Mr. Patrick Cormack: I was so moved by his eloquence that I was suggesting to the hon. Member for Newham, North-West (Mr. Lewis) that in the leadership stakes he would be a much better candidate.
Mr. Varley: The hon. Gentleman ought to go back where he has been all evening, because he is plainly not in control of his wits.
One of the main arguments used by the Manpower Services Commission in relation to redundancies is that it needs time so that it may start to investigate, explain and try to place people in jobs. That is all to be denied, and we shall find that as a result of the changes here proposed people will go straight to the dole, they will be utterly demoralised, and they will form part of the long-term unemployed.
I should like to give the House some examples of how a bad employer can take advantage of the changes proposed in the order. As section 99 of the Employment Protection Act stands, an employer proposing to dismiss as redundant 198 workers obtains little advantage from declaring them redundant in batches. Under section 99(3)(a), if he proposes on day one to dismiss, for example, 198 workers within a period of 90 days, he must consult 90 days before the first dismissal and consultation has to continue up to day 90. Under section 99(3)(b), if he proposes on day one to

517
dismiss 99 workers within 30 days, he must consult 60 days before the first dismissal. The best, or worst, he can do after that is to propose the dismissal of another 99 on day 31, and therefore he must consult for another 60 days about those dismissals. From day 31 to day 60 he would be engaged in consultation about all the 198 workers to be dismissed.
Under the order it would be an advantage to a bad employer—and there are some around—to dismiss 198 workers, if there were that number, in batches. That is what will happen in some cases. A bad employer will get round the protection afforded to a large group of people by dismissing them in small batches. There will be complaints in this House, probably from Tory Members, when this happens. All this has to be seen, as my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) was saying, against the background of today's mounting unemployment.
It is no good hon. Gentlemen talking about unemployment doubling. We know that the forecast set out in the Financial Statement and Budget Report shows that over the next 12 months, perhaps the next two years, unemployment will go on increasing month by month.
Mr. Tony Marlow Mr. Tony Marlow (Northampton, North) rose—
Mr. Varley: I shall not give way to the hon. Gentleman. I did not see him in the Chamber when we started the debate. I want to give his hon. and learned Friend the Minister the chance to intervene.
Mr. Marlow Mr. Marlow rose—
Mr. Varley: I shall give way to the hon. Member if he can honestly say that he was in the Chamber when we started the debate.
Mr. Marlow: I was. Will the right hon. Gentleman please remind the House of what the numbers of unemployed were when the Labour Party came into power, and what were the figures when it left?
Mr. Varley: No one denies that the unemployment rate went up. Over the next 12 months the Under-Secretary and the Secretary of State will not be able to say that for the first five months, or
518
12 months, of the Tory Government unemployment was falling. They will be coming to the Box every month and saying that unemployment is rising.
Mr. Harry Ewing: Does my right hon. Friend confirm that when the Labour Party came to power in February 1974 the unemployment figure was 3 million, on a three-day week?
Mr. Varley: That is true. All this has to be seen against the background of the Government's industrial policies. The fact that in the last few days £233 million has been lopped off regional assistance will force many of the small firms the Tories want to support to declare even more redundancies. We have to look at things against the overall background of the Budget. Many more workers will be out of a job. We do not know how many.
The Secretary of State is very coy about revealing the statistics. He shelters behind the time-honoured ministerial practice of saying that he does not make forecasts. He has admitted that unemployment will rise. Such things as the rise in MLR will place more people on the dole. Over the next few months there will be bankruptcies galore in the private sector, among some of the small firms that the Tories claim to support. In the new phraseology, jobs will be squeezed out of the public sector by penal cash limits, after the present Cabinet discussions.
The Secretary of State has made his reputation as the "nice guy", the man who can get on with the trade unions. He got away with that before the general election, but I doubt whether he will be able to do so over the next few months. I remember Mr. Alan Fisher, of all people, immediately after the general election, saying "I hope that the Prime Minister appoints Mr. Prior Secretary of State for Employment." I wonder what trade union leaders think of his performance so far.
Now we can judge the right hon. Gentleman by his actions, which so far have shown that he is pursuing policies which are extremely damaging to the trade union movement. First, we have the mean-minded cuts in the training programme and the programme of the Manpower Services Commission. Then we have his proposals for industrial relations legislation which are irrelevant and will prove

519
as unworkable as the Industrial Relations Act 1972.
Whatever else the right hon. Gentleman was thought to be, we were always given to understand that he was the great consulter, that he would at least talk. There is no evidence that he has consulted the TUC about the order. He sent the TUC a letter, and then decided to lay the order nevertheless. If he has the interests of good industrial relations at heart rather than the unsubstantiated prejudices of the Conservative Party, he would do better to take this mean-minded order back and think again. Because I suspect he will not, we shall vote against it.
11.37 p.m.
The Under-Secretary of State for Employment (Mr. Patrick Mayhew): Mr. Deputy Speaker—[Interruption.] I hope that I shall not be further delayed from beginning my speech with a sincere apology to the House for being late. It is nobody's fault but my own and I deeply regret it. I hope that I may now deal with the serious points raised in the debate.
The order has been blackguarded by the right hon. Members for Doncaster (Mr. Walker) and Chesterfield (Mr. Varley) and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing). No creditable reason was allowed as being possible for the Government introducing it. The most serious way in which it was put was by the right hon. Member for Chesterfield, who said that, by reducing from 60 days to 30 days the minimum period which has to elapse between the beginning of consultations and the date when the first dismissal becomes effective, we will be in many cases preventing the Manpower Services Commission from doing the valuable work that it can do.
Of course we would allow that a great deal of valuable work can be and is done by the MSC. The training and placing services are all put at the disposal of people threatened with redundancy. Naturally, if the Government believed that by reducing this period we would imperil the ability of the MSC to do that work, we should not do so.
The Manpower Services Commission has been consulted. The Government do not consult only the TUC and the CBI. We consult much more widely. Naturally we consult the Manpower Ser-
520
vices Commission, which is an extremely important part of the Department of Employment group. We are assured by the Employment Services Division that a reduction in the period of statutory notification from 60 days to 30 days in respect of redundancies affecting fewer than 100 employees—that is all that the order is about—would not impair the service that it provides, given that the Department of Employment ensures that all statutory notifications received by it are processed speedily. That is set out in a letter from the Manpower Services Commission that was written in May. Naturally enough, we are content that by reducing the period we shall not imperil the valuable services that can be performed.
We recognise that consultation is a valuable function. Employers should consult unions when they propose redundancies. However, the purpose of the order is not to vent the spite of a Conservative Government upon workers upon whom the nation depends for its salvation. The reason is that job protection shall not stop at job protection but shall extend to job creation. It is because there is such overwhelming evidence that the present provisions frustrate and unreasonably curtail the creation of jobs that we wish to reduce the period and to meet some of the objections that we have heard expressed.
Mr. Harold Walker: What is the evidence that is overwhelming?
Mr. Mayhew: I refer the right hon. Gentleman to the Engineering Employers Federation—[HON. MEMBERS: "Oh."] It seems that that is no good. Apparently it is no good to refer to the researches and opinions of those who have to do with the creation of wealth in this country. I refer to a survey carried out by the federation involving over 1,100 companies. Of those companies, 334, nearly 30 per cent., cited the redundancy handling provisions as being particularly influential in the running of their companies. If that is not enough, I shall cite the Birmingham Chamber of Industry and Commerce—[HON. MEMBERS: "Oh."] It seems that that is no good. Apparently Birmingham does not know enough about industry. The Opposition do not consider the chamber to be a reliable source. It cites as second in its order of importance the redundancy procedures. It considers them to be factors ranking

521
as having much influence on decisions that affect employment.
There are those who take part in the business of trying to earn Britain's living who have been saying to us in our constituencies, and to Labour Members in their constituencies if only they would listen, that if we do not mitigate the burden upon employers of employment protection legislation in this respect among others they will not be prepared to meet an upturn in business by increasing the availability of jobs and they will be content to allow things to go on as they are because it is safer so to do.
If the Opposition are not prepared to listen to the voices of those who run businesses in their constituencies, I dare say that they will continue to lose general elections. That is a matter for them. We would be entirely content for that to happen. However, if they listen to those who speak for business, they will know that the burden of employment protection legislation—not entirely the redundancy handling provisions but those in part—is proving disastrous to the creation of jobs.
My right hon. Friend cited the remarks of Mr. Harold Lever, who said that the Employment Protection Act must not be turned into an Employment Destruction Act. That was pooh-poohed by the
right hon. Member for Doncaster, but Mr. Harold Lever did not end there, for he went on to say:
"I cannot see them"—
the public authorities—
"taking up a million"—
unemployed—
"in the next decade. Nor can we expect much from the nationalised industries who are suffering from overmanning. … It is vital that we help small businesses to expand."
That was a very wise observation by Mr. Lever, and that is no doubt why he is now in the House of Lords. It is no less wise than it was when he said it in November of last—
Mr. Leadbitter: On a point of order. Mr. Deputy Speaker. Is it not a fact that, in dealing with statutory instruments, the procedure is that it is the responsibility of the Minister to place before the House—or, indeed, the Committee—as much evidence and documentation as is possible so that the House can debate the matter? Is it not, therefore, improper that the Minister should be giving—
It being one and half hours after the commencement of Proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No 3 (Exempted Business).
The House divided: Ayes 310, Noes 233.

Division No. 79]

AYES

[11.46 p.m.

Adley, Robert

Braine, Sir Bernard

Corrie, John

Aitken, Jonathan

Bright, Graham

Costain, A. P.

Alexander, Richard

Brinton, Timothy

Cranborne, Viscount

Alison, Michael

Brittan, Leon

Critchley, Julian

Alton, David

Brocklebank-Fowler, Christopher

Crouch, David

Amery, Rt Hon Julian

Brooke, Hon Peter

Dean, Paul (North Somerset)

Ancram, Michael

Brown, Michael (Brigg & Sc'thorpe)

Dickens, Geoffrey

Arnold, Tom

Browne, John (Winchester)

Dodsworth, Geoffrey

Aspinwall, Jack

Bruce-Gardyne, John

Dorrell, Stephen

Atkins, Robert (Preston North)

Bryan, Sir Paul

Douglas-Hamilton, Lord James

Atkinson, David (B'mouth East)

Buchanan-Smith, Hon Alick

du Cann, Rt Hon Edward

Baker, Kenneth (St. Marylebone)

Buck, Antony

Dunn, Robert (Dartford)

Baker, Nicholas (North Dorset)

Budgen, Nick

Durant, Tony

Banks, Robert

Bulmer, Esmond

Dykes, Hugh

Beaumont-Dark, Anthony

Butcher, John

Eden, Rt Hon Sir John

Beith, A. J.

Butler, Hon Adam

Edwards, Rt Hon N. (Pembroke)

Bell, Ronald

Cadbury, Jocelyn

Eggar, Timothy

Bendall, Vivian

Carlisle, John (Luton West)

Emery, Peter

Benyon, Thomas (Abingdon)

Carlisle, Kenneth (Lincoln)

Eyre, Reginald

Benyon, W. (Buckingham)

Carlisle, Rt Hon Mark (Runcorn)

Fairbairn, Nicholas

Best, Keith

Chalker, Mrs. Lynda

Fairgrieve, Russell

Bevan, David Gilroy

Channon, Paul

Faith, Mrs. Sheila

Biffen, Rt Hon John

Chapman, Sydney

Fair, John

Biggs-Davison, John

Churchill, W. S.

Fell, Anthony

Blackburn, John

Clark, Hon Alan (Plymouth, Sutton)

Fenner, Mrs. Peggy

Blaker, Peter

Clark, William (Croydon South)

Finsberg, Geoffrey

Body, Richard

Clarke, Kenneth (Rushcliffe)

Fisher, Sir Nigel

Bonsor, Sir Nicholas

Clegg, Walter

Fletcher, Alexander (Edinburgh N)

Boscawen, Hon Robert

Cockeram, Eric

Fletcher-Cooke, Charles

Bottomley, Peter (Woolwich West)

Colvin, Michael

Fookes, Miss Janet

Bowden, Andrew

Cope, John

Forman, Nigel

Boyson, Dr Rhodes

Cormack, Patrick

Fox, Marcus

Fraser, Rt Hon H. (Stafford & St)

McCrindle, Robert

Rost, Peter

Fraser, Peter (South Angus)

Macfarlane, Nell

Royle, Sir Anthony

Freud, Clement

MacGregor, John

Sainsbury, Hon Timothy

Fry, Peter

Mackay, John (Argyll)

St. John-Stevas, Rt Hon Norman

Galbraith, Hon T. G. D.

Macmillan, Rt Hon M. (Farnham)

Scott, Nicholas

Gardiner, George (Reigate)

McNair-Wilson, Michael (Newbury)

Shaw, Michael (Scarborough)

Gardner, Edward (South Fylde)

McNair-Wilson, Patrick (New Forest)

Shelton, William (Streatham)

Garel-Jones, Tristan

McQuarrie, Albert

Shepherd, Colin (Hereford)

Glyn, Dr Alan

Madel, David

Shepherd, Richard(Aldridge-Br'hills)

Goodhart, Philip

Major, John

Shersby, Michael

Goodlad, Alastair

Marland, Paul

Silvester, Fred

Gorst, John

Marlow, Antony

Sims, Roger

Gower, Sir Raymond

Marshall, Michael (Arundel)

Skeet, T. H. H.

Grant, Anthony (Harrow C)

Marten, Neil (Banbury)

Smith, Cyril (Rochdale)

Gray, Hamish

Mates, Michael

Smith, Dudley (War. and Leam'ton)

Griffiths, Peter (Portsmouth N)

Mather, Carol

Speed, Keith

Grimond, Rt Hon J.

Maude, Rt Hon Angus

Speller, Tony

Grist, Ian

Mawby, Ray

Spence, John

Grylls, Michael

Mawhinney, Dr Brian

Spicer, Jim (West Dorset)

Gummer, John Selwyn

Maxwell-Hyslop, Robin

Spicer, Michael (S Worcestershire)

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

Mayhaw, Patrick

Sproat, Iain

Hamilton, Michael (Salisbury)

Mellor, David

Squire, Robin

Hampson, Dr. Keith

Meyer, Sir Anthony

Stainton, Keith

Hannam, John

Miller, Hal (Bromsgrove & Redditch)

Stanbrook, Ivor

Haselhurst, Alan

Mills, Iain (Meriden)

Stanley, John

Hastings, Stephen

Mills, Peter (West Devon)

Steel, Rt Hon David

Havers, Rt Hon Sir Michael

Miscampbell, Norman

Steen, Anthony

Hawkins, Paul

Mitchell, David (Basingstoke)

Stevens, Martin

Hawksley, Warren

Moate, Roger

Stewart, Ian (Hitchin)

Hayhoe, Barney

Monro, Hector

Stewart, John (East Renfrewshire)

Heddle, John

Montgomery, Fergus

Stokes, John

Henderson, Barry

Moore, John

Stradling Thomas J.

Heseltine, Rt Hon Michael

Morris, Michael (Northampton, Sth)

Tapsell, Peter

Hicks, Robert

Morrison, Hon Charles (Devizes)

Taylor, Robert (Croydon NW)

Higgins, Terence L.

Morrison. Hon Peter (City of Chester)

Tebbit, Norman

Hill, James

Murphy, Christopher

Temple-Morris, Peter

Hogg, Hon Douglas (Grantham)

Myles, David

Thompson, Donald

Holland, Philip (Carlton)

Neale, Gerrard

Thorne, Neil (Ilford South)

Hordern, Peter

Nelson, Anthony

Thornton, George

Howell, Rt Hon David (Guildford)

Neubert, Michael

Townend, John (Bridlington)

Howell, Ralph (North Norfolk)

Newton. Tony

Townsend, Cyril D. (Bexieyheath)

Normanton, Tony

Trippier, David

Hunt, David (Wirral)

Nott, Rt Hon John

Trotter, Neville

Hunt, John (Ravensbourne)

Onslow, Cranley

van Straubenzee, W. R.

Hurd, Hon Douglas

Oppenheim, Rt Hon Mrs Sally

Vaughan, Dr Gerard

Irving, Charles (Cheltenham)

Osborn, John

Viggers, Peter

Jenkin, Rt Hon Patrick

Page, John (Harrow, West)

Waddington, David

Jessel, Toby

Pane, Rt Hon R. Graham (Crosby)

Wakeham, John

Johnson Smith, Geoffrey

Parris, Matthew

Waldegrave, Hon William

Johnston, Russell (Inverness)

Patten, Christopher (Bath)

Walker, Rt Hon Peter (Worcester)

Jopling, Rt Hon. Michael

Patten, John (Oxford)

Walker-Smith, Rt Hon Sir Derek

Kaberry, Sir Donald

Pattie, Geoffrey

Wall, Patrick

Kellett-Bowman, Mrs Elaine

Pawsey, James

Waller, Gary

Kershaw, Anthony

Penhaligon, David

Walters, Dennis

Kimball, Marcus

Percival, Sir Ian

Ward, John

King, Rt Hon Tom

Peyton, Rt Hon John

Warren, Kenneth

Kitson, Sir Timothy

Pink, R. Bonner

Watson, John

Knight, Mrs Jill

Pollock, Alexander

Wells, John (Maidstone)

Knox, David

Porter, George

Wells, P. Bowen (Hert'fd&Stev'nage)

Lamont, Norman

Price, David (Eastleigh)

Wheeler, John

Lang, Ian

Prior, Rt Hon James

Whitelaw, Rt Hon William

Langford-Holt, Sir John

Proctor, K. Harvey

Whitney, Raymond

Lawrence, Ivan

Pym, Rt Hon Francis

Wickenden, Keith

Lawson, Nigel

Rathbone, Tim

Wiggin, Jerry

Lee, John

Rees, Peter (Dover and Deal)

Wilkinson, John

Lennox-Boyd, Hon Marti

Rees-Davies, W. R.

Winterton, Nicholas

Lester, Jim (Beeston)

Renton, Tim

Wolfson, Mark

Lewis, Kenneth (Rutland)

Rhodes James, Robert

Young, Sir George (Acton)

Lloyd, Ian (Havant & Waterloo)

Rhys Williams, Sir Brandon

Younger, Rt Hon George

Lloyd, Peter (Fareham)

Ridsdale, Julian

Loveridge, John

Rifkind, Malcolm

TELLERS FOR THE AYES:

Luce, Richard

Roberts, Michael (Cardiff NW)

Mr. Spencer Le Marchant and

Lyell, Nicholas

Ross, Stephen (Isle of Wight)

Mr. Anthony Berry.

NOES

Adams, Allen

Barnett, Rt Hon Joel (Heywood)

Brown, Ronald W. (Hackney S)

Allaun, Frank

Benn, Rt Hon Anthony Wedgwood

Buchan, Norman

Anderson, Donald

Bennett, Andrew (Stockport N)

Callaghan, Rt Hon J. (Cardiff SE)

Archer, Rt Hon Peter

Bidwell, Sydney

Callaghan, Jim (Middleton & P)

Armstrong, Ernest

Booth, Rt Hon Albert

Campbell, Ian

Ashton, Joe

Boothroyd, Miss Betty

Campbell-Savours, Dale

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

Bradley, Tom

Cant, R. B.

Bagier, Gordon A. T.

Brown, Hugh D. (Provan)

Carmichael, Neil

Barnett, Guy (Greenwich)

Brown, Robert C. (Newcastle W)

Cartwright, John

524

525

Clark, Dr David (South Shields)

Home Robertson, John

Prescott, John

Cocks, m Hon Michael (Bristol S)

Homewood, William

Price, Christopher (Lewisham West)

Cohen, Stanley

Hooley, Frank

Race, Reg

Concannon, FU Hon J. D.

Horam, John

Radice, Giles

Conlan, Bernard

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

Rees, Rt Hon Merlyn (Leeds South)

Cook, Robin F.

Huckfield, Les

Richardson, Miss Jo

Cowans, Harry

Hughes, Mark (Durham)

Roberts, Albert (Normanton)

Cox, Tom (Wandsworth, Tooting)

Hughes, Robert (Aberdeen North)

Roberts, Ernest (Hackney North)

Craigen, J. M. (Glasgow, Maryhill)

Janner, Hon Greville

Roberts, Gwliym (Cannock)

Crowther, J. S.

Jay, Rt Hon Douglas

Robertson, George

Cryer, Bob

Johnson, James (Hull West)

Robinson, Geoffrey (Coventry NW)

Cunliffe, Lawrence

Johnson, Walter (Derby South)

Rodgers, Rt Hon William

Cunningham, George (Islington S)

Jones, Alec (Rhondda)

Rooker, J. W.

Cunningham, Dr John (Whitehaven)

Jones, Dan (Burnley)

Roper, John

Dalyell, Tam

Kilroy-Silk, Robert

Ross, Ernest (Dundee West)

Davidson, Arthur

Kinnock, Neil

Rowlands, Ted

Davies, Rt Hon Denzil (Llaneill)

Lamble, David

Ryman, John

Davies, E. Hudson (Caerphilly)

Lamborn, Harry

Sever, John

Davies, Ifor (Gower)

Lamond, James

Sheerman, Barry

Davis, Clinton (Hackney Central)

Leadbitter, Ted

Sheldon, Rt Hon Robert (A'ton-u-L)

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

Leighton, Ronald

Short, Mrs. Renée

Deakins, Eric

Lestor, Miss Joan (Eton & Slough)

Silkin, Rt Hon John (Deptford)

Dean, Joseph (Leeds West)

Lewis, Arthur (Newham North West)

Silkin, Rt Hon S. C. (Dulwich)

Dempsey, James

Lewis, Ron (Carlisle)

Silverman, Julius

Dixon, Donald

Lofthouse, Geoffrey

Skinner, Dennis

Dobson, Frank

Lyon, Alexander (York)

Smith, Rt Hon J. (North Lanarkshire)

Dormand, J. D.

Lyons, Edward (Bradford West)

Snape, Peter

Douglas-Mann, Bruce

Mabon, Rt Hon Dr J Dickson

Soley, Clive

Dubs, Alfred

McDonald, Dr Oonagh

Spearing, Nigel

Duffy, A. E. P.

McElhone, Frank

Spriggs, Leslie

Dunn, James A. (Liverpool, Kirkdale)

McKay, Allen (Penistone)

Stallard, A. W.

Dunnett, Jack

MacKenzie, Rt Hon Gregor

Stoddart, David

Dunwoody, Mrs Gwyneth

Maclennan, Robert

Stott, Roger

Eadie, Alex

McMillan, Tom (Glasgow, Central)

Strang, Gavin

Eastham, Ken

McNally, Thomas

Straw, Jack

Edwards, Robert (Wolv SE)

McNamara, Kevin

Summerskill, Hon Dr Shirley

Ellis, Raymond (NE Derbyshire)

Magee, Bryan

Taylor, Mrs Ann (Bolton West)

Ellis, Tom (Wrexham)

Marks, Kenneth

Thomas, Jeffrey (Abertillery)

English, Michael

Marshall, David (Gl'sgow, Shettles'n)

Thomas, Mike (Newcastle East)

Ennals, Rt Hon David

Marshall, Dr Edmund (Goole)

Thomas, Dr Roger (Carmarthen)

Evans, loan (Aberdare)

Marshall, Jim (Leicester South)

Thorne, Stan (Preston South)

Evans, John (Newton)

Martin, Michael (Gl'gow, Springb'n)

Tilley, John

Ewing, Harry

Mason, Rt Hon Roy

Tinn, James

Faulds, Andrew

Maxton, John

Torney, Tom

Field, Frank

Maynard, Miss Joan

Urwin, Rt Hon Tom

Flannery, Martin

Meacher, Michael

Varley, Rt Hon Eric G.

Fletcher, Ted (Darlington)

Mellish, Rt Hon Robert

Walker, Harold (Doncaster)

Foot, Rt Hon Michael

Mikardo, Ian

Weetch, Ken

Ford, Ben

Millan, Rt Hon Bruce

Wellbeloved, James

Forrester, John

Miller, Dr M S (East Kilbride)

Welsh, Michael

Foulkes, George

Mitchell, Austin (Grimsby)

White, Frank R. (Bury & Radcliffe)

Fraser, John (Lambeth, Norwood)

Mitchell, R. C. (Solon, Itchen)

White, James (Glasgow, Pollok)

Freeson, Rt Hon Reginald

Morris, Rt Hon Alfred (Wythenshawe)

Whitehead, Phillip

Garrett, John (Norwich S)

Morris, Rt Hon Charles (Openshaw)

Whitlock, William

George, Bruce

Morris, Rt Hon John (Aberavon)

Wigley, Dafydd

Gilbert, Rt Hon Dr John

Morton, George

Willey, Rt Hon Frederick

Ginsburg, David

Moyle, Rt Hon Roland

Williams, Rt Hon Alan (Swansea W)

Golding, John

Mulley, Rt Hon Frederick

Williams, Sir Thomas (Warrington)

Gourlay, Harry

Newens, Stanley

Wilson, Gordon (Dundee East)

Grant, George (Morpeth)

Oakes, Gordon

Wilson, Rt Hon Sir Harold (Huyton)

Grant, John (Islington C)

Ogden, Eric

Wilson, William (Coventry SE)

Hamilton, James (Bothwell)

O'Halloran, Michael

Winnick, David

Hardy, Peter

O'Neill, Martin

Woodall, Alec

Harrison, Rt Hon Walter

Orme, Rt Hon Stanley

Woolmer, Kenneth

Hattersley, Rt. Hon Roy

Owen, Rt Hon Dr David

Wrigglesworth, Ian

Haynes, David

Palmer, Arthur

Wright, Miss Sheila

Healey, Rt. Hon Denis

Park, George

Young, David (Bolton East)

Heffer, Eric S.

Parker, John

TELLERS FOR THE NOES:

Hogg, Norman (E Dunbartonshire)

Parry, Robert

Mr. Ted Graham and

Holland, Stuart (L'beth, Vauxhall)

Powell, Raymond (Ogmore)

Mr. Donald Coleman.

Question accordingly agreed to.

Resolved,

That the draft Employment Protection (Handling of Redundancies) Variation Order 1979, which was laid before this House on 10 July, be approved.

UNFAIR DISMISSAL
12.1 a.m.
The Under-Secretary of State for Employment (Mr. Patrick Mayhew): I beg to move,
That the draft Unfair Dismissal (Variation of Qualifying Period) Order 1979, which was laid before this House on 10 July, be approved.
The order is laid before the House in accordance with section 149 of the Employment Protection (Consolidation) Act 1978, and its purpose is to raise the qualifying period of employment for making a complaint of unfair dismissal from the current level of 26 weeks to 52 weeks.
Our decision to lay the order again derives from our determination to see that the creation of new jobs is not curtailed by legislation that is unreasonable and unnecessary in its effect.
The increase in unemployment over the past five years—[Interruption.]
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. It would be of convenience to the Chair if I could hear what the Minister is saying.
Mr. Mayhew: I was referring to a matter of apparent indifference to Labour Members, namely, the increase in unemployment over the past five years. That increase has been much too serious for us to permit any legislation that curtails unreasonably the creation of new jobs to remain unamended. The same is true when one looks at future prospects for trade throughout the world.
But we might all bear in mind at the outset of our short debate that this is no onslaught on the concept of unfair dismissal. It was, after all, the Conservative Government who introduced that concept into our industrial law and put it on the statute book in 1971. The Labour Party had not found time for it in its 12 years of post-war government. Nor can the last Government have envisaged that such an adjustment as the order proposes could possibly be an attack on principle, for they provided in section 149 of the 1978 consolidation Act the procedure which we are employing.
When in 1971 we advanced beyond the remedies of the common law and provided compensation for unfair dismissal for the first time, Parliament fixed the
528
qualifying period for complaints at two years.
With the advent of a Labour Government in February 1974, the opportunity arose for them to amend the qualifying period. They took the opportunity and the period that they thought it right to substitute for two years was the period that the order will achieve, namely, 52 weeks. It was a period to which the TUC gave its agreement, albeit for a short time, along with the CBI.
But in Committee the Government were assailed and pressed to reduce the period to 12 weeks. The present period of 26 weeks resulted as a compromise. It took effect on 15 March 1975, after a six-month interlude at 52. That being the genesis of the present period of 26 weeks, whatever the merits or disadvantages of enlargement to 52, it can hardly be said that in proposing it we are striking at the ark of the covenant of job protection.
Mr. J. W. Rooker: I remember those debates in the Standing Committee. Parliament decided that it should be 26 weeks. It is no good the hon. and learned Gentleman saying that we have 52 weeks because he and his hon. Friends wanted it. Parliament decided on 26 weeks after consultation between Labour Back Benchers.
Mr. Mayhew: I doubt whether I should have given way to the hon. Gentleman. I was not saying that we were making it 52 weeks because we wanted it at 52 weeks but that it could hardly be claimed that we were striking at a profound principle, since 52 weeks was a period that was, for a short time, acceptable to the Labour Government.
We can take heart in proposing this enlargement from an observation by Mr. Harold Lever in 1977 when, as Chancellor of the Duchy of Lancaster, he had special responsibility for small businesses. He took cognisance, in that position, of what was going on. He said that the Employment Protection Act should not be turned into an Employment Destruction Act.
Since then there has been a great increase in the volume of further evidence available to the Government that the qualification period is having that effect. The qualifying period of service for claims of unfair dismissal has been the

529
subject of a considerable number of representations from employers, again largely from small firms.
Indeed, in the last year, of the 120 or so representations made to my Department on the subject of the irritation of the unfair dismissal provisions in general, about three-quarters of the letters specifically made the point that the present qualifying period is too short, and since we took office on 3 May we have received some 70 spontaneous letters on the same theme. [Interruption.] I never cease to marvel at how the party of the people, as it likes to call itself, expresses profound contempt when the people actually express their views. Apparently, democracy is acceptable only when it agrees with the creed and dogma of the Labour Party.
I will not swap surveys with the Opposition, but they know that many surveys support the contention that I am putting forward. [Interruption.] It seems that surveys are, to the Labour Party, unreliable, so I will cite two letters we have received. The House can then decide whether they represent a valid point of view. The first is from the North Wales Sign Company. It was written in March 1979. The company is based in Bangor. The letter says:
"I would like it on record that I am holding back, as are most business men with whom I come into contact, with regard to taking on more staff. In the sign trade in particular a six-month period is often not long enough to ascertain an employee's true potential. If some leeway could be introduced … I would be happy to employ, and have a dire need to employ, more staff."
The other letter is from MI Finance Limited. It says:
"Like so many business people we are deterred from employing more staff due to the present regulations and we are prepared to work harder ourselves rather than take the risk of expanding and employing more staff."
[Interruption.] I will not be deterred by the Opposition's irritation at listening to what people have to say. The difference between this Government and their predecessors is that we seek to legislate for employment protection in a way that will truly protect and create jobs, because we listen to what we are told by those who are engaged in business. Our predecessors maintained a total contempt for those who advanced such reasons.
530
The next paragraph but one of the letter says:
"It is almost an impossibility for an employer to assess whether an employee is satisfactory after a short period of six months, and a Bill with more reasonable provisions will be extremely helpful to all small businesses."
Mr. Ted Leadbitter: The Minister heard one of his hon. Friends proudly say in the previous debate that there were 1,500,000 small businesses in the United Kingdom. He excluded the main employers. The Minister has the audacity to say in the debate on the order before us that he is motivated to produce it because he has received 70 letters—from that number of small businesses. Would not he have served the House much better if he had taken note of my point of order on the previous order and accepted his responsibility as a Minister, giving the House the evidence for the order beforehand, so that we could make a judgment? If he will not be deterred, the House will not be. Should not he give the whole of the evidence instead of isolated letters from his friends?
Mr. Mayhew: I have conceded, with regret, that I wasted a little time of the House in the previous debate, but I do not believe that it was as much as has just been wasted by the hon. Gentleman.
Employers argue that the present period of 26 weeks is not long enough to assess the suitability of a new employee without the fear of a tribunal claim, particularly where the employee is taken on at the beginning of the summer holiday period, and that they therefore hesitate to recruit, especially where the extra labour is likely to be needed for a short period only. They say that they are more ready to dismiss the employee about whose suitability they are uncertain before 26 weeks have elapsed than to give him the benefit of the doubt. Do Labour hon. Members want that?
Those views were also widely endorsed in the course of our consultations on the proposals in the two draft orders. Many of the employers' organisations confirmed again that a period of 26 weeks was too short in many cases—not all—to assess the suitability of an employee, and they all welcomed the proposed extension of the qualifying period to 52 weeks as a fully justified relaxation of the provisions. Many pressed to go to 104 weeks, but

531
we felt it right to go to 52, which represented the majority view of employers' organisations consulted as to the extent of an increase.
Mr. Michael Grylls: I think it is true that many small firms' organisations have asked for more than 52 weeks, but certainly the change proposed tonight will be a great help. Will my hon. and learned Friend consider one further point for the future? Will he consider the possibility of a two-year moratorium on the unfair dismissal provisions for new firms of up to, say, 25 people? Such a moratorium for firms that were starting up would be a great additional help.
Mr. Mayhew: My hon. Friend, who takes a great interest in these matters, has made a proposal that has attractive features and will be considered.
Mr. Greville Janner Mr. Greville Janner (Leicester, West) rose—
Mr. Mayhew: I must continue.
Dr. Oonagh McDonald Dr. Oonagh McDonald (Thurrock) rose—
Mr. Mayhew: This is a short debate, and I must get on.
We in this House are not at all wise if we discount the views of those who take the trouble to acquaint us with them. If the Labour Government had paid more attention to what the country was thinking, they might not have lost the election.
Mr. Janner Mr. Janner rose—
Mr. Mayhew: I shall not give way. I have given way two or three times.
The matter does not end there. There have been a number of surveys, on differing bases. I concede that they are something of a bran tub: there is something in them for everyone. Those that were undertaken by employers' organisations show convincingly the deterrent effect on employment that the present qualification period has had. I concede that those commissioned by the Department of Employment are not inconsistent with that but that they are less compelling.
Therefore, I shall cite one report that falls into neither category—Coopers and Lybrand's survey that was carried out for the Wilson committee in January 1978
532
into the investment attitudes and financing of medium companies. It is a report that is free from the taint of partisanship on one side or the other. I quote from the conclusion:
"We were frankly surprised at the strength of feeling that was held on this topic by many companies. The main point of concern was the increasing difficulty in recent years in being able to adjust readily the size of the work force to fluctuations in market conditions, or even seasonal changes in demand. … The Employment Protection Act 1975 was seen as a factor which strongly reinforced the trend towards inflexibility. The great majority of companies surveyed were therefore extremely cautious in taking on labour and were left in no doubt that this adversely affected investment decisions, including in some cases the choice between UK and some overseas countries".
Mr. Janner: In view of the representations that have apparently been made regarding a further reduction—returning to the point about the exclusion of small firms altogether from this protection, as raised by the hon. Member for Eye (Mr. Gummer)—will the hon. and learned Gentleman assure the House that this will not be the next step that the Government take? Are we to expect that there is to be—
Mr. Deputy Speaker: Order. The debate must be related to the order that is before us, not the next order.
Mr. Janner: I appreciate that, Mr. Deputy Speaker, but it has been suggested by Labour Members that this order is one of a series that erodes the rights of working people and that the next step is likely to be not merely the reduction in the qualifying period—
Mr. Deputy Speaker: Order. We are not debating the next order.
Mr. Mayhew: The Government have made clear that they are concerned with all aspects in which employment protection legislation bears unreasonably upon businesses in their ability to provide jobs, among other things. To anybody with ears to hear or eyes to read, it must be plain that the qualifying provisions are widely seen as discouraging employers from creating new jobs. It is said that there is ignorance of the Act's provisions and ignorance about the industrial tribunals. That is true. However, the point is that those who are debating whether to add to their staff know that after 26 weeks—
Dr. McDonald Dr. McDonald rose—
Mr. Mayhew: I shall not give way to the hon. Lady.
After 26 weeks the employee will have only to prove that he was dismissed. It will then be for the employer to discharge the burden of proving that he sacked him for admissible reasons and also that he acted reasonably.
Dr. McDonald Dr. McDonald rose—
Mr. Deputy Speaker: Order. The hon. Lady knows perfectly well that if the Minister is not giving way she must retain her seat.
Mr. Mayhew: As promised, the Government have had wide consultation on the matters. We are convinced that it is right to raise the qualifying period to the level of 52 weeks. The Labour Government thought that to be the correct period when they introduced their Bill in 1974. We are convinced that a higher proportion of the cases which are quite unmeritorious and bound from the first to fail will, as a result, never reach the tribunals. That will be a great relief to the anxieties of employers about taking on new staff. We are convinced that by that measure a clog will be removed from the matching of labour supply with demand.
I warmly recommend the order to the House.
12.20 a.m.
Mr. Harold Walker: I must say again what I said to the Secretary of State. The Government seem to depend entirely on the views of employers for their guidance on these matters affecting workers' protection, workers' livelihoods and workers' wellbeing. Again, we had from the Minister nothing but a recitation of employers' views. At no stage do the Government appear to be prepared to consult or to be interested in the views of workers or their representatives and organisations.
When I was a Minister in the Department of Employment, we sought to obtain independent, impartial, objective guidance. The hon. and learned Gentleman the Under-Secretary referred to it in passing, but he ignored entirely what it said. I refer again to the PSI study and the Opinion Research Centre study, and I must tell the hon. Member for Chelsea
534
(Mr. Scott) that I did not rest my earlier argument solely on the PSI study. I based my case also on the Opinion Research Centre study, which consulted firms employing 50 or fewer people.
When the 301 firms were asked specifically about the extent to which employment legislation had caused problems, those which said that the unfair dismissal provisions had given rise to problems comprised a mere 7 per cent. Those were small firms, but this order applies to all firms and not merely small ones, in spite of the fact that the Minister rested his case heavily on the impact of employment legislation on small firms.
The hon. and learned Gentleman referred to the genesis of the unfair dismissal provisions. He said that the Labour Party had had 15 years in office and had not bothered about these matters. The truth is that when the 1966–70 Labour Government left office there was before this House a Bill containing almost exactly the provisions that were later embodied in the Industrial Relations Act. That is why we continued them when we repealed the rest of that Act. They were provisions created by the Labour Government, and I myself played quite a significant part in their creation.
We waited first until the Royal Commission had reported. It recommended very strongly the introduction of machinery for dealing with unfair dismissals. In paragraph 555 of its report the Royal Commission referred to the length of the qualifying period and said:
"the fact that he had been dismissed after a short period of employment could in some circumstances have a serious effect on an employee's future prospects".
It is quite true that in our original proposals, because we needed to assess the possible case load, initially we set the qualifying period at two years, but we made it clear that that was an initial trial run and that there was every intention of reducing the qualifying period thereafter.
Mr. Rooker: Is it not a fact that Lord Carr made the same point when speaking as Secretary of State for Employment during the passing of the Industrial Relations Act? Did not he say that the two-year period was a run-in to test the water, with the intention of lowering it in the

535
future? During the passing of the Industrial Relations Act, was not it widely thought that the Tories put in the unfair dismissal provisions as a sop to win the acquiescence of the trade unons, anyway?
Mr. Walker: I remember that the then Conservative Government frequently quoted against the Opposition that the unfair dismissal provisions could not be objected to and that therefore, by implication, no one could object to the Industrial Relations Bill since a Labour Government had conceived and created them. My hon. Friend is right.
Like many others, the Secretary of State and his Under-Secretary overlook the fact that their unfair dismissal provisions do not provide an absolute guarantee to a worker against being dismissed. They provide a remedy against unfair dismissal. The dismissal has to be unfair before the worker has a right to seek his remedy. Heedless of the duration of the employment, provided he has good grounds and follows the right procedure, an employer can at present, properly and legitimately, dismiss a person. It seems that what some employers want and what the Government are eager to grant is an extended period during which an employer can dismiss without any justification and heedless of the damage that might be done to the individual's livelihood, his career or his reputation.
We have not heard a single word from the Government that shows any recognition of the consequences for the worker who loses his job and the way that this might stigmatise him, prejudice his future chance of employment, damage his livelihood or inflict damage on his family.
Mr. David Mellor: Would the right hon. Gentleman care to comment on the damage done to businesses being dragged before industrial tribunals, often on claims that have no foundation whatever and at considerable expense in obtaining professional advice and waste of executives' time? They are unable to recover costs, except in a small proportion of cases which are frivolous and vexatious. Is he aware how many claims are brought before tribunals and dismissed and the damage that they cause to the flow of British business?
Mr. Walker: I do not intend what I say as a point of criticism but merely as a statement of fact. The hon. Gentleman has not been in the House during the past two years when interminable debates have taken place on the point that he raises. I feel, Mr. Deputy Speaker, that you might reproach me if I were to take up these matters. If the hon. Gentleman looks back through Hansard, he will see that I have frequently chided employers for detracting from what we hoped would be the informality of industrial tribunals, with the least reliance on legal support, the least intervention by solicitors and the minimum of cost.
Employers do not need legal advice. I would discourage them from engaging legal support and taking solicitors to tribunals. What we wanted and what I hope will develop is an informal system of justice that will be inexpensive for every participant. If the employers have the resources to employ solicitors, it is much more grievous and burdensome for the dismissed employee, who does not have any wages, let alone the resources to employ a solicitor.
I am prompted by the intervention of the hon. Member for Putney (Mr. Mellor) to quote a letter that I have before me. Much of the inspiration and the zest for what is being done tonight has come from people like a gentleman writing on behalf of the Tyne, Wear and Northumberland region of the National Federation of Self-Employed. The letter, written to me when I was in office after I had explained why I considered six months was the right period, said:
"It takes six months or more for an employee to start taking liberties with his employer. Indeed, the lack of an employment contract during the first six months must surely create the need for employees to be on their best behaviour and it is only after that period that disobedience and unruliness will show itself because of the way that employment legislation compromises the employer. The end of the six month period marks the point of no return and is the trigger for unruliness and disobedience."
The gentleman who wrote that letter was crystallising and putting in blunter language what the hon. and learned Gentleman, with all his urbanity, has been putting forward. I should like to quote one further gem from this philosophy and attitude of mind reflected not only in the letter but in the approach of the Govern-

537
ment to the business before the House. The letter goes on:
"With respect to unfair dismissal and redundancy payments, I feel that it is time a small employer was protected and compensated in a reciprocal manner if he relies on employees that he has trained to do a job but who are enticed away from him by another firm, which so often happens to the detriment of the employer.
I believe that to provide for such instances there should be a retention from the employee's weekly or monthly income to be used as compensation or alternatively the company standing to gain by purloining the man's services should pay compensation equal to redundancy payment in much the same manner as transfer fees for footballers".
Mr. Greville Janner: My right hon. Friend is giving the Government ideas.
Mr. Walker: I agree with my hon. and learned Friend that I must be careful about giving them ideas.
Reading that letter, I was reminded of the way the slaves in the United States in the nineteenth century bought their freedom by deduction of their pay.
The disputes which harm industrial relations and spring from arbitrary dismissals should be resolved in a more decent and civilised way. I thought that that was common ground between the parties. We should establish machinery by which the aggrieved worker can seek a remedy without his workmates having to strike as they had to do in the past.
That is the right way to deal with these matters. The Government apparently do not share that view. By depriving one section of workers access to that machinery, the Government will compel those workers to resort to the more traditional and damaging ways of resolving grievances.
I warn the Government that I fear that, deprived of access to that machinery, workers will resort to the only other method open to them: they will use their industrial muscle. The House should prefer the decent and civilised method of handling grievances through a tribunal.
The Under-Secretary of State leaned heavily on employers' views. I have leaned heavily on the independent, impartial view. We have not heard the view of the workers, except in so far as I may represent the workers in the debate.
538
We have not heard the management view—the view of those at the sharp end.
The British Institute of Management recently carried out a survey of its members, copies of which were sent to the Government but to which the Government have not referred. Referring to the unfair dismissal provision, the institute states:
"This is generally regarded as reasonable although managers consider that the unfair dismissal provisions relating to closed shops need amendment. Otherwise management would not wish to see any changes in the unfair dismissal provisions."
That is a sensible and reasonable view. It is a pity that the Government took no heed of it.
We shall vote against the order.
12.32 a.m.
Mr. Douglas Hogg: Hon. Members agree that almost the greatest problem that faces the United Kingdom and the Western world is the great menace posed by the increasing threat of unemployment. For that reason, we should scrutinise each piece of legislation that comes before the House to determine what effect it may have on employment and unemployment.
I am as certain as I can be certain of anything that some features of the employment protection legislation have diminished substantially the number of jobs available. That is because certain aspects of that legislation make the employment and protection of staff less desirable and less attractive than necessary.
I have had experience of advising employers and employees about the implementation of such legislation. Frequently I have had to advise employees who wish to lodge a claim for compensation. I almost always say to them "Go ahead. The employer is almost certain to pay £500 in order to get rid of the claim."
When an employer asks my advice on similar matters I express the same view, though, of course, I couch it in different language. In doing so I represent the law as it is. Hon. Members would do well to consider the law as it is.
Opposition Members seem to find it difficult to understand that the law in certain respects makes it unattractive for

539
employers to take the risk new staff.
Mr. David Lambie: Not lawyers, though.
Mr. Hogg: My view is that the order will greatly assist the school leaver and the youngster seeking his first job. The reason is simple, and I commend it to the Opposition. Under the present law, a person who has been employed for 26 weeks has a right to claim compensation for unfair dismissal. [HON. MEMBERS: "Yes, unfair".] I believe that to be too low a threshold, because 26 weeks give too short a time within which to assess a potential employee's suitability for employment.
Mr. Allen McKay: Will the hon. Gentleman give way?
Mr. Hogg: No, this is a short debate and I do not propose to detain the House for much longer.
The low threshold inevitably deters employers from taking employees on trial, and the direct result of that is to increase unemployment. In my view, the minimum threshold that the House should contemplate is 52 weeks. Within such a period it should be possible for most employers to determine whether any employee is suitable. An extended threshold is likely to make employers much readier than they presently are to take on young people and to give them a chance.
I believe that employment prospects will be thereby improved, and for that reason I support the order and suggest that Opposition Members would do well to go with us into the Lobby.
12.37 a.m.
Mr. Ernie Roberts: We have heard that the TUC would not support these variations but the employers do. That is significant enough in itself. They will serve the interests of employers, and they will certainly be against the interests of the 12 million organised workers for whom the TUC speaks. The Employment Protection Act was introduced by the Labour Government in order to defend the interests of workers against the arbitrary attacks of employers.
There has been reference to a statement by Harold Lever that the Employment Protection Act is an Employment Destruction
540
Act. By these variation orders the Government are making certain that it becomes such an Act. The orders we have discussed tonight will turn it into just that. They will destroy the protection which workers receive at present under the Act, first, by extending the qualifying period from 26 weeks to 52, thus denying for one year the protection of the Act against unfair dismissal.
On the question of unfair dismissal, I shall now quote Hepple and O'Higgins, the labour relations law experts. They cite one case as follows:
"Overruling the industrial tribunal, Mr. Justice Phillips decided that the employer should not he deprived of his right to dismiss unfairly somebody employed less than 26 weeks if 'only the accident' of summary dismissal had occurred."
The right to dismiss unfairly is now to be extended to 52 weeks. Hepple and O'Higgins say also:
"… judges will not easily allow interference with the employer's common law right of summary dismissal".
It is that right that employers are trying to get to themselves again through this variation order.
The order we discussed before this one makes further inroads into employment protection for workers in industries large and small. These attacks upon the Employment Protection Act are in conformity with the Tories' promise to attack the legal protection given to workers. The Government are obviously determined to dismantle piecemeal all the protective legislation built up by the workers in this country over the past 150 years. This order is part of that process.
Ever since the workers smashed the Combination Acts of 1824, ever since the victorious workers succeeded in forcing the Government to introduce protective legisation, there have been contrary efforts to remove that protection on the part of the employers and the Tory Government, as exemplified in the orders. Examples of these punitive acts include the 1825 Act restricting trade union organisation and the 1909 Osborne judgment, which took away the right of trade unions to use their political funds. Another example of Tory punitive measures was the Trades Disputes and Trades Unions Act 1927, which banned sympathetic strikes. The last and most infamous example of punitive acts by a Tory Government was

541
the Industrial Relations Act, which my union defeated by taking industrial action.
The Tory Iron Maiden and her axe-wielding suitors are determined to rape the unions and take away the protection they have won through a Labour Government. This order, removing protection from dismissal without compensation, will hit the young workers. The employer will be able to employ people for 11 months and 27 days before he dismisses them and takes on some other young workers. This move will hurt all seasonal workers who will be dismissed if they work fewer than 52 weeks in a year. Those are the sort of people this order will attack.
The Tories have been clamouring for the removal of the Employment Protection Act, particularly in view of the massive sackings which are about to take place as a result of the Government's axing policy. It is the Government's economic policies which have produced the need for these orders—so that it will be easy for the employers to get rid of the labour they will wish to displace. By doing so in this way they will save millions of pounds in redundancy payments.
These variation orders are part of the process of dismantling the whole of the Act and making it easier to sack the workers. There is already too much power in the Act allowing employers to sack for so-called fair reasons. The Act says:
"the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether the employer can satisfy the tribunal that in the circumstances … he acted reasonably in treating it as a sufficient reason for dismissing the employee."
That is in relation to an employee's capability. Capability is assessed by reference to the worker's skill, aptitude, health, physical or mental qualities or because of his qualifications, which include
"any degree, diploma or other academic, technical or professional qualification relevant to the position the employee held."
For all those reasons, employers can and do unfairly dismiss workers at the moment.
Unfair dismissals will lead to disputes. If workers cannot go to a tribunal, their
542
only other recourse will be strike action in defence of their jobs or of their shop steward who has been sacked.
West Germany does not have strikes over dismissals of workers. No worker can be dismissed there without the authority of a works council—a joint body of employers and unions. They do not have the problems that we shall have under the order.
The Prime Minister and the Cabinet are hell-bent on provoking confrontation with the unions and working people in the interests of profit and of the dictatorship of capital.
12.46 a.m.
Mr. John Townend: First, I must declare an interest in that I have run a medium business for the last 20 years. I welcome and support what the Minister said. The changes he described are necessary and acceptable, but I hope that they are only the start of a drastic amendment of the Employment Protection Act, which, although well-intentioned, has been a heavy burden on British industry.
The number of cases brought under the Act has been much greater than expected. Many of them are frivolous, as is shown by the fact that the great majority are won by employers. Some are settled out of court in ways which are an exploitation of the Act. The cost to industry in time and legal fees, and the cost to the public, is immense. I understand that this marginal change will save the Treasury £2½ million, which means that the saving to industry will be many times that—about £10 million to £12 million.
Dr. McDonald: The hon. Member mentioned the cost of unfair dismissal legislation for employers. Is he not aware that employers can insure themselves at a very small cost—£8 per employee—against such cases, covering themselves entirely for any legal costs and for any compensation involved? I do not see that that is a large cost to industry.
Mr. Townend: I am well aware that employers can insure themselves, but it is rather expensive and the overall cost to industry must be greater than it would otherwise be because the insurance companies have to make a profit. Nor do I think that one could insure oneself completely for the expenditure of management time.

543
Small firms are also frightened by some of the bizarre results published in the press, when employers are found guilty of unfair dismissal for dismissing workers found sleeping on the night shift or workers who have been convicted of fraud in the courts.
The situation is so critical in the small business sector that the Act is known as the Unemployment Creation Act. Whether that attitude is justified is arguable, but I am a small business man and mix with small business men. I represent a constituency in which the vast majority of employment is provided by small employers. The smaller a business, the more the regulations become an important factor.
The Government are looking to small business to create more wealth and more jobs. The Conservative Party was committed in its manifesto to encourage small business by restoring incentives and lifting the hand of bureaucracy and legislation from the small firm. The first part of that objective was fulfilled in the Budget with the reductions in taxation, which restored incentive.
Mr. Bob Cryer: It did not satisfy you lot, did it?
Mr. Townend: I am prepared to give way to the hon. Gentleman if he wants to get to his feet instead of barracking me.
Mr. Cryer: The hon. Gentleman keeps repeating the canard that the Government Front Bench are continually coming out with, namely, that the incentives given in the Budget are releasing enormous numbers of entrepreneurs. Will the hon. Gentleman tell the House why it was that all the Conservative Members found the tax incentives so small that they pressed their own leadership for a massive increase in pay immediately?
Mr. Townend: With respect, I think that that intervention was completely irrelevant. The hon. Gentleman does not realise that small business wants incentives and reduced taxation and not subsidies. The order is starting to fulfil the second, commitment of releasing the hand of bureaucracy from small business.
Mr. George Grant: The hon. Gentleman is talking about a minute number of cases in which employers lose. Does he realise that employment protection
544
legislation was designed to protect workers against backwoodsmen employers? That is what it was all about. Let us have the real facts about the Act.
Mr. Townend: With respect, the hon. Gentleman is living 30 years in the past. Nobody sacks anybody now who is any good, because employers cannot easily get good people.
The proposals of the Under-Secretary to change the qualifying period from six months to one year may be satisfactory for large firms as represented by the CBI, but they do not go far enough for small and medium businesses. Most medium businesses expected the qualifying period to be extended to two years. The small business committee of the CBI recommended that period. Tinkering with the qualifying period will not make any difference to really small businesses, because the small business man is afraid of tribunals. That is borne out by a conversation that I had with a tailor in the constituency of the hon. Member for Hull, North, who was telling me that he was—
Mr. Kevin McNamara: On a point of order, Mr. Deputy Speaker. The hon. Gentleman is living so much in the past that he cannot remember the name of my constituency. He is trying to recall the name of the constituency in which I beat him.
Mr. Townend: The tailor was regretting that it took him four months to deliver suits to his customers. He employed one man. I asked him whether he had considered taking on anybody else. He told me that he had thought of taking on a young man to teach him the business. He explained that in the tailoring business a great many customers might order suits at a certain time and yet the tailor will find himself very slack 18 months hence. He said that he was afraid of getting a chap who was no good. He contacted the employment exchange and asked "If I take on this man and he is no good, shall I be able to get rid of him without having to go before a tribunal?" He was told "If you follow the procedure, you will be able to get rid of him. He might well take you to the tribunal but you will win." The man said "I do not want to know anything about tribunals", so that job was lost.

545
I know very well the arguments against exempting small businesses altogether. That would be creating a second class of employee. I accept that that is a valid argument, but I would counter it by saying that when people are working in very close contact with their employers it is a very different relationship from that which applies when they are working in very big factories, with the employer in an office 100 miles away. In small businesses, people who are any good at their job are very rarely sacked. My hon. and learned Friend should accept that it is possibly better in some cases for people to be in jobs with slightly fewer rights than to be on the dole.
I believe that there is a precedent, in that the Sex Discrimination Act 1975 does not apply to firms with fewer than six employees. I urge my hon. and learned Friend earnestly to consider likewise exempting such small firms from the unfair dismissal provisions of the Employment Protection Act. I am sure that if he did so he would be fulfilling our election pledge to lift the dead hand of bureaucracy from small firms.
12.57 a.m.
Mr. Greville Janner: The point that the hon. Member for Bridlington (Mr. Townend) has just made is one which, with the very greatest of respect, I was trying to make during the Minister's speech, and I was told that it was too wide. I accept most readily what the hon. Member said because it illustrates what Labour Members have been saying throughout—namely, that by using the procedure of an order the Government are starting a process which they will continue by statute. They are using the form of an order because they can do it quickly, whereas a statute would take them very much longer.
I have always failed to understand why employers should have the right to dismiss anyone unfairly. I have never understood why it should be the right of a manager to dismiss even a new employee unfairly. I do not know why a qualifying period of 26 weeks is needed, never mind a year, and I have always believed that it was wrong for any employer to dismiss any employee at any time unfairly.
546
The Employment Protection Act does not, in my view, go far enough to protect people. It says that whether or not an employer dismisses—
Mr. John Townend: Would not the hon. and learned Gentleman accept that where an employer dismisses someone fairly, on good grounds, that employer can still be taken before the industrial tribunal?
Mr. Janner: Yes. Unfortunately, or fortunately, it is possible in a free and democratic country for anyone to go to court and to lose. There is no law against fighting an unsuccessful case. It is, of course, correct that an employee can go to an industrial tribunal and lose. The fact is that 69 per cent. of all employees who go to industrial tribunals lose, and it is not because the Employment Protection Act is too strong. It is because the Employment Protection Act, as it stands, is too weak to protect the employee.
It is a weakness of our law that so many employees with good cases lose them, and in my experience, which is considerable, they lose them in many cases because they cannot produce the evidence, documentary or oral, to back their cases. They have no documents, and the people who could support them will not do so because they are still employed by the same companies and they value their own jobs, their own livelihood, the ability to feed their families. Far from there being too much protection, there is too little.
My hon. Friend the Member for Thurrock (Dr. McDonald), who raised the insurance problem, was quite right. For a mere £8 a year, one can insure against unfair dismissal, and this insurance covers legal advice and the lot. The fact is that the Conservative Party has built up, as the Minister so correctly said, an ogre in the minds of employers. It has created this belief in the minds of small employers that the oppressive employment protection provisions weigh down upon them in such a way that they cannot afford to take on staff. That is completely and absolutely untrue.
The object of a qualifying period at all—it was an object accepted by the Labour Government at the time—was to give people the opportunity to decide for

547
themselves, within a reasonable time, whether a new employee was or was not capable of doing a job. We have heard a series of hon. Members say that an employer needs 12 months to decide whether an employee can do a job. In the world of management, it is accepted that in most jobs one knows perfectly well within a few weeks whether a man is capable of operating a machine, whether a salesman can sell or whether a person can answer the telephone or do a clerking job. There are exceptions in the area of sales and research, where even 12 months is not enough, but in 99 per cent. of all cases six months is not only enough but is more than enough.
Mr. A. P. Costain: Does not the hon. and learned Gentleman appreciate that when someone wants to expand his business he does not know whether he will be able to sell his products? When he takes on two or three people, he takes them on to try out new products. Many small firms do not do so because they will be clobbered with the trouble of getting rid of these men, and the extra expense, if the products do not succeed.
Mr. Janner: I hope that the House heard not only what the hon. Gentleman said but the words he used. He said that employers are worried about taking on two or three people in case they get clobbered by the law when they want to get rid of them. Those were his precise words. I believe that employers who want to take on two or three people, and who have 26 weeks to decide whether they are doing the job, have more than enough time for that assessment.
I do not believe that the good employer takes on a person because he wants to get rid of him. I do not accept the language used by the Minister about sacking. I believe that the qualifying statutory trial period of 26 weeks is not only a long one but is too long. I serve notice from the Back Benches that, so far as I am concerned, when the next Labour Government get into office we shall reduce the time limit not to 26 weeks but to 13 weeks, and immediately.
1.3 a.m.
Mr. John Loveridge: I believe that increasing the period from 26 to 52 weeks under this order will help in the creation of new jobs. That is the
548
strongest and most proper justification. It will encourage small firms to take on additional staff. Many small firms looked for a longer period, especially the very smallest firms, as was suggested by my hon. Friend the Member for Surrey, North-West (Mr. Grylls).
The reason for the belief that it will help employment is demonstrated, at least in part, in the recent Massachusetts Institute of Technology survey in the United States, which shows that 66 per cent. of all new jobs there have come from firms with less than 20 staff and that four-fifths of those firms are new firms of less than five years old.
Here is the justification. Small new firms create work. Large firms, public or private, are likely to shed labour as modern technology takes hold. From the small firms sector comes the hope of new jobs for the future. It must be wise to encourage small firms to take on more staff, as the order does. If every small firm took on only one extra worker, that would go a long way to solving the nation's employment problems.
There is a question. Does the fear of the complexities involved in the unfair dismissal procedure deter these firms from expanding? I believe that it does. The head of one firm was quoted in The Sunday Times on 28 August 1977 when speaking of his reasons for turning down an important contract that would have increased his staff from 60 to 75. He said:
"It is unfair to say it was only the Employment Protection Act. It is also the high rate of taxation and the capital transfer tax, which is important at my age."
He went on:
"If we take on extra people, it is difficult to dispose of them. There is a real disincentive to taking the entrepreneurial risk."
He did not blame the Employment Protection Act entirely—and nor do I—but certain it is that he put some blame on the Act in deterring him from taking on staff, and I believe that to be the case.
Last year a Department of Employment survey showed that 20 per cent. of applications to tribunals came from firms with fewer than 20 workers. It is clear that small firms are involved and affected by the Act. That is natural. If employees lose jobs through their fault, they also lose the first six weeks of

549
unemployment pay. They are questioned by Department of Employment officials as to whether their dismissal was fair or unfair. For small firms in particular it is likely that technical faults will arise, because most staff are on terms of easy friendship and it is difficult to give written warnings. It is natural for such an employee who is questioned by departmental officials to go before the tribunal. He has nothing to lose. He is prompted to do so. The employer, however, may lose time, be much worried, and be turned away from working on export orders, and he spends much thought and anxious time on unaccustomed legal questions that puzzle and perplex him. Even if there is no case to answer, the procedure must be gone through. It is no wonder that many people prefer to opt out of the tribunal in favour of a separate settlement. There is surely a measure of deterrence to expansion here.
Large firms sometimes get away from the present legislation—
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am sorry to interrupt the hon. Member, but can he relate his remarks to the extension of the period from 26 to 52 weeks? This is not a debate on the Employment Protection Act.
Mr. Loveridge: I was applying my argument, Mr. Deputy Speaker, to the part of the Act that relates to the order, and the order is to extend the exemption from 26 to 52 weeks. I believe that my arguments surely demonstrate that in these circumstances there is a measure of incentive to small firms to take on more labour than they would otherwise have done. They suffer from a multitude of legislation, and it is in relation to the whole range of that legislation that they find themselves in greatest difficulty. It is not only the 26-week provision which affects them. They are wounded—that is not too strong an expression—by the mass of legislation.
The order will encourage the creation of employment, and I hope that Labour Members will recognise that aspect of it. They have outlined only the disadvantages, but I hope that in their hearts they know that we must try to get more jobs—and that is what the order will do.
1.10 a.m.
Mr. Michael Martin: I have listened to the debates on the two orders that have been before the House and I am astonished that Conservative Members have not mentioned the plight of workers who may face unfair dismissal. We have been asked to cry over the problems of small business men, but no mention is made of those who are likely to be dismissed by small employers. My experience is that small employers are notoriously bad employers.
An hon. Member referred to garment workers. Insead of talking to a tailor who is an employer, he should have spoken to the girls working in sewing machine factories making shirts. They are told that if they do not do enough piece work in a week they will be sacked at the end of the week.
The Employment Protection Act was passed with the small employer in mind. We do not need to worry about the large employers. We have good collective bargaining systems in the large engineering factories and shipyards. We need to worry about the bricklaying yards and the engineering workshops that we in Glasgow call rat pits. Such places are so bad that they flout even the safety legislation, let alone unfair dismissal provisions.
Mr. Tony Marlow: How many more people would be put out of work if the hon. Gentleman put the small firms in Glasgow out of business, as seems to be his intention?
Mr. Martin: We are interested not only in creating jobs but in creating secure jobs in good working conditions. It is useless to create jobs in firms where an employer can tell a worker that he will be on the dole by Christmas. My hon. Friends have been accused of having no experience of the running of businesses. That is certainly true of me, but I have experience of being made redundant two or three weeks before Christmas and having to go home to my family and tell them that it would not be much of a Christmas that year. That sort of thing happens throughout the country.
The Act has given security to millions of workers. Hourly paid workers who have money docked from their wages if they miss an hour at work have no security except that given by the Act. It

551
is an excellent measure and it frightens Conservative Members. They want to go back to the old days when employers could divide and rule workers. If one worker can be unfairly sacked, that is a threat to others.
It has been suggested that lawyers should be brought into the tribunals, but they should not be allowed near them. The tribunals should be places—
Mr. Mellor Mr. Mellor rose—
Mr. Martin:—where laymen—
Mr. Mellor: Will the hon. Gentleman give way?
Mr. Deputy Speaker: Order. The hon. Gentleman is not giving way.
Mr. Martin: The tribunals should be places where laymen from both sides of industry are able to take their grievances and have them heard fairly. There is enough work in the courts for lawyers without their being given the tribunals as well.
It is claimed that six months is not enough time in which to assess a worker. But a week, two weeks at the most, is enough time to assess whether a man is a decent worker. It does not say much for managerial techniques if a manager cannot tell whether a person is a good worker within six months.
1.16 a.m.
The Secretary of State for Employment (Mr. James Prior): Having heard the speeches of the hon. Members for Glasgow, Springburn (Mr. Martin) and for Hackney, North and Stoke Newington (Mr. Roberts), I am not surprised that it became impossible for the Labour Government to take any sensible action on the Employment Protection Act or on any other matter connected with industrial relations.
I regret that we should have found ourselves tonight arguing about what I would think the vast majority of the people outside, whether trade unionists, small employers or members of the general public, believe is a perfectly sensible and reasonable measure to take.
The evidence I have for saying that is this. In Committee on the Employment Protection Bill, when an amendment was moved to make the unfair dismissal procedure operate after 12 weeks, who voted
552
against it? The right hon. Member for Ebbw Vale (Mr. Foot) and the right hon. Member for Barrow-in-Furness (Mr. Booth). They argued that 52 weeks was the right period to choose. It was only at a subsequent stage of the Bill that they changed their minds and came down to 26 weeks.
We warned them at the time that if they wanted to achieve a reasonable balance between the fears of employers, particularly small employers, and the perfectly legitimate right of workers not to be unfairly dismissed, 26 weeks would not achieve it and would be bound to lead to problems of small employers at any rate not taking on labour.
On Second Reading of the Employment Protection Bill, we moved the following amendment:
"this House, whilst recognising that parts of the Employment Protection Bill give legislative effect to good industrial practice, declines to give a Second Reading to a Bill which makes no attempt to establish a fair balance between the rights of management and unions, adds a heavy burden of cost without proper consideration of how it should be shared by employer, employee and State, and takes no account of the particular problems of small businesses."—[Official Report, 28 April 1975; V31. 891, c. 47.]
I think we were right then and I think that we are right now.
My hon. Friend the Member for Bridlington (Mr. Townend) talked with knowledge about the problems of small businesses and said that we should have moved back to 104 weeks, which was the original period that a Conservative Government introduced in the Industrial Relations Act 1971. I have a good deal of sympathy with him in that view.
Certainly, the weight of evidence that we had in the consultations was that 52 weeks was a fair balance. We are not trying to make the same mistakes as the Labour Government made when they introduced the legislation. We are not trying to tilt the balance in favour of one section of society. We are trying to have a fair balance between employers and. workers. I believe that 52 weeks is a very fair balance.
In the earlier debate the right hon. Member for Chesterfield (Mr. Varley) talked about unemployment. We are making the change in the order solely because in the difficult days ahead on employment, which the whole House

553
knows the country must face, we should do whatever we can not to make the task of employers more difficult.
Mr. James Hamilton: Exactly.
Mr. Prior: The hon. Gentleman and the whole House know that employers must spend more time in getting on with the job of production and selling. They must produce a standard of discipline and a standard of work that we in this country have not had in the past few years. We must do it in the interests of the country as a whole, with the co-operation of the workers.
Of course any Government, particularly a Government in office at a time of economic difficulty such as we shall experience in Britain in the next two years—[HON. MEMBERS: "Oh."] I suppose that no one has heard of the oil crisis. Any Government must seek the maximum co-operation, and that we shall do. We are putting the order through tonight because we believe that it is a small measure that can help with the provision of extra jobs.
My hon. Friend the Member for Grantham (Mr. Hogg) was abundantly right when he pointed out, with his experience of the law and of advising both employers and workers, that the payments made out of court were damaging to discipline and to the Act—
Mr. Eric S. Heffer: The right hon. Gentleman has used the word "discipline" twice.
Mr. Prior: —and have been a deterrent to employment.
I very much hope that the House will recognise that the order is designed to help with employment and is reasonable in terms of the balance of bargaining power between unions and workers on the one hand and employers on the other.
The right hon. Member for Doncaster (Mr. Walker) commented on surveys on the importance of the worker. One report said:
"About a quarter"—
of those interviewed—
"said when directly asked that the unfair dismissal provisions had affected the numbers recruited, and nearly half said that these had made them take more care in recruitment."
554
I have no doubt that that is a view that hon. Members on both sides of the House found during the election campaign and for a long time before that.
Mr. Heffer: How many more jobs, then, can we be guaranteed as a result of the order?
Mr. Prior: The hon. Gentleman knows that no one could guarantee how many more jobs would be created. But one thing of which one can be absolutely certain is that the effect of the Act in the past few years has been to lose a number of other jobs that we would have had. It is not good enough for the hon. Gentleman to produce that type of argument.
Mr. Harold Walker: I am sure that the Secretary of State does not wish to mislead the House about the Opinion Research Centre study. That study states that
"24 per cent. said that they had been affected by the legislation on unfair dismissal, i.e. it had influenced them, though they may not necessarily have had experience of a complaint or threat of a complaint being made."
Mr. Prior: The fact that 24 per cent. of those who were interviewed said that they had been affected and influenced by the Employment Protection Act is good enough evidence to show that a large number of them might have taken on more labour had the 26-week period not applied. The hon. and learned Member for Leicester, West (Mr. Janner) referred to the period of 26 weeks as being too long. He could have argued that one day was too long—he probably would have argued that one day was too long. Even his Government did not reduce the period to less than 26 weeks, and the argument that he used to apply to 52 weeks would apply equally to 26, 13 or 6½ weeks.
Dr. McDonald: The right hon. Gentleman refers to 26 weeks as being a disadvantage. Will he explain why West German employers, who face a period of 26 weeks in which they have to assess an employee, are more discerning than British employers? Apparently they can assess an employee within that time, whereas British employers seem to take twice as long.
Mr. Prior: If the hon. Lady is suggesting that we should have similar industrial relations to those that apply in West Germany, many Conservative Members

555
would go along with the 26-week period for unfair dismissal. I have often heard Labour Members—no doubt it will be heard from the hon. Lady herself in the autumn—saying that we have to live and work in and adopt our methods to the country in which we live. Many of us have a great admiration for the way in which the West Germans manage their industrial relations. In this country we have closed shops. We do not have a rule that states that 70 per cent. of the workers have to vote by secret ballot before they can go on strike If the hon. Lady is suggesting that West German legislation should apply in this country, some of us might agree with her.
It is not only a question of unfair dismissal procedures operating after six months or even after a year. We recognise that the whole process of industrial tribunals has helped to cut down on the number of strikes which otherwise would be
caused by someone being unfairly sacked. However, we have to restore the confidence of management and small employers to take on labour and to be able to carry out their duties properly. In the last five years the ability of Britsh management to conduct its affairs properly has been undermined by parts of the Employment Protection Act. When we return after the recess we shall be asking the House to consider other measures that will deal with the Employment Protection Act. We shall consult fully on the measures before we introduce them.
In this order we are concerned to make a start in achieving a sensible balanced position between employer and employee, which is something that has been missing in this country for the past few years.
Question put:—
The House divided: Ayes 298, Noes 224

Division No. 80]

AYES

[1.30 a.m.

Adley, Robert

Chalker, Mrs. Lynda

Galbraith, Hon T. G. D.

Aitken, Jonathan

Channon, Paul

Gardiner, George (Reigate)

Alexander, Richard

Chapman, Sydney

Gardner, Edward (South Fylde)

Alison, Michael

Churchill, W. S.

Garel-Jones, Tristan

Ancram, Michael

Clark, Hon Alan (Plymouth, Sutton)

Glyn, Dr Alan

Arnold, Tom

Clark, William (Croydon South)

Goodhart, Philip

Aspinwall, Jack

Clarke, Kenneth (Rushcliffe)

Goodlad, Alastair

Atkinson, David (B'mouth East)

Clegg, Walter

Gorst, John

Baker, Kenneth (St. Marylebone)

Cockeram, Eric

Gower, Sir Raymond

Baker, Nicholas (North Dorset)

Colvin, Michael

Grant, Anthony (Harrow C)

Banks, Robert

Cope, John

Gray, Hamish

Beaumont-Dark, Anthony

Cormack, Patrick

Griffiths, Peter (Portsmouth N)

Beith, A. J.

Corrie, John

Grist, Ian

Bell, Ronald

Costain, A. P.

Grylls, Michael

Bendall, Vivian

Cranborne, Viscount

Gummer, John Selwyn

Benyon, Thomas (Abingdon)

Critchley, Julian

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

Benyon, W. (Buckingham)

Crouch, David

Hamilton, Michael (Salisbury)

Best, Keith

Dean, Paul (North Somerset)

Hampson, Dr. Keith

Bevan, David Gilroy

Dickens, Geoffrey

Hannam, John

Biffen, Rt Hon John

Dodsworth, Geoffrey

Haselhurst, Alan

Biggs-Davison, John

Dorrell, Stephen

Hastings, Stephen

Blackburn, John

Douglas-Hamilton, Lord James

Havers, Rt Hon Sir Michael

Blaker, Peter

Dover, Denshore

Hawkins, Paul

Body, Richard

du Cann, Rt Hon Edward

Hawksley Warren

Bonsor, Sir Nicholas

Dunn, Robert (Dartford)

Hayhoe, Barney

Boscawen, Hon Robert

Durant, Tony

Heddle, John

Bottomley, Peter (Woolwich West)

Dykes, Hugh

Henderson, Barry

Bowden, Andrew

Eden, Rt Hon Sir John

Heseltine, Rt Hon Michael

Boyson, Dr Rhodes

Edwards, Rt Hon N. (Pembroke)

Hicks, Robert

Braine, Sir Bernard

Eggar, Timothy

Higgins, Terence L.

Bright, Graham

Emery, Peter

Hill, James

Brinton, Timothy

Eyre, Reginald

Brittan, Leon

Fairbairn, Nicholas

Hogg, Hon Dougles (Grantham)

Brocklebank-Fowler, Christopher

Fairgrieve, Russell

Holland, Philip (Carlton)

Brooke, Hon Peter

Faith, Mrs. Sheila

Hordern, Peter

Brown, Michael (Brigg & Sc'thorpe)

Farr, John

Howell, Rt Hon David (Guildlord)

Browne, John (Winchester)

Fell, Anthony

Howell, Ralph (North Norfolk)

Bruce-Gardyne, John

Fenner, Mrs. Peggy

Hunt, David (Wirral)

Bryan, Sir Paul

Finsberg, Geoffrey

Hunt, John (Ravensbourne)

Buck, Antony

Fisher, Sir Nigel

Hurd, Hon Douglas

Budgen, Nick

Fletcher, Alexander (Edinburgh N)

Irving, Charles (Cheltenham)

Bulmer, Esmond

Fletcher-Cooke, Charles

Jenkin, Rt Hon Patrick

Butcher, John

Fookes, Miss Janet

Jessel, Toby

Butler, Hon Adam

Forman, Nigel

Johnson Smith, Geoffrey

Cadbury, Jocelyn

Fox, Marcus

Johnston, Russell (Inverness)

Carlisle, John (Luton West)

Fraser, Rt Hon H. (Stafford & St)

Jopling, Rt Hon. Michael

Carlisle, Kenneth (Lincoln)

Fraser, Peter (South Angus)

Kaberry, Sir Donald

Carlisle, Rt Hon Mark (Runcorn)

Fry, Peter

Kellett-Bowman, Mrs Elaine

Kershaw, Anthony

Murphy, Christopher

Spicer, Jim (West Dorset)

Kimball, Marcus

Myles, David

Spicer, Michael (S Worcestershire)

King, Rt Hon Tom

Neale, Gerrard

Sproat, Iain

Kitson, Sir Timothy

Nelson, Anthony

Squire, Robin

Knight, Mrs Jill

Neubert, Michael

Stainton, Keith

Knox, David

Newton, Tony

Stanbrook, Ivor

Lamont, Norman

Normanton, Tom

Stanley, John

Lang, Ian

Onslow, Cranley

Steen, Anthony

Langford-Holt, Sir John

Oppenheim, Rt Hon Mrs Sally

Stevens, Martin

Lawrence, Ivan

Osborn, John

Steward, Ian (Hitchin)

Lawson, Nigel

Page, John (Harrow, West)

Stewart, John (East Renfrewshire)

Lee, John

Page, Rt Hon R. Graham (Crosby)

Stokes, John

Lennox-Boyd, Hon Mark

Parris, Matthew

Stradling Thomas, J.

Lester, Jim (Beeston)

Patten, Christopher (Bath)

Tapsell, Peter

Lewis, Kenneth (Rutland)

Patten, John (Oxford)

Taylor, Robert (Croydon NW)

Lloyd, Peter (Fareham)

Pattie, Geoffrey

Tebbit, Norman

Loveridge, John

Pawsey, James

Temple-Morris, Peter

Luce, Richard

Penhaligon, David

Thompson, Donald

Lyell, Nicholas

Percival, Sir Ian

Thorne, Neil (Ilford South)

McCrindle, Robert

Pink, R. Bonner

Thornton, George

Macfarlane, Neil

Pollock. Alexander

Townend, John (Bridlington)

MacGregor, John

Porter, George

Townsend, Cyril D. (Bexleyheath)

Mackay, John (Argyll)

Price, David (Eastleigh)

Trippier, David

Macmillan, Rt Hon M. (Farnham)

Prior, Rt Hon James

Trotter, Neville

McNair-Wilson, Michael (Newbury)

Proctor, K. Harvey

van Straubenzee, W. R.

McNair-Wilson, Patrick (New Forest)

Pym, Rt Hon Francis

Vaughan, Dr Gerard

McQuarrie, Albert

Rathbone, Tim

Viggers, Peter

Madel, David

Rees, Peter (Dover and Deal)

Waddington, David

Major, John

Rees-Davies, W. R.

Wakeham, John

Marland, Paul

Renton, Tim

Waldegrave, Hon William

Marlow, Antony

Rhodes James, Robert

Walker-Smith, Rt Hon Sir Derek

Marshall, Michael (Arundel)

Rhys Williams, Sir Brandon

Wall, Patrick

Marten, Neil (Banbury)

Ridsdale, Julian

Waller, Gary

Mates, Michael

Rifkind, Malcolm

Walters, Dennis

Mather, Carol

Roberts, Michael (Cardiff NW)

Ward, John

Maude, Rt Hon Angus

Ross, Stephen (Isle of Wight)

Warren, Kenneth

Mawby, Ray

Rost, Peter

Watson, John

Mawhinney, Dr Brian

Royle, Sir Anthony

Wells, John (Maidstone)

Mayhew, Patrick

Sainsbury, Hon Timothy

Wells, P. Bowen (Hert'fd&Stev'nage)

Mellor, David

St. John-Stevas, Rt Hon Norman

Wheeler, John

Meyer, Sir Anthony

Scott, Nicholas

Whitelaw, Rt Hon William

Miller, Hal (Bromsgrove & Redditch)

Shaw, Michael (Scarborough)

Whitney, Raymond

Mills, lain (Meriden)

Shelton, William (Streatham)

Wickenden, Keith

Mills, Peter (West Devon)

Shepherd, Colin (Hereford)

Wiggin, Jerry

Miscampbell, Norman

Shepherd, Richard(Aldridge-Br'hills)

Wilkinson, John

Mitchell, David (Basingstoke)

Shersby, Michael

Winterton, Nicholas

Moate, Roger

Silvester, Fred

Wolfson, Mark

Monro, Hector

Sims, Roger

Young, Sir George (Acton)

Montgomery, Fergus

Skeet, T. H. H.

Younger, Rt Hon George

Moore, John

Smith, Dudley (War. and Leam'ton)

Morris, Michael (Northampton, Sth)

Speed, Keith

TELLERS FOR THE AYES:

Morrison, Hon Charles (Devizes)

Speller, Tony

Mr. Spencer le Marchant and

Morrison, Hon Peter (City of Chester)

Spence, John

Mr. Anthony Berry.

NOES

Adams, Allen

Concannon, Rt Hon J. D.

Eadie, Alex

Allaun, Frank

Conlan, Bernard

Eastham, Ken

Anderson, Donald

Cook, Robin F.

Edwards, Robert (Wolv SE)

Archer, Rt Hon Peter

Cowans, Harry

Ellis, Raymond (NE Derbyshire)

Armstrong, Ernest

Cox, Tom (Wandsworth, Tooting)

Ellis, Tom (Wrexham)

Ashton, Joe

Craigen, J. M. (Glasgow, Maryhill)

English, Michael

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

Crowther, J. S.

Ennals, Rt Hon David

Bagier, Gordon A. T.

Cryer, Bob

Evans, loan (Aberdare)

Barnett, Guy (Greenwich)

Cunliffe, Lawrence

Evans, John (Newton)

Barnett, Rt Hon Joel (Heywood)

Cunningham, George (Islington S)

Ewing, Harry

Benn, Rt Hon Anthony Wedgwood

Dalyell, Tam

Faulds, Andrew

Bennett, Andrew (Stockport N)

Davidson, Arthur

Field, Frank

Booth, Rt Hon Albert

Davies, Rt Hen Denzil (Llanelli)

Flannery, Martin

Boothroyd, Miss Betty

Davies, E. Hudson (Caerphilly)

Fletcher, Ted (Darlington)

Bradley, Tom

Davies, Ifor (Gower)

Foot, Rt Hon Michael

Brown, Hugh D. (Provan)

Davis, Clinton (Hackney Central)

Forrester, John

Brown, Robert C. (Newcastle W)

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

Fraser, John (Lambeth, Norwood)

Brown, Ronald W. (Hackney S)

Deakins, Eric

Freeson, Rt Hon Reginald

Buchan, Norman

Dean, Joseph (Leeds West)

Freud, Clement

Callaghan, Jim (Middleton & P)

Dempsey, James

Garrett, John (Norwich S)

Campbell, Ian

Dixon, Donald

George, Bruce

Campbell-Savours, Dale

Dobson, Frank

Gilbert, Rt Hon Dr John

Cant, R. B.

Dormand, J. D.

Ginsburg, David

Carmichael, Nell

Douglas-Mann, Bruce

Golding, John

Cartwright, John

Dubs, Alfred

Graham, Ted

Clark, Dr David (South Shields)

Duffy, A. E. P.

Grant, George (Morpeth)

Cocks, Rt Hon Michael (Bristol S)

Dunn, James A. (Liverpool, Kirkdale)

Grant, John (Islington C)

Cohen, Stanley

Dunnett, Jack

Hardy, Peter

Coleman, Donald

Dunwoody, Mrs Gwyneth

Harrison, Rt Hon Walter

558

559

Hattersley, Rt. Hon Roy

Martin, Michael (Gl'gow, Springb'n)

Silkin, Rt Hon John (Deptford)

Haynes, David

Mason, Rt Hon Roy

Silkin, Rt Hon S. C. (Dulwich)

Healey, m. Hon Denis

Maxton, John

Silverman, Julius

Heffer, Eric S.

Maynard, Miss Joan

Skinner, Dennis

Hogg, Norman (E Dunbartonshire)

Meacher, Michael

Smith, Rt Hon J. (North Lanarkshire)

Holland, Stuart (L'beth, Vauxhall)

Mikardo, Ian

Snape, Peter

Home Robertson, John

Millan, Rt Hon Bruce

Soley, Clive

Homewood, William

Miller, Dr M S (East Kilbride)

Spearing, Nigel

Hooley, Frank

Mitchell, Austin (Grimsby)

Spriggs, Leslie

Horam, John

Mitchell, R. C. (Soton, Itchen)

Stallard, A. W.

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

Morris, Rt Hon Alfred (Wythenshawe)

Stoddart, David

Huckfield, Les

Morris, Rt Hon Charles (Openshaw)

Stott, Roger

Hughes, Mark (Durham)

Morris, Rt Hon John (Aberavon)

Strang, Gavin

Hughes, Robert (Aberdeen North)

Morton, George

Straw, Jack

Janner, Hon Greville

Moyle, Rt Hon Roland

Taylor, Mrs Ann (Bolton West)

Jay, Rt Hon Douglas

Mulley, Rt Hon Frederick

Thomas, Jeffrey (Abertillery)

Johnson, James (Hull West)

Newens, Stanley

Thomas, Mike (Newcastle East)

Johnson, Walter (Derby South)

Oakes, Gordon

Thomas, Dr Roger (Carmarthen)

Jones, Alec (Rhondda)

Ogden, Eric

Thorne, Stan (Preston South)

Jones, Dan (Burnley)

O'Halloran, Michael

Tilley, John

Kilroy-Silk, Robert

O'Neill, Martin

Torney, Tom

Kinnock, Neil

Orme, Rt Hon Stanley

Urwin, Rt Hon Tom

Lambie, David

Owen, Rt Hon Dr David

Varley, Rt Hon Eric G.

Lam born, Harry

Palmer, Arthur

Walker, Harold (Doncaster)

Lamond, James

Park, George

Weetch, Ken

Leadbitter, Ted

Parker, John

Wellbeloved, James

Leighton, Ronald

Parry, Robert

Welsh, Michael

Lestor, Miss Joan (Eton & Slough)

Powell, Raymond (Ogmore)

White, Frank R. (Bury & Radcliffe)

Lewis, Arthur (Newham North West)

Prescott, John

White, James (Glasgow, Pollok)

Lewis, Ron (Carlisle)

Price, Christopher (Lewisham West)

Whitehead, Phillip

Lofthouse, Geoffrey

Race, Reg

Whitlock, William

Lyon, Alexander (York)

Radice, Giles

Willey, Rt Hon Frederick

Lyons, Edward (Bradford West)

Rees, Rt Hon Merlyn (Leeds South)

Williams, Rt Hon Alan (Swansea W)

Mabon, Rt Hon Dr J Dickson

Richardson, Miss Jo

Williams, Sir Thomas (Warrington)

McDonald, Dr Oonagh

Roberts, Albert (Normanton)

Wilson, Gordon (Dundee East)

McElhone, Frank

Roberts, Ernest (Hackney North)

Wilson, Rt Hon Sir Harold (Huyton)

McKay, Allen (Penistone)

Roberts, Gwllym (Cannock)

Wilson, William (Coventry SE)

MacKenzie, Rt Hon Gregor

Robertson, George

Winnick, David

Maclennan, Robert

Robinson, Geoffrey (Coventry NW)

Woodall, Alec

McMillan, Tom (Glasgow, Central)

Rodgers, Rt Hon William

Woolmer, Kenneth

McNally, Thomas

Rooker, J. W.

Wrigglesworth, Ian

McNamara, Kevin

Roper, John

Wright, Miss Sheila

Magee, Bryan

Ross, Ernest (Dundee West)

Young, David (Bolton East)

Marks, Kenneth

Rowlands, Ted

Marshall, David (Gl'sgow, Shettles'n)

Sever, John

TELLERS FOR THE NOES:

Marshall, Dr Edmund (Goole)

Sheerman, Barry

Mr. James Hamilton and

Marshall, Jim (Leicester South)

Sheldon, Rt Hon Robert (A'ton-u-L)

Mr. James Tinn.

Question accordingly agreed to.
Resolved,
That the draft Unfair Dismissal (Variation of Qualifying Period) Order 1979, which was laid before this House on 10th July, be approved.

SELECT COMMITTEES RELATED TO GOVERNMENT DEPART MENTS
Motion made, and Question proposed,
That the Standing Order (Select Committees related to Government Departments) be amended, in the Table, column 4 (Maximum numbers of Members), in respect of the Defence Committee, the Energy Committee, the Environment Committee, and the Transport Committee, by leaving out '10' and inserting '11', instead thereof.—[Mr. Wakeham.]
Mr. Deputy Speaker (Mr. Bernard Weatherill): The Question is the motion in the name of the Chancellor of the Duchy of Lancaster. As many of that opinion say "Aye". To the contrary, "No".
Mr. Ronald W. Brown: I put down an amendment on this item calling for the addition of the other four Select Committees, to change them from nine-member Committees to 11-member Committees in the same way. Am I not to be called on my manuscript amendment?
Mr. Deputy Speeket: I know that the hon. Member has submitted a manuscript amendment, which has been selected by Mr. Speaker, but I was putting the Question first. Now, will the hon. Member move his amendment?
Mr. Ronald W. Brown: I have chosen to move my amendment, after "11", insert
"and in respect of the Agriculture Committee, the Education, Science and Arts Committee, the Employment Committee, and the Social Services Committee, by leaving out '9' and inserting '11'"—
It being after Ten oclock on Tuesday evening, and objection being taken to further proceeding, the debate stood adjourned.
Debate to be resumed this day.

MEMBERS' INTERESTS
Motion made,
That Mr. Robert Adley, Mr. Joe Ashton, Mr. Andrew Bennett, Mr. R. B. Cant, Mr. Geoffrey Dodsworth, Mr. Tony Durant, Sir Nigel Fisher, Mr. Percy Grieve, Mr. Geoffrey Johnson Smith, Mr. David Madel, Mr. Charles R. Morris, Mr. Arthur Palmer, and Mr. Frederick Willey, be members of the Select Committee on Members' Interests.—[Mr. Wakeham.]
Hon. Members: Object.

PETITION

  Nursery Education
  1.42 a.m.
  Mr. D. N. Campbell-Savours: With your permission, Mr. Deputy Speaker, and that of the House, I wish to present a petition, which reads:
  To the honourable the Commons of the United Kingdom of Great Britain and Nortnern Ireland in Parliament assembled—
  The humble Petition of citizens of the United Kingdom sheweth—
  That the honourable Member for Workington has received a Petition signed by more than seventeen thousand residents of West Cumbria who are concerned by proposals that nursery education should be subject to severe cutbacks, and that many people in West Cumbria are gravely concerned at the disastrous effect of these cuts on the young children of the area.
  Wherefore your Petitioners pray that Your honourable House impress upon Her Majesty's Government the need to preserve and extend provision for nursery education in West Cumbria and elsewhere in Britain, and that Your honourable House do not pass any legislation which will have the effect of diminishing that provision.
  And your Petitioners, as in duty bound, will ever pray, &c.
  This petition stems from a fear among my constituents that cuts in public expenditure will affect the provision of nursery education in my constituency.
  To lie upon the Table.

GLASGOW (POPULATION CHANGES)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]
1.45 a.m.
Mr. Hugh D. Brown: I am not sure whether we have now cleared away all the procedural difficulties which the House apparently has to face these days, but I am delighted that the Under-Secretary of State is here from the Scottish Office. I am a little surprised that no one has commented on the fact that the Scottish Office is working a Minister short compared with what we used to do. I do not want a reply on that, because the hon. Gentleman will perhaps argue that the quality has changed as well. I merely say that I recognise that it is sometimes inconvenient to be here at this time of the morning. For what it is worth, I can tell the Minister that, including my three previous Adjournment debates, this is about the earliest I have managed.
As I was forced to go back to look at what I had said on those occasions, I found it interesting, and not surprising, that the three subjects I raised related to Easterhouse, to Scottish housing and the Cullingworth report, and in 1970 to a report from the Scottish Housing Advisory Committee entitled "Council House Communities". Again tonight I am on a similar subject, the problems facing the peripheral areas of Glasgow.
The Minister knows the report, "Glasgow: Implications of Population Changes to 1983". I do not think that there is anything between the parties on the background and analysis. Ultimately, there was common ground with the district council, the regional council and the SDD. That all-party recognition of the problem, to call it that, probably first emerged in 1972, when the late Robert Mansley, the director of planning in Glasgow, produced for the council his report "Areas of Need in Glasgow". On page 4 of that report, he drew attention to the fact that
"Co-ordinated action, involving many Committees and Departments of the Corporation, is needed, and the very high level of expenditure necessary will illustrate that the Government's recent offer of finance for a form of 'first-aid' environmental improvement becomes

563
virtually irrelevant to the scale of the problem to be tackled."
I do not suggest for one moment that the previous Government were able to provide resources on the scale which Glasgow always thought should be provided. I do not argue that problems have suddenly emerged of which we have not been aware over many years. But from the SDD report, paragraph 23 on page 17, it is clear that in the past, as I say, there was general recognition of the scale of the problem, although, for obvious reasons, there was never agreement about the scale of resources needed to tackle it in the terms now presented by the report on the implications of population changes to 1983.
There has been general agreement and all-party recognition of the figures: that Glasgow is continuing to lose 25,000 of its population a year, that by 1981 there could be 25,000 houses empty and by 1983 there could be 30,000 houses empty. That is the size of the problem confronting Glasgow and Strathclyde in that context.
We therefore need an assurance from the Government. This is the first opportunity that the Minister has had to speak on the subject, since Glasgow was not even mentioned in the debate last week. I do not blame the Minister for that, and I had better not say anything about the selection by the Chair or I shall be in further trouble. But it was unfortunate that no voice was heard raising these issues, and this Adjournment debate is therefore pretty timely.
I now draw the Minister's attention—I am sure that he will be warned of it—to what was said in the Evening Times on 27 June by Bailie Derek Mason. Dealing with the need to face up to the financial crisis which he sees as more or less permanently facing Glasgow—perhaps somewhat exaggeratedly—he said:
"It is the intention of the Conservative administration to give the Government such detailed information about Glasgow that, rather than cut any assistance, they will be prepared to treat us as a special case."
We are all familiar with how special cases can be built up. The Minister will be fully aware that there will be special pleading when he meets the representatives of Glasgow in the near future.
The Minister should also be aware that I am not just arguing about the peri-
564
pheral areas. I also seek an assurance about the future of the GEAR programme. When the first cuts in public expenditure were intimated, there was a statement by one of these anonymous Scottish Office officials—the type of statement that seems to be made at weekends. I confess that I always shuddered when I read them when I was in Government and said "I wonder who on earth made that one". This was well up to standard, displaying the classic approach that seems to emerge from time to time. It dealt with the question:
"Will the GEAR programme be affected?"
The answer was:
"Yes, but it will maintain its relative priority."
As I understand that, it means, in ordinary layman's language, "If everyone else is to get cut back, so will the GEAR programme". Perhaps the Minister will explain.
I should like some assurance that the urban aid programme will continue at its present level. This is entirely within the control of the Government. Will that, too, be affected?
I put my next question in the context of Easterhouse and of one scheme in particular, at Garthamlock. As the Minister will know, in the housing management report for last year, at page 70, the district council, accepting the need for action following on the report dealing with the implications of population changes, said that it had set up what it called an
"Environmental Revitalisation Officer to prepare a brief which is developed with the assistance of a local community and which balances the requirements of the city with the needs of the existing population in an area. The point has been reached where the emerging surplus of dwellings in Glasgow is beginning to be apparent in certain areas."
On page 71 there is recognition of this because there is reference to the preparation of briefs covering five areas—Drumchapel, Garthamlock, which is in my constituency, Priesthill, Lochend, again in my constituency, and Pollok. This is part of the general recognition of the need to do something about these peripheral areas. The briefs in preparation cover over 7,000 houses in these five areas.
The importance of that reference is that it raises expectations in a community. It is all right for us to say "But there was

565
no commitment given that there would be £X million forthcoming." Here we have large communities, and no one can deny that a lot of effort is needed.
I refer again to Garthamlock. Its description is the classic description of a deprived area. A total of 70 per cent. of its residents want to leave it; 44 per cent. of residents have submitted a transfer application form; 32 per cent. wish to leave because of violence and vandalism. There is no sheltered housing in the area. There is a high rate of abscondencies in a year—about 130 out of a total of 1,600 households. Ten per cent. of all households are single-parent families. Unemployment is exceptionally high, with almost 50 per cent. of economically active males unemployed. Car ownership is only 6.5 per cent. of the population.
All the classic indices of a deprived area are set out there in one small part of the so-called Easterhouse township. Yet the Government apparently feel that the selling of council houses is a panacea that will solve all these complex problems. There is some inconsistency here.
The Government's circular of 20 June gives local authorities more discretion. They are no longer required to submit detailed housing projects for approval. I welcome that continuation of our policy, but if the Government believe in it why are they taking such a rigid and doctrinaire attitude to the selling of council houses?
The Prime Minister admitted today that there would have to be some discretion—that, for example, houses in national parks, and tied cottages, might be exempt. I hope that the Minister will not reply too dogmatically and that I am being helpful when I say that I shall seek exemptions in areas of need, where the problems will not be solved with a blanket approach and which need a changed approach to the size, style and layout of houses.
Does this mean—I do not necessarily expect an answer tonight—that there will at least be consultations with local authorities to determine, as the Minister has apparently done with the SSHA, that houses due for imminent modernisation should be excluded from sale? That is a practical problem in some areas. If the expectation of a substantial injection
566
of public money has been raised, might that not enhance the value of an area and allow the argument about selling council houses to continue?
I know that I am raising fundamental questions, but I was not happy with the Minister's attempt in the Scottish Grand Committee on Thursday to justify this policy on financial grounds. I am not now talking about social policy. Of course I believe in extending owneroccupation—I wish we could go into that tonight—but I am not satisfied with his explanation.
This seems like a short-term advantage, like someone selling his gas fire to pay for his summer holiday because he will not need heating until the autumn. That may be an unfair analogy, but the Scottish Office will be forced to seek short-term gains in public expenditure because of the pressure on it to make its contribution to the savage cuts dictated by the Cabinet.
We must consider whether we are not storing up long-term financial trouble. I do not always agree with Shelter—the Minister probably has had more responsibility for that organisation than I ever had—but many arguments in its document on this subject should be taken seriously.
It might be worth while if the proposed Scottish Select Committee considered the arguments on this matter. I warn the Minister—I am not threatening him—that there are areas of discontent. People know that one reason for involving them in this exercise is to enable someone to build a new shooting lodge in the Highlands when nothing is done about houses that are not of a tolerable standard. In other words, the tax relief to those who are earning well over £10,000 is colossal compared with the experience of many of our constituents who will suffer because of the Government's approach.
The Government should take on board that in the summer of discontent that will undoubtedly be theirs there is a need to pause and reflect before they return to this place in the autumn with legislation that they now think they can steamroller through the House merely because they have a parliamentary majority. It is not enough merely to have a majority. There must be social consensus or the right state of mind in the areas where Government

567
policy will bite. I argue that the Government's policies will not be accepted in the areas that I have described.
When reading the report of the Royal Commission on the National Health Service, 1 was struck by paragraph 2.3 of chapter 2, which states:
"It is a wry comment on the way of life in developed countries that we now pay more attention to the diseases of affluence than we do those of deprivation."
In the years ahead the Government may be accused of adopting that approach on housing policy. The Government should not overlook the less fortunate in society. I am talking about an area that has colossal social problems. The problems will not be solved by an extension of urban aid contributions. Something much broader is required for Glasgow, which has at least started working on a scheme.
I appeal to the Minister to bear in mind that we need to put a great deal of effort, and be seen to be putting a great deal of effort, into large schemes in Glasgow at Drumchapel, Castlemilk, Easterhouse and Pollok. I appeal to the Government to proceed cautiously and not to be too doctrinaire. If they assess the problems, they will surely accept that it is necessary to spend more money and devote more energy to the difficult areas.
2.2 a.m.
The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The hon. Member for Glasgow, Provan (Mr. Brown) has ranged rather wide in his remarks, but it is highly desirable that he should have introduced a debate on the report on the implications of population changes in Glasgow. The report was especially welcomed as it followed one of the few occasions when there was close, useful and productive liaison between district and regional authorities. That has produced a good result which will be to the benefit of the community that the authorities serve. As the hon. Gentleman knows, the Scottish Office contributed to the report. It is an example of a degree of co-operation and liaison that is clearly helpful.
The hon. Gentleman mentioned some dramatic conclusions contained in the report, especially the likely continuing drastic reduction in the population of Glasgow over the next few years. As the hon. Gentleman will be aware, the
568
report concluded that on current trends the population of Glasgow from 1977 to 1983 will decline from the present 830,000 to between 714,000 and 770,000. That will be a substantial fall. As the hon. Gentleman indicated, one of the most dramatic conclusions concerns the housing implications. By 1983 there could be between 11,000 and 29,000 empty houses in Glasgow. That is a dramatic figure and one that calls for the most serious consideration by local authorities and by all who are concerned with the quality of housing in Glasgow, the implications of changing circumstances and the policies that should be pursued to deal with them.
As the hon. Gentleman is aware, the report indicates that a high proportion of the vacant houses may prove impossible to let. It may prove impossible to find people who are prepared to live in them. These houses are concentrated in the peripheral areas, especially in the four estates of Castlemilk, Pollok, Drumchapel and Easterhouse.
It is interesting that the report indicated why it was believed that the vacancies would be concentrated in those areas. It pointed to the poor quality and lack of variety of housing in those areas, the poor environment, the shortage of social facilities, the high level of unemployment, the lack of convenient employment opportunity, poor public transport, a significant degree of vandalism, arid a high crime rate. It is obvious that where there is a concentration of these factors in a specific area the social consequences for the housing of that area and the related problems that go with it can be very serious.
The hon. Member referred to Garthamlock. In addition to the statistics he mentioned, one is conscious of the fact that fully 9 per cent. of the properties in Garthamlock are vacant. That is for 1977, and one can only be apprehensive as to what the consequences in 1983 might be if that trend continues.
Concerning expenditure to deal with this problem, the hon. Member—indeed, the House as a whole—will be aware that the policy of the last Government, which this Government are pursuing, is that it is ultimately for local authorities to determine, within the expenditure available to them, the priorities that they will apply to deal with local problems. While the Secretary of State is obviously con-

569
cerned and takes the decision as to the overall amount of expenditure available, it would not be right, desirable or possible for him to dictate the specific way in which that expenditure is to be allocated.
The hon. Member, quite correctly, reminded the House that of course the problems of the peripheral areas have to be related to the other problems in Glasgow, particularly the inner city difficulties and the GEAR project. He asked for an indication as to the future of the GEAR project and poured some scorn on what he chose to call anonymous weekend statements. I am not sure whether they were weekend statements but they certainly were not anonymous, because I made them myself and am quite happy to admit authoriship of at least a certain proportion of them.
The hon. Member referred to what he considered to be the difficulty of understanding what might be meant by maintaining the same degree of priority. Perhaps I can explain the phrase in this way. Obviously, if there are expenditure restraints affecting Glasgow and Strathclyde region, it is possible that there will be less cash available in the GEAR area. But what the Government have indicated is that they would hope that the same degree of priority that is presently given to the GEAR project within the expenditure available to Strathclyde region, to Glasgow district and to the other authorities involved in the GEAR project should be allocated to the GEAR project, whatever the total amount of available resources might be.
The hon. Member also asked for a statement from me this evening as to the future of the urban aid programme. I can indicate to the hon. Member that in regard to Glasgow and the West of Scotland area the urban aid programme will. of course, continue. Indeed, it is likely to have in the next year a level of resources comparable to that which it enjoys in the current year. I am not suggesting that it will be mathematically exactly the same, but the overall level of resources available to the local authorities out of the urban aid programme is unlikely to be significantly different in the forthcoming year.
570
The hon. Member ranged quite considerably over the problem of the sale of council houses and related this to the difficulties in Glasgow and the housing problems of the peripheral areas.
The Government have never suggested that the sale of council houses will in some way be a panacea for all the housing problems of the hon. Member's constituency, much less of Scotland as a whole. We see that policy as relating to an expressed demand from many council tenants throughout Scotland and as playing a part in dealing with the housing problems of Scotland, but obviously the problems to which the hon. Member has referred go beyond the simple question of the form of tenure, and the Government have never suggested otherwise.
The hon. Member asked specifically whether there would be exempted categories in regard to the statutory right to purchase that we shall give to tenants. As my right hon. Friend the Prime Minister indicated earlier today, there will, of course, be exempted categories, but I must emphasise that these exempted categories will amount to a very small proportion of the total public housing stock. It will be our policy to give a statutory right to buy to public sector housing tenants, and although there may be one or two exemptions the hon. Member should not conclude that they will relate to other than a small proportion of housing available.
The hon. Gentleman asked whether we would have consultations with the local authorities on the question of the sale of council houses. I can answer him by saying that we have indicated to COSLA and to the Scottish local authorities that we will certainly be willing to discuss with them the details of the policy of the sale of council houses. We do not consider it appropriate to have discussions or consultations on the general principle whether tenants should have a statutory right to buy, but we will certainly be happy to discuss with them—indeed, a meeting has already been arranged which I shall attend—the detailed implementation of these proposals. If they have specific suggestions to put forward, we shall, of course, be happy to give full consideration to them.
The hon. Gentleman emphasised that in his view any financial benefits that

571
might result from the policy of the sale of council houses would be essentially short-term benefits and that this should not be the basis of the Government's policy. Let me make it quite clear—obviously we shall have plenty of opportunity in future months to discuss this in greater detail—that the fundamental reason why the Government are embarking on this policy is not financial. It is the social factor.
We believe that in Scotland in particular there is an overwhelming need radically to expand the level of home ownership. Indeed, I hope I pay the hon. Gentleman a tribute in saying that I think he recognised that when he was the Minister responsible for these matters. I think that he sought to educate some of his own hon. Friends of the need in Scotland compared with the rest of the United Kingdom, and particularly compared with other parts of Western Europe, to change the depressing legacy of past years and to have a radical expansion in this sphere. He knows that the private sector alone cannot meet that target and that a significant proportion must come from the sale of existing houses in the public sector.
I return to the specific point of the consequences of the likely decline in population in Glasgow, the hon. Gentleman's constituency and in other peripheral areas. In general terms, we can perhaps draw two conclusions from what has been experienced and what is being experienced at the present time. First, it calls for the local authorities in particular, but also everyone concerned with the welfare of Glasgow and Scotland in general, to re-examine the whole future of the public sector as regards those parts of the public sector housing stock that will remain in the public sector, notwithstanding the Government's policy. Obviously, large numbers of houses, particularly in the kind of estate which the hon. Gentle-
572
man represents, will at the end of the day remain public sector housing. Clearly the appropriate course must be to consider all possible ways of ensuring that houses are occupied. In some cases that will mean selling, if not to sitting tenants—if there are no sitting tenants—perhaps on the open market to anyone who may wish to live in them. It will perhaps involve consideration of underletting in areas that would not otherwise have property occupied. It may involve changing the kind of tenure that is available in those areas. One must have a maximum, flexible approach to ensure that at least the houses are occupied. The way in which they come to be occupied is a lesser consideration if we are to avoid the major problem of gross and massive derelict areas in our cities.
The other general point is that, by contrasting the needs of the peripheral areas with those of the inner urban areas, the report highlights the present absence of a comprehensive plan for Glasgow. There is no such plan. There are some extremely good analyses of particular problems. There are some very good recommendations in respect of the peripheral areas. There are other organisations and bodies concerned with the inner areas or with the GEAR project. But what we have not had up to now is a more comprehensive approach, whereby the local authorities and others concerned with the future of Glasgow are able to present in a single set of proposals an analysis, suggested remedy and suggested degree of priorities for the rehabilitation of the city—
The Question having been proposed after Ten o'clock on Tuesday 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 fourteen minutes past Two o'clock.

  LEICESTERSHIRE MUSEUM AND ART GALLERY
  LEICESTERSHIRE MUSEUM AND ART GALLERY
  TURNER BEQUEST
  TURNER BEQUEST
HOUSE OF COMMONS
  Members' Office Accommodation
  Members' Office Accommodation
  Members' Salaries
  Members' Salaries
HOME DEPARTMENT
  Public Footpaths (Dogs)
  Public Footpaths (Dogs)
  Crimes (Statistics)
  Crimes (Statistics)
  Drunken Driving
  Drunken Driving
  Children of God
  Children of God
  Air Weapons
  Air Weapons
  Firearms
  Firearms
  Vietnamese Refugees
  Vietnamese Refugees
  Advisory Council on Race Relations
  Advisory Council on Race Relations
  Detention Centres and Borstals
  Detention Centres and Borstals
  Immigration Act 1971
  Immigration Act 1971
  Attendance Centres
  Attendance Centres
  Departures
  Departures
  Immigration (Applications for Bail)
  Immigration (Applications for Bail)
  Official Secrets Act 1911
  Official Secrets Act 1911
  Illegal Entrants
  Illegal Entrants
  Crossbows
  Crossbows
  Concessionary Television Licences
  Concessionary Television Licences
  Deportation
  Deportation
  Immigration
  Immigration
  Scientology
  Scientology
  Mr. Anthony Ledger
  Mr. Anthony Ledger
  Prisoners
  Prisoners
SOCIAL SERVICES
  Mobility Allowance
  Mobility Allowance
  Mental Health Act 1959
  Mental Health Act 1959
  Wessex Regional Health Authority
  Wessex Regional Health Authority
  Supplementary Benefits Commission
  Supplementary Benefits Commission
  Elderly Persons (Pocket Money)
  Elderly Persons (Pocket Money)
  Hospital Services (Kent)
  Hospital Services (Kent)
  Tax Credit Scheme
  Tax Credit Scheme
  Unified Housing Benefit
  Unified Housing Benefit
  Pay Beds
  Pay Beds
  Dental Treatment (General Anaesthesia)
  Dental Treatment (General Anaesthesia)
  Child Benefit
  Child Benefit
  Maternity Services (Worcestershire)
  Maternity Services (Worcestershire)
  Value Added Tax
  Value Added Tax
  Mixed Wards
  Mixed Wards
  Hearing Aids
  Hearing Aids
  Hospital Waiting Lists
  Hospital Waiting Lists
  Chiropody
  Chiropody
  Salmon Report
  Salmon Report
  Prince of Wales Hospital, Tottenham
  Prince of Wales Hospital, Tottenham
  Hypothermia
  Hypothermia
  Expenditure Cuts
  Expenditure Cuts
  Personal Social Services
  Personal Social Services
  National Health Service (Public Involvement)
  National Health Service (Public Involvement)
  Elderly Persons (Residential Accommodation)
  Elderly Persons (Residential Accommodation)
  National Insurance Scheme
  National Insurance Scheme
  Hospitals (Accident and Emergency Departments)
  Hospitals (Accident and Emergency Departments)
  Area Health Authorities
  Area Health Authorities
  Consultants (Rotherham and Doncaster)
  Consultants (Rotherham and Doncaster)
  Pay Beds
  Pay Beds
  Disabled Persons (Specialised Vehicles)
  Disabled Persons (Specialised Vehicles)
  Human Tissue (Register of Donors)
  Human Tissue (Register of Donors)
  Mrs. M. (Member's Correspondence)
  Mrs. M. (Member's Correspondence)
  PRIME MINISTER (ENGAGEMENTS)
  PRIME MINISTER (ENGAGEMENTS)
  TUC
  TUC
  PRIME MINISTER (QUESTIONS)
  PRIME MINISTER (QUESTIONS)
  NATIONAL ECONOMIC DEVELOPMENT COUNCIL
  NATIONAL ECONOMIC DEVELOPMENT COUNCIL
  SUPPLEMENTARY BENEFIT
  SUPPLEMENTARY BENEFIT
  HOGGESTON, BEDS.
  HOGGESTON, BEDS.
  PRIME MINISTER'S SPEECH (CAMBRIDGE)
  PRIME MINISTER'S SPEECH (CAMBRIDGE)
  LORD BELLWIN
  LORD BELLWIN
  BINGHAM REPORT
  BINGHAM REPORT
  NORTHAMPTON
  NORTHAMPTON
  INDUSTRIAL RELATIONS POLICY
  INDUSTRIAL RELATIONS POLICY
  HONG KONG
  HONG KONG
  SCIENTOLOGY
  SCIENTOLOGY
  HARDMAN REPORT
  HARDMAN REPORT
  POSTER-FILM COLLECTIVE
  POSTER-FILM COLLECTIVE
  CIVIL JUDGMENTS (RECIPROCAL ARRANGEMENTS)
  CIVIL JUDGMENTS (RECIPROCAL ARRANGEMENTS)
DEFENCE
  Low Flying
  Low Flying
  Royal Naval Auxiliary Service
  Royal Naval Auxiliary Service
EMPLOYMENT
  Unemployed Persons
  Unemployed Persons
  Industrial Employment (Statistics)
  Industrial Employment (Statistics)
  Unemployment Benefit
  Unemployment Benefit
  Unfair Dismissal Procedure
  Unfair Dismissal Procedure
  Temporary Employment Programme
  Temporary Employment Programme
  Firms (Number of Employees)
  Firms (Number of Employees)
  Unemployment (North-West)
  Unemployment (North-West)
  Job Creation
  Job Creation
  Tent Manufacturing
  Tent Manufacturing
ENERGY
  Fuel Oil
  Fuel Oil
  Solar Energy Heating
  Solar Energy Heating
  Central Electricity Generating Board
  Central Electricity Generating Board
  Coal Industry Act 1977
  Coal Industry Act 1977
  Electricity (Transmission)
  Electricity (Transmission)
  British National Oil Corporation
  British National Oil Corporation
  National Coal Board
  National Coal Board
  Oil Consumption
  Oil Consumption
  Electricity Generation
  Electricity Generation
  Windscale (Fire)
  Windscale (Fire)
TRADE
  Insurance Advisory Panel
  Insurance Advisory Panel
  Overseas Projects Board
  Overseas Projects Board
  Prices and Tax (Separate Indication)
  Prices and Tax (Separate Indication)
  Citizens Advice Bureaux
  Citizens Advice Bureaux
  China (Air Services Agreement)
  China (Air Services Agreement)
  Weight (Small Items)
  Weight (Small Items)
WALES
  Garth Farm, Ynystawe (Gipsy Site)
  Garth Farm, Ynystawe (Gipsy Site)
  Teachers (Pay)
  Teachers (Pay)
EUROPEAN COMMUNITY
  Council of Ministers
  Council of Ministers
FOREIGN AND COMMONWEALTH AFFAIRS
  Hong Kong
  Hong Kong
  Vietnamese Refugees
  Vietnamese Refugees
  Nuclear Safeguards (Australia)
  Nuclear Safeguards (Australia)
INDUSTRY
  National Giro
  National Giro
Microprocessor Applications
  Programme
  Programme
  Map Workshop Programme
  Map Workshop Programme
  Post Office (Monopoly)
  Post Office (Monopoly)
  Shipbuilding
  Shipbuilding
  Concorde
  Concorde
  Penistone
  Penistone
  Jarrow Slake (Reclamation)
  Jarrow Slake (Reclamation)
  Yorkshire and Humberside
  Yorkshire and Humberside
  Regional Development Grant (Wales)
  Regional Development Grant (Wales)
AGRICULTURE, FISHERIES AND FOOD
  Grain Harvest
  Grain Harvest
  Hill Farmers (Teesdale)
  Hill Farmers (Teesdale)
  Liquid Milk (Importation)
  Liquid Milk (Importation)
  Milk Deliveries
  Milk Deliveries
  Milk Consumption
  Milk Consumption
  Liquid Milk (Importation)
  Liquid Milk (Importation)
  Family Income
  Family Income
NATIONAL FINANCE
  Gross Domestic Product
  Gross Domestic Product
  Taxation
  Taxation
  Public Expenditure
  Public Expenditure
  Value Added Tax
  Value Added Tax
  European Community Budget (Grain Prices)
  European Community Budget (Grain Prices)
  Tobacco Duty
  Tobacco Duty
  Public Expenditure
  Public Expenditure
  Income Tax
  Income Tax
  Value Added Tax
  Value Added Tax
  Stamp Duty
  Stamp Duty
  Gratuities (Catering Staff)
  Gratuities (Catering Staff)
  Retirement Bonus (Taxation)
  Retirement Bonus (Taxation)
  Business Loan Finance
  Business Loan Finance
  National Economic Forum
  National Economic Forum
  Wealth Distribution
  Wealth Distribution
  Investment Income Surcharge
  Investment Income Surcharge
EDUCATION AND SCIENCE
  Youth and Community Services
  Youth and Community Services
  Special Educational Treatment
  Special Educational Treatment
  Youth Community Services
  Youth Community Services
  Pupil Numbers
  Pupil Numbers
  Schools (Maintenance)
  Schools (Maintenance)
  Burnham Committee
  Burnham Committee
  Gipsy Children
  Gipsy Children
  Expenditure
  Expenditure
  Further Education
  Further Education
  Schoolchildren (Employment)
  Schoolchildren (Employment)
NORTHERN IRELAND
  De Lorean Motor Company
  De Lorean Motor Company
  Gaming Machines
  Gaming Machines
  Financial Aid
  Financial Aid
  Perinatal and Infant Mortality
  Perinatal and Infant Mortality
SCOTLAND
  Public Expenditure
  Public Expenditure
  North-East of Scotland Development Association
  North-East of Scotland Development Association
  1971 Census
  1971 Census
  Drunken Driving
  Drunken Driving
  Education Authorities (Spending)
  Education Authorities (Spending)
  Moss Morran (Petro-chemical Project)
  Moss Morran (Petro-chemical Project)
  Industry Act 1972
  Industry Act 1972
  Crime
  Crime
  Unemployment (Ayrshire)
  Unemployment (Ayrshire)
  St. Enoch Square, Glasgow
  St. Enoch Square, Glasgow
SOCIAL SERVICES
  Abortion
  Abortion
  Whooping Cough Vaccine
  Whooping Cough Vaccine
  Nottinghamshire Area Health Authority
  Nottinghamshire Area Health Authority
  Ont-patients (Transport Costs)
  Ont-patients (Transport Costs)
  Benefits
  Benefits
  Psychiatric Patients (Coventry)
  Psychiatric Patients (Coventry)
  Worthing Hospital
  Worthing Hospital
  Christmas Bonus
  Christmas Bonus
  Doctors (Emigration)
  Doctors (Emigration)
  Tinnitus
  Tinnitus
  National Health Service (Finance)
  National Health Service (Finance)
  Family Practitioner Committees
  Family Practitioner Committees
  Broadmoor (Visits)
  Broadmoor (Visits)
  Supplementary Benefit
  Supplementary Benefit
  Ancillary Staff (Pay Awards)
  Ancillary Staff (Pay Awards)
  Residential Care Order Legislation
  Residential Care Order Legislation
  Population
  Population
  One-Parent Families
  One-Parent Families
  Personal Social Services
  Personal Social Services
  Persons Over 65
  Persons Over 65
  Motor Industry Research Association
  Motor Industry Research Association
  Non-Means-Tested Benefits
  Non-Means-Tested Benefits
  District Nurses (Cars)
  District Nurses (Cars)
  National Insurance (Hotel and Catering Workers)
  National Insurance (Hotel and Catering Workers)
  Long Term Benefits
  Long Term Benefits
  Vaccine Damage Payments Act 1979
  Vaccine Damage Payments Act 1979
  Finer Report
  Finer Report
  Local Authority Services (Reductions)
  Local Authority Services (Reductions)
ENVIRONMENT
  Radioactive Waste
  Radioactive Waste
  Hospital Admissions (Macclesfield)
  Hospital Admissions (Macclesfield)
  Japanese Seaweed
  Japanese Seaweed
  Birmingham (Inner City Partnership)
  Birmingham (Inner City Partnership)
  Rate Support Grant
  Rate Support Grant
  British Steel Corporation, Corby
  British Steel Corporation, Corby
  Milton Keynes (Railway Station)
  Milton Keynes (Railway Station)
  Housing (Statistics)
  Housing (Statistics)
  Unfit Housing
  Unfit Housing
  Exchequer and Rate Support Grant
  Exchequer and Rate Support Grant
  Compulsory Purchase
  Compulsory Purchase
  "Save Our Shorelines"
  "Save Our Shorelines"
  Housing Investment Programme
  Housing Investment Programme
TRANSPORT
  A27/M27 (Worthing)
  A27/M27 (Worthing)
  Industrial Developments (Northern Region)
  Industrial Developments (Northern Region)
  Motor Cycles
  Motor Cycles
  Dockland Southern Relief Road
  Dockland Southern Relief Road
  Test Regulations
  Test Regulations
  Roads Expenditure
  Roads Expenditure
  Motor Cars (Head Restraints)
  Motor Cars (Head Restraints)
  Second Tyne Tunnel
  Second Tyne Tunnel
  Lorries
  Lorries
  Vehicle Excise Duty
  Vehicle Excise Duty
  Headlight Use
  Headlight Use
CIVIL SERVICE
  Civil Service Sports Council Ltd.
  Civil Service Sports Council Ltd.
  Institution of Professional Civil Servants (Dispute)
  Institution of Professional Civil Servants (Dispute)
  Recruitment
  Recruitment
  Scientology
  Scientology

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 Newcastle.

LORD HARRIS OF HIGH CROSS
Ralph Harris, Esquire, having been created Baron Harris of High Cross, of Tottenham in Greater London, for life—Was, in his robes, introduced between the Lord Robbins and the Lord Houghton of Sowerby.

BARONESS RYDER OF WARSAW
Margaret Susan Ryder Cheshire, CMG, OBE, wife of Geoffrey Leonard Cheshire, Esquire, VC, DSO, DFC, having been created Baroness Ryder of Warsaw, of Warsaw in Poland, and of Cavendish in the County of Suffolk, for life—Was, in her robes, introduced between the Lord Dowding and the Baroness Hylton-Foster.
Several Lords—Took the Oath.

MILLBANK HOSPITAL: FUTURE
2.45 p.m.
Lord SEGAL: 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 are their plans for the future of Millbank Hospital.
Lord MOWBRAY and STOURTON: My Lords, it is the Government's intention to redevelop the whole of the hospital site, as resources become available, to provide new accommodation for the Tate Gallery. In the meantime, existing buildings are being converted to display the Turner Collection and to provide additional facilities for the Gallery.
Lord SEGAL: My Lords, while thanking the noble Lord for that reply, may I ask if he is aware that the longer delay occurs about this matter, the further this building is likely to deteriorate? Is he able to give an estimate of what in the meantime is the cost to the taxpayer of maintaining the hospital in a proper state of repair?
Lord MOWBRAY and STOURTON: My Lords, I cannot give an estimate of what it would cost to keep the hospital because that is now history, but what I can tell the noble Lord is that the immediate conversion to enable us to show various exhibits and to use it for archive purposes will be about £700,000.
Lord WIGG: My Lords, will the Minister be good enough to convey to the Secretary of State for Defence that it would be an affront if this site were handed over to the demolition experts without leaving some memorial to the fact that for the better part of a century officers and other ranks of the Royal Army Medical Corps and members of the Queen Alexandra's Imperial Military Nursing Service rendered yeoman service there, including looking after the first wounded from Mons, and that the British Army will always have an affection for this hospital, particularly those of us who on many occasions have benefited from being a patient in it?
Lord MOWBRAY and STOURTON: My Lords, the goodwill towards and affection for the Army and the Armed Forces on the part of the noble Lord, Lord Wigg, are well known. I have every sympathy with what he has said and will certainly convey his remarks to my right honourable friend.
Lord SEGAL: My Lords, will the noble Lord confirm that he has sounded the death knell of the use of this building as a hospital?
Lord MOWBRAY and STOURTON: Yes, my Lords, but this has been a death knell which has been accepted by past Governments of both the noble Lord's and my party. Perhaps I should have added in reply to the noble Lord, Lord Wigg, that it is not necessary, and I hope it may not be necessary, for the actual shell of the building as we look at it from the Tate side to be pulled down, even in the final development.
Lord WELLS-PESTELL: My Lords, if there is any question at all of the building being disposed of, by which I mean sold, may I ask the noble Lord to ask his right honourable friend to secure some of the money for the National Health Service?
Lord MOWBRAY and STOURTON: My Lords, the noble Lord is being mischievous; there is no intention of disposing of this building for that purpose.

PROPOSED NEW BIRMINGHAM-OXFORD ROAD
2.48 p.m.
The Earl of CAITHNESS: 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 is their policy with regard to the proposed new road between Birmingham and Oxford.
Lord MOWBRAY and STOURTON: My Lords, my right honourable friend the Minister of Transport has said in another place that he will make available shortly an interim statement on his policy for trunk roads. Final decisions on the trunk road programme cannot be taken until the Government have completed their consideration of the public expenditure programme for the next few years. The Government intend to give priority to roads required to meet industrial needs, roads to the ports, and those which relieve the worst congestion and environmental problems. The proposed new road between Birmingham and Oxford fits into these categories.
The Earl of CAITHNESS: My Lords, I am grateful to my noble friend for that reply. May I press him a little further to give me a date when the White Paper will be published and to say how soon after that a decision will be made regarding this particular road?
Lord MOWBRAY and STOURTON: My Lords, a short document will be available quite soon, and it will give the Minister's broad outlines of policy. The actual detailed White Paper will take a little longer, but I hope that we might see it by the end of this year.
Lord SEGAL: My Lords, can the noble Lord give an assurance that, whatever further road development takes place, there will not be any more encroachment into the Oxford Green Belt, to which there have already been many inroads from various directions?
Lord MOWBRAY and STOURTON: My Lords, I take the noble Lord's point, but I do not think that it comes into this particular context.
Lord TAYLOR of BLACKBURN: My Lords, may I ask the noble Lord how short the document will be?
Lord MOWBRAY and STOURTON: My Lords, I do not know how short the noble Lord means by "short", but it will not be very long.

PAY AND PRODUCTIVITY: PUBLIC UNDERSTANDING
2.51 p.m.
Lord ROCHESTER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they aim to confer with representatives of employers, trade unions and other interested parties under conditions which might enable a better public understanding to be gained of the effects on the national economy of pay increases which are not matched by increases in productivity.
The MINISTER of STATE, TREASURY (Lord Cockfield): My Lords, it is a major concern of the Government to improve public understanding of the general economic context of their policies and of the consequences of pay increases of different magnitudes. In particular I would draw the attention of noble Lords to the desire which we expressed in our Manifesto for
"… more open and informed discussion of the Government's economic objectives … so that there is wider understanding of the consequences of unrealistic bargaining and industrial action".
More recently, my right honourable friend the Chancellor of the Exchequer referred in his Budget Statement to the Government's willingness to examine better

1807
methods of ensuring that the implications of higher pay without higher productivity were fully understood by all those concerned with wage negotiation. Noble Lords will not expect me to be able to comment in detail at this stage, but I can say that Ministers are giving careful consideration to all the issues that would be involved in setting up discussions of the kind to which the noble Lord, Lord Rochester, refers.
Lord ROCHESTER: My Lords, I thank the noble Lord for those expressions of sympathy so far as they go. But is he aware that his inability to give a somewhat more positive reply will be a disappointment to many people who are seeking common ground on which to improve our economic and industrial performance? Is not the need for an educational process of this kind one of the few matters on which there is a consensus among elements in all political parties and between many employers and trade union leaders, on which we could build together?
Lord COCKFIELD: My Lords, the Government entirely appreciate the importance and the value of the educational process, and we believe that everything possible should be done to improve the flow of information to those who take part in decisions affecting pay bargaining. Ministers have repeatedly made their views on this subject known both in another place and in your Lordships' House.
Lord ROCHESTER: My Lords, may I ask one more supplementary question? Is it not essential for the Government to give a lead in this matter immediately if it is to have any effect on pay negotiations in the near future? Without such a process, how are we to avoid increased inflation, more bankruptcies and even higher unemployment?
Lord COCKFIELD: My Lords, we are fully aware of the importance of improving public understanding of economic policy, but when it comes to embarking upon discussions of the kind to which the noble Lord refers it is very important that this should be got right. The issue is a difficult and complex one, and we are anxious to ensure that whatever
1808
measures are taken are effective and successful. My right honourable friend the Prime Minister, my right honourable friend the Chancellor of the Exchequer and other Ministers have already made clear how important it is that increased pay should be matched by increased productivity.
Lord ORR-EWING: My Lords, is my noble friend aware that Mr. Alan Fisher, of the National Union of Public Employees, said on the radio this morning that Government action would lead to half a million more unemployed? Is this not rather an irresponsible statement coming from someone who is responsible for the public sector; and would my noble friend continue to repeat, as did Ministers in the previous Government—repeat and repeat, again and again—that irresponsible pay increases, whether in the public or the private sector, must lead to reduced employment?
Lord COCKFIELD: My Lords, the Government are obviously not responsible for statements which are made by other people, but we have made it clear again and again that we are determined to stick to our monetary targets. As a result, if there are excessive pay increases they can result only in threatening jobs and in putting firms, on which jobs depend, out of business. This is a matter which we would expect responsible bargainers on both sides to take fully into account.
Lord BLYTON: My Lords, bearing in mind the fact that the Tory Party fought the last election on free negotiations for trade unions, can the Minister object if they have fixed their guidelines in the same way as the Government have fixed theirs for the top people, like judges, doctors and dentists, at 20 per cent?
Lord COCKFIELD: My Lords, we are not fixing guidelines, and we have taken great care not to do so. What we have done, and will continue to do, is to draw the attention of everybody concerned to the inevitable link which exists between excessive settlements and jobs and the prosperity of industry.
Lord ROBBINS: My Lords, would the noble Lord agree with me that, although he is quite right in saying that Ministers of this and the former Government have insisted on the connection between productivity

1809
and pay increases, it is very doubtful whether that connection has yet got home to the general public? Would it be improper for me to suggest that some short analysis of the material contained in, let us say, Professor Henry Phelps Brown's authoritative pamphlet on the subject, or of the most valuable information gathered together by the Diamond Commission, might help in this matter?
Lord COCKFIELD: My Lords, I am always very happy to agree with the noble Lord. We have endeavoured, both in your Lordships' House and elsewhere, to impress these facts upon public opinion, and we shall go on doing so. The specific suggestions which the noble Lord makes are interesting, and we shall be very happy to look at them.
Baroness SEEAR: My Lords, would the noble Lord not agree that statements by the Government, however correct and however much reinforced by extracts from authoritative sources, do not carry the same conviction as would flow from discussions with the people who are involved—discussions of the kind proposed by my noble friend Lord Rochester?
Lord COCKFIELD: My Lords, Ministers have held discussions with bodies representative of both employers and employees, and they will go on doing so. The Government's views in this matter carry great authority, and we very much appreciate any help or assistance which is given by other people in bringing these truths home to the mass of our people.
Lord WALLACE of COSLANY: My Lords, is the noble Lord aware that past platitudes will not get us anywhere? Is he further aware that Government policy itself is adding to the possibilities of price increases and other charges, which will in turn add to the wages bill? If he wants an educational process, why not start at No. 10 Downing Street?
Lord COCKFIELD: My Lords, there are no platitudes in the Government's policies. In fact, the Government's policy consists of actions specifically directed to curing the ills of the British economy which were created by five years of mis-management of our affairs by a Labour Administration.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware that this 19th
1810
century concept of continuously increased production is a concept embracing the period of mountains of butter, seas and lakes of milk and wine and the overproduction of micro-chips? Is he not aware that increased production cannot be entered into modern economics with the automation which is now being introduced all over the world, and that we are getting the results of this situation more than ever in the history of mankind?
Lord COCKFIELD: My Lords, I am grateful to the noble Lord for his reminiscences. I myself was not born in he 19th century. The policies we are following are directed to the problems of the last quarter of the 20th century.
Lord PAGET of NORTHAMPTON: My Lords, can the noble Lord tell us what increase of productivity is expected of the Members of the European Parliament whose salary is being increased from nil to some £8,000 per year, and whether this presupposes a change in Government policy which was to oppose any increase of productivity by that institution?
Lord COCKFIELD: My Lords, I do not think it is incumbent upon Her Majesty's Government to express views about the level of productivity of Members of the European Parliament.
Lord MISHCON: My Lords, when the noble Lord tries to assure us that the Government are acting as a doctor in order to cure our economic ills, would he be kind enough to try to assume the tone of a cheerful doctor instead of that of an undertaker?

PEERS AND LOBBY CORRESPONDENTS: IMPROVED CONTACTS
3.2 p.m.
Lord WHADDON: 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 the Leader of the House whether he will consider the establishment of suitable facilities for Lords and accredited Lobby correspondents to meet on an informal basis within the precincts of the House.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, this is a matter in the first place for the Administration Committee. The Committee last considered the provision of a bar for Peers and Lobby correspondents as recently as March last year. They concluded that it was not a practical proposition because of the lack of accommodation and the cost involved. The Committee suggested that journalists and Peers might be encouraged to use the Lords' Bar. Peers may, of course, invite journalists to the Guest Room as their guests.
Lord WHADDON: My Lords, I am grateful to the noble Lord for that Answer. Does he not agree that greater access for accredited correspondents, as of right instead of by invitation, would lead to greater understanding by the public of the issues debated in this House? Furthermore, would he not agree that the similar facilities available at the other end of the Palace of Westminster have been of great advantage there?
Lord SOAMES: My Lords, as noble Lords know, there are difficulties about accommodation at this end of the corridor. It has been looked at over a long period of time. Would that matters were better! But they are not, and we have grave difficulties. I must say that my experience has been that, if journalists have wanted to seek out noble Lords, they have always managed to succeed in doing so. And, as I say, perhaps the Lords' Bar could be used rather more than it is.
Lord MURRAY of GRAVESEND: My Lords, would the noble Lord not agree that it would be helpful if he accepted my noble friend's suggestion, because we are going to undergo a number of U-turns within the next few months and it would be helpful if the Government could explain them to journalists?
Lord SOAMES: My Lords, I do not think that the noble Lord need worry on that score. We shall find plenty of means of explaining our policies both to noble Lords and to journalists—for whom they will be so self-evidently right that they will fall on receptive ears.
Lord DRUMALBYN: My Lords, would my noble friend at least treat this
1812
as a priority? Would he at the very earliest opportunity take advantage of any accommodation becoming available? Is he aware that there are a large number of Members in this House who think that it would be a very desirable development to encourage journalists to visit this end of the Palace of Westminster rather more frequently than they do?
Lord SOAMES: My Lords, undoubtedly, it would be nice if it were possible. This has been considered by the Administration Committee, and I have no doubt that, if the House so willed, they would be ready to consider the matter again. It is not for me to give obiter dicta on whether or not this is right. In principle, it would be nice; but we suffer from certain shortages of accommodation and that is a fact of life.
The Earl of LAUDERDALE: My Lords, would not my noble friend consider that, since the House of Lords now is much more active than it was 10, 15 or 20 years ago and has many more active Members now than before, whereas the House of Commons has remained static in that respect, there is a case for recovery from the House of Commons of such territory as the Pugin Room, which was ceded to them in a period of Lords' weakness and Commons' bombastry?
Lord SOAMES: My Lords, it was a considerable time back when this was done. I think that the other place would have some difficulty in giving it up now.
Lord DONALDSON of KINGS-BRIDGE: My Lords, does the noble Lord think that if some change of this kind could be made noble Lords here could have an entertainment allowance; for without that I do not think they would be able to entertain the Press very much?
Lord SOAMES: My Lords, this would be possible; in fact, it is possible. If noble Lords wish to, I am sure that there will be the possibility of so doing.
Lord ROBBINS: My Lords, returning to the original Question, would the noble Lord not agree with the sentiment that I think has been expressed on both sides of this House: that this is a matter of extreme importance for the future of the House of Lords? Day after day, I sit

1813
here on the Cross-Benches hearing the most expert and illuminating speeches; and day after day I open the quality newspapers—even the newspaper of which I was at one time chairman—and read no evidence whatever of the discussions which have taken place. It really is important for this House and for the country at large that the things which are said in this House should be more broadly reported.
Lord SOAMES: My Lords, I agree very much with the noble Lord that one would wish to see greater coverage of what takes place here. I must say that I think that since broadcasting was brought in, what goes on in this House in the way of business and speeches has got to the public ear very much more successfully than happened up to that time. I think that that was an important addition. Unfortunately, the Press Gallery here is not always as full as noble Lords would wish, but this is a matter for the journals concerned. Certainly, the more contact there can be between the Lobby and noble Lords the better. I think that that has always been the case. It is a question of working both ways. It is not only journalists seeking access here but also us trying to put our points over to the media.
Lord ARDWICK: My Lords, on the subject of getting the work of this House better known to the wider world, I wonder whether the noble Lord the Leader of the House has read the Hansard of the debate that we had on the report of the Select Committee on Textiles on which both the noble Lord, Lord Rhodes, and I spoke of the need not merely to publish but to publicise these splendid documents. Even on the publication side there was a poor distribution of this notable report on textiles. I hope that the noble Lord has read it or will read it and will be able to assure the House that some arrangements are possible to make the good work known.
Lord SOAMES: My Lords, many efforts have been made, but without the degree of success that we would have wished.
Lord PLANT: My Lords, do I detect in the reply from the noble Lord the
1814
Leader of the House a desire to take this matter away and sympathetically to review it?
Lord SOAMES: My Lords, I have every sympathy with the thought that underlies the Question. There are two difficulties from my point of view. One is that the Administration Committee has given a lot of thought already to this and will doubtless continue to do so; secondly, there is not the extent of accommodation that we would wish to have. Subject to that limitation, the point has been well taken, and I hope that it will be well taken not only within this House but also outside it.
Lord TAYLOR: My Lords, could the noble Lord say who precisely is entitled to use the Lords' Bar at present?
Lord SOAMES: My Lords, everyone in your Lordships' House.
Lord TAYLOR: My Lords, I believe it is open to many other persons as well. It is in the basement, is it not?
Lord SOAMES: My Lords, it is certainly not confined to Members of your Lordships' House. It is open to anyone in the Palace of Westminster to use. It is a bar where such activities as underlie this Question could be carried on.
Lord TAYLOR: My Lords, would I not be right in suspecting that many of your Lordships have never visited the Lords' Bar?
Lord SOAMES: My Lords, that may be so. It is very agreeable and has access to the Terrace.
The Earl of LAUDERDALE: My Lords, on the issue of accommodation, will the noble Lord take this further point into consideration? At present the Lobby are excluded from the Princes Chamber, whereas they have access to the Members' Lobby at the other end of the corridor. Possibly if the Lobby correspondents were given access to the Princes Chamber, that might have a considerably ameliorating effect until proper accommodation can be found.
Lord SOAMES: I wonder whether the noble Earl is right, because the Peers'

1815
Lobby is really the equivalent of the Members' Lobby in the House of Commons, and members of the Lobby do have access to that.

GENEVA CONFERENCE ON INDO-CHINESE REFUGEES
3.12 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask Her Majesty's Government the Question of which I have given Private Notice, namely:
"To ask Her Majesty's Government whether they will make a statement regarding the conclusions of the Geneva Conference on the Indo-Chinese refugees."
Lord TREFGARNE: My Lords, with the leave of the House, as my noble friend the Foreign Secretary is in Brussels today, I shall reply to the Question asked by the noble Lord, Lord Brockway.
My Lords, in response to the proposal that my right honourable friend the Prime Minister made to him on 31st May, and with the support of many other Governments, the United Nations Secretary-General called an international meeting in Geneva on 20th and 21st July to discuss the problem of refugees and displaced persons in South-East Asia. Sixty-five countries were represented. My noble friend the Foreign and Commonwealth Secretary and my honourable friend the Minister of State (Mr. Blaker) attended the meeting together with the Governor of Hong Kong. Each Government stated their views. The United Nations High Commissioner for Refugees and Dr. Waldheim summed up.
As my noble friend said in his speech, and Dr. Waldheim confirmed, this meeting was unprecedented. It was also important and could have even more important results. In concentrating international attention on the plight of the refugees and on the urgent need to help them and the countries in which they have sought refuge, the conference was humanitarian. But it was widely agreed that the problem could not be solved unless attention was also given to its root causes and that these have been the inhumane policies of Vietnam.
1816
The conference resulted in a massive increase in offers of resettlement places, from 125,000 to 260,000, and in new pledges of additional financial support for the United Nations High Commissioner for Refugees' activities amounting to 190 million United States dollars. The Vietnamese Government indicated that they would suspend for a time the export of boat people, the first time that this Government have acknowledged even implicitly that they control this wicked traffic, and will discuss measures for the safe and orderly departure of those of their citizens who wish to leave. The conference also demonstrated the strength of international concern about Cambodia, the need for a political settlement in that strife-torn country and the even more urgent need for food aid to its starving people.
There was also widespread affirmation of several vital humanitarian principles repeated in Dr. Waldheim's summing-up: the basic right of individuals to stay in their own country or leave as a matter of free will; that when they leave they must have orderly arrangements for departure; a safe journey and an assured destination; that the principle of first asylum must be respected by the countries to which the refugees now flee; and that the international community must work together for their resettlement. In their respect for human values these are vital principles.
None of this would have happened if there had not been a conference. And the conference would not have taken place if Britain had not proposed it. We commend Dr. Waldheim and the United Nations High Commissioner for Refugees for bringing it about in a matter of weeks.
We hope that the world community now has at least a breathing space while it sets about the urgent task of clearing the refugee camps in South-East Asia and so giving new lives to the boat people and land refugees. This is the first priority as Dr. Waldheim repeated in his summing-up. The world community is clearly ready to grasp its responsibilities for bringing order into the human misery which marks the refugee situation in South-East Asia. The world now looks to Vietnam to show the same responsibility as a member of the community of nations.

1817
Copies of my noble friend's speech, and of the final statements by the United Nations High Commissioner for Refugees and Dr. Waldheim are being placed in the Library of the House.
3.16 p.m.
Lord BROCKWAY: My Lords, I thank the Minister for that very full Statement. Is he aware that, despite political differences, we would wish to express appreciation of the Prime Minister in initiating this conference which has had such valuable results? Is it not the case that Dr. Waldheim, the United Nations Secretary-General in effect saved this conference when it was in danger of political controversy, and has not the status of the United Nations been greatly enhanced by the service which he and the Commissioner for Refugees gave to the conference? Is the noble Lord aware that we desire to express our tribute to the island of the Philippines and to Indonesia for providing transit accommodation to the refugees, and particularly to Hong Kong which has in a humanitarian way received the refugees at a cost of £13 million a year? Will the Government be making some contribution to Hong Kong to meet that cost?
Lord AVEBURY: My Lords, may we associate ourselves with the tribute which has been paid by the noble Lord, Lord Brockway, to those responsible for setting this conference on foot, and particularly to the noble Lord, the Foreign Secretary, who played such a significant and important role in ensuring that the outcome is as successful as it has been? Would the noble Lord consider publishing a table showing commitments already undertaken by various nations prior to the conference, and those now entered into as a result of the proceedings, both in terms of the number of refugees that they are prepared to take and the financial contributions towards defraying the cost of resettlement?
Would the noble Lord confirm that the net emigration over immigration in the United Kingdom over the past eight years has averaged 37,500 and therefore to put the 10,000 refugees that we have agreed to accept in context, they represent fewer than one quarter of the outflow from this country in a typical year. Therefore there is no danger that the acceptance by the
1818
United Kingdom of this number of refugees will make the slightest difference to the domestic composition of the population. In view of the success of this Conference, would Her Majesty's Government take the initiative in convening similar exercises where refugee problems arise in other parts of the world, particularly in the Horn of Africa, to which attention was drawn by Professor Richard Greenfield in a recent letter to the Guardian.
Lord TREFGARNE: My Lords, I am obliged to both noble Lords for what they have said. I think that the noble Lord, Lord Avebury, somewhat oversimplifies the problems in accepting a large number of refugees in this country from the Far East or from anywhere else. We have offered, as the noble Lord will know, and as my noble friend confirmed in Geneva, to accept 10,000 additional refugees, and the process of accepting those is now going ahead. The noble Lord, Lord Brockway, referred to the special position of Hong Kong in this matter. Hong Kong will certainly benefit from the Geneva Conference in two ways: the reduction in outflow from Vietnam and from the speedier resettlement of no fewer than 66,000 refugees who now find themselves there. As the Governor emphasised in his speech, there is a clear need for Hong Kong to be given more resettlement places. This has been fully recognised by the United Nations High Commissioner for Refugees and others concerned.
Baroness VICKERS: My Lords, may I ask the noble Lord whether, in view of the fact that one of the saddest aspects of this problem is the divided families, and especially the orphaned children, any machinery is being set up to try to trace relations?
Lord TREFGARNE: My Lords, the re-uniting of divided families was one of the earliest matters to which the Vietnamese Government agreed with the United Nations High Commissioner for Refugees—I think it was as far back as May.
Lord GORONWY-ROBERTS: My Lords, may I ask the Minister whether he is aware that we on this side of the House join wholeheartedly with my noble

1819
friend Lord Brockway in his expression of appreciation of the Prime Minister's initiative and indeed of the Foreign and Commonwealth Secretary's actions and statements in Geneva? No doubt the noble Lord will recall that as far back as last November the preceding Government made a similar attempt in Geneva, led by Mr. Evan Luard, who was then Under-Secretary of State for Foreign and Commonwealth Affairs, to get a solution of this human problem in its very early stages. We can only hope that the results of last week's conference will indeed prove fruitful.
It is in no sense of cavilling that I raise the question that is indeed implicit in the second paragraph of the Statement, where it is stated that:
"the conference was humanitarian".
It was an attempt to solve the humanitarian problems, the terrible suffering and the loss of life, by drowning and in other ways, of hundreds and thousands of refugees in this area. Certainly the conference was "humanitarian" but, if I may quote again:
"it was widely agreed that the problem could not be solved unless attention was also given to its root causes and that these have been the inhumane policies of Vietnam".
While in no way minimising the results of this conference, which everybody in every party in this country and indeed throughout the civilised world hopes will lead to a solution of the problem, one is bound to say that one hopes. I would ask the Minister whether he is aware that there is considerable concern lest what we are doing on the humanitarian front, measured in terms of money and services—and we warmly welcome what was said about these in the Statement—may be regarded by the totalitarian Government of Vietnam as underwriting the continuation of their inhumane policies: in other words, "We produce the refugees and you rescue them and pay for them"? That, unfortunately, is the way in which many may think. I would ask the Minister to give attention to this, as indeed I know he will, and also to the import of the second paragraph—and none will do so more than the Secretary of State, who is well aware of the dichotomy involved in this policy.
1820
May I ask him also to accept our appreciation of the fact that the terrible suffering in Cambodia has not gone unremarked and unattended? Finally, may I ask him to give us, either today or as soon as due consideration has been given to the matter at ministerial and official level here and elsewhere, an assurance that attention has been given to the follow-up machinery? Here we have nations which are responsible for this situation coming a long way to agreeing with the West as to the courses and the means of redress; but it is necessary that the United Nations, with Britain in the van, should see to it that these decisions, substantial as they are, are in fact practically pursued.
Lord SHINWELL: My Lords, will the noble Lord answer all the questions together or individually?—because I want to repeat to him a question which I put several weeks ago even before the conference took place. I agree entirely with the humanitarian aspects of the problem—entirely, without any reservation at all—but I asked a question and I want an answer to it, because it is a political issue also. Were the Soviet Government and the Chinese People's Government present at the conference? If so, what guarantee did they give that they will reorientate their political attitudes in order to prevent this disaster from recurring?
Lord TREFGARNE: My Lords, may I first thank the noble Lord, Lord Goronwy-Roberts, for the helpful things that he said. He asked about curing the disease as well as the symptoms. I think the conference was very effective in treating the symptoms of the disease but, with regard to the disease itself, the United Nations Secretary-General was authorised by the Vietnamese Government in his final speech to make certain undertakings, the effect of which, if carried through as we hope they will be, will be effectively to control and restrict the outflow of refugees from Vietnam. It was a solemn and formal undertaking given to the United Nations Secretary-General, and we hope they will honour it.
The noble Lord also referred to the follow-up action. We welcomed Dr. Waldheim's undertaking to present a comprehensive report on the refugee situation in South-East Asia and on the

1821
implementation of the action planned for the next General Assembly. This will allow the international community to review the situation, and in particular the way in which Vietnam has fulfilled its undertaking to the Secretary-General, in about three or four months' time.
If I may now reply, more effectively, I hope, to the noble Lord, Lord Shinwell: yes, both Russia and China were at the conference. We thought that the Chinese contribution was rather more helpful than the Russian one, but, all the same, both were welcome.
Lord PAGET of NORTHAMPTON: My Lords, may I ask the noble Lord what the Americans are doing about this? Has he observed that refugee problems arise when an invader is expelled, leaving behind supporters who are neither protected nor wanted in their home country? Also in this case the Americans, who both recruited and abandoned these people, seem to be doing nothing about them. Would not President Carter's predilection for human rights be perhaps better exercised by recognising his and the American responsibility towards them?
Lord TREFGARNE: My Lords, I am not sure that that is entirely fair. There was, of course, a long and tragic war in which America certainly took part in the latter stages, but the war had been going on for many, many years before the Americans even became involved. Despite that, however, the Americans have accepted, according to my figures, 225,000 refugees.
Lord JANNER: My Lords, may I ask a simple question? While thanking the Government for the excellent services in respect of this conference, may I ask what steps are being taken at present to see to it that those who are considering the Helsinki Agreement shall at the next meeting have the fullest possible information about the decisions of this particular conference? Will an attempt be made to make them realise that there are certain sections of it against which some of them are committing grievous errors, and to try to get them to understand what civilised people really want?
Lord TREFGARNE: My Lords, the Helsinki Agreement related to affairs in Europe and not the Far East.

FINANCE BILL
3.30 p.m.
Lord COCKFIELD: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a (Lord Cockfield.)
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. 43 having been suspended (pursuant to Resolution), Bill read 3a, and passed.

EDUCATION BILL
3.31 p.m.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young): My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Baroness Young.)
On Question, Motion agreed to: Report received.
Baroness DAVID Baroness DAVID moved the Amendment:
After Clause 1, insert the following new clause:
Transfer
. Those local authorities to whom sections 1, 2 and 3 of the Education Act 1976 applied in whole or in part prior to their repeal by this Act shall have the duty of ensuring that pupils can transfer easily from secondary modern schools to grammar schools and of publishing annually information for parents and teachers detailing the methods and costs of transfer from one type of secondary school to another.
The noble Baroness said: My Lords, there was a good deal of sympathy for the new clause on transfer that I moved last Thursday. This sympathy, and the suggestion of the noble Lord, Lord Beaumont of Whitley, that a clause declaring a general duty of LEAs to facilitate transfer and to provide information to parents and teachers might be acceptable, have caused us to come forward with this new clause.
The noble Baroness the Minister, in rejecting the clause that we put forward in Committee last week, said:
"…were we to put into a Bill a requirement like this, we should be disturbing the balance between central and local government".

1823
And, again,
"because it would go fundamentally against this important but rather delicate relationship between central and local government in education … I cannot accept this Amendment ".—[Official Report, 19/7/79; cols. 1560–61.]
I hope that our new clause will be acceptable to the Minister, as it interferes not at all with the relationship between central and local government. It asks simply for transfer to be made easy.
I have some sympathy with the attitude of my noble friend Lady Bacon, who thinks that any tinkering with a bad scheme is not helpful. But I feel that individual children may suffer badly in areas that are continuing with the selective system, and that great injustice may be done to them. They will not have the opportunities that they should have. This new clause asks for information to be freely available to parents and teachers, and everybody in the local community, and this I understand to be very much a tenet of the Government at this moment. So I hope that the House will be able to support the new clause as it now stands. My Lords, I beg to move.
3.33 p.m.
Baroness YOUNG: My Lords, I have every sympathy with the wish of the noble Baroness, Lady David, to facilitate the transfer of pupils from secondary modern schools to grammar schools during their school career, where this would be right, and to ensure that full information about the admission arrangements to secondary schools is published. I think, however, that it would only be right for me to explain at the outset that this new clause is not germane to the Bill, because the sole purpose of the Bill is to restore to local education authorities and to governors of voluntary schools, where appropriate, their right to initiate proposals relating to secondary school organisation, and to repeal the powers of the Secretary of State to require such proposals under duress.
Section 8 of the 1944 Education Act already provides that it is the duty of every local education authority to secure that there shall be available for their area sufficient schools for providing secondary education that is suitable to the requirements of senior pupils. In order to be sufficient in the terms of that section, the authority must provide,
1824
"… for all pupils opportunities for education offering such variety of instruction and training as may be desirable in view of their different ages, abilities, and aptitudes".
It is on this statutory basis that authorities have provided opportunities for transfer from secondary modern to grammar schools, where they still exist.
The details of such arrangements have always been a matter for local education authorities to determine in consultation with the schools in their area. They have many years of experience in these matters, and I see no justification for introducing a further statutory requirement. So that, so far as the first part of this amendment is concerned, local education authorities already have the power to do what the amendment is asking. Pupils can transfer from one school to another, and we see no need to replace this with a further duty on local education authorities.
So far as the second half of the amendment is concerned, I share the view—and I am sure that this is one which is held by other Members of your Lordships' House—that much more information about schools and their admission arrangements should be published. I hope the noble Baroness will accept that when we said in the gracious Speech that we would introduce legislation to ensure that,
"parents' wishes are taken into account in the choice of schools for their children and that there is a local appeals system",
it is our intention to introduce this legislation in our second Education Bill, which we hope to introduce in the autumn. That being so, we believe that the second part of this amendment will be met in subsequent legislation.
I think, therefore, that a clause about information for parents would be far more appropriate in the later Education Bill, because that Bill will also make provisions covering admissions to all schools and not just transfer between secondary schools. We shall also have an opportunity to debate the clauses on school admissions included in the Bill, and it seems to me only logical that a comprehensive provision on the publication of information should be part of whatever clauses are agreed to on school admissions. School admissions and transfer and information are, as it were, two sides of a very important point and one needs to be balanced against the other.

1825
I have carefully noted the points that the noble Baroness and other speakers made when this matter was debated at an earlier stage. I have read them carefully and I shall take note of what has been said this afternoon, so that all this may be borne in mind in the preparation of the second Education Bill. With that assurance, I hope very much that the noble Baroness will withdraw her amendment.
3.37 p.m.
Lord BEAUMONT of WHITLEY: My Lords, I do not think that some of us can really accept either of the points which the noble Baroness, Lady Young, is making. On the first one, about provision for transfer between schools, I admit that there is an arguable case on both sides, though I think that in putting forward this amendment a lot of us had in mind the really appalling difficulties that have been found in the past in seeing that this happened. The noble Baroness spoke rather as if everything went smoothly, and children were transferred when they needed to be. We know from speeches made at the Committee stage that the system does not always work well, and the contribution of the noble Baroness, Lady Bacon, gave us an example of that. Back in the days when there was selection universally, many were the horror stories about the difficulty of getting children changed from one type of school to another, when it was necessary. A very great deal of that has disappeared over the years, because of the comprehensive system. But where that system does not apply, there are still difficulties and there is probably still a need for that to be in the Bill.
But much more important is the second half of the amendment. I entirely take the point made by the noble Baroness, Lady Young, that provisions to this effect will be in the second Education Bill which is to be brought forward, and certainly, I, for one, will heartily support them when that happens. But there is a particular point. We are dealing in this amendment with those schools and those education authorities which come under the classification with which this Bill is dealing. These schools will be having problems, making decisions and going through processes during the next few months, and it is not good enough to say that we
1826
must wait for an autumn Bill to include this. With regard to these schools, it is now that this is needed. If it were not that I know the noble Baroness, Lady Young, to be as innocent as a dove, I should suspect that the reason for putting off this Amendment is that, if we pass it, it will wreck either the Government's legislative programme or the programme of another place. However, since I know that the noble Baroness would not approach the problem in that light, I find it very difficult to understand why this amendment is opposed. Therefore, I hope very much that it will succeed.
Baroness BACON: My Lords, I must apologise for not being in your Lordships' Chamber when this amendment was moved. However, I was under the impression that there was to be a debate on the Finance Bill and that eight noble Lords were to speak in that debate. That being so, I thought that I had time for a cup of tea before the Report stage of the Education Bill began. It will be remembered that when we discussed the Committee stage of the Bill my name was attached to all of the amendments except the one about transfers. I explained during the Committee stage that this was because it was very difficult to devise any satisfactory method of transfers. I hope that transfers, no matter how easy they become, will not be regarded as an answer to the 11-plus separation which takes place. It was for that reason that I did not put down my name to that amendment. However, this is a rather different amendment from the one which we had before us during the Committee stage.
Although I do not in any way take back anything that I said about this amendment not being an answer to the 11-plus, I feel that I can fully support it because it says that it will be the duty of these local authorities to ensure:
"that pupils can transfer easily from secondary modern schools to grammar schools…".
That is absolutely essential in those few backward and reactionary places where there will still be secondary modern schools and grammar schools.
My experience has always been that it is the number of places available in the grammar schools to which children are proposed to be transferred rather than the ability of the children who are being

1827
transferred which is the important factor. However, it is essential that the suitability of the child whom it is proposed to transfer to the grammar school should be considered, rather than whether or not there are enough places in the grammar school.
Although mistakes are made over the 11-plus, I very rarely hear of children being transferred from grammar schools to secondary modern schools. However, I am sure that, with the 11-plus, mistakes are made both ways. Children who should have passed the 11-plus do not pass, and sometimes it would be better if some children, who have gone to grammar schools, were doing different courses. Of course, all courses are provided in comprehensive schools. That is the beauty of the comprehensive school system. I hope that the noble Baroness will accept this amendment, because it asks that transfers should be made easier—and that, I think, is absolutely essential in those places where the 11-plus remains.
Viscount SIMON: My Lords, I added my name to this amendment because I felt that it went a long way towards meeting the objections which were made by the noble Baroness, Lady Young, to the amendment which was put down at the Committee stage by the noble Baroness, Lady David. As I understood it, those objections were based on her feeling that, as originally proposed, the amendment was upsetting what she described as the delicate balance between the duties of the local education authority and central Government. It was my noble friend, if I may call him so, Lord Beaumont of Whitley who suggested during the Committee stage that the case might be met by a declaratory clause of this kind.
I would not suggest for a moment that the noble Baroness, Lady Young, has changed her ground. However, she has come forward with two objections to this amendment: first, that the first half of it is unnecessary, because it is already provided for, and, secondly, that the second part of it would do better in another Bill. I am sure that there is a great deal to be said for both of those points of view. However, as the noble Lord, Lord Beaumont of Whitley, has said, there is clear evidence that transfers have not been easy and that there have been difficulties about these transfers in a number of areas. Therefore,
1828
it seems to me that there is no harm whatever in repeating something which, as the noble Baroness rightly says, is already the duty of local education authorities.
As regards the publishing of information, I should be prepared to accept the view that if the Government can give an assurance that they will bring something forward in the next Bill, this can wait. There is not, perhaps, a great deal of value in introducing a new procedure and then having to alter it in some detail within six months or a year. On the other hand, I take the point which was made by the noble Lord, Lord Beaumont of Whitley, that when there is this difficulty and that when these problems are going to arise immediately in respect of the local authorities which are covered by this clause—and, indeed, by the Bill as a whole—it is desirable to have something put down. And what is put down is not a detailed arrangement but merely the requirement that local authorities shall publish information annually on the lines suggested here. Therefore, on further consideration I hope that the noble Baroness will be able to accept this amendment. If she is unable to do so, I shall advise my noble friends to support it.
Lord SOMERS: My Lords, I do not want to repeat everything that I said in support of the amendment which was moved by the noble Baroness, Lady David, during the Committee stage. However, I should like to ask the noble Baroness, Lady Young, what connection central Government can have with the transfer of individual children. How can they know whether an individual child in some remote part of the country is or is not suitable for transfer? The only people who can possibly know about that are the local education authority and, more particularly, the school the child is attending and the patents. They are the people who know the facts of the case. Nothing could be farther removed, surely, than central Government. I hope that the noble Baroness will not make hypothetical difficulties over this amendment.
Lord DONALDSON of KINGS-BRIDGE: My Lords, could I say two sentences in support of my noble friend's new clause. The first part of it is a vivid illustration of what was beginning to get better under the comprehensive system—as it grew, the need for transfers diminishing

1829
—and the new situation where there is an about-turn, even if, for the moment, only quite a small number of local authorities are going in the opposite direction. Although it is for the local authorities to make these decisions, a word from the centre—which has put them into reverse—might indicate that local authorities should observe that there is more reason now than there has been in the past to be very careful about this point.
As regards the second part of the amendment, we on this side of the House accept the good faith of the noble Baroness; namely, that in due course the kind of thing that is visualised here, in the way of information, will be included in the Government's next Bill. Indeed, I remember that during our long discussions over the 1976 Bill the noble Baroness pressed me very hard and that we circulated a very distinguished circular asking, very politely, all local education authorities to give a great deal more information than had ever been given before.
So I do not accuse the noble Baroness of being unsympathetic to this. On the other hand if we manage to keep this Government's Education Bill as long on the stocks as they kept ours, it may be quite a long time before a decision is made about this and, as the noble Viscount, Lord Simon suggested, I think that to put something in broad terms in this Bill, making it certain that that information will be available, not from next March or April but from now, will be a very wise thing. On the whole, I think my noble friend ought to press this amendment.
Lord HUNT: My Lords, as one of those who was not a signatory to this amendment and in fact saw it only when he came in this afternoon, I have only one point to make and that is very much in line with what the noble Viscount, Lord Simon, had to say in drawing a clear distinction between the two parts of the amendment. I feel quite reassured by what the noble Baroness, Lady Young, has said about the forthcoming Education Bill which will take care of the second part of the amendment. With regard to the first part, I am inclined to support the mover of the amendment, for the reason put forward by the noble Lord, Lord Beaumont of Whitley—namely the time factor.
In speaking on the Second Reading of the Bill, a Bill which I regard as most
1830
retrogressive, I made the point that it would increase the inequality of opportunity which is to some extent inevitable in different areas. It would increase it because of the freedom given to local education authorities to devise policies according to their political views. In view of the decision which will be made regarding the movement of children under the terms of this Bill when it becomes an Act this autumn, it is important that it should be enjoined upon local authorities to ensure that these transfers can be made easily. From all I personally know and from what I have heard, these transfers have not been at all easy in some cases in the past. My concern is to limit the inevitable increase in inequality of opportunity which children will suffer under in the decisions to be made at the 11-plus.
Viscount ECCLES: My Lords, like the noble Baroness, Lady Bacon, I also was caught out by the speed with which your Lordships discussed the Finance Bill.
A noble Lord: We did not discuss it!
Viscount ECCLES: I apologise for that, my Lords. Transfers have always been difficult, for a variety of reasons. Of course, in the first place, the grammar schools were building up and they did not want to take a number of boys or girls from the secondary modern schools while it was not possible to shed from the grammar schools the corresponding number of children back to the secondary modern schools. Your Lordships will surely know the ways of parents, as well as I do. Parents rarely mind if their child is promoted, but if their child is, as it were, demoted, they object very much, and that was one of the chief reasons why the number of transfers appeared to be unsatisfactorily low.
Of course, another reason was that the good secondary modern schools developed their own syllabus, and that syllabus did not really bring the children to the point where it was very easy to take them into a grammar school because they had been learning different things in different ways.
Baroness BACON: My Lords, will the noble Viscount give way? Is not everything he is saying now the greatest argument that I have heard for a long time in favour of the comprehensive schools?
Viscount ECCLES: My Lords, on previous occasions I have said that if all comprehensive schools were good schools I should be in favour of nothing but comprehensive schools. I am taking the attitude on this Bill that I did on the 1976 Bill, because unfortunately I know that a very large number of comprehensive schools are not as good as the good secondary modern schools and for that reason we have a serious problem.
There was another reason that head teachers used to give me as to why it was difficult to make transfers. It was because all the things like having responsibility at the end of your school life, being in charge of something or looking after other children or, if you like, being captain of some sport, are very good for children and, if they transferred to a grammar school, it would perhaps not be so likely that they would have those lessons in responsibility which they could get if they remained. I think that was the reason why many head teachers did not encourage the transfers, but I am entirely with my noble friend Lady Young: we really want to wait to see the whole of this picture, because transferring between comprehensives will be just as important as transferring between secondary moderns and grammar schools.
Now that it is accepted, as the noble Lord, Lord Alexander of Potterhill, pointed out in his admirable speech on Second Reading, that the large comprehensive school is not viable except in the rarest cases and therefore, because of reasons of management, comprehensives have to be 800 or whatever number may be suitable, transfers between comprehensives will have to be arranged. It is far better that all that should be brought together in a new Bill. I have not seen the draft of the new Bill, but I am hopeful that—
Lord TAYLOR of BLACKBURN: My Lords, if I may interrupt the noble Viscount, the noble Lord, Lord Alexander of Potterhill, did not say that. If your Lordships will read what the noble Lord, Lord Alexander, said, you will see that he did not mention any numbers.
Viscount ECCLES: My Lords, I never said that Lord Alexander mentioned a number; I was merely saying that 800 is
1832
fairly often spoken about as being the sort of size of school that is manageable in a big city. I do not stand by one number or another, but I think that the problem of how we now sort out children of different degrees of ability, as we cannot have—except in rare cases—a grammar school inside a comprehensive school, is very difficult and requires new thought and, in my opinion, a new Bill. It is looking forward to that new Bill that makes me say that I would not myself accept this amendment today because it does not deal with the whole problem.
Baroness PHILLIPS: My Lords, as Lord Lieutenant I should probably remain neutral but as an ex-teacher I cannot do so. I must make a plea that we do not go backwards in time. I taught in the days of the 11-plus, when I can recall that 29 children in a class of 36 in London went to a grammar school, and I taught in a school in Surrey where 2 children out of 32 went to a grammar school. Why? Not because one group was more intelligent than the other but because there were more places available in one place than in the other.
We have passed the point where our children are at the mercy of the geography of the place in which they live for the type of education that they receive. We have got to a point where there has been some level of equal opportunities. I plead with your Lordships not to go back. This must be the most retrograde step that the new Government will take if they move back to a system that all who taught in those schools will deplore.
Lord CLITHEROE: My Lords, I want only to make one short point. I agree with what the noble Baroness, Lady Young, said in her speech. In the new clause proposed by the noble Baroness, Lady David, the word "easily" puzzles me. I know of cases where the teacher would willingly take in a pupil in a grammar school by way of transfer but there is not room. That means that more money has to be spent in making more room. I know of an instance of this in a school with which I am connected.
Baroness GAITSKELL: My Lords, may I add one sentence to this discussion. What possible reason can there be for the noble Baroness, Lady Young, not to accept

1833
the second part of this amendment? When great changes are made, such as have been made in the Education Bill, surely the one thing that is needed is to give parents and teachers more information, adequate information, to tell them that this is what is necessary because of these changes.
Lord BERNSTEIN: My Lords, I hope your Lordships will not be influenced by the noble Viscount, Lord Eccles, the great advocate of the status quo. He said that new thinking is required. Where better than at the school itself, where the pupils are, at the school?
Baroness DAVID: My Lords, I think the noble Viscount, Lord Eccles, and the noble Lord, Lord Clitheroe, really spoke very well for this amendment. We are asking that the local education authorities should ensure that pupils can transfer freely. I would like to remind the House that there are 59 local authorities affected by this Bill and 383,000 children still in secondary modern schools, so a lot of children can be affected.
I do want to press this amendment. It has had a lot of support. I do think that, so far as the second half of the amendment is concerned, the time gap between this Bill and the suggested new Bill—after all, that cannot be started before November, and I should think it would take about a year if it is a long Bill—will be a lengthy one. A lot of children will be going through the stage of secondary education during that time. So I should like to press this amendment.
Baroness YOUNG: My Lords, with the leave of the House, the noble Viscount, Lord Simon, speaking on this amendment said that I had changed my ground from the time that we debated this subject at the Committee stage. Although it may well be that I do not have all the evil thoughts that the noble Lord, Lord Beaumont, has attributed to me in my first reply on this particular amendment, I do, I hope, always look at amendments. If the amendment is different from the one previously moved I like to give a different reply in answering a second point. It does seem to me that one owes it in courtesy not only to your Lordships' House but to the mover of the amendment
1834
to address oneself to the point that is raised. As the noble Baroness, Lady David, said in her opening remarks, this amendment is not identical with the amendment she moved in Committee. It is for that reason that I gave a different reply from the one that I gave at Committee.
The general point would still be true. I am not at all certain that local education authorities would welcome a duty imposed on them when they already have a power to do what the first part of this amendment is asking for. I would, however, like to reiterate this about the second part of this amendment. The noble Baroness, Lady Gaitskell, asked what possible reason I have for not accepting the second half. The reason why I feel unable to accept it is not because I and my noble friends do not agree precisely with the point that it is making. In fact we do. We said so at the time of the general election; we said that we believed in publication of much more information about schools. We said so in the Queen's Speech, and I have already indicated that it is our intention to cover this point in our second Education Bill.
However, the fact of the matter is that publication of information about schools is only one part of the argument. I believe parents need to have the maximum amount of information about schools and I think schools should publish a prospectus about themselves covering all aspects of their activities. But the problem that will arise—and this is the point my noble friend Lord Eccles made—is that where you get very popular comprehensive schools they will he over-subscribed. The more information you get, particularly details of staffing, equipment, examination results and so on, the more some schools will inevitably be thought to be better and will be better than others and will become over-subscribed. Then we have to have—and this is precisely the point the noble Baroness, Lady David, and the noble Lord Lord Donaldson, made—something about admission limits. If one accepts half of the argument without having anything about admission limits one is accepting something which will not make very good sense legally. After all, we are talking about legislation. Therefore, I think it is important to try to get it right.

1835
There are other defects in this particular amendment, but I have not explained what they are because I do not feel that that is the important issue before the House. However, I should like to reiterate that we shall meet the second half of this amendment in our second Education Bill. As far as the first half of the amendment is concerned, local education authorities still have a power of transfer. There is one final point. The noble Lord, Lord Somers, asked whether the central Government do interfere with the transfer of pupils from one school to another. I understand that this would be a very unusual event. I would not like to say that it has never happened. The Secretary of State has power to consider admissions under Section 68 of the 1944
Act, where he believes that a local education authority has acted unreasonably. I hope that, with these assurances, the noble Baroness will consider withdrawing her amendment.
The DEPUTY SPEAKER (Lord Segal): My Lords, I regret that I also was caught by the rapid passage of the Finance Bill and did not call the amendment, because I had no copy in front of me. But an amendment has been proposed: after Clause 1 to insert the new clause as printed.
4.7 p.m.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 101; Not-Contents, 133.

CONTENTS

Airedale, L.

Gladwyn, L.

Parry, L.

Amherst, E.

Gordon-Walker, L.

Peart, L.

Amulree, L.

Goronwy-Roberts, L.

Phillips, B.

Ardwick, L.

Gosford, E.

Ponsonby of Shulbrede, L. [Teller.]

Ashby, L.

Grey, E.

Avebury, L.

Hale, L.

Raglan, L.

Aylestone, L.

Hall, V.

Rathcreedan, L.

Bacon, B.

Hampton, L.

Rhodes, L.

Banks, L.

Hankey, L.

Ritchie-Calder, L.

Barrington, V.

Hatch of Lusby, L.

Rochester, L.

Beaumont of Whitley, L.

Henderson, L.

Sainsbury, L.

Bernstein, L.

Houghton of Sowerby, L.

Seear, B.

Blease, L.

Howie of Troon, L.

Sefton of Garston, L.

Blyton, L.

Hunt, L.

Shackleton, L.

Brockway, L.

Hutchinson of Lullington, L.

Shepherd, L.

Burton of Coventry, B.

Ilchester, E.

Shinwell, L.

Byers, L.

Kaldor, L.

Simon, V.

Castle, L.

Kirkhill, L.

Somers, L.

Clancarty, E.

Leatherland, L.

Stedman, B.

Clifford of Chudleigh, L.

Lee of Newton, L.

Stewart of Alvechurch, B.

Cooper of Stockton Heath, L.

Llewelyn-Davies of Hastoe, B.

Stewart of Fulham, L.

Crowther-Hunt, L.

Lloyd of Hampstead, L.

Stone, L.

Darling of Hillsborough, L.

Lloyd of Kilgerran, L.

Strabolgi, L.

David, B.

McCarthy, L.

Taylor of Blackburn, L.

Davies of Leek, L.

McCluskey, L.

Taylor of Gryfe, L.

Denington, B.

McGregor of Durris, L.

Thomson of Monifieth, L.

Donaldson of Kingsbridge, L.

Maelor, L.

Wallace of Coslany, L.

Douglas of Barloch, L.

Melchett, L.

Walston, L.

Dowding, L.

Monson, L.

Wells-Pestell, L. [Teller.]

Eldon, E.

Morris of Grasmere, L.

Whaddon, L.

Evans of Hungershall, L.

Murray of Gravesend, L.

Wigg, L.

Fulton, L.

O'Brien of Lothbury, L.

Willis, L.

Gaitskell, B.

Pannell, L.

Wilson of Radcliffe, L.

Galpern, L.

Pargiter, L.

Wynne-Jones, L.

NOT-CONTENTS

Adeane, L.

Berkeley, B.

Cockfield, L.

Alexander of Tunis, E.

Bessborough, E.

Cottesloe, L.

Allen of Abbeydale, L.

Boyd-Carpenter, L.

Craigavon, V.

Allerton, L.

Brookes, L.

Craigmyle, L.

Ampthill, L.

Buxton or Alsa, L.

Cranbrook, E.

Auckland, L.

Cairns, E.

Crathorne, L.

Avon, E.

Caithness, E.

Crawford and Balcarres, E.

Balfour of Inchrye, L.

Chelwood, L.

Cullen of Ashbourne, L.

Barnby, L.

Cholmondeley, M.

Daventry, V.

Bellwin, L.

Clitheroe, L.

de Clifford, L.

Belstead, L.

Clwyd, L.

De Freyne, L.

Denham, L. [Teller.]

Henley, L.

Reigate, L.

Derwent, L.

Hornsby-Smith, B.

Renton, L.

Digby, L.

Hylton-Foster, B.

Roberthall, L.

Drumalbyn, L.

Inglewood, L.

Rochdale, V.

Dulverton, L.

Kimberley, E.

Romney, E.

Dundee, E.

Kinloss, Ly.

Rootes, L.

Ebbisham, L.

Kinnaird, L.

Rugby, L.

Eccles, V.

Lauderdale, E.

Sackville, L.

Effingham, E.

Linlithgow, M.

St. Aldwyn, E.

Elliot of Harwood, B.

Long, V.

St. Davids, V.

Elton, L.

Loudoun, C.

Sandford, L.

Emmet of Amberley, B.

Luke, L.

Sandys, L. [Teller.]

Erroll of Hale, L.

Lyell, L.

Selkirk, E.

Exeter, M.

McFadzean, L.

Sempill, Ly.

Ferrers, E.

Macleod of Borve, B.

Sharples, B.

Forester, L.

Mancroft, L.

Skelmersdale, L.

Fortescue, E.

Mansfield, E.

Sligo, M.

Fraser of Kilmorack, L.

Marley, L.

Soames, L.

Gainford, L.

Massereene and Ferrard, V.

Spens, L.

Galloway, E.

Middleton, L.

Stradbroke, E.

Garner, L.

Milverton, L.

Strathclyde, L.

Geoffrey-Lloyd, L.

Monck, V.

Strathspey, L.

Glasgow, E.

Monk Bretton, L.

Suffield, L.

Glenarthur, L.

Mowbray and Stourton, L.

Trefgarne, L.

Glendevon, L.

Newall, L.

Trenchard, V.

Gowrie, E.

Northchurch, B.

Tweedsmuir, L.

Greenway, L.

Nugent of Guildford, L.

Vaux of Harrowden, L.

Gridley, L.

O'Hagan, L.

Vickers, B.

Hailsham of Saint Marylebone, L.

Orr-Ewing, L.

Wakefield of Kendal, L.

(L. Chancellor.)

Porritt, L.

Ward of North Tyneside, B

Hanworth, V.

Powis, E.

Westbury, L.

Harmar-Nicholls, L.

Rankeillour, L.

Willoughby de Broke, L.

Hatherton, L.

Reay, L.

Young, B.

Hawke, L.

Redcliffe-Maud, L.

On Question, amendment agreed to.

Then, Standing Order No. 43 having been suspended, pursuant to Resolution:
4.16 p.m.
Baroness YOUNG: My Lords, I beg to move that this Bill be now read a third time. We have spent some considerable time discussing with great care and attention the purposes of this short Bill. Several of my noble friends—and here I should like particularly to refer to my noble friend Lord Swinton—have said that if the Bill were against comprehensive schools they would not be supporting it. If that were so, we would not have introduced it. Conservative Secretaries of State have approved the establishment of many comprehensive schools and I fully expect my right honourable and learned friend to approve further proposals for comprehensive reorganisation during his period of office. What we are against is the principle of compulsion. We do not believe in imposing comprehensive schools everywhere—that is to say, we do not believe that all schools must be comprehensive if any school is to be comprehensive.
1838
We look forward as a Government to securing the best education for all children according to their respective needs. I said on Second Reading—and I regard this as so important that I shall repeat it again—that the real question we should be debating is the content of education, leaving local authorities to consider the form of organisation under which it should be carried out. I am sure that noble Lords on all sides of the House would agree that what makes a school good has much less to do with the type of school that it is than with the quality of the head teacher; the quality of the staff and the ethos that the staff can create for learning and discipline; the range of courses available to the pupils; the social mix of the area which the school serves; the quality of the building and its resources and, not least, the support and involvement of the parents.
My Lords, we have been concerned with this short Bill which has the simple aim of removing the compulsion on local education authorities to reorganise secondary schools along comprehensive lines. We believe that decisions of this kind should be primarily theirs. What we have done is to go back to the position before 1976.

1839
May I in conclusion look forward to the consideration of the second Education Bill—to which I have already made reference—which the Government intend to introduce this Session. Much of what has been said during the passage of this Bill will appropriately fall within the scope of that measure also, and I look forward to the opportunity of further discussions on that occasion. In particular, we are as concerned as noble Lords opposite that urgent attention should be given to the question of admission limits to schools in a period of falling rolls. The very effect of falling rolls will influence the pattern of organisation of secondary schools and I am sure that we shall be grateful for the contribution of noble Lords on our proposals.
Today's Bill returns freedom of choice on the comprehensive principle to local authorities. Without choice, democracy withers. I beg to move.
Moved, That the Bill be now read 3a.—(Baroness Young.)
Baroness DAVID: My Lords, this Bill makes selection at the age of 11 legal again. We have made it quite clear from this side of the House that we are totally opposed to that. I shall say no more.
On Question, Bill read 3a, and passed.

PNEUMOCONIOSIS, BYSSINOSIS AND MISCELLANEOUS DISEASES BENEFIT (AMENDMENT) SCHEME 1979
4.20 p.m.
Lord SANDYS: My Lords, on behalf of my noble friend Lord Cullen of Ashbourne, I beg to move that the Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit (Amendment) Scheme 1979, laid before the House on 15th June 1979, be approved. It may be helpful if I first say something in general about the principal benefit scheme—the Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit Scheme 1966—which the amendment scheme alters, before I go on to explain the purpose and effects of the amendment scheme.
Benefits for accidents and diseases due to employment after 4th July 1948 are provided by the main Industrial Injuries
1840
Scheme under the Social Security Act 1975. Workers suffering from accidents or diseases due to employment before 5th July 1948 receive weekly payments under the old Workmen's Compensation Acts. But there are some workers who suffer from certain diseases which develop slowly and appear long after exposure to the cause at work. These workers cannot benefit under either of the two provisions I have mentioned. They cannot claim under the Industrial Injuries Scheme unless they were employed in a relevant employment on or after 5th. July 1948; and they cannot claim under the Workmen's Compensation Acts because of the absolute time limit for claims. The principal Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit Scheme was therefore enacted, under what is now the Industrial Injuries and Diseases (Old Cases) Act 1975, to ensure that these workers should not be deprived of benefits. The purpose of the principal scheme is to ensure that they may receive benefits which are broadly in line with those payable under the main Industrial Injuries Scheme. The benefits are paid from the National Insurance Fund.
The principal benefit scheme covers pneumoconiosis, byssinosis and six other slowly developing diseases. The amendment scheme before us today adds a seventh disease to the list of six other diseases covered by the principal scheme: nasal carcinoma in workers engaged in the manufacture and repair of leather footwear. This same disease has just been added to the schedule of prescribed industrial diseases in the main Industrial Injuries Scheme, by means of the Social Security (Industrial Injuries) (Prescribed Diseases) Amendment (No. 3) Regulations 1979, S.I. 1979 No. 632, which was laid before Parliament on 15th June 1979 and is due to come into operation on 8th August 1979. The amendment scheme is, therefore, a consequence of that change.
I should now like to say a little about the background to the change which the amendment scheme makes and the effect it will have. The decision to add nasal carcinoma in leather footwear workers to the diseases covered by the principal benefit scheme is based on a recommendation by the Industrial Injuries Advisory Council which, as your Lordships may know, is an independent statutory body which advises the Secretary

1841
of State for Social Services on matters to do with industrial injuries benefits. The council based its decision on independent research findings presented to it about the incidence of the disease in the footwear industry. The council concluded that there was strong evidence that the disease was occupational in origin and it found that cases were occurring as many as 40 years and more after exposure. The exact nature of the carcinogen is not yet known, but it is believed that the disease is due to one or more constituents in the dust arising from the working of leather or fibre board.
The disease can be severely disabling and the prognosis is poor but, fortunately, the number of people who suffer from it is very few. It is expected that 20 or so persons may benefit initially under the main Industrial Injuries Scheme with four or five new cases a year thereafter. The amendment scheme is likely to benefit even fewer people, but I hope it will be agreed that, however few, it is right that these people should be entitled to benefits.
Turning now to the amendment scheme in a little detail, Article 1 is formal. Article 2 adds the new disease, numbered 7, to those to which the principal scheme applies. Article 3 brings the new disease within Schedule 6 to the principal scheme which specifies the date, in relation to each of the diseases, after which death must have occurred if the relevant provisions are to apply for death benefit purposes. And the schedule to the amendment scheme contains the description of the disease and the nature of the occupations covered. Finally, I should add that the date of coming into operation of the amendment scheme is 8th August 1979. This is the date to be entered in Articles 1 and 3; and it is the same date as that on which the change in the main Industrial Injuries Scheme also comes into effect. In conclusion, I hope that I have made it clear that the amendment scheme is beneficial—albeit to a relatively few people—and is a consequence of a similar change made recently in the main Industrial Injuries Scheme. I, therefore, commend the amendment scheme to your Lordships for support. I beg to move.
Moved, That the draft order laid before the House on 15th June, be approved.—(Lord Sandys.)
4.27 p.m.
Lord WELLS-PESTELL: My Lords, I should like to thank the Minister for what has been a very clear and helpful description and, if I may say so, analysis of the events leading up to this order. It is a wholly good measure and, if there is any criticism at all, it is one which we all bear, that perhaps it ought to have reached this stage some years ago. That has nothing to do with the Government. As I understand it—and the Minister has made this perfectly clear—this particular scheme covers not only pneumoconiosis and byssinosis, but six other slowly developing diseases, all of which, as I understand it, are various forms of cancer.
In some measure this would be a suitable opportunity to pay tribute to my noble friend Lord Hale, because ever since I have been a Member of your Lordships' House, which goes back over some years, my noble friend has consistently fought for some measure of this kind. This is perhaps a suitable moment to say that we are glad his efforts have come to this kind of fruition—largely, because of pressure that he has put on successive Governments.
As the noble Lord said, this order adds a further disease to the list, that of nasal carcinoma. It is a slowly but severely disabling disease, which fortunately few people suffer from. But it can take—and this is the point which the noble Lord made—many, many years before it is discovered. It is good that, when we are thinking so much about other matters, we can spend time to put on to the Statute Book a measure which would be of considerable benefit to perhaps only a small number of people.
As the noble Lord, Lord Sandys, pointed out, before 1948 there was no compensation at all. As a result, people suffering from this particular complaint were not covered by normal National Insurance industrial injuries benefit. The existing scheme will fill the gap and, as I understand the scheme, the benefits are identical to those available under the National Insurance Scheme. This is a wholly good scheme, and I can do no more but thank the Minister and commend the scheme to your Lordships.

NURSING QUALIFICATIONS (EEC RECOGNITION) ORDER 1979
4.30 p.m.
Lord SANDYS: My Lords, on behalf of my noble friend Lord Cullen of Ashbourne I beg to move that the draft Nursing Qualifications (EEC Recognition) Order 1979, laid before the House on 2nd July, be approved. The Order in Council before us is designed to make those changes in existing legislation which are necessary to implement the EEC Nursing Directives. The order is made under paragraph 2(2) of Schedule 2 to the European Communities Act 1972, and in line with the established procedure, is subject to Affirmative Resolution. By this means Parliament is given an opportunity to debate the way in which the Government intend to meet our Community obligations. I am sure that, on a matter which concerns nurses, the House would most certainly wish to have this opportunity.
Although the Treaty of Rome itself aims to encourage free movement of persons and services throughout the Community when rendering those services depends on possession of recognised professional qualifications, member States—quite rightly—want to be assured that any national of another member State wishing to practise within their country is trained to an equivalent standard as members of that profession in their own country. This is essential as a protection for the public. And that is why the Treaty provides for the issue of Directives covering the mutual recognition of qualifications and the right of establishment for various professional groups.
The first health profession for whom Directives were signed was the doctors in 1975. The Nursing Directives followed two years later in 1977, and I think it is fair to say that the United Kingdom played a major part in getting agreement as, in many ways, our system of nurse training is more advanced than anywhere else in the Community. That is not to say that we are perfect—I am sure there are many aspects which could be developed—but it is, I believe, significant that the United Kingdom will be the first country to complete the process of implementation. We are, in short, leading the way.
1844
Although the purpose of this debate is, strictly speaking, a limited one, to approve the order making certain changes to existing legislation, I think I should explain briefly what the Directives are all about. There are, as is customary in these matters, two Directives; the first concerned with the mutual recognition of qualifications and the right of establishment, and the second concerned with the content of the training which leads up to the award of those qualifications which are to be recognised. The aim of the two documents is quite simple: to ensure that nurses responsible for general care—and I must emphasise that we are here speaking only of registered general nurses, not those trained specifically in the care of the mentally ill, or mentally handicapped—will in future throughout the Community have undergone a comparable form of training, covering the same theoretical subjects and including the same practical experience, so that their training can be recognised by all Member States and they can practise freely in any country of the Community. For the United Kingdom, as I have said, this means relatively minor changes in existing patterns of training. It does, however, mean that we have to make some equally minor changes in the administrative arrangements which govern the profession. These are contained in the Order in Council we are now discussing.
Article 1 is a purely technical point, dealing with commencement of the order. Article 2 contains some definitions. The real substance of the order starts in Article 3, which deals with the amendments needed to the Nurses Act 1957, the present head legislation governing the profession in England and Wales. It inserts two new sections to that Act, 3A and 3B and a new Schedule 1A which lists the European qualifications which will give a right to be registered (just as our own nurses are registered) under Section 3A. The new Section 3B deals with an important point. It provides that registration lapses on failure to satisfy the General Nursing Council, the registering body, that the registrant has the knowledge of English necessary to render nursing services in the United Kingdom.
In making this provision we are taking exactly the same line as was taken in the medical Directives, in placing a duty on the

1845
competent authority—the registering authority—to ensure that those wishing to work in the United Kingdom have an adequate command of English. The validity of this approach has, in the case of the doctors, been challenged by the EEC Commission, who have suggested that we are in breach of our Community obligations, as we are, in their view, making language testing a prerequisite of registration and right of establishment, something which is contrary to the Treaty of Rome. Indeed, they have indicated that they might take the United Kingdom Government before the European Court. But we remain firmly convinced that our position on the medical Directives is entirely in line with our EEC obligations and for that reason have adopted the same approach here. The Directives place a specific duty on Member States,
"to see to it that, where appropriate, the persons concerned acquire, in their own interest and"—
more importantly—
"in the interest of their patients, the linguistic knowledge necessary for the exercise of their profession".
It is our contention that the right body to determine that linguistic competence is the registering body, the body which under existing legislation has the responsibility for ensuring that a nurse is competent to carry out nursing services.
Articles 4 and 5 make similar innovations in the head legislation for Scotland and for Northern Ireland, the Nurses Act (Scotland) 1951 and the Nurses and Midwives Act (Northern Ireland) 1970. Article 6 deals with what is known as "prestation". This is the situation where a nurse registered in another Member State wants to come to the United Kingdom and work as a nurse for a short period—perhaps to accompany a sick person who needs constant nursing attention to see a specialist—but does not intend to work here in a more formal sense. Obviously, in the type of case I have outlined it would be foolish to expect the nurse to obtain full registration here in order to carry out a very limited duty. Far from facilitating free movement, in such circumstances it would be a positive hindrance. A procedure has, therefore, been devised which makes such arrangements possible, but does not leave the system open to abuse by people who might not, in the normal way, be accepted for registration. This involves making a
1846
declaration of the type of services to be rendered and showing proof of qualification in the member State of origin to the registering authority. Article 7 is, I think, also quite an important point. It contains a vital safeguard by providing for disciplinary procedures for those giving nursing services, as under Article 6, while visiting the United Kingdom.
This leads me on to something on which, as it is not specifically mentioned in the order, I think I should give some reassurance. That is the arrangements for those nurses from other EEC countries who are not just visiting the United Kingdom but have exercised their right of establishment and intend to work here. As the amendments proposed to existing legislation make clear, such a person will be registered, if they have one of the recognised qualifications, in exactly the same way as our own nurses. That includes being of good character. And once registered, the "EEC nurse", is subject to the same arrangements for discipline as any other nurse on the register. So that if she is accused of professional misconduct, her case will come before the registering authority in exactly the same way as for anyone else. She may have a right of establishment, but that right carries with it obligations.
So far as the effect of the Directives is concerned, I see the coming into effect as an important step for our nurses, in forging closer links with their colleagues in Europe and in giving them an opportunity to broaden their experience by seeing different patterns of health care in different countries. I hope that they will take advantage of this opportunity—and that nurses from other Member States will come here to see what we have to offer. We can all, whatever our calling, learn from the experience of others working in the same field, and this is as true for nursing as for any other field. I beg to move.
Moved, That the draft order laid before the House on 2nd July, be approved.—(Lord Sandys.)
4.40 p.m.
Lord WELLS-PESTELL: My Lords, once again we are grateful to the Minister for setting out the provisions of the order so clearly. It is a remarkable order in the sense that I found no difficulty understanding it, a surprising thing for me. It is an

1847
order which everyone should look at because it is of some importance. I have no comment to make on what the noble Lord, Lord Sandys, said, other than to ask him three questions.
First, I was glad to hear that we are proposing to insist on a reasonable and adequate standard of the understanding of the English language before we allow anybody to practice as a nurse in this country. I am not unmindful of the difficulties, because I am aware of the difficulties we have run into and are running into so far as doctors are concerned. Can the Minister give an assurance to the House that we will not be deflected from that intention; namely, to see that people who come here as nurses in fact speak adequate English?
Secondly, reference has been made to the fact that under the order we will get certain information about the nurses coming here. My reading of it is that most, if not all, of it will be in the nature of some sort of paper setting out the professional qualifications of the nurse. Is the Minister in a position to give an assurance that there will be accompanying that document some sort of report on the nurse as a person and on her general standard of conduct and behaviour? It would be unfortunate if we found ourselves using nurses from abroad who for one reason or another would not be allowed to continue as nurses in their own hospitals because of some offence they may have committed. I should like to know what safeguard there is in relation to that.
Thirdly, the Minister mentioned in the opening part of his remarks that the order would require some changes in—I think he used this phrase—"the existing pattern of training". I do not know whether that is a fundamental or simple matter, but if it were possible for him to tell the House what those changes are to be, it would be helpful for us all to understand.
4.43 p.m.
Lord SANDYS: My Lords, I am grateful to the noble Lord, Lord Wells-Pestell, for associating the Opposition with the order. He asked three questions, the first of which was the need to ensure that nurses intending to come to this country had a standard of English which was sufficient to meet the situation. I think
1848
I can give that assurance; we shall not be deflected from our central purpose of ensuring that that shall be the aim of the professions concerned.
His second question was about the requirements. I think that the registering authority in this country would ask the equivalent authority in the other EEC country concerned to provide a certificate that the nurse fulfilled the registration requirements including that of character, and such certificates would have to be produced. If, however, the country concerned did not provide satisfactory certificates, the registering authority here would have to ask for references as to character.
The noble Lord's third question sought information in regard to training, and I can satisfy him to some extent. At present, in a three-year training programme a nurse covers a range of theoretical subjects and practical placements as defined by the General Nursing Council for England and Wales and its equivalent bodies in Scotland and Northern Ireland to comply with the EEC requirements. The length of training will remain the same and the subjects outlined in the theoretical curriculum are in line with the present syllabus. It is the practical placements which change. All students currently have experience in medical and surgical nursing as well as paediatrics. In addition, a proportion have experience in psychiatry or geriatrics and obstetrics or community nursing. In future, students will be required to have experience of all these areas of nursing and care.

SOCIAL SECURITY (UNEMPLOYMENT, SICKNESS AND INVALIDITY BENEFIT) (AMENDMENT) REGULATIONS 1979
4.46 p.m.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE rose to move, That the draft order laid before the House on 5th July, be approved. The noble Lord said: My Lords, the purpose of these regulations is to remedy an unintended consequence of the Social Security Act 1975, the result of which has been to put students who claim unemployment benefit during the short Christmas

1849
and Easter vacations in a privileged position compared with the general body of contributors.
Under the pre-1975 legislation a person entering National Insurance had to work for at least 26 weeks in order to pay sufficient contributions to satisfy the first contribution condition for unemployment benefit. Students entering higher education straight from school were not usually able to work for long enough to achieve this. Only about 10 per cent. of the students who registered for employment during their vacations qualified for unemployment benefit, and these were most likely to have been mature students.
By contrast, a person entering National Insurance under the 1975 Act can satisfy the first contribution condition after a much shorter period of work. This is because contributions are now related to the level of a person's earnings rather than to the number of weeks he has worked. To satisfy the first contribution condition, a person now has to have paid contributions on earnings in any one year of at least 25 times the weekly lower earnings limit. A student leaving school this summer and finding work would be expected to earn sufficient each week to satisfy the first condition within about 10 weeks before entering higher education compared with 26 weeks previously by paying contributions on total earnings of only £487·50. If he were then to claim unemployment benefit at the Christmas vacation, he could receive starting credits to enable him to meet the second contribution condition, which requires a person to have paid or been credited with contributions on earnings of at least 50 times the weekly earnings limit for the relevant tax year; that is the tax year preceding the calendar year in which the interruption of employment begins.
Starting credits have long been available to new entrants to insurance, but they were made more generous under the 1975 Act. In qualifying for unemployment benefit on the basis of this very limited amount of work, the student could then receive benefit at each vacation throughout his course without undertaking any further employment. This is because claims for benefit made within 13 weeks of one another link to form a single period of interruption of employment, and since
1850
university vacations are usually less than 13 weeks apart, each claim made by the student would be determined by reference back to the same contribution year in which he had received the benefit of starting credits.
In addition to this, it should be recognised that the Christmas and Easter vacations are so short as to make the employment prospects of any student who has not made previous arrangements to work very slim indeed and to make his unemployment at these times a virtual certainty rather than an insurable risk. Taken together these factors place students in an unduly favourable position compared with the general body of employed earners. If the latter lose employment, they may receive initial help from starting credits but thereafter they are likely to have to satisfy the second contribution condition on each occasion that they are unemployed. This is because these earners do not normally experience regular and successive periods of unemployment falling within the 13-week periods.
The previous Administration submitted proposals to the National Insurance Advisory Committee in 1977 which would have completely withdrawn a students' entitlement to unemployment benefit in the short vacations, but the committee rejected them as "too blunt an instrument." The following year a majority of the committee rejected fresh proposals requiring students to have paid 50 times the weekly lower earnings limit in the relevant tax year, or the tax year preceding it, in order to qualify for benefit in the short vacations. They held to their previous view that entitlement to contributory unemployment benefit should not be withdrawn from a particular section of the community. However, on that occasion two members of the committee supported the proposals on the grounds that it was fair and proper that those who chose to be full-time students before having had much employment and then claimed unemployment benefit should be required to meet an additional condition compared with the rest of the contributors.
On 30th November 1978 the previous Government announced in another place that they had taken account of the committee's recommendation and would not proceed with the regulations for the time being. They said, however, that

1851
they still considered it important in principle that students should not have such easy access to unemployment benefit, and that they would therefore be considering whether these or similar regulations should be introduced for the 1979 academic year.
We have considered the whole issue very carefully, not least because of the majority recommendations against the proposals by the National Insurance Advisory Committee, whose advice we take very seriously. However, in the light of all the facts, we are forced to conclude, like our predecessors, that regulations are needed to prevent continuation of a situation that is impossible to justify. I think that none of us was aware of the unduly generous effects that the 1975 Act could have for students when we were debating it.
To satisfy the additional condition that would have to be met under these proposals before unemployment benefit could be paid in the short vacations, students would need to have paid contributions on earnings of 50 times the lower earnings limit. Someone claiming for the first time in December 1979 could satisfy the condition if he had earned £750 in the tax year ending in April 1978, or £650 in the tax year ending in April 1977. These amounts could have been earned within about 2½ months by someone on average earnings. "Mature" students, who have always been able to claim unemployment benefit in their vacations, would normally satisfy the special condition, but it would be unusual for a student who had gone straight from school to further full-time education to be able to do so. The additional condition would not apply during the summer vacation.
About 30,000 students qualify for unemployment benefit in each short vacation, and it is estimated that around 6,000 of these may be mature students, most of whom will still be able to qualify for benefit at these times. The saving in public expenditure is estimated at about £4 million a year.
The conditions set out in the proposed regulations are the same as those submitted to the National Insurance Advisory Committee by the previous Administration. These regulations amend the principal regulations by inserting after Regulation 19 a new regulation, Regulation 20. Regulation 1 is formal and includes provision for
1852
the regulations to come into operation upon the day on which they are made. Regulation 2 inserts the new Regulation 20 into the principal regulations.
With regard to the new Regulation 20, paragraph (1) describes the category of persons in respect of whom an additional condition for the receipt of unemployment benefit is imposed. Paragraph (2) sets out the additional condition whereby a person who comes within the prescribed category is required to have paid contributions based on a minimum level of earnings in the tax years to which the paragraph refers.
Paragraph (3) provides for a student, in cases where the earliest of the two tax years referred to in paragraph (2) is the one ending in 1975, to meet either the condition in paragraph (2), or an alternative condition. Paragraph (4) provides for a student, in cases where both the tax years referred to in paragraph (2) fall before the tax year ending in April 1976, to meet the alternative condition referred to in paragraph (3). Paragraph (5) provides that the additional condition applies only in respect of days between the beginning of the first term starting after 31st August in any one year and the end of the last term finishing before 31st August in the following year, so that the additional condition will not apply in respect of days falling within the long summer vacation. Paragraph (6) provides that once the additional condition has been satisfied, it does not have to be satisfied again in respect of any future claim for unemployment benefit. Paragraph (7) defines "benefit year" for the purpose of these regulations.
These regulations will not affect many students, and the financial savings are comparatively small. But some restriction of students' rights to benefit is necessary in the interests of other contributors, and we do not think it unreasonable to expect a student who may qualify for unemployment benefit at regular intervals over three to four years to show that he has a reaonable attachment to the employment field. I recommend to your Lordships that the regulations be approved, so that they can take effect in the 1979–80 academic year. My Lords, I beg to move.
Moved, That the draft order, laid before the House on 5th July, be approved.—(Lord Cullen of Ashbourne.)
Lord WELLS-PESTELL: My Lords, there is not much I want to say beyond thanking the noble Lord the Minister for giving such a detailed and fairly simple explanation of the position. I do not find myself very much at variance with it, because the principle involved is very much in keeping with the thinking of the last Government, and although the figures may differ a little, what is proposed runs parallel with what we had in mind. Therefore, I approve of the order and give it support.
4.59 p.m.
Lord BANKS: My Lords, I wish to thank the noble Lord for his very careful explanation of the regulations. He has made it very clear that since the introduction of the 1975 Act students going straight from school to higher education, because under that Act they are given more generous starting credits than previously, and due to the working of the 13-week rule, can claim unemployment benefit during all vacations of a 3-year course, this being based on only a few weeks' actual employment. As the noble Lord has said, that was never the intention, and he has indicated that it caused concern to the previous Government as well as the present Government, and it led to the previous Government putting forward the suggestion that all students should be debarred from receiving unemployment benefit in the short vacation. The National Insurance Advisory Committee recommended against that suggestion. Then came the proposal from the last Government in similar terms to that before us this afternoon, requiring a longer term of employment in effect, and not affecting mature students—a regulation which would apply only to the short vacations.
During the operation in the last Parliament of the Lib-Lab pact (as it was called) the Minister for Social Security consulted me about this proposal, and at that time I got in touch with the National Union of Students and other student bodies to sound out opinion. At that time no objection in principle was made to me about the possible introduction of a third condition, although, of course, objections have been made subsequently. But there was concern expressed about mature students, because there was at that time the danger that a mature student's entitlement might run out before the
1854
end of the course. I recommended to my colleagues that we should say to the Government that we would support the proposal provided we were satisfied about the position of mature students; and in the order which we have before us I think that point has been met.
This point of view was expressed by my colleagues to the Government; the Government then drew up the order and presented it again to the National Insurance Advisory Committee; and, as we have heard, they recommended against it. They said that students should not be treated separately. As against that, there is the fact that other classes of contributor are treated separately already—share-fishermen and seasonal workers—and I think it is important to bear in mind that we are not talking about supplementary benefit. There are problems connected with the application of supplementary benefit to students, but we are not talking about that here; we are not talking about particular cases of hardship. It is a matter of contributions record, and the question is: Should perhaps two and a half months' employment between school and university be sufficient grounds for qualifying for unemployment benefit through all the vacations of a university course, particularly when you bear in mind that there is a maintenance element included in the student grant to cover the short vacations?
I do not believe that that was Parliament's intention, and I do not really think it is fair to other contributors—a view which, as the noble Lord has said, was sustained by two of the eight members of the National Insurance Advisory Committee. But they did recommend by six to two against these proposals, and therefore the question arises as to whether the Government should go against the advice of the committee. I suppose we then ask: Should the Government ever go against the advice of the committee? I think we must say that the committee are a most valuable and important body, and no Government should lightly reject their view—indeed, the noble Lord said that the Government had not done so; but they are advisory, and therefore must expect, surely, that their view will not be accepted in every case.
So, on balance, I support the order which both Governments have thought to be necessary, but in conclusion I

1855
should like to make it clear that I am not by any means satisfied about the adequacy of students' grants, nor about the practice of making some students dependent on a parental contribution. I want, too, to get away from the concept of benefit in relation to contributory record and into an entirely new system of tax credit. But so long as we have a contributory system it should be fair as between different sections of contributor.
Viscount MASSEREENE and FERRARD: My Lords, perhaps I may ask my noble friend a question. Unlike ordinary unemployed people, if students wish to take a job during their vacations can they at the same time have unemployment benefit? This is a question to which I have never had an answer, and I do not really know what the answer is: but is it in fact legal for them so to do?
Lord CULLEN of ASHBOURNE: The answer is, no.
Lord ANNAN: My Lords, may I ask the noble Lord, Lord Cullen, a question, simply to elucidate on what he said? He mentioned a figure of 30,000 students, of whom 6,000 were mature students, and he said that most of them will be able to claim. Was he referring to the 6,000 mature students or to the whole of the 30,000?
Lord CULLEN of ASHBOURNE: My Lords, I should first like to thank both the noble Lord, Lord Wells-Pestell, and the noble Lord, Lord Banks, for their approval of the order, and I should particularly like to thank Lord Banks for having made such a valuable contribution to the short debate on this matter. I am sure that my noble friend the Secretary of State will read what he has said with great interest. Mature students have never had difficulty in the past; and, of the 30,000 students, the majority will be unable to claim because they will not have had the opportunity to do sufficient work. Before, it was quite easy for them to do about 10 weeks' work, but they would not normally be able to claim; and we reckon the savings would be about £4 million. I may say that the 30,000 students we are talking about are those out of, say, 500,000 students who are at universities, polytechnics and similar institutions.

NORTHERN IRELAND (EMERGENCY PROVISIONS) ACT 1978 (AMENDMENT) ORDER 1979
5.6 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, NORTHERN IRELAND OFFICE (Lord Elton): My Lords, I beg to move that the Northern Ireland (Emergency Provisions) Act 1978 (Amendment) Order 1979, which was laid before this House on 2nd July, be approved. In discussing the order the House may find it convenient to consider at the same time the Prevention of Terrorism (Temporary Provisions) Act 1976 (Amendment) Order 1979. With your Lordships' agreement, following this debate I shall be moving that this order, also, should be approved.
My Lords, the effect of these two orders is to proscribe the Irish National Liberation Army throughout the United Kingdom. They do so by adding the name of the INLA to the appropriate Schedule to each Act—Schedule 2 to the Emergency Provisions Act 1978 and Schedule 1 to the Prevention of Terrorism (Temporary Provisions) Act 1976. As a result, it is now an offence to belong to, or to profess to belong to, the organisation, to solicit or invite financial support for it, or knowingly to make or receive financial contributions on behalf of the organisation.
The INLA is stated to have links with the Irish Republican Socialist Party, a political group which broke away from the Official Sinn Fein in 1974. INLA have, however, gone beyond the mere expression of political views. They have admitted guilt for a number of shooting and bombing attacks in Northern Ireland, in which members of the security forces have been killed. Your Lordships will also know that INLA have publicly admitted that members of their organisation were responsible for the death of Mr. Airey Neave. He was a public figure, highly respected and personally known to many Members of both Houses of Parliament. The revulsion of feeling caused by that horrible deed was therefore acutely felt in Westminster. Your Lordships will realise that every time a private individual is cold-bloodedly slaughtered by terrorists there is a revulsion of feeling affecting his or her immediate circle of family, friends, relations, colleagues and

1857
members of his community, and that that revulsion is just as acute and just as important.
The Government believe that an organisation which thus invokes terrorism as a means of furthering political ends has no claim to a public platform in the same way as political groups which deploy lawful methods. While there is no doubt that the INLA is a much smaller organisation than the Provisional IRA and is of less significance, public confidence in the maintenance of law and order is nevertheless undermined by the lack of any legal restraint on the existence of such an organisation, or on seeking recruits or financial support for it. Proscription imposes restrictions on the activities of the organisation in terms of recruitment and fund-raising. It also enables the police to prosecute activists on charges of membership of an illegal organisation.
My Lords, this Government, like the previous Administration, have no wish to inhibit the freedom to express political views properly. But a line can and must be drawn between political and criminal acts. There can be no doubt that, by its admitted involvement in terrorism, INLA has crossed that line. Proscription of INLA has the support of the police and Army in Northern Ireland, and of the police in Great Britain. I believe it will also have the massive support of public opinion in the United Kingdom. The Government are satisfied that it is the right course to take, and I beg to move.
Moved, That the order laid before the House on 2nd July, be approved.—(Lord Elton.)
5.10 p.m.
Lord BLEASE: My Lords, I should like to thank the Minister for the way he has explained the details of these two orders. On this side of the House we wish to declare that we concur with the remarks that he has made and will support the orders.
Lord HAMPTON: My Lords, I think there is little that I should add on this point. We feel that we must support the inclusion of the INLA in this order. It goes against the grain, for we like to support the liberty of the individual,
1858
but we accept that the circumstances are too grave to allow it. We support the order.
Lord HYLTON: My Lords, I should apologise for intervening today. When we had the debate on 9th July on what I might call the principal order I made some remarks which were, no doubt, ill-prepared, unclear and which certainly failed to persuade my noble friend the Minister. I tried then to suggest that there should be drafted one emergency law applicable to the whole of the United Kingdom. This might be either in replacement of the Emergency Provisions Act and the Prevention of Terrorism Act or it could be in addition to both of them. I hope that I shall be in order in trying to clarify that suggestion a little.
Such legislation, first of all, would be normally dormant except in "areas of civil disorder". That is the key concept. That concept, I believe, is comparable to the concept in French law of état d'urgence. Secondly, such a law should be capable of rapid activation with the consent of Parliament and subject to any other necessary safeguards. Its purpose would be to enable our constitutional democracy, to cope with violent minorities using terrorism or other illegal means without destroying the very principles of civilisation for which democracy stands.
The aim of the legislation that I have in mind is to make possible a graduated response by the Government. Perhaps I should give some examples. I think that, obviously, a different response is needed to, say, an oil spillage at sea as compared with an attempt by terrorists to take over a nuclear establishment; or, in the Northern Irish context, a different response may well be appropriate in Crossmaglen or the Shankill Road or Ballymurphy from that required in more peaceful and more law-abiding areas. If I could say something about the reasons for introducing such legislation, I would suggest that in the past it has not always been clear to the army which civil authority it should be supporting; it has not always been clear—and probably is still not clear—which police functions the army may assume in cases of need. I gave some examples on 9th July of someareas of military activity of doubtful legality. I accept that all or most of these were not per se illegal but they have

1859
undoubtedly given rise to uncertainty both within the army and within the civilian population.
Enemy propaganda, such as that of the Provisional IRA, has been able to feed on such uncertainty. I submit that we should do everything possible to remove it. I should like to emphasise that I am not suggesting a new emergency law for the reasons given by the Northern Irish Peace Movement in paragraph 6 of their proposals on the Emergency Provisions Acts. An equality of misery, as one might call it, between Northern Ireland and the rest of the United Kingdom is not a desirable thing. However, I think that it is very significant when there is substantial agreement between, on the one hand, the advocates of peace and, on the other, distinguished members of the security forces.
In the past I have ventured to ask the Government what would be their view on certain novel security measures in Northern Ireland. I was thinking of, and mentioned, identity cards, widespread finger-printing and access by the security forces to some civilian records. I recognise that there are considerable difficulties in the use of any of these steps. But I urge the Government not to rule them out and to see whether there are lessons to be drawn from the Malayan emergency that may be relevant to the use of such measures in Northern Ireland.
In conclusion, I should say that I was amazed to find the following statement in a letter from my noble friend Lord Elton, for which I am grateful:
"The Government are satisfied that the effective operation of the security forces is not being hampered by lack of necessary information".
This, I thought, was fine of the most remarkable and surprising statements that I had heard for a very long time. Why, if it is true, have unacceptable violence and armed insurgency been able to continue for very nearly 10 years? Why have the murderers of the late Mr. Neave not yet been arrested? Why is it necessary today to ban the Irish National Liberation Army? Good intelligence, I think it is universally accepted, is the key to successful counter-insurgency. It has been said that one informer is worth at least two infantry battalions. I beg the Government to ponder that remark and to do their
1860
utmost to win over, to use and to recompense, when necessary, as many informers and defectors as possible. This I believe to be the best and surest way in which to defeat the men of violence.
Lord SOMERS: My Lords, I do not know whether this is the right time to ask a question, but, as we have seen, the other place has rejected, possibly rightly, the possibility of reintroducing capital punishment and I wonder if the noble Lord could say that there was any hope that the Government might introduce in its place a really genuine life sentence for acts of terrorism? We have seen only yesterday the case of an ex-murderer who had emerged from prison and who has already started a new life of crime. I think that a real life sentence would be the only hope.
5.18 p.m.
Lord ELTON: My Lords, I am grateful to the noble Lords, Lord Blease and Lord Hampton, for the cautious welcome they gave to this essential measure. I am obliged to my noble friend Lord Hylton for his disquisition on the état d'urgence as it might apply here. I cannot say that I follow him now that he has made the situation clearer. I wonder whether he is not perhaps in some respects under some misapprehension. The Prevention of Terrorism Act, which is, after all, half of what we are talking about today, already applies to the whole of the United Kingdom—which is what he wants. Indeed, so does the proscription of the INLA, which is what we are having this little debate about. That applies equally to the whole of the United Kingdom.
Much of what he seeks is already to hand. I do not think that it is really prudent for the noble Lord to suggest that we should want the sort of emergency legislation which is necessary in the Province to be ready to hand permanently in the rest of the United Kingdom. I suspect that this is applying equal measures to unequal situations, and I would think that there was something constitutionally undesirable about that. I shall however—now that the noble Lord has declared himself more fully and with marginally more notice than before—undertake to look at this matter; but I cannot give any grounds for enthusiastically awaiting my reply because I do not think that it will be very favourable.

1861
The noble Lord then went on to quote from a letter that I wrote to him in reply to other matters after the last debate. It would have been to the advantage of the House if he had not started the quotation in the middle of a sentence. If I may give the whole passage, it reads:
"As regards your suggestion that the security forces should have access to DHSS census and other records…"
and then it goes on:
"the Government are satisfied that the effective operation of the security forces is not being hampered by lack of necessary information".
The noble Lord was addressing himself in his speech specifically to that area and it was that area in which I replied. I am under no illusions whatsoever about the crucial importance of intelligence in any military operation whatsoever and its enhanced importance in internal security of the type with which we are dealing now. I am not aware that Her Majesty's Government, or any of my colleagues, are less than enthusiastic in pursuing it. I do not wish to deal further with the question of how far supposedly confidential documents are made the subject of public inquiry. I am satisfied that what can properly be done is being done and that, if there are innovations which will improve what is being done, they will be pursued. I hope that the noble Lord will be contented with that reply.

PREVENTION OF TERRORISM (TEMPORARY PROVISIONS ACT) 1976 (AMENDMENT) ORDER 1979
5.22 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, I beg to move.
Moved, That the order laid before the House on 2nd July be approved.—(Lord Belstead.)

APPROPRIATION (No. 2) (NORTHERN IRELAND) ORDER 1979
5.23 p.m.
Lord ELTON: My Lords, I beg to move that the draft Appropriation (No. 2) (Northern Ireland) Order 1979, which was laid before the House on 4th July, 1979, be approved. The order is being made under paragraph 1 of Schedule I to the Northern Ireland Act 1974. The main purpose of the order is to appropriate the balance of the 1979–80 main Estimates, the sum on account having been appropriated in March this year. The order also appropriates a token amount arising from an Excess Vote for the financial year 1977–78.
Anyone moving legislation that is both complex and important and yet not susceptible of amendment is in something of a dilemma. One can either deal with the matter in detail and incur your Lordships' displeasure by boring them by the length of his speech or he can deal with them briefly, allowing matters to arise in the course of subsequent debate to which he can address himself in reply, and be accused of being superficial in his approach. I have already trespassed in the past on your Lordships' patience beyond the time thought agreeable; I shall therefore on this occasion take the alternative risk and deal with what I regard as the salient points, leaving it to your Lordships to bring to the attention of the House, and to my own, the matters which are felt to be most important.
The total of the main Estimates provision for 1979–80, including the sum already voted on account, is £1,642 million or some £119 million more than the total Estimates provision, including supplementaries, for 1978–79. Details of he provisions sought are set out in the main Estimates for Northern Ireland departments, copies of which are available in the Library. The presentation of the main Estimates volume has been altered from previous years. First, each Vote is either fully cash limited or completely exempt from cash limits control. Secondly, the provision being sought for 1979–80 includes an element to reflect estimated pay and price changes occurring during the year.

1863
The largest increase over 1978–79 is that of £37 million in Class X Vote 3, family benefits. This results from the higher rates of child benefit which have been payable from April 1979. In Class IX Vote 1, health and personal social services, an increase of £30 million is sought over last year's figure. The additional funds will be used to cover pay and price increases, and to finance further developments necessary as a result of demographic and other factors.
For the housing services, Class V Vote 1, an extra £19 million is being sought. Increases in the grant to the Housing Executive and in the recoupment of its expenditure on the renovation of private sector dwellings, account for some £15 million. The balance of £4 million is to be made available to housing associations in anticipation of growth in their activities. Class II Vote 5, functioning of the labour market, seeks £64 million compared with £41 million last year. Technical accounting adjustments account for £15 million of this increase, and of the balance £6 million will be used by Enterprise Ulster and the Youth Opportunities Programme.
The largest decrease is in Class I Vote 2, agricultural support, where £51 million less than in 1978–79 is being asked for. This is because the 1979–80 provision needed for the Meat Industry Employment Scheme, aid to the milk industry and feed price allowances for pig, poultry and egg production schemes is not included. It will be sought later in the year, however, and the reduced figure does not, therefore, reflect any change in Her Majesty's Government's commitment to the agricultural industry.
There is an excess Vote amounting to £10 on the Estimates for 1977–78. Details are set out in the Statement of Excess, copies of which are in the Library. The excess Vote has been considered by the Public Accounts Committee, which has recommended that the necessary sum be made available. To a layman, £10 seems to be a remarkably small deviation from the intended target. The provision in this order will enable most existing services to be continued at a level similar to last year.
An appropriation order contains within it material that affects every aspect of
1864
Government activity in the Province of Northern Ireland other than that undertaken specifically by the Northern Ireland Office itself. It covers, therefore, a very wide field the whole of which was under scrutiny in another place and, indeed, until a latish hour this morning. If I was to deal even briefly with each relevant subject I should detain your Lordships long beyond the point of endurance. As I indicated at the beginning of this debate, I have instead sought to pick out only a few matters in a short introduction in order to give an opportunity to your Lordships to raise matters to which you attach particular importance. Of some of these I have already received advance notice, and I am grateful to those noble Lords who have thus assisted me to give replies that will be both full and, I hope, satisfactory. I commend this order to your Lordships. I beg to move.
Moved, That the order, laid before the House on 4th July, be approved.—(Lord Elton.)
5.29 p.m.
Lord BLEASE: My Lords, I should like to thank the Minister for explaining the effects of this order. At the outset of my remarks, I wish to indicate support for the proposed financial provisions contained in the order. At the same time, I must express regret that, after almost seven years of the direct rule form of government over the affairs of the Province, we as a community have failed to achieve the establishment of a devolved assembly. When I speak of a devolved assembly, I mean a democratically elected devolved assembly with full, vigorous, positive and constructive participation by representatives of both parts of the Northern Ireland community.
The reason I mention at this time the issue of an elected regional assembly is that I feel a debate on this important order, and the crucial financial implications involved, could be of great effect and indeed all round benefit if it was being considered at greater length and against the immediate full backcloth of regional accountability and consensus. I am stating this view but in no way blaming the present Conservative Government, nor am I accusing the previous Labour Administration for the impasse. I am not blaming any particular individuals,

1865
but I fear that the basic language of party politics in Northern Ireland is still influenced by the political rhetoric of 10, 20—some even say 300—years ago. I think that recent outbursts would almost underline the last statement.
The politics of fear, hate, bigotry, of sectarianism and of division cannot be in the best interests of any of the people of Northern Ireland, especially considering the future for our children. For far too long, intelligent and decent people in Northern Ireland have been drawn away from direct political involvement. Sadly, they have left the issues of government to the politicians. Whatever may be the reasons or the excuses for this, it is totally unfair to the politicians for people to withdraw from active help in the resolution of political issues and then to blame the politicians when things go wrong. We have yet to learn that a healthy political system requires the active interest and co-operation of all thinking citizens.
The order before us deals with the authorisation of the financial provisions under 48 different votes and 12 classifications or departmental categories, as the Minister indicated in the debate in another place last evening—or should I say this morning?—which lasted for eight and a half hours. I shall wait with interest to read the outcome of that debate in Hansard. As the Minister has said, in a debate such as this, I think it would, in accordance with the practices and procedures of this House, be unwise of me, to attempt to deal with anything more than the broad outline or a couple of general matters.
I think the order before us must be considered against the background of the £35 million cut in Government expenditure in the Province and against the continuing inflation. One must stress the very serious nature of the economic and social outlook for the people of the Province and the tragically high unemployment rate—a rate that is twice that of the United Kingdom as a whole. In some parts of the Province male unemployment is as high as 30 per cent.
Perhaps the Minister may indicate to us something of the nature of the Statement made in the other place yesterday in reply to a Question concerning the very important issue of Harland and Wolff. I have had only a glance at the Statement, but I
1866
think it has serious consequences for the workers of Harland and Wolff, and perhaps the Minister could enlarge upon it. If my interpretation of the document is correct, it calls upon the workers, the management and the Government immediately to get together and ensure that the great shipyard of Harland and Wolff is maintained and made competitive in some way. I feel sure that the workers of that company, given encouragement, will rise to the need for competitiveness and production.
There is no doubt that continuing violence and terrorism have increased the difficulties of overcoming the Provinces' grave structural economic problems and geographical disadvantages. We have found through the years that Northern Ireland has benefited from the carefully blended dynamic of public enterprise and finance and private initiative and entrepreneurial skills. Management and trade unions, together with the Government, have enabled the Province to surmount terrible industrial, commercial and social difficulties. I would ask this House to listen carefully to these words which I quote:
"Any Government in the next few years must face the possibility that lengthening dole queues will be an important element in the pattern of violence in the Province".
Those are not my words: they are the words of warning and of concern voiced by the late Mr. Airey Neave, when he spoke in another place at column 873 on 7th July 1978, when a similar order on Northern Ireland was being debated.
I would ask the Minister what immediate hopes he and his Government may have for shortening the persistent long dole queues in Northern Ireland. Can the Minister dispel the fears that are already mounting daily in the Province that unemployment could be as high as 100,000 by January next? That is an increase of something like 40,000 over the next six months. Could he indicate to us how the cuts will affect employment in the various sectors? What are likely to be the levels of unemployment in teaching, in hospitals, the public service, public transport and the manufacturing sectors? I realise that the Minister may not have these figures easily to hand, but I am sure he is aware, as I am, of the concern expressed at all levels by workers and other persons throughout the Province. I have been

1867
inundated with requests for information about the present situation and, as I indicated, during a debate here some 14 days ago, there is already a conference arranged by the Northern Ireland Committee of the Irish Congress of Trade Unions to consider the whole aspect of the Government's policy.
I should also like the Minister to be able to deny that there has been a considerable reduction in the numbers being recruited for industrial training and retraining. If I may again quote the late Mr. Airey Neave—because I believe he spoke with great knowledge and understanding of the position—he said this at column 874 in the same debate:
"The attack on unemployment seems to need an overall strategic plan, and I am unclear whether that exists now".
Those were his words. He also said in the same column:
"we want to know a good deal more about the Government's plans for job creation".
I would re-echo those words and hope that the Minister may be able to dispel some of our worst fears about the immediate outlook for employment in Northern Ireland.
I should now like to turn to two aspects of educational policy. One aspect is the action on the Astin Committee Report on the reform of school management. The other concerns Professor Nesbitt's committee on services for adults. To take first the Astin Report on the reform of school management in Northern Ireland, this was a committee set up under the chairmanship of Professor Astin and was one of a number of working parties set up by the Labour Administration in 1977, when a decision was taken to introduce comprehensive education. But, while the other working parties were intended to prepare the way for comprehensives, the Astin Committee had a much wider brief. I think I am right in saying that the prospective change to comprehensives was seen as an opportunity of reviewing the working and composition of school management on the same central lines as the Taylor Committee in England and Wales. Now, of course, the movement towards the comprehensives has been halted and the reports of all the working parties rendered somewhat irrelevant, at least in the short term. However,
1868
there is a great danger that, just as the pre-comprehensive reports have come to nothing, the Astin Report will similarly be pigeon-holed. That is the fear expressed by many people concerned in the teaching profession and by parents in the Province. That would be very sad, because reform is very necessary, and indeed essential, if the school system, on both the State and the Catholic sides, is to be given a more representative and informed base in local school management.
The main recommendation of the Astin Report was that all schools in the State sector and in the Catholic maintained sector, which receives more than 90 per cent. of its running costs from the State, should include four elements on their governing bodies—representatives of the local education authority, of parents, of teachers and of Church trustees. The Committee made two alternative recommendations. One said that, as a first choice, there should be equal representation of these four elements, with 25 per cent. representation from each. The other recommendation, which accepted the difficulties of achieving this by agreement, proposed that no interest should have more than 40 per cent. of the membership.
The present composition of the boards, whose main function is to appoint teachers, has constantly been attacked by the trade unions who, quite rightly, resent the heavy clerical influence. I know that the Minister has already said publicly that he wishes to consult and to have the advice of parents and teachers concerning education matters in the Province. Here, I suggest, is a report which stresses the importance of parent representation, as well as teacher representation, on school management committees. May I ask the noble Lord what action has been taken to implement the recommendations of the Astin Report?
Concerning Professor Nesbitt's committee on adult services, can the Minister indicate when the report will be completed and whether the findings will be made public? I note that there is a great deal of interest in the work of this committee, and many are concerned that educational and career guidance should be promoted and developed according to the needs of the Province.
I wish now to mention matters concerning the maintenance and future

1869
development of some of the public and voluntary bodies which are at present operating in Northern Ireland. It is true that there have been established a number of statutory bodies which are woven into the administrative fabric and other aspects of public life in the Province. Recently, some of these have been unfairly attacked in an ideological manner. While I agree that some form of continual review of the role, work, effectiveness and attendance of members of these bodies may be necessary, in the absence of a devolved assembly, I should consider it a retrograde step for a number of reasons if moves were made to limit the work or the number of these public bodies. Out of a long but not exclusive list, there are two such bodies which are likely to have an increased workload, and I suggest that every encouragement and assistance should be given by the Government so that those bodies are able adequately to carry out their appropriate services. The two bodies to which I refer are the Fair Employment Agency and the Labour Relations Agency. Whatever may have been the necessity for the services of the two bodies in the past, the requirements brought about by the sweeping changes in the labour market will make critical demands on their impartiality, experience and expertise. I realise that I am raising a number of matters about which I was, unfortunately, unable to get in touch with the Minister. I shall therefore understand if he is unable to give me forthright answers from the Dispatch Box on these issues. But I hope that he will take note of them and give them due consideration.
My attention has been drawn to an anomaly concerning the method of payment of retirement pensions to persons in Northern Ireland. It appears that in Great Britain a retired person may have his State retirement pension paid monthly through a banker's order. In Northern Ireland, this provision is available only on a quarterly payment basis. I cannot understand the reason for this restricted facility, and why the same payment method should not be available to all persons in the United Kingdom. As I said, I was unable to contact the department responsible, and will wait for the Minister to make appropriate inquiries concerning these points.
As the Minister said, the order deals with votes for a number of departments,
1870
under various headings. From the manner in which the Minister put these forward, it would appear that there has been a substantial increase, but, in my view, these are really cuts in public expenditure. While they are all particularly important, I want to single out one, which is in Class XI, Vote 7. It concerns expenditure on the Central Secretariat, including the expenses of Information Services and a grant in aid. I want to take the opportunity to commend—I want to use modest words; the word "praise" is too grandiose—the efforts of the Information Services provided by the Northern Ireland Government Office. There has been a tremendous improvement in the manner in which information is now made available to the public. It is much more acceptable in terms of the needs of a province which does not have information readily available through local representatives, in the sense that we had during the Stormont parliamentary period.
It is in this connection that I want to make my final comment. In my opening remarks, I referred to the impasse reached ill achieving new and positive approaches to political thinking in Northern Ireland. There is no doubt about the depressing aspect of the sterility of political debate. As a society, we have had to face tremendous difficulties. Working people, management and men, have demonstrated that we have the ability to cope with great economic and technological change in agriculture, in textiles, in engineering and in modern industrial construction, yet it is apparent that we cannot adjust to the realities of current political circumstances. I say "apparent", because there are signs that the community in general displays more flexibility and more pragmatism in dealing with issues, than do its elected leaders.
I believe that the institutions designed to provide for industrial and social consensus have proved immensely valuable in the promotion of constructive approaches to many industrial and community problems. I am thinking of the Economic Council, along with other statutory bodies on which management, men and Government get together and try to work out solutions to many problems. I believe that there is a need for a new forum of political public information and discussion that is neutral, independent, objective, constructive and, above all, forward-looking. Such a forum

1871
could be supplied by the establishment of a Northern Ireland Institute of Public Affairs. Even in these dark days of economic stringency and financial constraints, perhaps the Minister may consider grant-aiding such a body. I believe that the monies would be well spent in dispelling ignorance and distrust, in overcoming black propaganda and in creating new political horizons in the Province. My Lords, I support the order before us today.
5.49 p.m.
Lord ELTON: My Lords, I think that all your Lordships will be indebted to the noble Lord, Lord Blease, for the way in which he has taken this order. I must say that he has almost given me indigestion with the concentration of his inquiry. I regarded what he was putting before me as a sack of grain to be planted, but I find that it has been threshed already and almost everything that he put forward was a request for information, or an offering of either condemnation or approval. I shall do my best to keep level with this pressure of interest.
I take well the noble Lord's introductory point. How much better, he said, would it have been had we been discussing these matters in the context of an elected, democratic and devolved Government in Northern Ireland. Like the noble Lord, at times I wonder when it was that the clock stopped and, like him, I hope that we can bang it just the right amount on the side to start it ticking again without knocking it over. The great thing is not to allow frustration to give too much strength to the blow. I said in my first speech from this Box what I fear I shall say often again: that the greatest danger we face is too much haste. However, I take the noble Lord's point and I share his impatience that things may move. He can rest assured that we are doing all that we can.
The noble Lord went on to refer to a number of matters. He said that we were conducting this debate in the context of cuts amounting to £35 million in the Northern Ireland account and in the context of inflation, and that he was expecting a very large increase in inflation. I am not in the business of making predictions in this field, and I shall say this again when we look at Harland and Wolff. All I can say is that I believe
1872
that the impact in the Province will be less acute than the noble Lord supposes. When the changes in taxation have worked through, I think that they will have the effect of reducing further that impact. We are not complacent. We are not as frightened as many people are by this problem. The reason for us not being so frightened is not that we are hard-faced or hard-hearted but that we believe that the outcome, while it will obviously be difficult, will not be so difficult as many people suppose. I cannot put a figure on this, and I do not think that the noble Lord expects me to do so.
There are one or two matters upon which I shall write to the noble Lord. One of them relates to the numbers coming in for training and re-training. I should know the precise figure, but I cannot give it off-the-cuff to the noble Lord. In the educational field, the noble Lord went on to refer to the Astin report. That report is not a dead letter. It has been published, and comments on it are invited from all interested bodies. Those comments will be collected, collated and considered by me. Until I have had them, it would be unwise of me to give an opinion on any aspect of the contents of the report.
Lord BLEASE: My Lords, may I ask the noble Lord what methods were used to distribute that document and asking for the appropriate information to be sent back? How wide was that distribution?
Lord ELTON: My Lords, if copies of the report have not already reached all those to whom they should be addressed, they will do so in the next few days. This is not a hole-in-the-corner operation. It would be a great waste of Government funds to publish a document, to invite comments on it and then to keep it dark. If the noble Lord is aware of cases where they have not been received I should be grateful if he would draw my attention to them.
The noble Lord then went on to refer to the Nesbitt Committee. The subject of this inquiry is another one to which the department will be paying close attention. I think that the noble Lord's concern throughout what he said was that, as a result of the change in the policy of the Government—in not requiring educational

1873
and library boards to put forward schemes for reorganisation—a great deal of preparatory work would be thrown out of the window.
There are two things which make that not quite the case. One is that a number of committees—and the Astin Committee is the prime example—have done work which is relevant, can be of use and will not be snuffed out. The Dickson Committee is another organisation to which the noble Lord did not refer where progress has been made; and where it remains relevant, its work will be completed. The other is that, contrary to what appears to be the impression of many people in the Province, at no stage have either I, or the Secretary of State or the Government said that comprehensive reorganisation may not take place. We have only said that there is no requirement for it to take place. I believe that some schemes will come forward, and I take this opportunity, gladly, of saying that I shall not allow any doctrinaire assumptions of my own to come between me and the question of whether the scheme is acceptable to the people who are involved in it.
The noble Lord then went on to deal with what is referred to in some circles as the "Quango shooting season". This species, he feels, is more adapted to the pastures of the Province than it is to those of the mainland. I am aware that there are quasi-autonomous non-governmental bodies which perform useful functions. Indeed, as the beaters go through the thickets driving them into the open, one discovers characteristics of which one had not been aware. Naturally, we are still bent upon reducing expensive and unnecessary operations, but we are not bent upon eliminating useful or essential ones, and in some cases the noble Lord will find that bodies which he expects to be knocked on the head have in fact been amalgamated so that a number of functions can be performed by one body. However, it would be impolitic of me to make a further statement because people will start guessing at the category into which their own body will fall before we have sufficiently reviewed the matter.
I do not know the answer to the question which the noble Lord asked about the payment of pensions, but he was kind enough to say that he would be happy for me to write to him. I shall inquire
1874
into the matter and write to the noble Lord. I was glad to receive from such an authoritative source commendation of the work of officials and of all those concerned in the distribution of information. The other half of the struggle that is going on regarding the collection of secret information is the dissemination of public information. This is reassuring, but again Her Majesty's Government are not complacent.
The noble Lord then said, as I suspected he might, that the examples which I had chosen added up to an increase, not a decrease. The main Estimates provision is £1,641,560,000 compared with a total estimates provision in 1978–79 of £1,522,163,550. That is the comparison for which the noble Lord asked. However, when we are speaking about cuts, we are speaking about cuts in planned expenditure. We came in to find expenditure on an accelerating curve. We realised that this would carry us into such stratospheric levels that we should be unable to breathe. Therefore we have had to reverse the process. And, as always, we have an unpleasant sensation as we go over the top of the curve. However, it does not mean that the level of expenditure at one point in time is going to be reduced below that of the immediately preceding point in time.
The noble Lord concluded—and again I must say that it was a very agreeable and polished speech—after so many questions, almost all of them constructive, with a constructive suggestion about an Institute of Public Affairs. That is something which clearly wants to be looked at. Not only shall I look at it myself but I shall see that those of my colleagues who would be most closely concerned with such a project take the idea on board. What the result of that consideration will be I do not know.
I am grateful to noble Lords for the patience with which they have listened to this disquisition. The order is not capable of amendment. I commend it, therefore, as it stands to your Lordships.

CRIMINAL INJURIES COMPENSATION BILL [H.L.]
6 p.m.
The Earl of LONGFORD: My Lords, I beg to move that the House do now

1875
resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Longford.)
House in Committee accordingly.
[The LORD ALPORT in the Chair.]
Clause 1 [Right to Compensation]:
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 1:
Page 1, line 22, leave out ("in the case of a claim by a victim").
The noble Earl said: The object of this amendment is to leave no doubt that this might be a claim made not only by a victim but by a dependant. I beg to move.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 2:
Page 1, line 24, leave out from ("loss") to end of line 2 on page 2 and insert ("or a personal loss caused by bodily or mental injuries").
The noble Earl said: This is a drafting amendment. I think it is a more convenient way of making the same point as was made in the original wording. I beg to move.
Lord BELSTEAD: I think that the personal element is an essential factor in determining loss and therefore I should like to express my agreement with this amendment.
6.4 p.m.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 3:
Page 2, line 14, leave out from ("victim") to end of line 16.
The noble Earl said: This again is a drafting Amendment. I beg to move.
On Question, Whether Clause 1 , as amended, shall be agreed to?
Lord BELSTEAD: Since this is the clause which provides the basic statutory right to compensation in the noble Earl's
1876
Bill, I should like to make it clear, before I say anything else on Clause 1, that I have no intention of voting against this clause. My purpose is to try briefly to explain the reason why the Government do not consider that the time is ripe for a Bill of this kind, but that is the limit of my intention.
Your Lordships may have read in the Press or heard on the radio of the announcement which was made yesterday in another place by my right honourable friend the Home Secretary as a reply to a Parliamentary Question for Written Answer. My right honourable friend and my right honourable friend the Secretary of State for Scotland, yesterday published a revised version of the existing Criminal Injuries Compensation Scheme, and announced that the scheme would be made statutory when there had been sufficient experience of the revision to enable any problems to be identified and to be solved.
The revised scheme is based on the recommendations of the interdepartmental working party which, after taking evidence from more than 50 people and organisations with special knowledge of the law relating to compensation, reported on the Criminal Injuries Compensation Scheme last year. I think it is fair for me to say, taking advantage of all that expert knowledge, that the revised scheme arose from a report which obviously needed to be taken very seriously. This is neither the time nor the place to describe in any detail the improvements which the revised scheme announced by my right honourable friends yesterday make, but perhaps I may just refer to two of the improvements as I see them.
The most substantial change is the extension of the scheme to the victims of family violence. They have previously been excluded from compensation for criminal injuries, partly because of the difficulties in establishing the facts in such cases and partly because of the risk of the offender benefiting from any reward. The revised scheme also provides for a new method of calculating the upper limit of earnings on which a claim for compensation may be made, ensuring that some 98 per cent, of working people will be entitled to full compensation for any loss of earnings. On the procedural side the new scheme will allow for the first time the Criminal Injuries Compensation

1877
Board to re-open cases so that where there has been a serious change in a victim's medical condition within three years of the date of the final award, the board may reconsider its previous decision. For the first time the board will be required to give reasons when an award is refused or reduced, and for the first time the board is allowed to admit observers from the media to attend hearings, provided that the anonymity of the applicant and other parties is preserved.
The noble Earl, Lord Longford, may well say to me that if the Government accept the principle (as we do) of the statutory right to compensation to which Clause 1 will give effect, therefore the Government should welcome this clause and should table the amendments necessary to enable the Bill to put the new revised Criminal Injuries Compensation Scheme on a statutory footing. It would be perfectly reasonable for the noble Earl to say that, and maybe that is what he will say to me. But it is really not as easy as that, for certainly the Government consider it essential that the new features of the revised scheme genuinely need to be tried out in practice before they are provided for in legislation, and without in any way wasting time it has really genuinely only been possible, so far as the Government are concerned, to make clear our intentions with regard to the future of the Criminal Injuries Compensation Scheme.
Perhaps I may just explain what I mean by that. No one, for instance, has any real idea of how many cases of family violence will be brought before the board. I think one wants to see how that works out to ensure that the rules which the Government are intending to make in the revised scheme for the minimum compensation payable in family violence cases to be £500, will not be too onerous. But we need a little time to see how that will work out. Indeed, everybody needs a little time to see how it will work out.
Secondly, the revised scheme, if legislation is going to be based on that, is really very complex and detailed. Your Lordships will be able to check on the truth of what I am saying by simply glancing in the Library, where a copy of the scheme has now been placed. It consists of 25 paragraphs which cover all aspects of
1878
the board's work, including its constitution, procedures and the basis upon which compensation is to be calculated. To translate this or anything like it into legislation so as to strike the right balance between substantive and subordinate legislation and to tread the narrow tightrope between too great and too narrow a discretion for the board, really is a highly skilled exercise which requires a great deal of time and consideration. I accept that what the Government said yesterday in another place perhaps may not be absolutely to the taste of all your Lordships. We may not have got it absolutely right, but at least the scheme as it is being altered at the moment is not yet being put on the Statute Book, and there is time for everybody to decide whether it is right before the legislation is brought in.
Thirdly, I have to say this. Admirable though the noble Earl's intention is in this Bill, the Bill none the less in its present form could only be made to give statutory effect to the existing or revised scheme by a wholesale replacement of each of its clauses by new and entirely different clauses. If I may confine the examples of what I mean just to Clause 1, on which I am speaking, to base payment of compensation on the concept of loss rather than of injury is, if I may say so with respect, something which is misconceived. To make the compensation payable by the Secretary of State brings such payments, I think mistakenly, out of the legal and into the political arena. The territorial scope of Clause 1 is not as wide as that of the revised scheme which has been placed in the Library of your Lordships' House. The clause prevents the payment of any ex gratia award of compensation in circumstances when criminal injury is not involved.
Individually, these and other similar deficiences, the noble Earl might say, might be drafting points; but when one bears in mind that these sort of points are in every single clause of the noble Earl's Bill, I really think that to put this into legislation that would be acceptable to all your Lordships would mean drafting almost a different Bill. So I ask the noble Earl whether this is really the way in which he wishes to see legislation enacted in your Lordships' House. The Bill is most valuable in that there is no question but that it has hastened on yesterday's

1879
Government announcement which was the culmination of several months' work on the revision of the scheme. I have no intention of voting against Clause 1; there is no question of that at all. But I ask the noble Earl whether, when this Committee stage is completed, it does not perhaps make sense to wait a little longer, to see how the scheme works, and to wait for Government legislation which undoubtedly will quite genuinely have been contributed to by the Bill which the noble Earl is bringing before us this evening.
The Earl of LONGFORD: I am naturally very grateful to the noble Lord for the kind words he has said about the contribution that I and those working with me might possibly have made. It would be wrong not to express at any rate some measure of welcome to the statement made yesterday by the Secretary of State, repeated in essence today. Certainly, this is the first time since 1964 that a Government have come forward and really shown some positive interest in victims. It would be very wrong for me to ignore that fact and I am sure, speaking, if I am allowed to for the moment, on behalf of the victims, everybody should be grateful to that extent. The support for the victims' support scheme and other indications of increased interest are extremely welcome.
I am also glad that the noble Lord has said more clearly than was said the other day—though I realise that he was under certain inhibitions—that the Government agree that this scheme should be dealt with on a statutory basis. Where I am afraid I cannot agree with the noble Lord is that there is some reason for delay. There will be delay for a few months after this Committee stage before anything else can happen. But the noble Lord is no doubt very well aware that, taking the main change that is suggested by the Government as the inclusion of family injuries in the compensation provision, that was recommended by the departmental committee as something which could be done without legislation; so that it could be put into force tomorrow without legislation, and no doubt will be, and changed without legislation. If we were to introduce legislation, that does not make it harder to alter that, unless you insist that legislation is going to cover all the minutiae.
1880
The noble Lord mentioned the very lavish scheme, but as far as I am concerned there is no question of trying to cover all these points in legislation. On my advice, there is no need to constitutionally. So I differ from the noble Lord if he is implying that a large part of the very detailed scheme now in operation would have to be included in the Bill. I do not accept that, and therefore we differ at that point. I feel that we have to keep on pressing the noble Lord. He has been kind enough to say that our pressure has accelerated the steps that have been taken. Well, perhaps it will accelerate future steps. I cannot fall in with the idea that if we just fold our hands and go to sleep again that will be serving victims.
Clause 1, as amended, agreed to.
Clause 2 [Claims for compensation]:
The DEPUTY CHAIRMAN of COMMITTEES (Lord Alport): I have to advise your Lordships that if Amendment No. 4 is agreed, I will be unable to call Amendment No. 5.
6.15 p.m.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 4:
Page 2, line 18, leave out from ("within") to first ("or") in line 19 and insert ("three years").
The noble Lord said: I beg to move Amendment No. 4 and with it I would, if I may, speak to Amendment No. 6. The effect of these two amendments is to change the time limits which apply to applications for compensation. Under the clause as it stands at present application may be made within a year of the relevant injury or within 6 months of the victim's death, whichever is the later. If the proposed amendment is accepted, there will be a time limit for all appications of three years from the date of injury, subject to a power of the compensation tribunal to allow a longer period in exceptional circumstances. This amendment is in accordance with the revised scheme which the Government published yesterday.
I think that both the noble Earl and the working party, which the noble Earl has already mentioned in our debate this evening, consider that there should be a time limit on applications because of the

1881
difficulty of establishing facts after a period of time. This is clear from the drafting of the Bill. Clearly the chance of a successful application diminishes with the passage of time. I think it would be common ground for me to say that your Lordships would wish to encourage victims to apply as quickly as possible. On the other hand, it may well be that an injury which at first appeared insignificant may later cause grave problems, and someone who in the first instance may have thought it not worthwhile to apply may change his mind. The year which is suggested in this Bill is not really long enough to allow for any such change in circumstances.
There is, of course, no particular magic about three years, but we on this side of the House believe that it is long enough to show the victims of criminal injury that there is no intention of prejudicing their chances of compensation, yet short enough to allow facts still to be established where necessary. It is obviously possible that to apply a three-year time limit might very occasionally operate more restrictively than the noble Earl's proposal that there should be an alternative limit of six months from the death of the victim. But then the tribunal's power, which is in the scheme, to waive the time limit in exceptional circumstances could be brought in to overcome any difficulty of that sort. So in moving this amendment, and in speaking to the other amendment, I am asking your Lordships to agree, if you will, that it is better to have one simple, easily understood time limit for all applications than to differentiate between cases. The amendment is accordingly intended to simplify the clause as well as making it more generous to victims.
The Earl of LONGFORD: I am happy to endorse the proposal of the noble Lord. I am very glad that he should, if I may use the expression, incriminate himself in this Bill. I hope that in the end he will regard it as much his Bill as mine. The more amendments he moves which I am happy to accept, the better for both of us.
Lord BELSTEAD: It may be temerity to move amendments to the noble Earl's Bill, but it does not mean claiming paternity.
[Amendment No. 5 not moved.]
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 6:
Page 2, line 21, leave out from ("made") to ("and") in line 23 and insert ("or such longer period as the compensation tribunal may in exceptional circumstances allow").
6.20 p.m.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 7
Page 2, line 31, leave out subsection (2).
The noble Earl said: I beg to move Amendment No. 7. This is the only important change which I am bringing forward to the Bill that was placed before the House and discussed on Second Reading. It is an attempt to meet criticisms levelled by, for example, the noble Lord, Lord Allen of Abbeydale, and the noble Lord, Lord Belstead. Quite frankly, it is an attempt to produce a Bill which it would be quite easy for the Government to introduce themselves with any amendments they thought appropriate. In other words, it is an attempt to get the Bill as far as possible into a shape which could be adopted by the Government. Although I am not resiling in any way from the idea of the local boards, I do not think that it is such a question of principle as deeply to separate myself from what is obviously the Government's point of view. So we are removing the whole plan for the local tribunals, bearing in mind that, under the existing rules and under any of the provisions that we are suggesting, it would be possible for the main board to meet in a number of places. I gather that that already happens and to some extent the number of places in which the main tribunnal could meet could be multiplied.
Bearing that in mind, and for the reasons that I have given, I wish the removal of this subsection, although two parts of it are inserted later. So far as local tribunals are concerned, they would go out of the Bill. I beg to move.
Clause 2, as amended, agreed to.
Clause 3 agreed to.
Clause 4 [Exclusion of minimal compensation]:
THE DEPUTY CHAIRMAN of COMMITTEES: I must advise the Committee that, if Amendment No. 8 is agreed, I cannot call Amendment No. 9.
6.23 p.m.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 8:
Page 3, line 10, leave out from ("claim") to ("as") in line 13 and insert ("if the amount of the compensation would be less than such amount").
The noble Lord said: I beg to move Amendment No. 8 and, with the Committee's permission, I should like to speak to Amendment No. 10. The Amendment of the noble Earl, Lord Longford, is Amendment No. 9 and if your Lordships agree to Amendment No. 8 his amendment would not be called. None the less, Amendment No. 9 suggests that the noble Earl realises that unintentionally the Bill makes less beneficial provision for the victim of criminal injury than either the existing or the revised Criminal Injuries Compensation Scheme. The Bill allows only pecuniary loss to be taken into account when calculating whether the compensation payable exceeds £150. That means that if someone who was not a wage-earner was crippled for life, he or she might not be entitled to any compensation because his or her pecuniary loss might not exceed £150. In case that sounds fanciful, let me point out that pensioners, in particular, might be adversely affected. I think that the noble Earl and I have both picked this matter up in our different ways and it so happens that I am moving the amendment.
Therefore, briefly, Amendment No. 8 simply allows the total amount of compensation payable to be taken into account when considering the minimum payment, whether the compensation is for pecuniary or any other loss. It also makes the slight adjustment of referring to "less" than the minimum amount rather than more so that those whose compensation would be exactly £150 would, as at present, be entitled to that sum.
The second amendment, Amendment No. 10, is suggested with the revised scheme, which was announced yesterday,
1884
in mind. Under that scheme, although the minimum payment for most applications remains at £150, the minimum payment in cases of family violence is set at £500. That is partly to ensure that only the more serious cases are included, but mainly to make it easier to assess the impact of family cases on the cost and operation of the scheme. I was at some pains a few minutes ago to explain that one of the advantages of not putting the family violence provisions into legislation immediately is to see how they work out in the coming months before we move to legislation. With those few words I beg to move Amendment No. 8.
The Earl of LONGFORD: I support the noble Lord.
[Amendment No. 9 not moved.]
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 10:
Page 3, line 14, at end insert ("; and an order under this section may make different provision for different cases or different circumstances").
Clause 4, as amended, agreed to.
Clause 5 agreed to.
Clause 6 [Reduction in compensation where certain other payments are made to a claimant]:
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 11:
Page 3, line 20, leave out ("pecuniary").
The noble Earl said: I beg to move Amendment No. 11. This is a drafting amendment.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 12:
Page 3, line 21, leave out ("may") and insert ("shall, as nearly as may be, apply the rules of law which would have been applicable if the tribunal were assessing a claim for damages in civil proceedings taken by the claimant against the malefactor for the loss in respect of which the compensation is claimed and shall").
The noble Earl said: I beg to move Amendment No. 12. This is perhaps the second most important amendment that I am bringing forward. The Bill was

1885
criticised at an earlier stage by the noble Lord, Lord Belstead, and the noble Lord, Lord Allen, for not making clear what would be the basis of compensation. I was advised at that time that that was not necessary because it would be understood that the basis would be the basis in civil actions. Anyway, it is now inserted clearly that the basis would be the basis in tort and therefore Amendment No. 12 is trying to meet the criticisms of the noble Lord, Lord Belstead. I beg to move.
Lord BELSTEAD: There is just one small point that is worth mentioning. The amendment rectifies one of the Bill's deficiencies by indicating the basis on which compensation would be assessed. However, as a result of the amendment, the side-heading to the clause as printed in the Bill is no longer accurate in referring only to reductions. I thought that the noble Earl would like me to point that out. If I have not quite made myself clear, what I have said will be accurately reported in the Official Report.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 13:
Page 3, leave out line 29.
The noble Earl said: I beg to move Amendment No. 13. The effect of this amendment, and one or two others which come later, is to meet certain criticisms made by the noble Lord, Lord Allen, reported at columns 259 and 260 of the Official Report. The amendments as a whole are intended to make it clear that it is to be mandatory for the tribunal to make deductions from compensation, for social security benefits and so on received by the claimant. The Bill was criticised by the noble Lord, Lord Allen, for failing to make that plain, so the effect of this amendment and others which come later is to rectify the situation.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 14:
Page 3, line 32, leave out from beginning to ("of") in line 33 and insert ("the claimant as a result").
The noble Earl said: I beg to move Amendment No. 14. This amendment is intended to deal with points raised by the noble Lord, Lord Allen, reported
1886
at column 261 of the Official Report. The amendment will provide that a claimant who receives damages must give notice of that fact to the tribunal so as to enable the Secretary of State to claim back the relevant repayment as defined by Clause 9(2) of the Bill.
Lord BELSTEAD: It is not entirely easy to follow what are, at any rate to me, technical matters, but I think I ought to say that the amendment which the noble Earl has just moved, and the previous one, have an unfortunate effect. Although they are an improvement on the Bill as drafted, they reduce the payment of compensation to a dependant by the amount of any insurance money or benefits relating to the injury, instead of those arising from the victim's death. The subsection, as amended by the noble Earl, is also more restrictive than the Government's revised scheme announced yesterday, in that under the revised scheme benefits and pensions which are received as a result of personal payments made by the victim need not be taken into account when assessing compensation. I am not particularly asking the noble Earl to respond to what I have said, but I thought it was right to place this on the record. These are some of the problems which the Government still see in the noble Earl's Bill.
The Earl of LONGFORD: I do not for one moment suppose that perfection has already been achieved. We have to go through two further stages. I shall certainly look very carefully at what the noble Lord said and expect to make the necessary adjustments at the next stage.
Clause 6, as amended, agreed to.
Clauses 7 and 8 agreed to.
Clause 9 [Return of compensation where certain other payments are made to a claimant]:
6.31 p.m.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 15:
Page 4, line 21, after ("shall") insert—
(" (a) within twenty eight days serve notice by post upon the tribunal of the receipt by him of any sum in payment of any such damages, compensation (other than com

1887
pensation paid under this Act), insurance money, benefit, pension or gratuity as are or is, as the case may be, referred to in subsection (2) below; and (b)").
The noble Earl said: I have already spoken to this amendment. I beg to move.
Lord BELSTEAD: This, of course, follows the word "shall", which is a requirement. I am not entirely clear what will happen if a claimant fails to comply with the requirement. I do not mean deliberately to ask a difficult question. This is a genuine question which the noble Earl needs to look at. There is a requirement here and the Bill does not say what happens if the requirement is not met. For instance, will the claimant be subject to ordinary court proceedings, or will the compensation tribunal have some special power further to reduce the compensation as a sanction? Those are the kind of questions which arise in one's mind. The noble Earl may wish to look at what I have just said before we come to the next stage of his Bill.
The Earl of LONGFORD: I would rather read what the noble Lord has said and then make the necessary rectifications.
The Earl of LONGFORD The Earl of LONGFORD had given Notice of his intention to move Amendments Nos. 16 to 19:
Page 4, line 37, leave out from beginning to ("the") in line 38.
Page 4, line 40, leave out ("that dependant by virtue of the victim's death") and insert ("the claimant")
Page 5, line 1, leave out from ("question") to end of line 4.
Page 5, line 7, at end insert—
("(4) In this section "insurance money", "benefit", and "pension" have the meanings respectively assigned to them by section 6(2) above.").
The noble Earl said: These amendments are intended to meet points made by my noble friend Lord Allen of Abbey-dale. In view of the difficulties that have been presented by the noble Lord, Lord Belstead, I would rather not move these amendments but table them at the next stage in whatever form seems most suitable.
[Amendments Nos. 16 to 19 not moved.]
Clause 9, as amended, agreed to.
Clause 10 [Criminal Injuries Compensation Tribunal]:
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 20:
Page 5, line 19, leave out ("who") and insert ("and two other members and the president and each of those members").
The noble Earl said: This amendment and the following amendments relate to a point on which my noble friend Lord Allen of Abbeydale dwelt quite considerably. His point was that all members of the tribunal should be legally qualified. These amendments will provide accordingly. It is an attempt to meet my noble friend's point and, indeed, this was a point raised by the noble Lord, Lord Belstead—certainly I understood that that was his point of view.
The Earl of LONGFORD The Earl of LONGFORD moved Amendments Nos. 21 to 24:
Page 5, line 21, leave out from ("Chancellor") to end of line 25.
Page 5, line 28, leave out from ("for") to ("shall") in line 30 and insert ("the words "a president" to end of the subsection, the words "a president and two other members and the president and each of those members").
Page 6, line 18, leave out ("paragraph (a) of")
Page 6, line 21, leave out from ("Session") to end of line 22.
The noble Earl said: I beg to move these amendments en bloc.
Lord BELSTEAD: I should like to speak to this group of amendments, and express my recognition of the fact that the noble Earl has taken the view that the Bill should be amended so that the members of the compensation tribunal do not need to be medically qualified. It is not that the medical qualifications are not most important with regard to the work of the board, but, as I sought to say on the previous stage of the Bill, the medical advice can be procured without including in legislation the fact that one, or more than one, of the members of the board needs to be medically qualified. Having said that, I cannot see why the members of the tribunal need to be appointed respectively by the Lord Chancellor and the Lord President of the Court of Session, when the members of the existing board have been appointed by my right honourable friends the Home Secretary and the Secretary of State for

1889
Scotland for 15 years without any apparent reason for complaint. However, I assume that this is because the noble Earl wishes to emphasise the legal nature of the tribunal's proceedings. I thought I would just raise that aspect again. It is right to raise this particular marker before we say goodbye to Clause 10.
The Earl of LONGFORD: I do not lay great stress on the fact that it must be the Lord Chancellor. I should also like to look at this again.
Lord WELLS-PESTELL: May I ask the Minister whether I understood my noble friend Lord Longford to say that all the members of the tribunal were to be legally qualified? If so, that is a most unusual course. Normally in matters of this kind the chairman of the tribunal is legally qualified. Does the Minister himself believe that all members of the tribunal should be legally qualified?
Lord BELSTEAD: In the revised scheme, which the Government announced yesterday, that is the situation: the chairman and the members of the board will be legally qualified. The reason for that is a matter which occupied the Members of your Lordships' House considerably during the Second Reading of the Bill. It is because the compensation is assessed in accordance with assessment of tort damages. It is necessary to have people who understand the assessment of tort damages—in other words, people who are legally qualified—to sit on the board. Therefore, my answer to the noble Lord, Lord Wells-Pestell, is that it is the right way to proceed.
Lord WELLS-PESTELL: If I may say so, this is still a most unusual course to take. Bearing in mind what the noble Lord has said, I should have thought it was essential that the chairman should be legally qualified, that he should be a qualified lawyer. But in assessing these matters other considerations must be taken into account, which do not require a legal point of view. I should have thought that we would be creating a very bad precedent. In a matter of compensation for injury there ought to be at least one lay person on the tribunal. I am quite surprised that we should be considering a tribunal all the members of
1890
which are legally qualified. I do not know whether there is a precedent for this. If there is, I cannot think of it, but I think it is a dangerous one. We have always had one or two lay people on tribunals who can bring other experiences to bear in assessing matters of this kind.
Lord BELSTEAD: I have listened very closely to what the noble Lord, Lord Wells-Pestell, has said because he has considerable experience of tribunal matters, although not necessarily perhaps criminal injury matters. I would remind him that the present system of the Criminal Injuries Compensation Scheme is that, in the first instance, the hearings are held in front of a single member of the board. The Government claim—indeed I have no hesitation in claiming this—that this is a great advantage. It allows for hearings to be held as quickly as possible, although hearings are not held as quickly as everyone would wish; it allows for reasonable informality, and in the event people do not appear to object in any large numbers to the hearing in front of one member of the board.
However, if the applicant feels that the finding of the single board member is a wrong one, then it is open to the applicant to appeal to the board. Therefore, in the first instance, I would submit to the noble Lord that, for the reasons I have gone into, it is necessary for the single member hearing a criminal injuries compensation case to be legally qualified. It is when the matter goes to a three-man or three-men and women hearing that the noble Lord's remarks bite. I do not think I have anything more I would like to say, except that I should like to have another look at this scheme, and, if I feel there is anything else I should like to add, leave myself free to write about this to the noble Lord before the next stage.
Lord WELLS-PESTELL: I rather understood my noble friend to say that he was probably prepared to take back Amendments Nos. 21, 22, 23 and 24 to look at. I do not know whether it is his intention to do so, but, if he did and came back with a tribunal consisting of a chairman who was legally qualified and the other two who were not, would the noble Lord the Minister then resist these amendments?
Lord BELSTEAD: This is, in a sense, like putting in a paragraph in the middle of a page. I think perhaps it is a good moment, if the noble Earl does not mind my speaking once again on this, for me to repeat, in case I have seemed over-helpful, that the Government do not believe that the time is ripe (those are the words I used) for legislation. It is not because we do not like Private Member's legislation. We are delighted to see legislation from the noble Earl or any other Member of your Lordships' House, but there were good reasons why I got up on Clause 1 and said we thought the time was not ripe.
Secondly, there are still many things in this Bill which would need to be changed before the Bill could possibly become law. Therefore, the question put by the noble Lord, Lord Wells-Pestell, is hypothetical in this sense, because at the moment we have a Bill before your Lordships' House which I am afraid the Government do not support for the reasons I have tried to give, whereas we have the existence of the brand new revised scheme which the Government believe, I hope correctly, is the right way to proceed, at least for the next few months.
The Earl of LONGFORD: I was a little puzzled by what the noble Lord said about the initial hearing before the chairman of the tribunal, because at present in any cases known to me there is no hearing. The single chairman decides with the help of his advisers, and makes a decision on the basis of correspondence. The hearing is not possible until the next stage. That is the present situation, unless there are some exceptions known to the noble Lord and not to me.
I did not say that I was actually taking back this clause. I said I would look at it again—which may come to almost the same thing. I would hope that these amendments could be carried, but I am overwhelmingly convinced by my noble friend, to whom I owe a good deal of allegiance in these latter days. I would come up again, or at any rate make contact with the noble Lord and have a further argument about it. I might not have been so dogmatic in favour of the legal trio if I had heard the views of the noble Lord, but as of now I should like to move these amendments.
Clause 10, as amended, agreed to.
Clause 11 agreed to.
Clause 12 [Staff and expenses of compensation tribunal]:
6.45 p.m.
The Earl of LONGFORD The Earl of LONGFORD moved Amendments Nos. 25 and 26:
Page 7, line 15, leave out ("such local boards and")
Page 7, line 21, leave out ("and local boards")
The noble Earl said: Amendments Nos. 25 and 26 are really consequential on the removal of subsection (2). Perhaps in passing, very meekly and mildly, I can express a little sadness that, having tried to meet the noble Lord on all the main points he raised last time, he has dredged up a whole lot of new difficulties. I feel very much like Sisyphus. I suppose if I satisfy him on some of these points his clever advisers will come up with some new conundrums. We thought we had met him on what he called the new fundamentals. These amendments are really consequential on the removal of subsection (2).
Clause 12, as amended, agreed to.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 27:
After Clause 12, insert the following new clause:
Tribunal's duty to give publicity to rights to claim compensation
. The tribunal shall, so far as is reasonably practicable, call the attention of victims and their dependants to their rights to claim compensation under this Act.
The noble Earl said: As the Committee will be aware, we have removed subsection (2), but that did not only refer to local boards; it referred to two other issues. I attach a lot of importance to this new clause, although its effect is not quantifiable. The new clause would read:
"The tribunal shall, so far as is reasonably practicable, call the attention of victims and their dependants to their rights to claim compensation under this Act".
Although the noble Lord is advised by those who are most directly concerned—presumably the members of the board—that their scheme has always worked

1893
almost perfectly, in fact there is great bewilderment about it. Only yesterday somebody sent in a card to see me. He did not even know about the scheme. He had been injured a long time ago and he wondered how he could get some compensation. He had consulted the police. They did not give him any help. There is a large section of the population—again I cannot quantify it—who do not know about the scheme at present, and if they do, do not know how to proceed, so I do not think that anyone can object to these words being put into the Bill which I hope will lead to more publicity being given.
6.48 p.m.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 28:
After Clause 12, insert the following new clause:
Right to legal aid
. A claimant, whose financial circumstances are such that he would be eligible for legal aid in civil proceedings, shall be eligible for the like legal aid in claiming compensation under this Act.
The noble Earl said: This provision was also in the original Bill in the now defunct Clause 2(2). This provides for legal aid on the same basis as in civil proceedings. On the last occasion, the noble Lord explained that if and when this scheme is placed on a statutory basis, legal aid is likely to be available. I am not asking for anything extraordinary, because we are proceeding on the assumption that this is going to be a statutory board if this Bill goes through. Therefore, in that case, there ought to be legal aid on the same basis as in civil proceedings.
Lord BELSTEAD: I am not a lawyer, but I do not think it is quite so straight-forward as the noble Earl suggests. Legal aid is not generally available for hearings before administrative tribunals. The Legal Aid Act 1979 provides for regulations to be made specifying the proceedings before tribunals for which legal aid for legal representation may become available. It is also the case that the 1979 Act has not yet been brought into effect, and regulations have not been made yet.
On the same ground—that we await what is to be done—what I have to say is that the Government see no reason for making
1894
special provision for the compensation tribunal in advance of that for other similar tribunals. If provision were to be made for legal aid for tribunals—and I am in no way suggesting that this is to be done—then serious consideration would need to be given to the desirability of legal aid for all tribunals, or none, or picking out certain ones. But there could be no case for suddenly finding that legislation had provided for the compensation tribunal as unique. Apart from that objection, which is an objection of principle, it is a little doubtful whether the provision of legal aid would be wholly beneficial to applicants.
The procedures of the existing Criminal Injuries Compensation Board are designed to be as simple and straightforward as possible, and there is a risk—the noble Earl may think this is special pleading—that a greater degree of legal representation will lead to more lengthy and complicated procedures. Applicants already have access to limited legal aid and advice as to whether to apply, or whether to accept a single member's decision. They can also be given help with the application form. I am not convinced that anything more is necessary; I am doubtful whether it is desirable; and I am very doubtful indeed as to whether we should be able to proceed in this form taking the compensation board in isolation. I hope the noble Earl will forgive me, but I am really registering total and fundamental disagreement with him on this particular point.
Lord WELLS-PESTELL: Although I have no axe to grind in this matter, knowing how many tribunals there are in the country and the fact that few of the applicants have the right to legal aid, I think the Minister is right to say that this is likely to be a real stumbling block. If this particular door were opened, I think there must be, because there already have been over the past few years, many claims from people who have to refer certain matters to a tribunal where no provision is made for legal representation. If legal aid were given in this particular case, I believe it would result in a flood of applications coming which for various reasons could not be met. I am wondering whether my noble friend feels this is a crucial matter at this time. If he feels it is not absolutely crucial then, in the

1895
interests of his Bill—and the Minister has acceded to pretty well all his requests tonight so far as amendments are concerned—he might feel that the amendment could be taken back and thought through again with a view to not pressing legal aid at this stage.
Lord WIGODER: I support what the noble Lord, Lord Belstead, said. Speaking as one who very much supports the extension of legal aid to all tribunals at the earliest practicable moment, to start off piecemeal in this way would nevertheless seem an unhappy way of proceeding. Has the noble Earl endeavoured to cost this proposal? If so, what has been the result?
The Earl of LONGFORD: Does the noble Lord mean the cost of this proposal for legal aid?
Lord WIGODER: Yes.
The Earl of LONGFORD: No, and it is almost impossible to cost any of these proposals. The Government have been quite unable to produce any estimates of cost and it is impossible to know how many people will take advantage of these provisions. That seems to be common ground generally; nobody has any idea, however rough, of how many victims there are who do not at present apply, so it is a completely obscure area.
I am afraid I regard this proposal as crucial, and I could not again raise my head in front of any victim if I were quietly to collapse in front of the eloquence of noble Lords on this subject. Legal aid is, I believe, crucial and, in any event, this is a mild proposal, the amendment simply saying:
"A claimant, whose financial circumstances are such that he would be eligible for legal aid in civil proceedings, shall be eligible for the like legal aid in claiming compensation under this Act.".
I have only once been before a tribunal, although a good many people who have been victims have approached me, and I gave an account of that on Second Reading and will not go through it again. It was a pathetic affair. There was an almost illiterate man faced in the appeal by three lawyers, and of course he did not have a chance. It is really to prevent that sort of situation that I am insisting
1896
on this amendment being made; if it is within my power to insist on anything, I must insist on legal aid. Many people are represented by trade unions, but in so far as every claimant is left to his own devices, where he has no one to help him there can he many difficulties, and I must therefore press with all the strength at my command for legal aid.
Lord BELSTEAD: Perhaps I could ask one question of the noble Earl before we leave this subject. He gave as an example an appeal to a three-man sitting, and he said the applicant was not legally qualified whereas those who were hearing the appeal were legally qualified. He said the applicant did not have a chance. Why did he say that?
The Earl of LONGFORD: The applicant had up against him a high official—I will not describe him more closely than that—from the Criminal Injuries Board, so the real contest was between that high official and the illiterate working man. Thus, whether or not the three people were lawyers, unless they were great humanitarians they would probably have sided with the high official.
Lord BELSTEAD: People who are members of the board are there to do their best to assist, within the terms of the Criminal Injuries Compensation Scheme, those who make application to them for criminal injuries compensation. They are there to do their very best for the applicants within the terms of the scheme. There is no question of the people who are on the board in some way being faceless officials; they are independent members of the board once they have been appointed. It is most important that I should make that clear, and should underline the value of the work which members of the board do.
The Earl of LONGFORD: I am not sure who the Minister is talking about when he refers to the "members of the board". The people I was talking about were lawyers who had been brought in to form a tribunal. The man's adversary, so to speak, was a high official who had had a lot to do with turning down the case at an earlier stage. That was the actual situation. I am rather surprised that such an illustrious lawyer, apart from anyone else, should rate so low the

1897
services of counsel. People are paid thousands of pounds—I hope the noble Lord is paid vast sums—to appear on behalf of applicants. Although it is a lovely picture to think of the three lawyers being quite unaffected by high-powered arguments, that is what advocacy amounts to and what advocates are paid for. I am afraid I must take my stand as firmly as I can on the principle of legal aid.
Clause 13 [Interpretation]:
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 29:
Page 7, line 35, at end insert—
(" "loss" has the meaning assigned to that word by section 1(4) above;")
The noble Earl said: This is consequential. I beg to move.
Clause 13, as amended, agreed to.
Remaining clauses and schedule agreed to.
In the Title [An Act to confer a new right to compensation for loss suffered in the course of certain criminal acts; and for connected purposes]:
6.58 p.m.
The Earl of LONGFORD The Earl of LONGFORD moved Amendment No. 30:
Line 2, leave out ("suffered in the course of certain criminal acts") and insert ("arising from certain acts of violence").
The noble Earl said: I am submitting this with a sense of diffidence, because I am relying entirely on the very expert gentleman advising me; I have no doubt he is right, but others may disagree. What we are now doing is removing the word "criminal" from the Long Title. It is pointed out to me—I think this is in accordance with existing practice, which is why the amendment has been drafted for me in this way—that it is not intended in our Bill (and I think this is following existing practice) to refer to "crime" or "criminal" because the Bill is intended to cover acts of violence, for example committed by a child or person of unsound mind in such circumstances that no crime or criminal exists, and therefore the word "criminal" is too wide.
Under this proposal, one would, in the Long Title, leave out any reference to "criminal acts" by making it consistent with the Bill in referring to "acts of violence." But we are left with this position—and this is where I feel rather more than usually in the hands of my expert—that it is possible to leave it out of the Long Title but still to leave it in the Short Title, which is what I am proposing to do. If anybody tells me, "That is exactly what you cannot do", my reply is, "Sez you!" I say the opposite, but I do not know who would be prepared to say that this cannot be done.
Lord BELSTEAD: If it is helpful to have the Government's view, I would say that I am a little perplexed, but I do not object.
Title, as amended, agreed to.
House resumed: Bill reported with the amendments.

GIBRALTAR: BENEFITS OF EEC MEMBERSHIP
7.1 p.m.
Lord SELSDON Lord SELSDON rose to ask Her Majesty's Government what steps they are taking to ensure that Gibraltar obtains full benefit from membership of the EEC. The noble Lord said: The Question standing in my name today is prompted by two separate, and not necessarily related, issues, and I hope to seek to find a way to relate them. The first issue is the cost of British membership of the EEC and the benefits which we receive from that membership. The second issue is the enlargement of the EEC with the joining of Spain. And in the middle I have placed Gibraltar, because this is one territory which takes up both these issues.
The first issue which I raise is one that has caused considerable concern throughout the country, both with the previous Government and with this Government, who with considerable force have pointed out that they object strongly to the high cost of British membership, and in a relatively soft and weak voice have failed to point out that the cost of membership is exactly as was planned and budgeted many years ago, but the benefits that have

1899
accrued from it are substantially less. The reason why these benefits are lower than anticipated is in my view to some extent the responsibility of the Government of the United Kingdom in that we have failed to respond to initiatives which have been suggested to us by the Community and have grudgingly accepted proposals and made very few of our own. It is surely our responsibility to do what we can to help the regions of this country and territories which are dependent upon the United Kingdom to obtain the greatest benefits possible in both the economic and political spheres from membership of the EEC.
We of course suffer from a disadvantage in that we were one of the late entries, so to speak, and came in with a large number of relationships around the world, probably greater than the rest of the EEC put together. It is therefore not surprising to note that the older members of the EEC, in particular France, have managed to obtain considerable financial and economic benefit for their dependent territories and for their former dependent territories. If we look at the benefits offered under the Lomé Convention, we find that the major beneficiaries are not members of the Commonwealth but former territories of other nations.
Thus, my first point is to ask what responsibility is it of the United Kingdom Government, and what will the Government do, to ensure that our Dominions or Crown Colonies obtain maximum economic benefit from membership of the EEC, for surely since they are dependent territories and dominions, the responsibility for benefits accruing to them rests as much with the United Kingdom as it does with the territories themselves.
I start with the subject of Gibraltar by reminding your Lordships' House that in the Preamble to the new Constitution in 1969 it was stated:
"Gibraltar is part of Her Majesty's Dominions and Her Majesty's Government have given assurances to the people of Gibraltar that Gibraltar will remain part of Her Majesty's Dominions unless or until an Act of Parliament otherwise provides".
Presumably the same principles apply to many other dominions around the world. If we inquire of these dominions directly or indirectly what benefits have they received out of United Kingdom membership of the EEC, we find, first, that they
1900
are somewhat lacking in knowledge of what benefits they could receive, and that more often than not they have never really had direct touch with the EEC.
Gibraltar is a special case at this time for it is a territory which, because of relationships with Spain, is having and suffering economic and political problems. The reasons for that we are all aware of. But we come to the question of the solution, and the solution to the Gibraltar problem must inevitably be related in some way or another to the EEC, for surely it is not practical that when one assumes wider membership of the EEC and Spain joins, there should be a border set up between two EEC countries over which man may not tread freely. That is of course an issue that I know could be resolved; but I am sure that the Government would not hold back support for Spain's membership of the EEC purely on the question of Gibraltar. But surely between now and the time of Spanish entry there are chances for discussions and negotiations on this particular front. Therefore, I would argue that Gibraltar should be entitled to obtain some form of political benefit from membership of the EEC, and that we should use the opportunity of Spain joining to seek further discussions and negotiations with a view to trying to arrive at an equitable solution before the final act of accession by Spain.
I do not believe in this case that the fault necessarily rests with the United Kingdom Government—with this Government or with the previous Government—nor with Gibraltar, for I understand that some time ago Gibraltar took an initiative and suggested that there might be talks between the British Foreign Secretary and the Spanish Foreign Minister. This was agreed, and as long ago as November 1977 talks were held in Strasbourg, presumably an independent EEC centre. At those talks it was agreed that a working group of officials from Britain, Spain, and Gibraltar would be established to study a number of areas, and I believe that the group met twice, once in London and once in Madrid. But I think no real progress was made, and I see no signs of any progress being made at the moment, unless, as I hope, my noble friend can report some initiatives following a recent visit to Gibraltar by one of his right honourable friends. But if no progress is made, I think it is up to Her Majesty's

1901
Government to try to propose and take some form of initiative, which I am sure they would do. Obviously the Spanish-Gibraltar situation is really a bilateral problem, but equally, with impending EEC membership, there is perhaps something that could be done.
So I move now away from the political scene to the economic scene. There is no doubt that the problems with Spain have had an adverse effect upon Gibraltar's economy. Previously she was relatively independent and self-sufficient, but since these problems she has had to rely more and more heavily upon the United Kingdom for aid and support. This support has been both generous and fair, and not for a moment would I suggest that Gibraltar should have any complaints about the way she has been handled in this particular field.
But when it comes to the question of membership of the EEC, one of the objectives of the EEC is to help to some extent the poorer or underdeveloped parts of the EEC territory. Gibraltar does not necessarily qualify as being poor. While she has a growing visible balance-of-payments deficit up to about £28 million, she has in all a moderate trade surplus due to invisibles. She has a relatively low level of unemployment; about 40 people are totally unemployable, and the general level is in the field of hundreds. Thus she does not qualify in that particular area.
However, I am advised that some time ago she made an application to the European Investment Bank for financial support, which was rejected. I therefore thought that I would see what the attitude might be among the Community institutions and the Commission, and I asked informally, as one can do in this world, what their attitude to Gibraltar would be. All those to whom I spoke, of all nationalities, confirmed a willingness to try to help and support Gibraltar if the right mechanism could be found, and all of them seemed to indicate that it was up to Her Majesty's Government to find that mechanism. There were possibilities that Gibraltar could be declared an assisted area, and all forms of technical ways in which Gibraltar could qualify for financial support from one of the EEC institutions.
Therefore I would ask my noble friend whether it is possible that Her Majesty's
1902
Government could take certain initiatives which would then permit Gibraltar to borrow money from the European Investment Bank, perhaps to benefit from the European Coal and Steel Community, from Euratom, or from the Ortoli facility, or from whatever funds or facilities the Community may devise in the years ahead. It is fair to say that, without some form of support of this sort from the Community, Gibraltar will continue to look to the United Kingdom for aid.
Its 1978–81 development plan calls for a total expenditure of around £28 million. I believe that around £13 million of that will be provided in grant aid or other forms of aid in the overseas development administration of the United Kingdom. Gibraltar will be required to find the balance of that finance, and she herself could be relatively stretched, particularly with the recent increase in oil prices. This has two effects upon Gibraltar. First, because of this increase in prices, and for other reasons as well, the pound sterling has risen sharply in value. This may be beneficial to the United Kingdom, but could have a detrimental effect upon Gibraltar's own tourist trade, which is part of her main invisible income. Secondly, of course, there is the cost of energy for Gibraltar, and her need to be self-sufficient and independent.
These are relatively minor sums in the context of the world as a whole, but the same principles as apply to Gibraltar could well apply to other dominions in other parts of the world. Gibraltar has one thing which makes her separate and different, I think, in the financial world. I am not quite sure whether I am totally right in this, but I believe that she is effectively the only territory outside the British Isles which is within the scheduled territories—the Gibraltar pound is on a par with sterling—and under the currency note ordinance Gibraltar notes in circulation have to be covered at least 70 per cent. by eligible sterling assets in a note security fund held and managed in London by the Crown Agents. So she is more closely linked to the United Kingdom than perhaps other dominions in matters relating to finance and the economy.
My Lords, I know, or I believe, that there is this willingness within the EEC institutions and within the new European Parliament to seek to support individual

1903
anomalies, if I might put it that way (because to some extent, in this area, Gibraltar is an anomaly), and before I sit down I would ask my noble friend whether he will do what he can to seek to help Gibraltar in terms of relations and opportunities which can come from its membership of the EEC. My Question does not imply any criticism, but is to point out that I believe there is an opportunity to obtain support which might reduce to some extent the burden upon the British taxpayer and, in the years or months to come before Spain joins, provide a real chance to resolve, independently and in a reasonable atmosphere, the current political difficulties.
7.13 p.m.
Lord MORRIS: My Lords, I must first thank my noble friend Lord Selsdon for tabling this most important and very well timed Question—certainly far better timed than one your Lordships may recall I tabled for Question Time earlier this month. The reason why I tabled a Question on Anglo-Spanish relations was to establish a measure of the priority which the new Administration placed upon this subject. Your Lordships may further recall that the Answer forthcoming, and indeed that to a supplementary put by the noble Lord, Lord Goronwy-Roberts, was positively brutal in its tartness. Be that as it may, serve me right for having the impertinence even to suggest that this Administration could get its priorities wrong!
My Lords, subsequent developments appear to show that Her Majesty's Government are placing perhaps an even higher priority on these matters than did the previous Administration. At a Press conference on 17th July the Lord Privy Seal said that it was a mistake to sit back and wait upon developments; Lord Carrington would be meeting the Foreign Minister in September. Indeed, the Spanish Foreign Minister, I understand, was in London this week. Furthermore, the Lord Privy Seal stated that Britain supported Spanish accession to the EEC. The transition to democracy in Spain was one of the major political achievements of the 20th century, and should be ackknowledged as such.
My Lords, this is marvellous stuff. It appears that Her Majesty's Government
1904
are following the previous Administration's example of maintaining assiduous and continuous negotiation. Indeed, I believe it would be quite wrong to pour a cold-water douche of disdain over the previous Administration's diplomatic efforts, for two reasons. The first is that, as the noble Lord, Lord Goronwy-Roberts, said on a previous occasion, foreign relations is a continuing process that flows from one Administration to the other, and partisan politics have no place in foreign affairs. Secondly, the previous Administration's efforts and achievements should be recognised and praised.
What I see as being particularly welcome is that Her Majesty's Government are seeking a positive dialogue for the future and are not dealing in a sterile debate of the past. In a statement on 17th July last, the Lord Privy Seal said:
"During the past ten years, during which all direct communications between Gibraltar and neighbouring areas of Spain have been severed, much has changed in Western Europe, including Spain. There are now new Governments in both Madrid and London engaged in bringing about further change. Spain's accession to the European Community is one of those changes, which should be turned to good account in Gibraltar as well as Europe generally. It is a common British and Gibraltarian interest for Spain to be inside the Community and a normal relationship resumed"
This, of course, must be so, and I believe that in the forthcoming negotiations Her Majesty's Government will be most assiduous in determining that any changes will be turned to good account for Gibraltar as well as for Europe generally.
There is, however, one point which had worried me. It is a point which could be inferred from the Question; namely, whether the question of lifting sanctions, or progress over any matters relating to Gibraltar, should be made a condition precedent to Spain's entry as a member of the European Economic Community. I believe that it should not, for the very good reason that the United Kingdom entry was not so fettered. I was therefore delighted to read that the Lord Privy Seal stated at the Press conference previously referred to that no formal link was made between the British Government's attitude towards negotiations for Spanish entry to the EEC and progress over Gibraltar. The Lord Privy Seal went on to say that it is, however, inconceivable that a border between two parts of EEC territory could remain closed. That would

1905
be out of the question. It was hoped that restrictions would be lifted before detailed negotiation was engaged: if not, the matter was bound to come up. My Lords, may I ask the Minister whether he would be good enough to confirm that the lifting of sanctions on the border is being made a condition precedent to the negotiations between Her Majesty's Government and Spain in September? I am not so concerned with the strategy but with the tactic of this device should the Minister's answer be in the affirmative.
I am most optimistic for the future. I believe that the lessons of 1966 are being learned. I believe most fervently that the history of the two great old monarchies has reached a watershed. I most respectfully ask Her Majesty's Government that when considering matters of style—namely, of form and timing—they consider very carefully matters of outlook and temperament. May Her Majesty's Government always remember—to paraphrase Yeats—to tread softly, for they are treading on dreams.
7.19 p.m.
Lord GORONWY-ROBERTS: My Lords, the House is grateful, I am sure, to the noble Lord, Lord Selsdon, for initiating this short debate, which should give Her Majesty's Government an opportunity to reiterate their views on the future of Gibraltar and its people. I think the noble Lord made a powerful and cogent case for examining with great care the future of Gibraltar as an economic entity within the EEC, in view of its special link, economically and constitutionally, with this country, and certain difficulties that may arise if the mainland—that is to say, Spain—accedes to the Community in 1983 with certain relationships between it and Gibraltar still unresolved. I think it is a speech that will bear careful scrutiny in the cold light of Hansard tomorrow morning and a contribution to our thinking on these matters.
Similarly, I thought that the noble Lord, Lord Morris, put some very important points particularly in regard to the impact of the Gibraltar question on the long-standing friendship between us and the people and Government of Spain. It is of the utmost importance that we should endeavour to relate proper consideration and, indeed, recognition of the
1906
desires of the people of Gibraltar with a very great British interest in the very best relations with Spain. I agree with him that it is a continuing process—he said an "assiduous and continuous" process—of consultation and co-operation with the Spanish Government.
I am confident that when the noble Lord replies to this debate what he has to say will not substantially or essentially differ from what 1 have said from time to time when I had the privilege of explaining the policy of the then-Government in relation to Gibraltar and to Spain. Our views, and, I think, the views of successive Governments, and of the overwhelming majority of the people of this country and of Gibraltar, are enshrined in the preamble to the Constitution of 1969 which, in so many words, says that Her Majesty's Government will not agree to any change in the constitutional status—and that has economic overtones, as the noble Lord, Lord Selsdon, will agree—of Gibraltar which was at variance with the democratically-expressed wishes of the people of Gibraltar.
Before and after the adoption of the 1969 Constitution those wishes were indeed democratically expressed. The referendum of 1967 produced an overwhelming majority against any change of constitutional status; and in subsequent elections to the Gibraltar Parliament the support given to the two pro-Spanish groups was negligible. Neither the party for autonomy for Gibraltar, a Rightist group, nor the Socialist Party of Gibraltar, a Maoist-Marxist group, won a single seat in the Assembly. All 12 seats were, in the majority, won by the moderate socialists led by Sir Joshua Hassan and in the minority by a centre party, both in favour of the present constitutional and, therefore, economic status of Gibraltar. There can be no doubt, therefore, about the democratically-expressed wishes of the people of Gibraltar. With a passionate near-unanimity they want to stay as they are in the constitutional sense.
On the other hand, it is true that Spanish feelings run deep on this issue; and it is also true that there are ties of historic, cultural and commercial importance between Britain and Spain and a friendship which was not essentially impaired even by the long night of fascism which estranged the people of the two

1907
countries for a time. Now that Spain, as we have heard, has courageously, and, I think, effectively, re-asserted its democracy, that friendship between Britain and Spain is warmer than ever and even more valuable to the course of Western democracy than it ever was. And it is powerfully reflected in the strong support from the very start given by the United Kingdom to the candidacy of Spain for membership of the EEC. Like our partners in the Community, we wish to see signature by the end of 1981 and entry somewhere at the beginning of 1983. This is British policy; it is Community policy; and it is equally the wish of the people of Gibraltar that Spain should effectively enter the Community in 1983.
But, naturally, as the noble Lord, Lord Selsdon, said, Gibraltarians of all shades of opinion, all shades of (shall we say?) pro status quo opinion—because there is very little else there—are asking questions. They ask me, they ask the noble Lord, and, no doubt, the noble Lord, the Foreign Secretary, and the noble Lord, the Lord Privy Seal, who was recently there on a visit: "How will the entry of Spain affect the position of Gibraltar?" There is no simple and instant solution to the dichotomy of interests in the Peninsula. We must respect the intensity of Spanish feeling—and we do! We respect and understand it. Our Spanish friends must equally recognise the intensity of the feelings of the people of Gibraltar. We must earnestly hope that the Spanish Government will lift the vexatious restrictions on contact between the Rock and the mainland.
I think we could agree that, as Spain accedes to the Community, so it may join the rest of us in the Community in cooperatively seeking a modus virendi for Gibraltar in the post-Spanish accession period. This gives point to the appeal made to the noble Lord to tell us about the intention of the present Government, like the last one, to continue with friendly discussions with the Spanish Government about this entire question.
My Lords, we are looking to the future. I spoke of vexatious restrictions on movement; and I agree that it is inconceivable that those should subsist into a post-accession
1908
period, that two territories within the same Community should, nevertheless, be subject to these restrictions on their mutual border. One often wonders how a noble, warm-hearted and imaginative people like the Spaniards can hope that restrictions of this kind can have any other result than to estrange the people of Gibraltar. Certainly, it is difficult to see how this kind of restriction can be carried legally into a situation of Spanish membership of the Community. The Lord Privy Seal's recent visit was, I am sure, undertaken in the hope that ideas about a better relationship between Gibraltar and Spain should arise as a result. His visit and his statements afterwards reflect that purpose, and I see nothing in what he did or said during his visit, and afterwards, to which Her Majesty's Opposition could take exception.
I have intervened to support the noble Lord in raising this matter to give an opportunity for the Government to repeat what we all assume to be their attitude, and to support the noble Lord, Lord Morris, in the reminders that he has ably given to us of the potential for intra-territorial difficulty within the Community unless we are very careful during the period of the run-up to the signature in 1981 and actual entry in 1983. It is a difficult problem which admits of no quick solution, as I said, except the solution of mutual tolerance, respect and patience; an evolutionary solution based on the participation of both Gibraltar and Spain in an attempt within the Community, when the time comes, to seek a way out of this difficulty.
I have only one further point to make: I agree entirely that it would be counter-productive to say the least—possibly dangerous—to attempt any formal linkage in this matter—that is to say, to trade off. One cannot trade off emotions one against the other, and the basis of this—whatever the economic and constitutional results may be—is deeply held feelings on both sides. It would be a grave mistake to be seen to try to barter two distinctive patriotisms; but rather bring them together within a larger entity, that of the Community. It is in the spirit of strong friendship for Spain and absolute assurance to Gibraltar that I hope that the Government, like the last Government, will proceed in this matter.
7.33 p.m.
Lord TREFGARNE: My Lords, once again the House has been treated to a careful, thoughtful and helpful speech from my noble friend Lord Selsdon and indeed from my noble friend Lord Morris. May I say that from the noble Lord, Lord Goronwy-Roberts, we have had a useful introduction to this difficult subject. My noble friend's Question hangs on the precise relationship of Gibraltar to the EEC. Let me begin by reminding noble Lords of the formal status which we secured for Gibraltar—I might add after lengthy negotiation—in the Accession negotiations between 1970 and 1972.
What we wanted for Gibraltar was that the Treaty should apply, but that certain provisions of it which would have been either irrelevant or unnecessarily and excessively complicated, should not. This was achieved in the following way. Article 227.4 of the Treaty of Rome declares that
"the provisions of this Treaty shall apply to the European territories for whose external relations a Member State is responsible".
But special provisions in the Treaty of Accession provide that three major areas of Community business do not apply within Gibraltar: the Common Commercial Policy (thus enabling Gibraltar, which has a very narrow tax base, to continue to control and retain revenue raised from import duties); the Common Agricultural Policy (because Gibraltar has no agriculture); and the obligation to introduce a value added tax. I need not go into details of the legal mechanics by which these derogations are given force of law. The effect of the arrangements I have described is, of course, that Gibraltar has not been required to make any budgetary contribution to the Community budget, nor have Her Majesty's Government done so on Gibraltar's behalf.
It may be useful if I review briefly the other main areas of the Treaty as they apply to Gibraltar. All the other rules of the Community apply in Gibraltar and Gibraltar is part of the territory of the Community. Community regulations are given direct force by law by means of Gibraltar's European Communities ordinance; and the Gibraltar authorities have taken steps to implement all Community secondary legislation where relevant locally.
1910
Gibraltarians are United Kingdom nationals for European Community purposes. Gibraltar therefore has had the opportunity to benefit from the provisions of the Treaty covering freedom of movement of persons, services and capital. Among other things, this means that any Gibraltarian wanting to establish himself professionally in any of the other member-States has the general right to do so. Furthermore there are now a number of specific areas—doctors, dentists, nurses, in some respects lawyers, and so on—where there is Community-wide recognition of qualifications. This too provides potential benefit to Gibraltar. But it will be for the Gibraltar Government itself to monitor the extent to which Gibraltarians have taken advantage of these arrangements.
I now come to the three major sources of Community aid, apart from the CAP, to members of the Community. I refer to the Regional Development Fund, the Social Fund, and loans from the European Investment Bank. These were the points raised specially by my noble friend Lord Selsdon. In principle, both the provisions of the Treaty concerning the bank and the acts establishing the funds apply to Gibraltar. There has been careful analysis by the Government over the years of the possibility of securing aid for Gibraltar from these sources. No doubt these analyses—as they are now—took place under the previous Administration.
As far as the EIB is concerned the bank has confirmed to the Government of Gibraltar that there is no legal obstacle to EIB lending to Gibraltar. Applications from Gibraltar for EIB loans would however naturally have to fit one of the three separate criteria set out in Article 130 of the Treaty of Rome. These are: projects for developing less developed regions; projects for modernising undertakings or developing fresh activities called for by the progressive establishment of the Common Market; and projects of common interest to several member-States.
A condition for both the last two is that they are of such a size or nature that they cannot be entirely financed by the means available in the individual member-States. It has not so far been possible to identify a project acceptable to the bank in the light of these criteria. There

1911
are, however, a number of projects still under discussion between the Gibraltar authorities and the appropriate departments in London, although I call give no undertaking as to what the outcome will be. One of the Banks' requirements is that it must have appropriate security for any loans it makes. The Government are currently examining whether it would be possible to provide the necessary guarantee if a suitable project was identified.
One possibility in the longer term is of a project that would meet the so-called "common interest" criterion. With Spain a member of the Community it is possible to think of a number of projects of common interest to both Gibraltar and Spain and that might conceivably qualify for EIB assistance. Although the Regional Development Fund in principle applies to Gibraltar, Article 3 of the regulation establishing the fund provides that regions and areas which may benefit from the fund shall be limited to those aided regions established by member-States in applying their systems of regional aid. Investments may benefit from the fund's assistance only if they fall within the framework of a national regional development programme. Gibraltar has never hitherto been included in areas to which the Government apply their system of regional aid: nor have the Government ever adopted a regional development programme covering Gibraltar. My noble friend Lord Selsdon specifically asked me whether Gibraltar could become an assisted area. I am told there may be some difficulties in doing that, but it is a matter I should like to look into further and perhaps I may write to my noble friend about it.
I am afraid there are similar problems with respect to the European Social Fund. Again, we would of course be willing to consider any projects which the Gibraltar Government might wish to put forward in relation to the Social Fund. They have not so far done so. This is not surprising, given, as the noble Lord, Lord Goronwy-Roberts, said, that Gibraltar has full employment or virtually so. This Government remain constitutionally responsible for Gibraltar's external relations. This includes representing Gibraltar's interests in the Council of Ministers and taking Gibraltar's interests into account in all
1912
relevant matters discussed within the Community context.
Gibraltar's relationship with the European Parliament has been a matter for discussion in this House in the context of direct elections to the European Parliament. Your Lordships will recall that the Government decided that it would be inappropriate for Gibraltar to participate in the direct elections to the European Parliament, given that the territory was not represented at Westminster. No overseas territory of any member State which does not participate in the national elections is represented in the directly elected European Parliament. Accordingly, Annex 2 of the Act annexed to the Council Decision of 1976 providing for direct elections to the European Parliament stated that the United Kingdom will apply the provisions of this Act only in respect of the United Kingdom. This provision was not directed specifically to Gibraltar: it operates to exclude the Channel Islands and the Isle of Man also.
The provisions of the Treaty relating to the European Court of Justice also apply to Gibraltar. This means that in principle a matter coming before the legal authorities in Gibraltar could be referred to the European Court for a preliminary ruling under Article 177. In practice this has not yet happened.
May I turn now to the implications for Gibraltar of Spanish accession to the Community. The problem of the Spanish frontier restrictions at Gibraltar, referred to by my noble friend Lord Morris, is one on which strong views are understandably held by your Lordships and indeed elsewhere. The Government's view, like that of successive British Governments, is that these restrictions are unjustifiable and should be removed without delay. We are not establishing a formal link between Spanish accession to the EEC—for which of course there is firm British support—and the Gibraltar problem.
In our view, the best way to find a solution would be through discussion with Spain. It is inconceivable, as my right honourable friend the Lord Privy Seal said during his recent visit to Gibraltar, that a border between two parts of EEC territory could remain closed. It is therefore best to work on the assumption that restrictions will be a thing of the past by the time this point is reached, and that direct contact

1913
between Spain and Gibraltar—impossible over the past decade—will be re-established before rather than after the Spanish treaty of accession is signed.
As I have said, Community provisions on the Common Commercial Tariff, the Common Agricultural Policy and VAT do not currently apply to Gibraltar. There is a case for considering changing the situation, and it seems likely that the closer integration into the Community which would result would be welcome to Gibraltarians, but there would inevitably be financial problems. In making the contribution to the Community Budget which would result from Gibraltar accepting these obligations, the territory would naturally also expect to enjoy the normal financial benefits of full Community membership.
As I have already indicated, Gibraltar is not currently a strong candidate for the Regional Development and Social Funds. Once Spain has joined the EEC, the European Investment Bank may offer rather more possibilities in terms of finance for projects of common interest to both Spain and Gibraltar; but it has to be recognised that the "resource" transfer from such loans might well of itself not match Gibraltar's own contribution to the EEC budget. The underlying problems involved are under active consideration both here and in Gibraltar.
My Lords, these are difficult and complex matters which need full and careful consideration, but your Lordships can rest assured that the Government have the best interests of Gibraltar in mind and will ensure that everything possible is done to enable Gibraltar to enjoy the maximum benefits from the EEC to which she is entitled.
Lord MERRIVALE: My Lords, before my noble friend sits down, may I ask just one question? For the last 30 years I have been very interested in the affairs of Gibraltar and I am delighted that my noble friend Lord Selsdon is also interested in them. May I ask whether Her Majesty's Government cannot by themselves exert sufficient influence on the Spanish Government for the lifting of restrictions between Spain and Gibraltar at the frontier? Will Her Majesty's Government seek the assistance and support of other Common Market countries to that end?—because in effect it is a
1914
crucial issue. For years now the Gibraltarians have been under this shadow of restrictions at the frontier. Would not my noble friend agree that something greater than he has announced this evening should be done?
Lord TREFGARNE: My Lords, I really do not think I can go much further than I have done. We do not link the question of Spanish accession to the EEC with that of the lifting of restrictions across the border between Spain and Gibraltar. As my right honourable friend said, it is inconceivable that these restrictions could remain. If Spain were to join the EEC, we think the Spaniards will see the merits of that argument and we hope that restrictions will be lifted long before Spain has joined the Common Market.

HOUSE OF LORDS OFFICES
Second Report from the Select Committee made, and to be printed.
  THE NATIONAL GALLERY: DEPLOYMENT OF EXHIBITS
  THE NATIONAL GALLERY: DEPLOYMENT OF EXHIBITS
  NEB: FUTURE ACQUISITIONS AND INVESTMENT
  NEB: FUTURE ACQUISITIONS AND INVESTMENT
  NUCLEAR FUEL ASSEMBLIES: AIR CRASH CONSEQUENCES
  NUCLEAR FUEL ASSEMBLIES: AIR CRASH CONSEQUENCES
  WATER CONSERVATION POLICY
  WATER CONSERVATION POLICY