Sitting of 2 April 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH RAILWAYS (CASTLEFIELD) BILL
  Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Unemployment
    Mr. O'Neillasked the Secretary of State for Scotland if he will take further action to reduce unemployment in Scotland.
    The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): Our first priority is to reduce inflation and establish a sound economy in which industry will be encouraged to expand and to create secure jobs. The measures announced by my right hon. and learned Friend the Chancellor of the Exchequer on 26 March will make a further contribution to this objetcive.
    Mr. O'Neill: In the light of the deterioration since the Government's first Budget, with the dramatic drop in the rise in the number of people in employment, the increase in the long-term unemployed and the decrease in the number of vacancies, is there anything in the Budget to which the Minister can specifically allude that will benefit Scotland?
    Mr. Fletcher: I understand that the hon. Gentleman taught economics before coming to the House. He will therefore know that the difficulties experienced in Scotland at the moment in employment are a direct result of the policies of the previous Labour Government 18 months or 2 years ago.
    On the particular points that the hon. Gentleman makes, there are many items
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    in the Budget that will be helpful towards creating new jobs in Scotland. Tax changes and incentives to invest and the way that these have been accepted by industry mean that the Budget is a good omen for the future.
    Mr. Gordon Wilson: Will the Minister accept that his reply to the hon. Gentleman was one of the best pieces of party political codswallop for a long time? In view of the fact that unemployment is increasing in Scotland startlingly and that Scotland will not receive any share of oil resources lying off the coast in terms of budgetary revenue, will the Minister say how the Government intend to reduce unemployment in Scotland? Will he give a simple answer—how?
    Mr. Fletcher: Scotland, like the rest of the United Kingdom, is enjoying the benefits of North Sea oil. About 60,000 to 70,000 jobs in Scotland are a direct result of North Sea oil. Jobs are still being lost in Scotland as a result of the previous Government's indiscriminate support for industry without regard to viability. The hon. Gentleman should know that in his area of Dundee and elsewhere new jobs are being created as industry expands with the incentives provided in the Budget.
    Mr. Sproat: Since the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) asked my hon. Friend to point to one thing in the Budget that would help cut unemployment in Scotland, will my hon. Friend remind him that there were no fewer than 15 proposals to help small businesses in Scotland? These could make a massive contribution to cutting unemployment in Scotland. If he wanted another, what about the enterprise zone in Clydeside?
    Mr. Fletcher: My hon. Friend is correct. The Budget is the most remarkable and the best in many years for small businesses and investment.
    Several Hon. Members—
    Mr. Speaker: Order. I shall call one further hon. Member from either side before the Front Bench, but we shall have to move quicker afterwards.
    Mr. Eadie: Did the Minister check, before answering that question, the speech made yesterday by his right hon. Friend the Secretary of State for Industry,

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    one of the most gloom-laden speeches this House has ever experienced? Is the hon. Gentleman saying to the people of Scotland, as a result of the Budget, that there will be almost ¼ million unemployed in Scotland as a consequence of his Government's policy? Is that what he is telling the people of Scotland?
    Mr. Fletcher: We are telling the people of Scotland that our first priority is to reduce the rate of inflation without which there can be no prospect for jobs in Scotland or anywhere else.
    Mr. Allan Stewart: Does not my hon. Friend agree that few things could be more damaging to the prospects for employment in Scotland than the serious threat of a Scottish Assembly with economic interventionist powers as proposed at the last Scottish Labour Party conference? Is it not just as well that wild-eyed, bearded fanatics who dominated that conference have no influence with either the Shadow Cabinet or the Parliamentary Labour Party?
    Mr. Fletcher: My hon. Friend is absolutely correct. The Gentleman to whom he referred is equally lacking in influence in this place.
    Mr. Millan: Why is the right hon. Gentleman so complacent about unemployment? Why does he not answer the question about the projected rise in unemployment for next year? Is it not now inevitable, given the current rate of inflation and the Government's disastrous economic policies, that by this time next year we shall have no fewer than 250,000 unemployed in Scotland? That will take us back to the conditions which obtained in the 1930s.
    Mr. Fletcher: We have never shirked the fact that unemployment in Scotland is at present on a rising trend. None of us knows what figures might be reached before economic circumstances improve. But the right hon. Gentleman will know that when his party took office unemployment stood at half the level it had reached when his party left office. We are starting with the high level we inherited and we intend to reduce that level over the next few years.
    Mr. Speaker: Order. I hesitate to say it, but Scots questions are getting as long as Welsh questions.

    Civil Servants (Location)
    Mr. Strangasked the Secretary of State for Scotland how many civil servants employed by the Scottish Office are based in Edinburgh.
    The Secretary of State for Scotland (Mr. George Younger): The number of civil servants employed by the Scottish Office, including the prison service, who are based in Edinburgh was 5,784 at 1 March 1980.
    Mr. Strang: Does the Secretary of State accept that that figure combined with the figure for other Departments highlights the importance of the Civil Service as an employer in Edinburgh? Does the right hon. Gentleman further accept that the Government's cutbacks mean that there will be precious few jobs in the Civil Service for Edinburgh school leavers this year? Does he accept that that fact, combined with the fact that unemployment in Edinburgh is above the national average, is ample justification for a reconsideration of the Government's decision to downgrade Edinburgh's development area status?
    Mr. Younger: The hon. Gentleman is right in pointing to the importance of the Civil Service as an employer in Edinburgh. I might add that the Scottish Office and those employed there do an extremely good job and deserve credit for that.
    It is, happily, the case that of the 9,500 unemployed school leavers in Scotland only 360 are in Edinburgh. However, there is no denying the fact that if Civil Service staff has to be reduced there will be fewer opportunities for new jobs. We hope to see those young people getting new jobs in other industries, particularly in the new small businesses which will be created as a result of the Budget.
    Mr. John MacKay: Will my right hon. Friend tell us whether those figures represent a decrease on the figure for the corresponding period last year?
    Mr. Younger: These figures represent a decrease on the figure for the same period last year. It has been difficult to achieve that, but it is necessary because the country cannot afford to carry the number of civil servants that we would like.

    Budget Strategy
    Mr. Canavanasked the Secretary of State for Scotland whether he will make a statement about the effects of the Budget on Scotland.
    Mr. Younger: The Budget strategy, notably the specific measures to stimulate investment such as those relating to small firms, will be particularly useful in solving the problems of Scotland's economy.
    Mr. Canavan: How many thousands of jobs will be lost in Scotland as a result of the £400 million cut in public expenditure in Scotland? In view of the fact that these cuts will mean a decrease in essential services such as housing and education, a decrease in the number of jobs in both the public and private sector and a massive increase in rents and rates, does not the Secretary of State realise that the Budget spells absolute disaster for Scotland?
    Mr. Younger: The greatest disaster for Scotland would be for inflation to get completely out of control as it was well on the way to being under the previous Government. There is no doubt that when public spending has to be reduced there is, in the short term, a reduction in employment. The hon. Gentleman should have thought of that when he was supporting the previous Government and allowing public expenditure to get right out of control.
    Mr. Henderson: What proposals has my right hon. Friend, and what action is he taking, to ensure that Scotland will benefit from the proposals for enterprise zones announced in the Budget?
    Mr. Younger: As my hon. Friend may have noticed, two of the suggested sites are in Scotland. I am speedily consulting the local authorities concerned so that we may come to a decision as to which site will be the preferred one for Scotland. I am certain that it will be of great benefit.
    Mr. Millan: How can the Secretary of State talk about encouraging investment in Scotland when high interest rates are having a savage effect on private investment and when the public expenditure White Paper, in relation to housing, envisages that at the end of the period covered by the White Paper housing
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    investment in Scotland will be less than 50 per cent. of the target projected by the Labour Government? That will have serious consequences not only for those looking for homes in Scotland but also for the construction industry.
    Mr. Younger: The right hon. Gentleman must take his own responsibility for that. The high interest rates, as he well knows, are not the desired policy of the Government. They are the result of inflation and public expenditure being allowed to get out of control. If the right hon. Gentleman had thought of these matters two years ago when he was making disastrous public expenditure decisions we would not be in this state now.

    General Teaching Council
    Mr. Foulkesasked the Secretary of State for Scotland when he next expects to meet the chairman of the General Teaching Council.
    Mr. Alexander Fletcher: My right hon. Friend and I have at present no plans for a meeting with the chairman of the General Teaching Council.
    Mr. Foulkes: I wonder if the Secretary of State, or the Under-Secretary, would consider having a meeting with the chairman of the General Teaching Council to explain to him that the future of the colleges of education is not just a matter of the numbers of teachers in training but also of the other courses the colleges now offer and the valuable service that they give to the communities in which they are situated? May I have a categorical assurance from the Secretary of State that because Craigie college is fulfilling these criteria there is no intention to close it?
    Mr. Fletcher: My right hon. Friend and I do not require to meet the chairman of the GTC to learn of the services that are provided by the colleges in Scotland. Craigie college, in line with other colleges, has been serving Scotland well over the years. However, we must bear in mind that the drastic reduction in the number of pupils will have some effect on the future of the colleges.
    Mr. Lang: Does my hon. Friend agree that his right hon. Friend's record in saving educational colleges in Scotland is second to none and that he does not

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    require a lesson from the hon. Member for South Ayrshire (Mr. Foulkes) on this matter?
    Mr. Fletcher: My hon. Friend is absolutely correct and most helpful.
    Mr. Harry Ewing: If the record of the Secretary of State has been so good in the past, may we have an assurance that he will do everything possible to maintain that record and that none of the 10 colleges of education will be closed? Can we also have an assurance that the Under-Secretary will keep his word that if there are proposals for changes in the colleges of education he will publish a discussion document in advance of those changes?
    Mr. Fletcher: There were half a dozen points in that question. In response I can only say that the Government Front Bench will be united on the future of the colleges unlike the Labour Party.
    Mr. Lambie: When the right hon. Gentleman does meet the chairman of the General Teaching Council will he remind him that the GTC has no right under statute to recommend closure of any college of education in Scotland? Will the right hon. Gentleman also remember that, in addition to the number of children entering schools, he should consider geographical and community needs before deciding to close any college in Scotland?
    Mr. Fletcher: We will certainly consider the geographical location of the colleges as the hon. Gentleman would expect us to do. The GTC has every right to give advice when one considers that advice has been accepted on this matter by both parties, when in government, during the past few years.

    National Farmers Union
    Mr. Pollockasked the Secretary of State for Scotland, when he will next meet the president of the National Farmers Union of Scotland.
    Mr. Mylesasked the Secretary of State for Scotland when next he will meet the President of the National Farmers Union of Scotland.
    Mr. Younger: I have met the president of the National Farmers Union of Scotland on a number of occasions since taking office and I shall be arranging another meeting with him shortly.
    Mr. Pollock: When my right hon. Friend next meets the president of the NFU will he discuss with him the disturbing fall in the size of the national dairy herd particularly in the north of Scotland Milk Marketing Board area? Will the Secretary of State confirm that the Government, who still retain control over the retail price of liquid milk, will accept their obligations to producers as well as to consumers? Will he take whatever political decisions are necessary to protect the incomes of our dairy farmers?
    Mr. Younger: As my hon. Friend knows, we have increased the retail price of milk by 22 per cent. since last summer but we must be careful that such increases do not reduce the uptake of the product. As my hon. Friend also knows, we have received a report on the position of producers and consumers and we are examining it carefully.
    Mr. Russell Johnston: Is it the intention of the Secretary of State to react to the NFU proposals for the Highlands? If so, will he say when he might do so?
    Mr. Younger: We are evaluating the points made by the NFU on this matter. It will be one of the subjects raised the next time I meet the president of the Scottish National Farmers Union.
    Mr. Myles: When next the Secretary of State meets the president of the NFU will he discuss the structural problems of agriculture in Scotland where the larger farms are continuing to expand? Is he aware that they are squeezing out the smaller farms and thereby doing away with the bottom rung of the farming ladder? Is he aware that that means that young people and farm workers find it difficult to make a start on their own account?
    Mr. Younger: The problem of openings for young people in farming is a cause of anxiety in the NFU. I have discussed that problem with the NFU and shall be doing so again. This is a difficult period for everyone involved in farming, but in the past year we have managed to make no less than three devaluations in the green pound, two increases in the milk price and a substantial addition to hill subsidies. That is not at all bad at a time of great economic difficulty.
    Mr. John Home Robertson: If the Secretary of State is interested in increasing

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    the consumption of liquid milk in Scotland should he not announce an initiative which will enable all regional education authorities in Scotland to take advantage of the Common Market scheme under which four-fifths of the cost of providing free school milk can be funded out of European funds?
    Mr. Younger: That suggestion is made from time to time. I am not aware that there is any inhibition which prevents local education authorities from taking part in the scheme if they want to.
    Mr. McQuarrie: When my right hon. Friend meets the chairman of the National Farmers Union will he discuss the serious situation which is arising in the agriculture industry, particularly in the smaller farms, where labour is being laid off because of the sharp fall in the price of their products?
    Mr. Younger: I am well aware of the position. The annual discussions on the price-fixing arrangements as part of the common agriculture policy are in train. The Minister of Agriculture, Fisheries and Food and the Minister of State, Scottish Office are aware of the problems and are bearing them in mind in the discussions.

    North of Scotland Hydro Electric Board
    Mr. John MacKayasked the Secretary of State for Scotland when next he intends to meet the chairman of the North of Scotland Hydro Electric Board.
    Mr. Alexander Fletcher: My right hon. Friend and I have no immediate plans for a further meeting with the chairman of the board.
    Mr. MacKay: Has my hon. Friend had a meeting with the board in order to discuss the proposed surcharge on consumers using electricity on those islands where electricity is generated by diesel? Will he consider asking for a consultation with the chairman of the board in order to tell him that the board's decision is unfair to the small islands which are being hit in that way? Will he ask the chairman to revert to his previous policy of uniform charging for all consumers in the Highlands and Islands?
    Mr. Fletcher: We have not had a meeting with the chairman of the board on that subject. However, representations have been made from the electricity con-
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    sultative council for the North of Scotland District among others. My right hon. Friend is considering the representations before deciding whether action should be taken.
    Mr. Donald Stewart: Is the hon. Gentleman aware that the surcharge on diesel generation was rightly regarded as iniquitous and was abolished in 1965? Is he aware that the policy contradicts the social remit written into the board's constitution? May we have an assurance that the Scottish Office will fight the board's suggestion?
    Mr. Fletcher: My right hon. Friend is considering the representations. We are aware of the strength of feeling and we shall try to reach an early conclusion on the issue.
    Mr. Russell Johnston: Will the Minister be more categorical? Will he respond to his hon. Friend the Member for Argyll (Mr. MacKay) and say directly that he believes that the hydroboard has made a wrong decision and that the Government will take action to reverse it.
    Mr. Fletcher: It would not be helpful to any statutory action that my right hon. Friend might decide to take if I were to reply in the terms suggested.

    Educational Institute of Scotland
    Mr. Ancramasked the Secretary of State for Scotland when he plans to meet the Educational Institute of Scotland.
    Mr. Alexander Fletcher: I had a useful meeting with representatives of the institute on 26 February. There are at present no plans for a further meeting.
    Mr. Ancram: When my hon. Friend meets the Educational Institute of Scotland again will he discuss the mediumterm requirements for teachers in Scotland? I accept that school rolls are falling, but does my hon. Friend accept that the birth rate in Scotland is rising? Will he assure the House that he will make provision for that?
    Mr. Fletcher: Yes, we shall certainly make provision for the rise in the birth rate in our calculations about pupil numbers. Teacher staffing is constantly referred to by the EIS which realises that the present level of staffing, whether or

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    not it accepts it, is in excess of the Red Book standards.
    Mr. James Hamilton: When the Minister next meets the institute will he discuss the possibility of increasing the block grant for education to the Strathclyde regional council? Will he bear in mind that many of the schools in that area are being axed because of Government policy? Is he aware of two such schools in my area which are urgently required?
    Mr. Fletcher: Schools are closing because of the decline in pupil numbers. It is not true to suggest that schools are being closed because of the Government's financial decisions.
    Mr. Peter Fraser: I congratulate the Minister on the bold initiative that he took this week on Munn and Dunning. Can he tell the EIS when he anticipates that the proposals that he has made will be fully implemented?
    Mr. Fletcher: I am grateful to my hon. Friend. We announced a three-year development programme this week. It is expected that the first assessments will be made in 1984 and the syllabuses will be prepared on the basis of Munn and Dunning. Thereafter, the full programme should be available to all schools in Scotland.
    Mr. Canavan: In view of the EIS's opposition to the Government's proposals to spend public money on private fee-paying schools, what response has the Minister had to his discusssion document on the assisted places scheme? Is it not fair to tell parents now that even if that half-baked scheme gets off the ground, there is no chance at all of it continuing after the next general election because the incoming Labour Government will abolish it right away?
    Mr. Fletcher: The half-baked scheme to which the hon. Gentleman refers has been operated in various forms in Scotland for many years under both parties. I expect it to continue for many years to come, in spite of the hon. Gentleman's remarks.
    Mr. David Steel: Will the Minister undertake not to apply the staffing standards in schools too rigidly at a time of falling school levels? Is he aware that in a secondary school in my constituency the
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    slight expected drop in intake in August could lead to a reduction in staff of three? Is he aware that that makes the organisation of a school extremely difficult? Will he be generous in his approach to the financing of local authorities?
    Mr. Fletcher: The right hon. Gentleman is correct. The diseconomies of scale apply when pupil numbers are declining. My right hon. Friend made allowance for that in the recent rate support grant figures.
    Mr. Harry Ewing: Is the Minister aware that his lack of knowledge of the brief for which he is responsible is causing serious concern among educationists in Scotland? Is he aware that the meeting with the EIS to which he referred was regarded by the EIS as unsatisfactory? When does the Minister propose to meet the EIS to explain how he proposes to reduce the number of teachers in Scotland by the 7,600 referred to by the Secretary of State?
    Mr. Fletcher: The hon. Gentleman always spoils his case by gross exaggeration. He should know, as I do, that if the EIS is dissatisfied with any meeting that it has with me it will tell me and not ask the hon. Gentleman to do it.

    Lord Provost of Edinburgh
    Mr. Ron Brownasked the Secretary of State for Scotland when he proposes to meet the Lord Provost of Edinburgh.
    The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): My right hon. Friend has at present no plans to do so.
    Mr. Brown: In view of Edinburgh district council's abysmal house building record, will the Minister give a special award to the Lord Provost for his consistent approach to Tory Party policy? What advice has the Minister to give to the many thousands of people on the housing waiting lists who have no opportunity of a house in the near future?
    Mr. Rifkind: I cannot accept the hon. Gentleman's allegation. Edinburgh has a fine record under successive Conservative housing chairmen in providing for the housing needs of the community, as I know as a constituency Member from that city. The Secretary of State has in-

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    creased the resources available to Edinburgh on the non-housing revenue account to allow young couples to have greater access to loans to purchase or improve their homes.
    Mr. Ancram: When my hon. Friend meets the Lord Provost will he discuss the possibility of protecting the hard hit ratepayers of the city of Edinburgh by restoring it to an all-purpose authority?
    Mr. Rifkind: It is significant that Edinburgh's proposed rate increase is only 18 per cent. compared with the over 42 per cent. proposed by the Lothian region. The Stodart committee is examining the future of local government and it is able to make any recommendations that are consistent with the viability of existing local authorities.
    Mr. Douglas: With his knowledge of planning law will the Minister tell the chairman of any district or regional councils how the Government's half-baked proposals for enterprise zones will affect existing industry, particularly small businesses in the Dunfermline district?
    Mr. Rifkind: It is unlikely that there will be an enterprise zone in Edinburgh. Nevertheless, it has been widely accepted that the sort of areas likely to be chosen for enterprise zones will have little prospect of encouraging industry without the kind of incentives the enterprise zone concept will provide.

    Human Tissue Transplants
    Mr. Dalyellasked the Secretary of State for Scotland if, pursuant to his statement, Official Report, 5 March 1980, column 464, he will make a statement outlining what specific action he has taken to encourage the possibility of a wide debate on recent court decisions involving the admissibility of evidence in relation to computers and opting-out schemes for kidney transplants.
    The Under-Secretary of State for Scotland (Mr. Russell Fairgrieve): I shall be glad to welcome any debate on these matters whether in this House or elsewhere; but I am not convinced that recent surveys show much support for the hon. Gentleman's proposal that individuals wishing to "opt out" of having organs removed from their bodies after death should have their wishes recorded on a central computer.
    Mr. Dalyell: Is that a parliamentary way of saying that the hon. Gentleman has done nothing?
    Mr. Fairgrieve: No, it is not. It is the normal way of pointing out to an hon. Member that hardly a day goes by without this whole subject of transplants and organ removals being in the national newspapers. The Leader of the House is well aware of the number of subjects for which debates are requested and takes them all into consideration.
    Dr. J. Dickson Mabon: Is there not genuine concern about the fact that many organs that could be used are lost because of that critical margin of time for decision, which concerns the deceased and the relatives?
    In view of what he said, is it not proper for the Under-Secretary of State to want to do all that he can to try to promote further discussion?
    Mr. Fairgrieve: I am trying to promote further discussion, and the hon. Gentleman knows that we are fortunate in Scotland in that we have a higher realisation of the kidney donor scheme than in other parts of the United Kingdom as a result of the work done by my Department.

    Tourism
    Mr. Hendersonasked the Secretary of State for Scotland if he is satisfied with the co-ordination of the promotion of tourism in Scotland; and if he will make a statement.
    Mr. Younger: In my view, there is need to improve the co-ordination of tourism promotion and tourist information services in Scotland. This must be achieved primarily by co-operation between the Scottish Tourist Board, the Highlands and Islands Development Board and the local authorities. These agencies and the Convention of Scottish Local Authorities are considering now what measures they should take to work more closely together in this field, and I expect to hear shortly the views of the Tourist Board and the Convention about action which might be taken by the Government to assist them in this objective.
    Mr. Henderson: Will my right hon. Friend discuss with regional councils the important role that they should be playing in these matters which they do not

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    always do? Will he further ensure that there is more co-ordination at local level between all the interested parties, not least the trade itself?
    Mr. Younger: I am grateful to my hon. Friend. I expect that the views of COSLA will show that it considers that regional councils need to do more. I hope that more co-operation at local level can be achieved. I am sure that the chairman of the Tourist Board is well aware of that.
    Mr. George Robertson: Will the Secretary of State not be too diverted, because of this tinkering with the institutions that is being suggested to him, and recognise the value of tourism in generating jobs? Will he ensure that those institutions are given the resources to maximise the benefits of tourism for Scotland?
    Mr. Younger: I agree with the hon. Gentleman that we do not want a prolonged period of uncertainty during which all the institutions are under the microscope, but it is timely to look at the co-ordination between the various bodies, and that is what is happening under the new chairman.
    Mr. Allan Stewart: Does not my right hon. Friend agree that there is a considerable architectural heritage in the West of Scotland that is now being increasingly appreciated by tourists? Will he ensure that this is fully taken on board in any discussions he has?
    Mr. Younger: I agree with my hon. Friend's view and I will make sure that the chairman of the Tourist Board bears that in mind.

    British Broadcasting Corporation Education Service
    Mr. Maxtonasked the Secretary of State for Scotland when next he intends to meet the Broadcasting Council for Scotland to discuss the British Broadcasting Corporation Education Service.
    Mr. Alexander Fletcher: I have no plans at present to discuss this matter with the Council.
    Mr. Maxton: When the Minister meets the Broadcasting Council, will he discuss the serious effect on Scottish education that the proposal to eliminate the broadcasting service will have, particularly in
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    rural areas? We welcome his statement today that he has asked the BBC to reconsider, but that is not good enough. The service is used by the education authorities in Scotland. Therefore will the Minister now announce a grant to the BBC from the Scottish Education Department so that the services can be continued?
    Mr. Fletcher: My right hon. Friend has already tabled a reply to a parliamentary question regarding the granting of funds to the BBC. I hope that the hon. Gentleman is aware that this is very much a matter for the BBC and I regret that its assessment of its priorities should have this result.
    Mr. Bill Walker: When he next meets the council, will my hon. Friend give some attention to the growing concern in Scotland about the way in which the BBC spends the finances it has? Radio Scotland leaves much to be desired and some of these funds would be better channelled towards the education service.
    Mr. Fletcher: I can only repeat that I hope these views are being expressed strongly to the BBC.
    Mr. Gordon Wilson: Cannot the Minister for Education give an explanation to the House as to why he has not sought a meeting with the BBC on educational programmes? Is it that he has no interest in the subject of education? Would it not be disastrous for Scottish school children if they receive their learning partly through programmes which are brought from England and have no respect for Scotland's traditional interests, language and literature?
    Mr. Fletcher: Both my right hon. Friend and I have had separate meetings with the BBC on these matters.
    Mr. Dewar: Are we to take it from the Minister's first reply that in his view the BBC's priorities are wrong and that he would like the Scottish Schools Broadcasting Service to be saved at the expense of something else? If so, would he say what that something else is? Does he not agree that it is useless to say that the BBC will reconsider unless one is prepared to give the Corporation the wherewithal to do it?
    Mr. Fletcher: I am saying that this is essentially a matter for the BBC and my

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    right hon. Friend has no basis on which he can intervene. As regards the BBC's priorities I am making it as clear as I can that I should have thought that there are other areas where savings might have been made before educational broadcasting and the orchestra became involved.
    Mr. Sproat: When my hon. Friend meets the Council will he draw to its attention not only the miserably low figures for Radio Scotland but also the fact that the staff levels of BBC Scotland have been increased by 35 per cent. in the past seven years? Would not both these areas be better suited to cuts than the education service or the Scottish Symphony Orchestra.
    Mr. Fletcher: Judging by the correspondence columns of the Scotsman over the past year many suggestions were made as to where the BBC in Scotland might make savings before this item was talked about. Now that these matters are under consideration as proposed cuts, it is obvious that the majority opinion in Scotland would like educational broadcasting and the Scottish Symphony Orchestra to be saved.
    Mr. Millan: Is not the Minister aware that these cuts in school broadcasting will be an absolute disgrace? The Secretary of State is the custodian of Scottish education and he cannot simply wring his hands and say how unfortunate all this is. We want some practical help from the Government. They have the power to give some financial assistance and the sums involved as regards school broadcasting are small. We want some initiative from the Government and so far we have had nothing from them.
    Mr. Fletcher: It is essentially a matter for the BBC, but the crisis would not have arisen if the right hon. Gentleman and his colleagues had raised the BBC licence fee earlier, when he was in office.

    Children in Care (Injuries)
    Mr. Bill Walkerasked the Secretary of State for Scotland how many children who were under the care and supervision of social work departments suffered non-accidental injuries in 1979.
    Mr. Fairgrieve: This information is not available centrally.
    Mr. Walker: I am disappointed with that answer. Does not my hon. Friend acknowledge that there is growing public concern at the number of cases of children who have suffered abuse whilst under the care and supervision of social work departments? Further, will he discuss with his right hon. Friend the Secretary of State the requests that have been made for an inquiry into the circumstances leading up to the deaths of Tracy O'Day, Angela Burns and Mandy McGibbon?
    Mr. Fairgrieve: There are a number of questions involved here. However, my right hon. Friend is at present considering the three cases referred to by my hon. Friend and will come to a decision in due course. As regards the general question of the worries that my right hon. Friend and I have about such cases, I remind my hon. Friend that the Leader of the House has also indicated that the Government are considering the training of social workers in this area and will be reporting when we hope to take some action.
    Mr. Hugh D. Brown: Will not the hon. Gentleman slap down more vigorously the hon. Member for Perth and East Perthshire (Mr. Walker) for seeking cheap publicity over circumstances that cause enormous distress to the innocent parties involved, such as friends, relatives, and indeed, social workers? Will he make it quite clear that he supports the idea that no social department can solve all the individual problems of society?
    Mr. Fairgrieve: I believe that my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) is doing what he is doing in the best interests of social work in Scotland. I shall certainly consider what the hon. Gentleman said and take the necessary action.
    Mr. George Robertson: Does the Minister recognise that, despite all the concern that has been expressed, the meagre additional provision for this area of activity in the public expenditure White Paper, and with inflation at its present rate, means that there will inevitably be a cutback in the level of services which are provided at present? Therefore, the concern which is now being expressed is likely to increase in the future.
    Mr. Fairgrieve: I cannot accept what the hon. Gentleman has said. He knows perfectly well that in the figures for next year we have allowed for a growth in social work.
    Later—
    Mr. Harry Ewing: On a point of order, Mr. Speaker. I seek your guidance on question No. 14, and in particular on the supplementary question asked by the hon. Member for Perth and East Perthshire (Mr. Walker). You will recall that during his supplementary question, he referred to the Tracy O'Day case. Unfortunately she was murdered. Her family live in my constituency. The hon. Gentleman gave me no notification that he intended to raise one of my constituency cases. Is it still a custom of the House that when an hon. Member intends to refer to another hon. Member's constituency—particularly on such a sensitive subject—he adopts the normal courtesy of advising the other hon. Member concerned?
    Mr. SpeakerI remind the House that we survive by observing our courtesies, one to another. If an hon. Member wishes to refer to another hon. Member's constituency, it is courteous to let him know. I did not expect the hon. Gentleman to know that. I remind the House that I am caused difficulty from time to time because hon. Members have asked questions which appear on the Order Paper about other hon. Members' constituencies. Obviously, I am unaware that they concern other hon. Members' constituencies. I hope that courtesies will be observed.
    Mr. Bill Walker: Further to that point of order, Mr. Speaker, I have no intention of abusing the conventions of the House. Indeed, I always hope to emulate your splendid example, Mr. Speaker. I only wish that many other hon. Members would do so.
    Mr. Speaker: I am much obliged to the hon. Gentleman, not for the kind words about me, but because some hon. Members are unaware of some of our unwritten courtesies and conventions. They mean as much as our Standing Orders.

    Scottish CBI and Scottish TUC
    Mr. McElhoneasked the Secretary of State for Scotland when next he intends
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    to meet the Scottish Trades Union Congress.
    Mr. Alexander Fletcher: My right hon. Friend and I have met representatives of the STUC several times since taking office and have made it clear that we are prepared to meet them at any time they wish.
    Mr. McElhone: When the Secretary of State next meets the STUC, will he explain why the Government, committed as they are to massive reductions in public expenditure, can under the Tenant's Rights Etc. (Scotland) Bill allocate an additional £1 million for rent allowances? Is he not aware that that money, plus the estimated £1·5 million in extra social security payments, will go straight into the pockets of private landlords at a time when the Government are cutting essential services in Scotland?
    Mr. Fletcher: The hon. Gentleman could have made his question a little more specific. If he has a particular example in mind of something in the Bill which he thinks will not work properly, he should address a more specific question to me.
    Mr. Ancram: Will my hon. Friend ask the STUC to explain how on earth the proposed day of inaction on 14 May will do anything to help promote productivity or prosperity of the sort which Scotland needs?
    Mr. Fletcher: I am grateful to my hon. Friend for raising that point. It is a senseless action in which to participate, particularly at a time when hon. Members of both sides of the House are concerned about the future prospects of the Scottish economy. It is also very damaging to schoolchildren, whose history examinations are being brought forward by three weeks just to meet this ridiculous protest by the unions in Scotland.
    Mr. Norman Hogg: When the Minister next meets the STUC, will he discuss the unemployment situation and at the same time give an assurance that there will be no selling of public assets in the new towns in Scotland?
    Mr. Fletcher: One invariably discusses unemployment when one meets the STUC. The selling of public assets in the new towns is obviously in the best interests of the growth and development of those new towns, and we are actively

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    encouraging the new towns to go on doing that.
    Mr. Lang: In the light of recent experience, does my hon. Friend agree that the working membership of unions seem to have a better appreciation of the economic facts of life than their leaderships? In that context, will he commend to the leaders of the STUC the provisions for secret ballots which are contained in the Employment Bill?
    Mr. Fletcher: My hon. Friend is absolutely correct. It is obvious that, had there been a secret ballot in the steel industry a couple of months ago, that strike would have been resolved within a matter of weeks rather than months.
    Mr. Harry Ewing: Is the Minister seriously pretending that a secret ballot in the steel industry two or three months ago would have voted in favour of a 2 per cent. increase? Surely even he appreciates that that would not have happened. As to the day of action, how on earth can the Minister pretend that a Government who steal two weeks pension increase from old-age pensioners, cut educational provision and cause the loss of 200 to 300 jobs each day, can expect trade unionists to stand back and do nothing about it?
    Mr. Fletcher: Yet again, the hon. Gentleman exaggerates his point. It is difficult to know what particular point he was addressing to me. Therefore, there is nothing that I can say to him.

    Crofter Housing
    Mr. Donald Stewartasked the Secretary of State for Scotland if he will now raise the level of grant and loan for crofter housing.
    Mr. Younger: I have nothing to add to my reply to the right hon. Member on 8 November.
    Mr. Stewart: Is the right hon. Gentleman aware that that is a disappointing reply in view of the increase in costs since the sum was previously raised? Is he also aware that his noble Friend the Minister of State has turned down two applications from constituents of mine on the grounds that they are unmarried? Will he inform his noble Friend that it is no part of his business to act as a marriage guidance counsellor for the Western Isles, and will
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    he ensure that those applications are approved forthwith?
    Mr. Younger: I am always anxious to be as helpful as I can to crofters. I would have thought that the present scheme is very helpful, as the interest rate on any loans is 31½ per cent. That will open the eyes of house buyers in other places. A crofter who is building a new house can get a grant of £4,000 and a loan of up to £5,500 at the lower rate of interest. I should have thought that that was pretty generous help.

    Strathclyde Region (Job Loss)
    Mr. Dewarasked the Secretary of State for Scotland what proposals he has to deal with the continuing job loss in the Strathclyde region.
    Mr. Younger: Our policies aim to create the soundly based economy in which industry can expand in Strathclyde as elsewhere. The changes we have made in regional policy are designed to concentrate support upon areas of most need, including West Central Scotland whose problems are recognised by our decision to extend the special development area. We have announced our intention of creating an enterprise zone on Clydeside and we will continue to encourage by all possible means the development of viable enterprises providing secure employment within the region.
    Mr. Dewar: I understand from the Minister that there is a degree of urgency with regard to his talks on the enterprise zone. When will he be able to make an announcement about the location? Can he also say when we shall have further details about the relaxation of normal planning regulations and other changes, and also whether any discussion document or Green Paper will be issued? Does he further accept that, whatever may be the potential in the enterprise zone, the job creation prospects are very small—a drop in the bucket—compared with the loss that will result from the Government's fiercely inflationary policies?
    Mr. Younger: I hope that no one will be tempted to talk down a good, new idea just because it is new. I am sure that the hon. Gentleman, with his constituency interests, will do everything he possibly can to encourage an enterprise zone and to make it successful. The purpose of

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    consulting the local authorities is to get their views. However, we have given the main outline of the scheme and we hope to complete discussions within a few weeks.
    Mr. Allan Stewart: Does not my right hon. Friend agree that certain job losses in Strathclyde are both inevitable and desirable? In particular, does he not agree that as a result of the success of the Government's economic policy and of electoral redistribution there will be considerable job losses in Strathclyde among Labour Members of Parliament in due course, and that that will be a jolly good thing?
    Mr. Younger: I am always sad to see anyone losing his job, particularly a Labour Member of Parliament, but I am sadder for some than for others.
    Mr. Buchan: Does the right hon. Gentleman accept that the only job loss which is desirable is his own? Will he stop talking the economic rubbish that we have heard from him, such as growth coming to Scotland through small businesses? He knows that that is a nonsense. He knows that the Budget Papers have predicted a 1 per cent. growth over the next three years. As that is mainly in oil, does it not mean a lack of growth in every aspect of Scottish industry and a consequent job loss? Will he cut out the nonsense?
    Mr. Younger: Of course, the hon. Gentleman's last point is the very problem which we, and the previous Government, have wrestled with for years. I am sorry and surprised that the hon. Gentleman has cast aspersions on the role of small businesses, especially as they provide more than one-third of the jobs in Scotland. We are in no position to turn our noses up at that, and I hope that the hon. Gentleman will do all that he can to encourage small businesses.
    Mr. Henderson: Will my right hon. Friend arrange a seminar within the Strathclyde region at the earliest possible date of leaders of industry, the trade unions and Scottish Labour Members of Parliament in order that they can understand the great prospects which could flow from grasping the opportunities presented by enterprise zones?
    Mr. Younger: I am grateful to my lion. Friend. I have many responsibilities, but
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    I am glad to say that one of them is not running seminars for Scottish Labour Members of Parliament.
    Mr. Millan: Is the right hon. Gentleman aware that the statement made on Budget day about enterprise zones is largely incomprehensible? So far as one can understand it, the advantages seem to be marginal. However, I understand that the Scottish Office has been unable to give any more details. Will the Secretary of State consider making a further and more detailed statement about what is involved in the enterprise zone and what the typical advantages, perhaps in money terms, would be for a company which establishes itself in that zone? There is real concern that at present there is apparently so little detail about the concept.
    Mr.Younger: I am sorry that the right hon. Gentleman feels that there is a lack of detail. I shall do all I possibly can to give him the maximum information. I thought that my right hon. and learned Friend had given quite a lot of detail in his announcement. For example, incoming firms will be exempted from development land tax; they will receive relief from rates and the local authorities will be compensated for that also there will be a reduction in bureaucracy and form filling for these firms. If the right hon. Gentleman wants more information I shall do my utmost to give him as much as possible.
    Mr. Myles: Will my right hon Friend take steps to encourage employment in the Grampian region so that we can take some—
    Mr. Speaker: Order. We have enough to do in dealing with Strathclyde now. In view of the length of questions this afternoon, I think I owe an apology to the Welsh for what I said earlier.
    Mr. Foulkes: In view of the fact that the Secretary of State is in favour of good ideas, will he not agree that the truck produced by Stonefield Vehicles is a good idea? Will he give an assurance that he will not put any ultimatum to the Scottish Development Agency about private investment in Stonefield Vehicles in Cumnock? Will he also give an assurance that if this company requires additional finance from the SDA, and it has enough money to provide the cash—the Secretary

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    of State has said that the SDA has more money than it knows what to do with—he will not veto the money from that source?
    Mr. Younger: I am very glad that the vehicle produced by Stonefields' has had good reports from those who have tried it. I have been doing my utmost through my Department and the SDA to help to provide a viable future for the company which depends essentially on the entry of private enterprise into it. I thought that at one time the hon. Member sounded a bit doubtful about the wisdom of that, but I hope that he is now wholly converted.

    HUMAN TISSUE TRANSPLANTS
    Mr. Dalyellasked the Solicitor-General for Scotland if, pursuant to his answer in the Official Report,column 473, 5 March, he will remind procurators fiscal by circular that they must ensure in advance that human organs for transplant can be released if human lives are to be saved, and if permission is granted.
    The Solicitor-General for Scotland (Mr. Nicholas Fairbairn): Circulars giving information and advice on the subject of human organs for transplant purposes were issued to procurators fiscal by the Crown Office in 1970, 1975 and 1977. In addition, the subject has been discussed informally at seminars and meetings of procurators fiscal. I am satisfied that procurators fiscal are already perfectly aware of the need to have available human organs for transplant purposes while ensuring that all due safeguards are complied with.
    Mr. Dalyell: Even though the Solicitor-General is satisfied, does he agree that perhaps doctors have certain inhibitions because no doctor wants to become entangled with the procurator fiscal? Why not have a circular?
    The Solicitor-General for Scotland: With great respect, I know of no case in which a doctor has been inhibited. Nor do I know any reason why any doctor should have any apprehension about the co-operation and the help of the procurator fiscal. If the hon. Member knows of any case, I hope that he will let me know about it and I will write to him.

    LAW SOCIETY OF SCOTLAND
    Mr. Ancramasked the Solicitor-General for Scotland when he plans to meet the Law Society of Scotland.
    The Solicitor-General for Scotland: I have no plans at present to meet the Law Society of Scotland.
    Mr. Ancram: When my hon. and learned Friend meets the Law Society of Scotland will he discuss with it whether it thinks that under the present procedure there is enough time for counsel and solicitors to prepare cases on indictment which appear before the Glasgow High Court?
    The Solicitor-General for Scotland: The Crown Office gives as much notice as possible. Regrettably this is not always very long. I intend to prosecute Mr. Speaker next week in the Glasgow High Court and I shall see the position for myself—[Interruption.]
    Mr. Speaker: Order. I think that we will all treat the Solicitor-General for Scotland with greater respect now.
    The Solicitor-General for Scotland: I am obliged to you, Mr. Speaker, for calling the accused to order. The timing will be improved if the Criminal Justice (Scotland) Bill is enacted, as it provides that a trial diet in an indictment should be not less than 29 clear days after service of the indictment, and that should be ample time for preparation.
    Mr. Ron Brown: When the Minister next meets the Law Society will he discuss the allegations of Mr. David Anderson about the cover-up by the Tory establishment in Edinburgh regarding his own position as a former Member of Parliament and indeed, as Solicitor-General for Scotland?
    The Solicitor-General for Scotland: No, I shall not discuss that matter. Any question of an inquiry is a matter for my right hon. Friend the Secretary of State for Scotland. His predecessor the right hon. Member for Glasgow, Craigton (Mr. Milian) put certain documents in the Library. I suggest that the hon. Member consults them.
    Mr. Peter Fraser: When the Solicitor-General meets the Law Society, will he

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    discuss its announcement that a junior counsel appearing alone at the High Court in Glasgow will now get a daily fee of £140, or a fee of £90 for a waiting day during which he just drinks coffee? Will my hon. and learned Friend do what he can to introduce a system of fixed diets for High Court trials in Scotland?
    The Solicitor-General for Scotland: I am extremely sympathetic to my hon. Friend's views. I greatly regret the waste of public money which goes on either waiting days or on late pleas by all parts of the profession. The question is which will save more money—fixed diets or fluid diets? I am anxious to do everything I can to ensure the saving of public money on these matters.
    Mr. Harry Ewing: Will the Solicitor-General make definite arrangements to meet the Law Society and ask it to consider Lord Grieve's comments yesterday in the Court of Session, where he made a fairly strong critical attack on firms of lawyers who have represented both clients in a divorce case? He pointed out that although lawyers from the same company handled both clients, separate accounts were rendered. In Lord Grieve's opinion, had a joint account been rendered, it would have been much smaller. As the Law Society is responsible for fees will the Solicitor General take that report from today's edition of The Scotsman and ask the Law Society to consider the matter?
    The Solicitor-General for Scotland: I am obliged to the hon. Member for raising that very important matter. I shall look into the particular circumstances, and raise the matter with the Law Society. I will then write to the hon. Member.
    Mr. Lambie: When the hon. and learned Member next meets the Law Society will he remind it that most people in Scotland now think of that society as a mutual admiration and protection society for lawyers? When will he abolish it?
    The Solicitor-General for Scotland: I do not think that that is either a very well-informed or helpful remark. It is important that, wherever any profession falls short of its principles and standards, there should be a society to ensure that high standards are kept.

    LORD JUSTICE GENERAL
    Mr. Dewarasked the Solicitor-General for Scotland when next he intends to meet the Lord Justice General.
    The Solicitor-General for Scotland: I have no plans at present to meet the Lord Justice General.
    Mr. Dewar: Will the hon. and learned Member consider discussing with the Lord Justice General the effect of the report which is associated with that gentleman's name, and is concerned with minimum life sentences in cases of murder? Is the Solicitor-General aware that in another place this provision, which was a specific Tory Party manifesto pledge, was rudely thrown out of the Criminal Justice (Scotland) Bill? Is it the Government's intention to seek to reinstate that provision in the Commons, and will he note that if any such retrograde step is made it will be firmly opposed?
    The Solicitor-General for Scotland: Yes, I will be very happy to discuss this matter with the Lord Justice General. But I take the view that the hon. Member for Glasgow, Garscadden (Mr. Dewar) needs a rest over Easter, and if he comes back refreshed after the recess he will discover what we intend to do.

    DEAN OF THE FACULTY OF ADVOCATES
    Mr. Pollockasked the Solicitor-General for Scotland when next he will meet the Dean of the Faculty of Advocates.
    The Solicitor-General for Scotland: I have no plans at present to meet the Dean of the Faculty of Advocates.
    Mr. Pollock: If my hon. and learned Friend were to make plans for such a meeting, will he confirm the Government's determination to keep the Queen's justice available to all subjects and at all times, irrespective of any sabre-rattling, militant Civil Service elements who are threatening disruptive actions in the courts?
    The Solicitor-General for Scotland: Yes. I am glad to see from the Financial Times and other reports today that the

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    unions concerned will not, apparently, persist in either the threat or the action. I believe that those who serve the cause of justice have a duty to that which is paramount and far above any other duty. I have said so in this House before and I say it again.

    SHERIFF PRINCIPAL FOR PERTH
    Mr. Bill Walkerasked the Solicitor-General for Scotland when next he plans to meet the Sheriff Principal for Perth.
    The Solicitor-General for Scotland: I have no plans at present to meet the Sheriff Principal of the Sheriffdom of Tayside, Central and Fife, in which Perth lies.
    Mr. Walker: I thank my hon. and learned Friend for that reply. When he next meets the sheriff principal, will he consider discussing the need for a suitable uniform or apparel to be worn by sheriffs in Scotland, thus enhancing their status and, more important, the administration of the law in Scotland?
    The Solicitor-General for Scotland: Yes. I have already discussed that question with the sheriff principal and with the sheriff of Perth. It is important that Scots sheriffs who—for an historical reason that has now disappeared—have not worn a uniform should have robes appropriate to the dignity of their office. My right hon. Friend the Secretary of State is essentially the "couturier" of the sheriff. When he finds sufficient funds he will, no doubt, make such dignity available.
    Mr. Speaker: We are one minute late in beginning questions to the Solicitor-General. I shall allow for that minute.

    SCOTTISH LAW COMMISSION
    Mr. Canavanasked the Solicitor-General for Scotland when he next expects to meet the Scottish Law Commission.
    The Solicitor-General for Scotland: Neither I nor my right hon. and noble Friend the Lord Advocate at present have any plans to meet the Scottish Law Commission, but meetings are held when and as necessary.
    Mr. Canavan: As we have been waiting almost a decade for the Commission's report on the law of diligence, including warrant sales, will the Solicitor-
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    General tell the Law Commission to stop dragging its feet? Will he also tell his Government to stop instructing one of their stooges from the Whips' Office to come here Friday after Friday in order to block my Private Member's Bill to abolish warrant sales?
    The Solicitor-General for Scotland: If it has taken as worthy, as wise and as diligent a Commission as this one 10 years to look into the law of diligence in Scotland, it is unlikely that a failed mad monk can do it on a Friday afternoon.

COUNCIL OF EUROPE AND WESTERN EUROPEAN UNION (DELEGATIONS)
Mr. Beith: On a point of order, Mr. Speaker. I am sorry that I was unable to give notice of this point of order. It has arisen as a result of our inability to conclude agreements in other ways. On 3 April 1979 the hon. Member for Islington, South and Finsbury (Mr. Cunningham) raised a point of order about the procedure used to nominate the British parliamentary delegation to the Council of Europe and to the North Atlantic Assembly. In rather graphic words he said that Front Bench Members had acted illegally for the past 28 years by using the device of a written parliamentary question in order to appear to have conveyed the will of the House to those Assemblies on the composition of any British delegation. He made that point in some detail. He said that article 25 of the Statute of the Council of Europe, quoted in full in our manual of procedure, provides that:
"the Consultative Assembly is to consist of representatives of member states elected by the several national Parliaments or appointed in such manner as those Parliaments direct."
In every case, with the exception of this Parliament, the confirmation of that fact is given by the Speaker's signature, or that of an equivalent person, on the names and credentials of the delegates concerned. That does not apply to the delegation from this country. Perhaps, Mr. Speaker, you will confirm my next point in a later ruling. However, I do not think that you have ever been asked to sign the credentials of the delegates.
I suspect that a written parliamentary question will be tabled, if the precedent of the past 28 years is anything to go by,

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and that an answer will be given to that question with a speed that is normally denied to Back Bench Members. I suspect that a question will be tabled tonight and that an answer will appear tomorrow. I also suggest that that answer will not reflect any agreement between hon. Members of different parties about the composition of that delegation.
The rights of Back-Bench Members in particular are very much affected by this matter. In any other matter, where the composition of a body is at stake, it appears on the Order Paper in a form to which Members can object and to which they can submit amendments. In that way hon. Members can attempt to secure that the will of the House is given effect to. At times, Back-Bench Members will find that their will is defeated in the end by the size of the Government's majority. However, at least procedures exist by which their will can be expressed. As you, Mr. Speaker, protect our rights, you can ensure that they have been protected.
It appears that an attempt will be made to reduce the size of the Opposition's delegation in the Council of Europe by means of a written parliamentary question. When it appears it will be too late to do anything about it. As a result, the credentials of the delegation can be challenged in the respective assemblies. The attempt to have your name as a signatory on the list of speakers, Mr. Speaker, was an attempt to get round that difficulty.
Unless the bodies to which such delegations are sent are sure that the delegation has the full authority of the British Parliament, at the first meeting—whether of the Council of Europe or of the Western European Union—questions can be raised about the credentials of the delegation. The whole delegation—no doubt sent at the taxpayers' expense—can be sent back home. I ask you, Mr. Speaker, to give the issue further consideration.
When the issue was raised by the hon. Member for Islington, South and Finsbury you said that you felt that it could be resolved by agreement between the Whips. However, no progress has been made over the past year and no satisfactory alternative has been proposed. It is therefore time for you to give further consideration to this
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question and, perhaps, to rule on it tomorrow. Perhaps you will also indicate to those Front-Bench Members concerned, particularly the Government Front Bench. that it would be wrong to try to slip in a parliamentary answer before you have given that ruling.
Mr. Speaker: I am much obliged to the hon. Gentleman for the clarity with which he submitted his point of order. I will look into the matter and make a statement tomorrow. I am sure that the hon. Member's latter remarks will have been observed by members of the Government. The interests of the House are involved. I am sure that that will be borne in mind.

COUNCIL OF EUROPE AND WESTERN EUROPEAN UNION (DELEGATIONS)
  GAS
  Mr. Secretary Howell, supported by Mr. Secretary Joseph, Mr. Secretary Nott, Mr. John Biffen, Mr. Hamish Gray, Mr. Norman Lamont and Mr. John Moore, presented a Bill to provide that the supply of gas to any premises at an annual rate in excess of 25,000 therms shall be subject to the special agreement of the British Gas Corporation: And the same was read the First time; and ordered to be read a Second time upon Thursday 3 April and to be printed. [Bill 184.]
  LICENSING (AMENDMENT) (No. 2)
  Mr. Neville Trotter, supported by Sir Bernard Braine, Mrs. Sheila Faith, Mr. Ivan Lawrence, Mr. A. J. Beith, Mr. W. E. Garrett, Mr. Ron Lewis, and Mr. David Watkins, presented a Bill to amend the Licensing Act 1964 in relation to grant of special hours certificates and the extension of existing on-licences to additional types of liquor: And the same was read the First time; and ordered to be read a Second time upon Friday 18 April and to be printed. [Bill 189.]

  SITTINGS OF THE HOUSE
  Ordered:
  That this House do meet tomorrow at half-past Nine o'clock, that no Questions be taken after half-past Ten o'clock, and that at half-past Three o'clock Mr. Speaker do adjourn the House without putting any Question provided that this House, shall not adjourn until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.—[Lord James Douglas-Hamilton.]

ADJOURNMENT (EASTER AND MAY DAY)
Motion made and Question proposed,
That this House at its rising tomorrow do adjourn till Monday 14 April and at its rising on Friday 2 May to adjourn till Tuesday 6 May.—[Mr. St. John-Stevas.]
Mr. Speaker: I have not selected the amendments on the Order Paper in connection with the Adjournment motion.
3.40 pm
Mr. Laurie Pavitt: I rarely detain the House on the Adjournment motion, as I believe that unless one raises a matter of extreme importance it is a bit of a charade when a very tired House pleads not to have its recess. Hon. Members would perhaps be shocked if the Government conceded the motion and we did not have our Easter Recess.
However, the difficulty of travelling at night is of extreme concern to my constituents and the country at large. All last weekend it was impossible to travel on the Underground into my constituency, because the stations were closed as a result of the serious attacks that have taken place over the past six months on the line that goes through Neasden and serves my constituents.
The problem is serious, especially if it continues. I support the railwaymen in my constituency, who have said that enough is enough. They are being injured. The last train driver who was attacked may well lose the sight of one eye. It is wrong that my NUR members, who have served the country and my constituency so well year in and year out, should be liable, on Friday and Saturday nights, to find themselves in the situation that occurred at Neasden, when a sledgehammer smashed every window in the train. The entire travelling public was at risk.
I do not criticise the police force in my area. By and large, it does a good job. I wish to bring to the attention of the House the need for decisions much higher up.
Under this Government especially there is a shortage of cash, and there is generally a shortage of personnel. It is incredible that when 100 members of the National Front are likely to go on a march, 3,000 policemen are used to protect them, yet when people travel through
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my constituency, having visited relatives, friends, the theatre or the cinema on Saturday night, they risk not completing their journey without being seriously harmed and ending up at the Central Middlesex hospital.
When one is dealing with two or three different Departments it is surprising how often papers go backwards and forwards between the Metropolitan Police, the Home Office and other Departments concerned. We should have a speedy resolution of this problem, and I am anxious that the House should discuss the matter and have a statement from the Home Secretary on the progress of negotiations. I raise the matter on this occasion as it is urgent. Over the Easter weekend my constituents are unlikely to be able to travel on Friday, Saturday or Sunday, because of such action.
When the national newspapers reported the terrible incident at Neasden, they said that they hoped that the London Underground service would not become like the service in New York—a no-go area after dark—which worried me intensely. We should not wait until the problem develops so that all that people can do to avoid danger after dark is to stay indoors and watch television. Action should be taken now.
There are many Bills in Committee. I believe that two Standing Committees finished yesterday. There is much business to be completed this Session. There is not much likelihood of finding time to debate the matter, other than on a brief Adjournment, before July. The Leader of the House is probably growing more grey hairs through worry about the parliamentary timetable than any previous Leader of the House for many years. There is a backlog of material to be dealt with before the end of the Session.
I again apologise to the House, because I rarely use the Adjournment motion to raise a matter of this kind. However, it is the only opportunity that I can see to bring the problem to the attention of the Government and the country at large. It is time that action was taken. Negotiations should be expedited.
I pay tribute to such people as Bob Kettle, the leader of the metropolitan NUR in my area, who has done much over the past two years to try to solve the problem for his men.

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I ask the Leader of the House to take the problem seriously and to try to find time for the Home Secretary to make a statement immediately after the recess.
3.45 pm
Mr. Nicholas Winterton: I wish to raise briefly two or three important matters.
I share the concern expressed by the hon. Member for Brent, South (Mr. Pavitt). My research assistant was gravely inconvenienced last weekend by not being able to use the Underground. Security on the Underground must be fully investigated. The concern expressed by those who work on it deserves serious consideration by the Government.
I wish to raise a matter relating to my constituency that has received attention in the national press. It relates to a long-established Act of Parliament—the Local Government Superannuation Act 1922, under which it is possible for long serving local government officers to retire and receive their superannuation pension, yet be taken on again 24 hours later in the job from which they have just retired.
In the Congleton borough council two senior and well-respected local government officers, by a council resolution last year, retired for 24 hours and were taken back again. For two, three or four years they are likely to be in receipt not only of their superannuation pension, which is 50 per cent. of their last year's salary, but their full salary, which will continue to increase. In the eyes of many hard-pressed ratepayers that gives those officers a salary increase of about 50 per cent.
I believe that the Act affords officers or other employees in local government service the opportunity of opting for a pension and then being taken back on again only if they have worked in local government for more than 40 years. I am pleased to learn from the chief executive of the Congleton borough council, Mr. Arthur Molyneaux, that there are no other officers in the employ of the borough council who can use the system, as the two officers have, by the resolution of the council, been held to have abused the system.
When the Government are appealing to the country for cuts in public expenditure it is important that such an abuse of the system should not be allowed to con-
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tinue. I ask the Leader of the House whether there are other councils in which senior officers or senior council employees have retired, have started to draw their superannuation pension, and have been taken back again on full salary. I hope that my right hon. Friend will tell me that that abuse is limited.
I believe that it is quite legal for those officers to do that, but it is immoral, wrong and undesirable. It sets a bad precedent for the rest of the country and for the manual workers in NUPE and NALGO within local government.
Mr. Arthur Lewis: Will the hon. Gentleman look at Hansard for today? I asked a similar question with regard to the top-paid civil servants, who do the same thing, only better. They get a full indexed pension and take a job as chairman of a bank at £20,000 or £30,000 a year. Their combined pension and salary is then greater than the salary of the person who succeeds them, yet the Government refuse to stop that practice.
Mr. Winterton: I am not necessarily opposed to that practice. If a person leaves his job and finds another job outside his previous activity, it is a different matter. I have cited an example of two persons retiring from a job for 24 hours, drawing their superannuation, and then being re-employed in the same job.
It is right that the House should appreciate that the officers concerned sacrifice a small increase in their superannuation pension when they finally retire. Their pension would be based on their final year's salary, that is the salary for 1979–80, rather than on the final year of their employment, which will cease when they are 65.
I am not levelling criticism at the two officers concerned, with whom I have an extremely good and close working relationship. They are well-respected officers of the borough council. I level the criticism that the arrangement is an abuse of the system. It is as much of an abuse as the abuse of the social security system, of which Conservative Members—and I hope many Labour Members—are highly critical.
Mr. Kenneth Lewis: I am not condoning the position, but I must ask my hon. Friend whether

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he realises that, under the normal redundancy schemes that apply to workers throughout the country, there have been many cases in which redundancy payment has been taken and the workers concerned have then been re-employed in the same firm.
Mr. Winterton: My hon. Friend appears to have misunderstood my criticism, which is that the two officers are voluntarily opting for retirement to draw their superannuation pension early. That is wrong. I hope that my right hon. Friend the Leader of the House will be able to quote some statistics to indicate that the abuse of the system is very limited. If some form of parliamentary legislation is required to close the loophole—it might be more widespread than we believe—I hope that the Government will take the necessary action.
Mr. Russell Kerr: The hon. Gentleman may have carried the majority of hon. Members with his persuasive argument. However, does he not agree that in the case of senior civil servants who opt for a similar arrangement there could be a serious breach of confidentiality? They are abusing their position of high trust, and, as a result, are being made attractive offers that can carry them comfortably into their retirement.
Mr. Winterton: If my memory serves me correctly, the hon. Gentleman has made that point before. If he catches your eye, Mr. Deputy Speaker, I am sure that he will be allowed to develop that argument. I do not wish to go down that path this afternoon.
The hon. Gentleman has reminded me of one point. The local government officers to whom I referred have contributed to their pensions. It is not a noncontributory scheme. It is only fair to present both sides of the case. However, an abuse has been committed and that is an unfortunate example. The Government should provide statistics to indicate that it is not a widespread abuse.
I wish to refer briefly to the lobby of the House that took place last week by physiotherapists, radiographers and speech therapists, following the anomalous and unjust recommendation of the Clegg Commission. The findings relating to these important paramedical groups within the Health Service show how unfortunate it was to appoint a commission
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under Professor Clegg to do the work that it has done in recent times.
In short, the Clegg Commission has recommended that these vital groups—who are highly skilled and need to undertake considerable training—are expected either to work much longer hours to qualify for an increase, or, if they continue on their present hours, to take a reduction in salary. That is utterly wrong.
The well-disciplined and impressive demonstration and march that took place last week will have had considerable impact upon the House. I believe that it has had considerable impact upon my hon. Friend the Minister for Health.
Mr. Bob Cryer: Last year the lion. Gentleman asked for a police escort for a demonstration by Health Service workers. I supported both that demonstration and the one that took place last week.
Mr. Winterton: We are used to dealing with the hon. Gentleman in many of his guises, not least in the House. I hope that he is prepared, if he catches your eye, Mr. Deputy Speaker, to stand up and support the case that I am advancing on behalf of the valuable groups who operate within our Health Service. They bring tremendous benefits to so many people who need to use the Health Service.
May I ask my right hon. Friend the Leader of the House to say what action the Government are taking? I understand that these groups feel so aggrieved that they may be forced to take some form of industrial action while the House is in recess. It would be unfortunate if they were to do so. My hon. Friend the Minister for Health is aware that an anomaly and an injustice has been done. May I have some form of assurance from my right hon. Friend that the Government are using their very best endeavours to ensure that industrial action does not take place, and that the injustice that is being suffered by these important people will be rectified quickly?
Perhaps I am speaking somewhat light-heartedly—I hope that I speak for all hon. Members—when I say that the lobby that we saw last week is one that all male hon. Members are delighted to receive. The lobby was extremely well

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disciplined. The groups produced their case in a concise manner. They left no one in any doubt that they had a good case. They were not seeking in any way to rock the economic boat in Britain.
Mr. John Bruce-Gardyne: Before my hon. Friend leaves the subject of the Clegg Commission, I must ask him whether he appreciates an important point. If there is a comparability commission—the whole concept was a nonsense dreamed up by the Opposition Party—and it says that comparability requires an increase in working hours or a corresponding reduction in wages, surely either the concept of comparability with its consequences must be accepted, or the whole idea should be scrapped.
Mr. Winterton: I am rather inclined to agree with my hon. Friend that the Clegg Commission should be disbanded immediately and that no further reference should be made to Professor Clegg. The recommendations of his commission have been damaging in many areas. I have given an example of how inadequate investigation into what is involved with a vital group within the Health Service has led to an undesirable recommendation.
If my hon. Friend wants more evidence, let us deal with middle management within the Health Service. Middle managements in hospitals in my constituency have written to me pointing out that a sister on night duty in a geriatric or psychiatric unit earns £8,252 maximum annual salary. That is far more than a senior nursing officer, two grades senior to that sister, can ever earn under the present salary system. The sister earns £1,568 more than the senior nursing officer's maximum basic salary. Even if the senior nursing officer works in a geriatric or psychiatric unit on night duty, with more than 1,000 patients to look after, the most that she can earn would be £7,649. That is £603 less than is received by the sister to whom I referred. Many anomalies and injustices have resulted from the Clegg recommendations.
Another matter that is of continuing concern is the position of the textile industry.
My right hon. Friend the Leader of the House is well aware that I have
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pestered him—I use that word purposely —during business questions for week after week. I have been asking my Government—a Conservative Government—to find time to debate the continuing problems of a vital and a strategic industry.
The hon. Members for Keighley (Mr. Cryer), for Birmingham, Perry Barr (Mr. Rooker), for Ormskirk (Mr. Kilroy-Silk) and for Feltham and Heston (Mr. Kerr) may receive representations from the various trade unions that work within the textile industry. I receive representations from employers and the professional and commmercial associations that represent the industry—for example, the British Textile Employers Association, the British Textile Confederation and the British Clothing Industry's Council for Europe Limited. I also receive representations from the trade unions. The British Clothing Industry's Council for Europe Limited is a body of considerable importance, which operates within Europe and looks beyond the shores of the United Kingdom.
The industry's position is grave. It is true to say that it has probably been in no more serious a state for 40 years. The Government owe something to the industry, the employers, the many people who have placed considerable investment in the industry over the years, and the skilled and responsible work force. They owe it to the industry to take action to bring about fair competition.
I shall quote from the annual report of Berisfords, which is a large company in my constituency. It is the biggest single employer in Congleton, the town and the borough in which I live. Under "Future prospects" the chairman stated:
"We are worried by the continued increase in imports of clothing from the Far East and the low-cost Mediterranean countries under the terms of the multi-fibre arrangement made with the EEC. Successive Governments do little to save textiles from this erosion of the British clothing industry. As manufacturers of accessories like ribbon, trimmings and labels, we suffer because clothing is imported complete with such items."
Later, the chairman said:
"The closure of Courtaulds, the United Kingdom's last viscose yarn-producing factory, which has been one of our traditional sources of supply for raw materials, constitutes a serious problem for us and we shall now have to import yarn at higher prices and maintain larger stock holdings."
Again, the hon. Member for Keighley and I are as one. The textile industry is

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being driven into a corner. We are eroding Britain's manufacturing base. We are forcing those higher up the textile-producing cycle to purchase commodities from abroad which they would like to purchase in Britain. If we allow that situation to continue, the textile industry, which is the third largest employer in Britain, will be driven to the wall. If that happens, not tens of thousands but 200,000 or 300,000 employees over the next five years will find themselves out of work. That will be unacceptable.
I must press my right hon. Friend to produce some answers. I hope that he will be closely in touch with the Department of Trade during the next couple of hours. What is the point of having a multi-fibre arrangement if we grant not only new quotas but increase existing quotas? Under category 8, the original quota for Romania was 665,000. Why has a revised quota of 765,000 been granted by the EEC? Romania is a Comecon country. Surely at this time we owe nothing to Comecon countries or to the Soviet Union. Under category 7, Hungary's original quota was 42,000. It has been increased to 62,000. Why was that increase granted? Under category 8, Hungary's original quota was 153,000. Why was it increased to 183,000? I could continue giving examples. The list is almost without end. The situation is serious. The mills that have closed this year total almost one a week.
Whatever party is in power in Whitehall has a responsibility to an important industry. It is an industry that has always modernised and rationalised in accordance with Government guidance. It has a history of industrial relations that is second to none in any industry in Britain.
If my right hon. Friend cannot obtain answers from the Department of Trade, and if he cannot obtain an assurance from the Department that action will be taken to prevent Britain losing its industrial base, I hope that he will say that early after the Easter Recess he will find time for the House to debate the problems facing the textile industry.
I am sick and tired of having to reply every day to letters from sensible, good employers and from those who work within the industry in my constituency and elsewhere. They write to me as they
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know that I am involved as chairman of the all-party group on cotton and allied textiles. They put great pressure on me and my limited secretarial staff. They ask what the Government intend to do and when they will take action. I am not prepared to tolerate the textile industry being sold down the river. My right hon. Friend is always courteous to me, and I hope that I can be courteous to him. I hope that he will be forthcoming with some answers to the questions that I have raised.
I do not seek to ensure that the House sits through Easter. We all have families, and we do not wish that. However, these short debates enable us to raise matters of considerable importance to us, as individual Members, and to our constituents, which is even more important. I beg my right hon. Friend to respond positively to my remarks.
4.7 pm
Mr. J. Enoch Powell: I am in a somewhat equivocal position in seeking to address the House on this motion, as I was a member of the Select Committee on Procedure which recommended that it should no longer be the opportunity for precisely the type of debate in which I am seeking to intervene. However, the House having in its wisdom decided that we should continue to have the opportunity, I should feel uneasy in going on Easter Recess, albeit in my constituency, if I were aware, as I am, that considerable numbers of my constituents and others in the Province were not receiving, owing to administrative failure benefits to which they were entitled.
I shall state briefly to the Leader of the House and to the House the circumstances to which I refer. At the beginning of January I became aware that a family in my constituency that was entitled to FIS had not been receiving it since the expiry of its book on 7 January. Apparently, the family had made proper application for a renewal before the middle of December.
I naturally wrote to the Minister of State, assuming there had been some administrative mishap—perhaps a loss in the post—and that the matter could easily be put right. I was astonished to receive from the Minister of State in the middle of February a reply to the effect that the

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facts were as I had alleged but that payment had not been resumed until the beginning of February. I did not find that in itself to be a sufficient explanation. Therefore, I pursued my inquiry with the Minister, who in the middle of March replied that
"the Prescribed Amounts for Family Income Supplement were increased from 13 November 1979. This resulted in an influx of claims which became more pronounced when the Government introduced a further measure to offset heating costs for Low Income Families and the Prescribed Amounts were further increased. The significant increase in the number of claims made caused a backlog in the Branch."
The Minister gave me an assurance that every effort was being made to clear and to process the claims as quickly as possible; but it was only at that stage that he offered any expression of regret that my constituents had been deprived for over three weeks of income to which they were fully entitled. Nevertheless, I still assumed that there could be only a few cases to which that applied; but thinking it a matter which ought to be established, I tabled a question to ascertain the nature and condition of the backlog. On 26 March I was astonished—I think the House will be astonished—to learn in reply that on 18 March the total number of claims outstanding was still 1,037. Thus, after an increase in amounts that had taken place in the middle of November, there were over 1,000 families who were not receiving their addition four months later; and in some cases they were not receiving any of the payment to which they were entitled, let alone the additional amount. In 472 cases—nearly half—requests had been made for additional information before a decision could be given.
The Minister of State—who I am glad to see on the Treasury Bench, and whom I thank for his courtesy in attending to hear these points—further said that it was
"not possible to state at this stage when the backlog of claims will be cleared, but extra staff have recently been trained and the situation is being kept under review."
Any hon. Member who went down for the recess without bringing to public attention a failure of administration of this character—apparantly so lightly taken —which results in people entitled to benefits not receiving them over many weeks, would be open to censure. There are
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priorities within departmental administration. In some circumstances, time has to elapse before a backlog can be removed. But surely this was a type of case where emergency measures and the drafting of additional staff from less urgent work should take place. It should not be possible that at the end of March 1,000 families are still not receiving the benefits to which they became entitled long before. I hope that when on the advice of the Minister of State, the Leader of the House replies to the debate, he will be able to tell me and the House that emergency measures are being taken, and that what constitutes a scandal on a considerable scale will be brought to an end.
4.13 pm
Mr. Michael Latham: I wish to raise three matters, in respect of two of which I gave notice to my right hon. Friend the Leader of the House on Monday. The first concerns a subject which, to my mind, should have been debated already because the regulations to which I shall refer took effect yesterday—the Building (Prescribed Fees) Regulations 1980, statutory instrument No. 286. They introduced for the first time fees for the submission of building regulations, on which many hon. Members have received representations. A prayer has been tabled against them by a Member of the Liberal Party.
I wrote to my right hon. Friend about the matter a couple of weeks ago suggesting that it was of sufficient importance to be debated. The powers to introduce those fees were included in the Health and Safety at Work etc. Act introduced by the Labour Government in 1974. The right hon. Member for Manchester, Openshaw (Mr. Morris) was responsible for the Act, and I am pleased to see that he is present in the Chamber.
There is no political question about whether the fees should be introduced. The question is whether they are being introduced in the right way. It would have been of considerable advantage to the House if we had been able to debate the matter, as a number of hon. Members would have been able to give reasons why they felt that the fees were not being introduced in the right way. There is no attempt to make a reduction for repetitive work, such as house building. As the House knows, I am a house builder. I favour fees in principle, but the method

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by which they have been introduced is incorrect.
I am concerned to receive reports from the House-Builders' Federation and others that local authorities are taking on more staff for the purpose of collecting the fees. The Federation has produced a list of local authorities—which it submitted to the Secretary of State for the Environment —which indicates that they are likely to take on more staff for the purpose. I regard that as unsatisfactory. The matter should be debated in the House.
There has been no indication that, in performing their duties and collecting a fee for them, local authorities will perform their duties in a speedy and efficient manner. There should have been adequate debate on that. Hon. Members from all parties are receiving representations on these matters. It is regrettable that they were not debated before the regulations took effect yesterday.
The second matter which I wish to raise—which I also drew to the attention of my right hon. Friend in advance—arises out of a constituency case, which I hope has been sorted out by private negotiations. However, the principle remains. It concerns passports for people who have ceased to be citizens of the United Kingdom through no fault of their own. One of my constituents, a Mr. A—I have given my right hon. Friend's office his correct name—has been living in Britain since 1938, having been born in a Caribbean country. He had a British passport, which recently came up for renewal. When he tried to renew it, he was told that he could no longer have a British passport because the country in which he had been born became independent in 1973, and that a passport should be issued by that country.
Having lived in Britain since 1938, having served in our Army for five years, and having subsequently worked for the Government in various capacities, he was not pleased about that. Nevertheless, he accepted the advice and went to the high commission of the country concerned. He was told that it would take a considerable amount of time for him to obtain a passport. He will not have any travel documents before May, when he is due to go abroad on a family holiday. That problem has, I hope, been sorted out through negotiations with the Home
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Office. However, I trust that my right hon. Friend will be able to say that the Government will shortly make a statement on its review of the law of nationality, because difficulties of that sort arise quite frequently, and it is not the first such case that I have experienced.
My third point is also a constituency matter. It relates to the urgent need for the Government to make a decision on a planning appeal—an appeal by British Gypsum Ltd., to mine gypsum at Barrow-on-Soar. This has been subject to an unusual procedure. On 25 February the Department of the Environment issued a semi-decision letter in which it said that the inspector had heard the appeal but that he felt that it should be dismissed —the plasterboard plant should not be built, and the gypsum should be carried away by rail. The Secretary of State for the Environment said that he was not prepared to decide upon the matter until people had been able to comment on the rail proposal, and he gave 28 days for comments to be received.
That is an unusual procedure, but not necessarily objectionable. Comments have now been received, and I hope that my right hon. Friend will be able to say that the Government will make an early decision on the matter. It is wrong tht the objectors and the applicants should be left in doubt when the inspector's report has been published and the Minister has left the decision in the air.
Those are three matters, two of which are of constituency importance, on which I hope my right hon. Friend will comment.
4.18 pm
Mr. Frank Allaun: The House should not adjourn for Easter without considering matters that arise from the publication this morning of the latest defence White Paper, and in particular the proposal to deploy 160 cruise missiles on British soil.
It has been said that we all live a telephone call away from disaster. That can apply to us personally, in that, for example, someone whom we love may be in a road accident, but it can also apply to the whole of humanity. By design, or more likely by accident, a nuclear bomb could be dropped on Moscow or Leningrad tonight. I do not think that the Russians would wait to set up the

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Russian equivalent of a Royal Commission. They would wipe out the possible sources of the bomb. As Aneurin Bevan once said, there is no label on a nuclear bomb.
We are a priority target, and we shall become far more of a priority target if we go ahead with the proposal. We are extremely vulnerable in our overcrowded island.
The White Paper says that the Government warmly endorse the proposal. It is easy for them. They will be safe underground, about five levels down. But I do not think that the rest of the population would warmly endorse the inevitable retaliation.
The position is not hopeless. We have three years to negotiate before the weapons are deployed on our territory. Mr. Brezhnev has offered to reduce the number of his nuclear missiles if we do not install these weapons. Today's newspapers report that four out of 10 tests of the weapon, production of which has been given to Boeing, have been failures, and it has gone astray. I do not fancy that happening on our territory.
People say "Ah, but look at civil defence." It is odd that there is not a word about civil defence in the White Paper. I am not very worried about that, because I think that it is futile. There is no civil defence against nuclear weapons. The only defence is to try to stop their being used. If nuclear bombs land on our country—and it would need only a dozen—
Mr. Pavitt: Four.
Mr. Allaun: I shall be generous, and say that a dozen megaton bombs would make life unliveable in this country.
I hope that if nuclear bombs fall my wife, my children and I will be underneath the first bomb, because we should die immediately. If we were 50 miles or 100 miles away, we should still die, but days later and in agony, because the atmosphere would be radioactive and the water, the soil and the food would all be poisoned by radioactivity.
Part of the revised proposal, for civil defence, which does not appear in the White Paper, is a question of morale building. A good deal of brain-washing is going on. If one can involve people
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in some kind of activity, in the belief that they are defending themselves, one is in a way indoctrinating them, preparing them for a third world war. There are hon. Members who are not prepared to play that game.
Mr. Russell Kerr: The Government are also kidding people along.
Mr. Allaun: That is right. I repeat that there is no defence against nuclear weapons except to prevent war breaking out.
There is another and more terrible weapon, Chevaline, the updated Polaris missile system, on which £1 billion has been spent by both Governments, after deceiving the House and the people. A number of us asked questions and we were not told that Chevaline was the updating of the Polaris missile system.
Another terrible weapon is the Trident missile. The cost is £5 billion for five submarines and the missiles to go with them. The money spent on one of those submarines—£1 billion—would build homes for 74,000 families and I know which those families would prefer.
I do not know whether others have noticed it, but I find it noteworthy that in the White Paper, which consists of two beautifully illustrated volumes, the word "detente" does not appear. Perhaps relaxation of tension is now an out-of-date idea. Although the word does not appear, there are misleading illustrations, beautiful illustrations in colour. There is no need to buy The Sunday Times Magazine.
The illustrations are misleading in two ways. First, in comparing the military strength of the two sides they omit China. China on the eastern flanks of Russia is no joke. Secondly, there is no mention of Polaris in dealing with medium-range missiles.
The White Paper says that the Government are demanding an improvement in the military machine. I think that the country needs an improvement in the nonmilitary machine, which the Government are dismantling day by day. There is a huge increase in arms spending, to nearly £11 billion, and further increases are to come in the years ahead. At the same time, the Government are smashing our housing. I believe that in three years no more council houses will be built and nothing more will be spent on improvement. Total housing expenditure is

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planned to be cut by £2½ billion compared with last year and by £3½ billion compared with what a Labour Government would have done.
Whatever Labour Party leaders say in the House, the party is opposed to nearly every measure for increased expenditure on arms and the expansion of the arms programme mentioned in the White Paper. It is particularly opposed to the acceleration of the arms race, and most particularly to the deployment of 160 cruise missiles. Unless we prevent it, they will be deployed on British soil and probably lead to the deaths of all of us.
4.26 pm
Mr. Fergus Montgomery: I wish briefly to raise two points. First, before adjourning for Easter we should have an opportunity to discuss the inequities and iniquities of the rating system. In the next few days people will receive their rate demands. In some parts of the country the increase that ratepayers will have to bear can be described only as horrendous. The overall rate increase imposed by my own local authority of Trafford is 19 per cent. That is high enough, but it was kept down to that amount only after the most stringent economies.
Some people believe that high spending is compatible with low rates. The authority has recently come in for a good deal of criticism because of the economies that it has made. I received a letter from an irate constituent who complained bitterly about the economies, but underneath her signature she wrote that she was a teacher and a parent and that her rates were excessively high. I wrote back saying that I should be grateful if she could explain how we could have high expenditure and at the same time have low rates. Unfortunately, she did not have an answer.
Whatever the cause of high rate bills, we must try to find a fairer system of collecting local government finance. Hon. Members on both sides of the House have constantly raised the problem of the person who lives alone, who has a small fixed income and who is paying exactly the same in rates as a family living next door, in an identical house and perhaps with four wage-earners.
In the general election campaign of October 1974 the Conservative Party
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promised to reform the rating system. In the election campaign last May rating reform took a back seat in the party manifesto. We were told that it had to have a lower priority because after four and a half years of Socialism the burden of personal taxation had risen tremendously and, therefore, the lowering of direct taxation had to be the top priority. But I hope that the Government have not forgotten the need to do something about a system that is so patently unfair.
What is even worse is the system of assessing water rates. Last summer the hon. Member for Stockport, North (Mr. Bennett) introduced a Ten-Minute Bill to try to deal with the problem, which concerns hon. Members on both sides of the House. At least with domestic rates the poor can apply for a rates rebate. That is of some help to them. But no such system operates for water rates. Like domestic rates, water rates are unfair. Whereas domestic rates take no account of a person's ability to pay, water rates take no account of the water used or the amount of sewage that must be disposed of from each house. Water rates are assessed on the rateable value of a property. Again, a person living alone will pay the same amount in water rates as a family with four or five in the house next door.
Mr. Ronald W. Brown: The situation is even worse than the hon. Gentleman has described. A hereditament does not need to have a water supply to be charged a water rate.
Mr. Montgomery: The hon. Gentleman may make that point in his speech, but I do not disagree with him. I should like the whole system to be looked at, because we must find something fairer. I am sure that he agrees that the system is unfair, because it takes no account of a person's ability to pay or of the amount of water consumed. For example, a family with four or five children will undoubtedly use a great deal of water, but the amount that family pays can be exactly the same as the amount paid by a single person living in the house next door. I see no equity at all in that system.
If domestic rates have jumped substantially in recent years, they are as nothing compared with the increases in water rates. I have just had the demand for

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the water rate for the small flat in which I live in London. My water rate will amount to £70 a year. A bill for £70 a year could be a disaster for families on low incomes or for the elderly living alone.
I cannot see why rebates are allowed on domestic rate bills but nothing is allowed for water rates. It is essential that the Government pay urgent attention to this vexed question. I hope that my right hon. Friend will give an undertaking that the Government will deal with this problem in an effort to achieve a fairer system.
The second point concerns the way in which certain oil companies are dominating and taking over the retailing of petrol in this country. As the oil companies take over more of the petrol sales, so we shall see the disappearance of more small garage businesses. By the end of 1977, more than half of Britain's petrol was sold by company-owned sites. In the last two years, I understand that the percentage has increased.
The point that I particularly want to make concerns the tactics being employed by Esso, because it is seeking to replace many of its tenants' leases with licences —a move which will deprive those tenants of their legal rights under the Landlord and Tenant Act and give Esso control over pump prices. This has caused great bitterness amongst Esso tenants.
It is a worrying situation. In 1979, 1,815 filling stations closed down. Of these, the majority—1,349—were independently owned filling stations often providing other services.
So worried were the Esso dealers that on 18 March they had a protest meeting in London. From all accounts, it was a bitter meeting with retailers complaining of the way in which they had been treated by Esso. Many of these tenants have been kept waiting for months after the expiry of their leases without knowing whether the leases would be renewed, whether they would be forced to accept licences in place of their tenancies or whether they would be in business at all. Apparently, more than 13 per cent. have been kept in the dark about their future since their leases expired in 1978 or earlier.
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But there are also serious consequences for the consumer. If the major oil companies are allowed to control the retail price of petrol, it will result in the closure of the smaller independent businesses. We must remember that the most important difference between a leased site and a licensed and directly managed site is the ability of the petrol company concerned to fix retail prices. The general view is that about 26 per cent. of petrol sold in the United Kingdom today is at prices dictated by the petrol companies, or, put in another way, one in every four gallons.
Shell has approximately 1,450 licensed sites. Esso is anxious to increase its number. If it manages to do that, it will be only a question of time before BP and National follow suit, and that could result in one in every two gallons of petrol in the United Kingdom being sold at prices firmly controlled by the supplying company.
That is at total variance with the report of the Monopolies Commission in 1965. That report declared:
"The power and resources of the petrol companies are such that, if left entirely free to pursue their own chosen policies, they will be likely to gain an increasing degree of control over the retail trade."
The report went on:
"The practice on the part of petrol suppliers of acquiring retail petrol premises may be expected to operate against the public interest unless some limit is imposed."
The limit proposed was 15 per cent. The undertakings given by the oil companies 15 years ago not to take more than 15 per cent. of the market were abandoned in 1968, and the percentage is getting greater each month. If it continues to increase at the same rate, it will mean the end of many small businesses. As the Government believe in trying to create conditions for greater and fairer competition as well as the encouragement and protection of small businesses, which give employment to many people, I think that they must listen to what the people from these small businesses are saying at this time.
I was alerted to this problem by a constituent of mine who operates the Altrincham service station. A few years ago his lease was due to expire and Esso decided that it wanted to redevelop the site. It wanted to turn the garage into a self-service station. It submitted plans

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to Trafford council. Those plans were turned down and Esso, as was its right, appealed to the Minister. On appeal, Esso was represented by members of the legal profession. My constituent, who was fighting for his livelihood, decided that he must also employ legal advice. The appeal was rejected, so my constituent could breathe again; but he was faced with legal costs which amounted to £5,000.
That in itself would be bad enough, but Esso has now made modifications to its original plan and is again applying to Trafford council for planning permission. If Trafford council should decide to reject that application, Esso could again appeal to the Minister. No doubt Esso would again employ lawyers to represent it and again my constituent, fighting to protect his livelihood, would also require legal representation. As I said, on the last occasion it cost him £5,000, and he had to pay that money out of his own pocket. If he has to go through this process again, I believe that he could be broken financially and Esso would have defeated him by what I can only describe as dubious tactics.
It is unfair that the law as it stands means that people, such as my constituent, can be put to such enormous expense and have no power to claim one penny back from the organisation which lodged the appeal and was unsuccessful.
I find it very strange that Esso can do in this country what it would be prevented from doing in the United States of America. At the moment it seems to be price fixing at the pumps, refusing to renew tenancies, taking over successful independent sites and arbitrarily ending contracts to supply petrol to filling stations which, in Esso's opinion, do not sell in large enough volume.
I believe that this whole business demands urgent investigation by the Government to try to ensure that there is no further enforced reduction in the number of independent filling stations in this country. At the same time, the planning laws should be looked at so that small businesses cannot be driven into bankruptcy by repeatedly having to spend large sums of money in successfully warding off planning appeals.
I hope that my right hon. Friend, when he replies, will be able to give me some
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message that the Government will look closely at this situation with a view to ensuring that small businesses will be allowed to prosper and trade fairly.
4.40 pm
Mr. Charles R. Morris: I have no wish to detain the House for any great length of time or to deny parliamentarians the approaching recess. But I am surprised and concerned that so far we have not had a ministerial statement from the Secretary of State for Industry about the location of the NEB-Inmos production unit at Bristol.
This important point was highlighted in a letter to The Times by three of my right hon. Friends on 29 February last. They were my right hon. Friends the Members for Chesterfield (Mr. Varley)— the former Secretary of State for Industry —for Swansea, West (Mr. Williams) and for Manchester, Ardwick (Mr. Kaufman). In their letter they suggested that NEB-Inmos was guilty of a breach of faith in suggesting that its production unit should be located alongside the technology centre at Bristol.
For the House to appreciate the significance of the letter it is necessary for me to recall the establishment of NEB-Inmos itself. It was set up with £50 million of public money. The handful of computer technologists who were attracted to return from the United States to establish a microprocessor industry were given a financial stake in that business. Additionally, when their view that they preferred to establish their technology centre at Bristol was made known, that was agreed to.
Former Labour Ministers claim, however—and this was indicated in the letter to The Times—that in return for those undertakings NEB-Inmos was to locate the production units—there will be four providing a total of 4,000 jobs— in the assisted areas. There has been no statement from the Secretary of State for Industry in reaction to the proposal to locate the unit in Bristol. He has a locus in the matter because he is now considering the payment of a further tranche of £25 million to NEB-Inmos. If the production unit is to go to Bristol, he will have to authorise an industrial development certificate.
In considering these two suggestions from the organisation, the right hon. Gentleman should re-endorse the approach

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of Labour Ministers and seek the undertaking which those Ministers sought and were given. The right hon. Gentleman should be getting a commitment from NEB-Inmos that the production units will be located in the assisted areas.
The North-West has an unanswerable case in this respect, and I say that not from any sense of mere parochialism. The last Government located the National Computer Centre in Manchester and the North-West because Manchester university is where the first computer was invented, and Manchester university, UMIST, and Salford university produce 12,500 graduates every year with a facility in computer technology. Before Inmos went to Bristol, the university there did not even have a chair in microelectronics.
I advance the claims not only of the North-West but of Wales, Scotland and the North-East. These are the areas which in recent years have lost tremendous numbers of manufacturing jobs. In the North-West the textile industry has been decimated, and there has been the contraction in coal mining, engineering and steel. If we are not to be considered for the new mobile industries upon which the future of Britain will depend—and I wish NEB-Inmos the greatest of success in establishing a microprocessor industry—the outlook is very bleak.
I have sufficient confidence in the Leader of the House that he will convey our concern on this matter to the Secretary of State for Industry. I hope that he will convey one other thought to his right hon. Friend—the hope that any Government statement on this crucially important issue will not be shuffled out by way of a written answer. We do not want an announcement of that significance to be dealt with in that manner.
4.45 pm
Mr. John Stokes: I do not think that we should adjourn for Easter until we have debated the influence which the BBC has on public opinion. We debated fairly recently the question of an additional television channel, but that debate touched only the periphery of this subject. Every hon. Member will agree that the BBC is the most powerful medium of news and propaganda in the country. It still enjoys immense prestige and reaches almost every
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household. It probably has far greater influence even than Parliament.
I was for many years an admirer of the BBC. In many ways I still am. I greatly respected Lord Reith, its first director-general, and I admired the tone and the high standard that he set from the earliest days. During the last war the BBC distinguished itself by the respect in which it was held, not only in this country but in enemy-occupied Europe and throughout the world.
Since the war there has been an enormous growth of television. In some senses it now dwarfs sound broadcasting. On the whole I prefer the latter. It is more responsible and has higher standards. Certainly the radio news bulletins are first-class, giving factual statements of the news which in my view are clearer and more succinct than those to be found, for instance, in the popular newspapers. The BBC television news falls short of its sound broadcast counterpart. The temptation for television is to concentrate on those items which will show up well through the camera. That is one of the grave faults of all television.
The broadcasting of the proceedings of Parliament is improving slowly. I was an outright opponent of the scheme, but having heard the transmissions from the other place I have to admit that their Lordships come across extremely well—so much better than we do. In broadcasting the proceedings in this Chamber, there is still too much emphasis on rows, scenes, angry confrontation and sensationalism which have little or nothing to do with the issues of significance here.
The BBC has much to be proud of. Its coverage of State events is magnificent. Its reporting of sporting items is, rightly, highly regarded. Above all, it still recognises the place of religion in this country, following in the traditions set by Lord Reith. However, I regret that the BBC falls down seriously in two other vital aspects—in morality and in the impartiality of its views. That is why I believe we should debate the subject before we adjourn.
The lapse in morality and taste started in the day of Sir Hugh Greene, the director-general who was proud to personify the permissive society, a phrase that fortunately is seldom heard today. It was under his leadership that the BBC began a whole series of reviews, sketches, skits

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and plays which fell far below its earlier high standards of morality.
The BBC might have plumbed even lower depths had it not been for the valiant efforts of one woman—and I refer to Mrs. Whitehouse, whom I greatly admire and who is greatly admired throughout the country. She at least partly stopped this moral rot.
Most hon. Members will agree that the inclination of the BBC is still far too much towards sex and violence in much of what it shows, inflicting, I fear, appalling damage on the moral fibre of the nation, particularly our young people. In some of the variety shows, the smutty jokes, the innuendoes and the sheer crudity and vulgarity jar in many households. We must never forget that, unlike the cinema, where entry can to some extent be regulated by age, BBC programmes can enter any sitting room. If no adult is present, the set may not be turned off.
At the same time as there has been a fall in moral standards, there has been an attack, I regret to say, by some BBC producers on the integrity, cohesion and patriotism of the nation. In the myriad of talks, commentaries, discussion groups, surveys and all the paraphernalia of the modern news media in dissecting and debating absolutely everything, whether or not a suitable subject, I find, to my distress, that there often creeps in bias that is inimical to the best interests of the nation.
The producers themselves may not even realise this. Being men of ideas with little practical experience of life, they are naturally bound to be more criticial than constructive. We may have found this here from some of those who, at one time, followed that profession. These producers seem to have a very free rein from their controllers. Some of them, I suspect, are the sort of people who, in private life, read The Guardian newspaper and who mistakenly believe that those are the views of the ordinary Englishman, not realising, of course, that the ordinary Englishman never reads The Guardian. Some of them have never even heard of it.
In spite of all the brainwashing by the BBC, the ordinary Englishman still loves his country and its institutions and reveres its heritage. Often, in BBC discussion programmes, it is painful to see how the point of view of the ordinary
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man in the street is belittled or ignored and various so-called trendy or progressive views are purveyed as if they were opinions generally widely held.
More serious Is the bias and the occasional appalling blunder of which there have been several examples recently —for instance, the interview with the IRA, giving it a status and publicity it dearly seeks. Can one imagine any foreign broadcasting organisation committing such a crime against the security of the State? More recently, there was a scandalous programme about the Army called "Gone for a Soldier" which gave great and universal offence. Even after showing those programmes, the BBC was actually considering selling this damaging indictment of our Army to foreign organisations before public opinion forced it to shelve the plan. This attack on the Army was particularly inappropriate at the time of its outstanding success in Rhodesia—a success, I venture to suggest, that no other army could equal.
These are highly disturbing matters. They cause great resentment, not amusement, as I know from representations by my constituents and from more general protests. If the BBC, the State institution, cannot stand by its own country and people, who, after all, pay for it and wish to look up to it, where can people look to in public affairs? Surely this is "treason by the clerks" writ large. That is why I believe we should debate this matter before we rise for Easter.
4.54 pm
Mr. Peter Hardy: The hon. Member for Halesowen and Stour-bridge (Mr. Stokes) will forgive me if I do not follow his remarks. It is interesting that Conservative Members frequently berate the British Broadcasting Corporation—I have, from time to time, criticised it myself—but rarely devote any time or energy to criticising newspapers such as The Sun when they would not allow that newspaper to enter their homes. I would not like it to enter my home. I have no intention of allowing it to do so. It seems to me that if Conservative Members are concerned about morality and responsibility they should devote more attention to the cheaper newspapers.
Mr. Stokes: I have frequently criticised The Sun and other newspapers for their photographs. I do so now.
Mr. Hardy: I am delighted to hear that. I only hope that more Conservative Members will emulate the hon. Gentleman's attitude towards such newspapers. There is a noticeable quiescence among Conservative Members about the appalling way in which Britain is served by the cheaper newspapers, both during the week and on Sundays.
My purpose in speaking, I hope briefly, is to suggest, for the first time in the 10 years I have been a Member, that the House should not rise until it has examined some urgent and serious problems. I shall reduce the number of items to which I refer, although the list is very long. I am concerned, for example, about the rate of unemployment in Yorkshire and Humberside, especially the impending enormous increase in the unemployed in the building and civil engineering industry. The needs and the lengthening dole queues in Yorkshire and Humberside show an insanity in our society. The air, the water and the environment of the area could be improved.
The quality of the local rivers—the open sewers of the Don, the Dearne and the Rother—recalls to my mind the hopes of a few years ago that those rivers would be upgraded in their classification by the mid-1980s. It is no wonder that my constituents are angry about the water rates now coming through their letterboxes. Although the people of South Yorkshire are prepared to contribute from their pockets to secure the improved cleanliness of the rivers, it is not acceptable that they should now be paying more while the rivers remain dirty for a great deal longer. The water rates, to some extent, are a consequence of the Water Act 1973, about which I have spoken in the House before. It was a muddled piece of legislation.
I was delighted when the previous Labour Government prepared a Bill to put right the inadequacies of the 1973 Act. Among those inadequacies—one that is felt sorely in at least 235 homes in my constituency—are the problems of people whose homes are not connected to the main sewers. This is the fourth time I have mentioned this issue in a debate in the House. As I said in 1979, there was a prospect of the Labour Government getting a Bill through the House to put the matter right, but there has been no
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sign whatever that the present Government will put right the appalling injustice to the 1 million or more people in Britain who depend on services not connected to main sewers. It is not fair for a Government to pretend to be the guardian of rural England when those affected, who are largely the dwellers of rural England, face increasing disadvantage.
Water rates are increasing. People are getting less of a bargain. I do not deplore or condemn those who serve on the water authorities. The root of the problem is the inadequacy of the Government's economic policy.
Just as water rates are rising, so are local government rates rising enormously. It is a far cry from the time, two or three years ago, when the Conservative Party was pledging to abolish the domestic rate. No doubt it will return to that demand in the autumn of 1982 as the election approaches.
Local government is placed in appalling difficulty. In my area the Government would like the borough council savagely to cut education and social services. The council is seeking to stand fast, but during the next year or two the pressure to reduce expenditure will grow. It may be that if pressure is maintained and the rate support grant shrinks in value the local authority will be hard put to it to maintain services.
In my constituency, as in many others, the number of elderly people is rising rapidly. Far from reducing social services expenditure by 6¾ per cent. as the Government wish, we should be increasing it in order to match the need.
Rotherham borough council has a first-class record in the provision of social services for the elderly. If the Government had their way, the facilities which we offer would be pruned drastically and problems would ensue. Unless the council increases provision over the next two years, services for the elderly will be in danger.
That is bad enough, but at the same time my area health authority is plunged into serious difficulties. It has not enough money to meet local needs. I have tried recently to secure an opportunity to raise this question in the House, and I am

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glad to have that chance to do so before Easter.
Rotherham area health authority is proposing to close Rosehill hospital, at Rawmarsh, and the Listerdale maternity hospital, at Wickersley. These hospitals will remain empty while need is severe. It is ridiculous that hospitals will be empty when the need is reaching appalling levels.
For many years until recently, psychiatric patients from my constituency were automatically sent to Middlewood hospital, in Sheffield. We are now told that such patients can no longer be sent to Sheffield. If there was adequate provision in Rotherham, that would be desirable perhaps, but we do not have that capacity.
I became involved in a case not long ago in which a very old and senile lady offered violence to the baby granddaughter of the family with whom she lived. She had to be rushed immediately to Middlewood. From now on we shall not be able to send such cases to Middle-wood. I do not know whether we have the facilities to cater for such a case in Rotherham, and that worries me. If the area health authority is expected to meet local needs, it should have extra finance. When the Government deny that area health authority even the money needed to keep up with the increase in VAT, imposed last year by the Government, we are in a serious situation.
Another matter of immense local importance in my constituency—and I believe of national importance—is the future of British Steel Corporation (Chemicals) Ltd. I believe that yesterday it was intended that the two large coking plants which form the bulk of the coking capacity of BSC (Chemicals) were to be transfered to the Yorkshire and Humberside division of the British Steel Corporation. Whether that occurred I do not know. Perhaps I should know as the Member of Parliament concerned.
However, I was relieved to hear that the coking capacity currently owned by BSC (Chemicals) would be transferred to another division of the BSC and not hived off. Unfortunately, however, I believe that it is the intention of the BSC and its masters in the Department of Industry that the chemicals content of BSC (Chemicals) is to be disposed of, or at
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least that a majority interest is to be sold.
I am anxious about that for a number of reasons. I considered the matter carefully over the weekend and I discovered that BSC (Chemicals) Ltd. is a highly successful enterprise. Even in the face of the serious and avoidable steel strike —.it would have been avoided had the Government not embarked upon a lunatic course—BSC (Chemicals) will be profitable in the current financial year as it has been profitable for a good many years.
The company is a developing organisation. It has invested in various parts of the country and in one or two outlets abroad to develop its electro-coating process. The firm would be a profitable source of investment and I understand that it needs capital of about £8 million or £9 million for current development.
However, the BSC main board, partly because of the interfering attitude of the Department of Industry, is unable to provide that capital. It seems likely that the main board has suggested to BSC Chemicals that it disposes of a majority interest —for perhaps a grossly inadequate sum —in order to develop capacity at Port Clarence and to develop overseas outlets for the electro-coating process.
Many hundreds of my constituents are employed by the BSC yet they do not know, and I do not know, what the position is. As a representative of those constituents, and of the taxpayers of Britain who are possibly being denied the opportunity to benefit from future and perhaps imminent profitability, I think I should have detailed information about the present position.
It is regrettable that the BSC in London —I do not complain about the Sheffield headquarters or at this stage about the Chesterfield headquarters of BSC (Chemicals) Ltd.—has not informed those employed in the industry, or hon. Members who represent them, of deals which are, perhaps, currently being negotiated. People should have adequate information about their future, and their parliamentary representatives should be informed about deals which are now clearly being done behind closed doors. I hope that those doors will soon be open.
Parliament is entitled to a short holiday. If the Government were taking a holiday as well, we would probably be overjoyed at the prospect of a break. However, we are going away but the Government

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will continue to govern. Tribute has been paid to Mrs. Whitehouse. I find some things to criticise in her utterances, but if we are to go away and leave the Government in charge I would rather Mrs. Whitehouse were at No. 10 Downing Street over Easter than the right hon. Lady the Prime Minister.
5.7 pm
Sir Ronald Bell: I wish to refer on this motion to an institution in my constituency which serves a national function. But before turning to that I would like to say how much I agreed with what was said by my hon. Friend the Member for Halesowen and Stour-bridge (Mr. Stokes). Anyone who speaks as he did about what needs to be done about the BBC exposes himself to the charge of naivety in the eyes of some. This is a serious national problem. We either have confidence in ourselves as a community and a nation or we face a doubtful future.
The problem which the BBC faces—I have always recognised this—is not bias among top management. I differ with my hon. Friend on this. The BBC has a problem of recruitment which it does not know how to solve. The difficulty underlying the complaints of my hon. Friend is that those who are, shall we say, on the Right in politics or in the middle, or who are not politically minded when they come down from the universities, go into useful and productive occupations. On the other hand, those primarily concerned with Left-wing politics make a straight line for the media.
Mr. Ronald W. Brown: And the law.
Sir R. Bell: Not the law. They go into newspapers and broadcasting. I often criticise the results of that. I believe that such people think that they are being impartial, but they do not know where the middle of the road is.
Mr. Cryer: They are not the only ones.
Sir R. Bell: The hon. Member for Keighley (Mr. Cryer) is wrong. I never imagined that I was in the middle of the road. On the contrary, I have always said that the middle of the road position is defined by those who are on the far Left or the far Right. One discovers the middle by adding the two together and dividing. Those of us who do not seek
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to be in the middle of the road have a greater influence than those who like to be there.
I turn to a local consideration—the Farnham Park rehabilitation centre in my constituency, which is threatened with closure. It is threatened for a reason which explains why I raise it in this forum. It is being closed because it serves a national need and not a local need. The local health authority, seeking economies, naturally turns to an institution which serves a national need.
The centre rehabilitates seriously damaged people. Its main function is to restore working capacity to individuals who are disabled by whatsoever cause. The criteria for admission are that the patient should be unable to work and that he should have been previously, but unsuccessfully, treated at a district general hospital. We are discussing a centre of second referral. When a district general hospital has had a go at a patient and has failed, that patient is sent to the Farnham centre. Such a patient might have suffered a stroke, an athletic injury, disseminated sclerosis or another disabling disease.
The centre is so successful that in recent weeks hon. Members from all parts of the country and in all parts of the House have written to me after receiving representations from their constituents. I have been asked to do what I can to ensure that the centre continues its work.
When health authorities scrutinise their budgets, they naturally consider what is most useful for the area. The East Berkshire district management team has concluded that the services provided at Farnham Park rehabilitation centre are of only marginal benefit to the district. A total of 70 per cent. of patients come from outside the region, so an even higher proportion comes from outside the district. I have no doubt that the health authority has examined the cost and said "Goodness, the vast majority of patients come from other parts of the country, so this is a jolly good candidate for economy."
It might be said that the issues could be raised in an Adjournment debate, but such an idea is preposterous since so many hon. Members would wish to take part in the debate. On the other hand, the subject is hardly suitable for a five-hour debate on a balloted motion. The

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decision is apparently to be made by the district or area health authority and yet the centre is important nationally. How can one deal with it except by having a debate in the House? How otherwise can one exercise influence? It is not for me to suggest how the problem might be solved, but perhaps my right hon. Friend the Secretary of State for Social Services should make a special allocation of funds for the centre, which is financed by a local health authority but fulfils a national function as an institution of second referral for totally disabled patients.
The centre has an extraordinary record of restoring patients to health and normal activity. I have a large pile of letters which have been sent to me in the last few months since the threat arose. The letters come mainly from outside my constituency. They are from patients who have profited and returned to active work as a result of the special skills at the centre.
I hope that my right hon. Friend the Leader of the House will deal with the matter. I hope that he will bear it in mind when I raise the issue as a possible subject for debate. I hope that he will draw the attention of the Secretary of State to the problem of the rehabilitation centre.
5.16 pm
Mr. Alan Williams: I wish to speak of one issue alone. Like my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris), I wish to explore the mystery of the missing statement. Two weeks ago my right hon. Friend and I, during the Consolidated Fund debate, raised yet again the question of the £25 million and the fight for Inmos. We were told that a decision was imminent. We expected a decision to be taken within days because it had already been considered by a ministerial Committee.
On the day before we go into Recess, nothing has been said to the House. A motion on the Order Paper has attracted nearly 100 signatures, such is the anxiety of hon. Members in various parts of the country. In the Chamber now are right hon. and hon. Friends representing Scottish, Yorkshire, Welsh, North-West and Northern constituencies. They all represent areas which have a direct interest in the Government's decision.
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We must bear in mind that at this stage in our economic affairs a production unit providing 1,000 jobs is attractive to and necessary for many parts of the country. I emphasise the peculiar nature of the development of the decision. When I was a Minister at the Department of Industry, the original assurance was given to me by the National Enterprise Board that if an industrial development certificate was given to Inmos to allow it to go to Bristol all the production units would go to assisted areas. That would result in 4,000 jobs.
A PA Management Consultants report was commissioned to analyse potential sites. Local authorities in various parts of the country, at considerable cost, made submissions to the consultants, explaining the sites that were available and the advantages of their localities. The report is surrounded in mystery. When I asked a National Enterprise Board spokesman whether the report recommended that the production unit should also go to Bristol, despite the promise from the NEB, he said that he could not remember what was in the report and that he did not have a copy of it. I was also told that the board would not want to put a copy of the report in the Library because it would be confusing to hon. Members. I am sure that it would be confusing if the report did not endorse the site for which Inmos is now pressing at Bristol. That is why we expect a statement from the Minister before the House goes into recess.
What has happened in the last two weeks that has prevented us from obtaining the information? There is considerable interest on the Government Back Benches about whether the£25 million should be given. I believe that my right hon. and hon. Friends and I are united in saying that we think that the money should be given to Inmos. But it is right that Government Members who take a different view should at least have an opportunity to question the Minister when he announces his decision. Whether or not the Minister decides that the production unit should go to Bristol, there are hon. Members who represent Bristol constituencies and assisted areas who will want to probe further the reasons for the site that has been chosen.
Mr. Alfred Morris: My right hon. Friend is

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making a point that is extremely important to my constituency and to the North-West. What he has said about the siting of the production unit seems to imply that there may have been some breach of faith. I read my right hon. Friend's letter in The Times on 29 February. What was said then was very disturbing to localities such as my own, and I hope that my right hon. Friend will tell us more about the intentions of Ministers in the previous Government.
Mr. Williams: I shall be as helpful as I can, but I must be careful because there are other hon. Members who want to speak.
When the application was made, I immediately said that I opposed it because in my view it was almost inevitable that Inmos would follow up with an application to site the production unit nearby. At that stage I was given an absolute assurance by the then deputy chairman of the National Enterprise Board, repeated by him at a further meeting and repeated by the chairman at a final meeting with my right hon. Friend the Member for Chesterfield (Mr. Varley), the then Secretary of State for Industry. I believe that my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) was also present. We were given assurances that it was not necessary for the production unit to be near the actual research and development unit.
I went into lengthy discussion with the deputy chairman about a Manchester site. I pointed out that in assisted areas, such as Manchester and the North-West, there was already a strong computer link and a good international airport. The same applies to Scotland, Wales and the North of England, where there is considerable infrastructure in terms of university back-up, labour availability and so on. All this was discussed, and it was on that basis that the PA report was to be commissioned, to find out which would be the most suitable site in the assisted areas.
We shall not be satisfied with a furtive written answer, slipped out at the last minute tomorrow afternoon when there will be no press and few hon. Members available to interrogate the Minister. If the Secretary of State for Industry does that, it will be seen as cowardly in the House and in the areas that have a direct interest in the siting of this project.
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Therefore, I emphasise to the Leader of the House that we expect a full statement. If we are not to have a statement this side of the recess, we expect an assurance from him that there will be no furtive, underhand announcement tomorrow or during the recess. We want an assurance that an announcement will be made when the House is back, when the Minister can be fully interrogated.
5.24 pm
Mr. John Bruce-Gardyne: I am inclined to agree with the right hon. Member for Swansea. West (Mr. Williams) in his request for a full statement on the Inmos project and an opportunity to discuss it. I, among others, have considerable scepticism about the wisdom of this proposed investment. I would not share the right hon. Gentleman's enthusiasm for finding this project dumped down anywhere near my constituency back-yard, because I have a nasty suspicion that it will probably end in tears. However, I certainly believe that it is investment which the House should have an opportunity to discuss; so to that extent I agree with the right hon. Gentleman.
I also agree with the remarks of the hon. Member for Brent, South (Mr. Pavitt), that this debate has tended to be occasion for hypocrisy. We all rise, one after another, and announce all sorts of reasons why the House should not adjourn, but we know in our heart of hearts that we would be absolutely horrified if my right hon. Friend turned round and said "I am so impressed by all the arguments that have been advanced that I have decided that we should abandon the Easter Recess." So we should be a little careful about the way in which we approach the matters in hand.
Having said that, I want to throw into the pool three little items of varying importance upon which I feel we could benefit from some elucidation before the House rises for this brief break. The first item is the report which emerged from the Monopolies and Mergers Commission yesterday evening on the Post Office monopoly. It may be recalled that this is a matter which has been before the Secretary of State for Industry for nine months. We now have from the commission a report which seems to be a remarkably half-baked document. The report finds, as if we did not know, that there is a

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Post Office monopoly of the mails. It also finds, as if we did not know, that that is a monopoly which works against the public interest. For reasons which, I confess, entirely escape my understanding, the commission also finds that, perhaps on balance, it would be better to do nothing about this monopoly.
The commission points out that it is about the fourth body that has examined the Post Office in the past four or five years and that all of them have found rapidly deteriorating services and rapidly escalating costs, together with mountainous public dissatisfaction. All these bodies have told the Post Office that it must mend its ways or else, and the Post Office has responded with a solemn pledge that mend its ways it would; yet each of these bodies has been equally ineffective in achieving any visible improvement.
Against that background, it is urgent that we should have from my right hon. Friend—before we rise for the Easter Recess if humanly possible, but certainly immediately after our return—a response to the report and, for preference, a response which shows the courage of the conclusions of the commission and determines that the time has come to rescind the legal monopoly in which the Post Office basks. Although the commission's report relates to the services supplied—if that is the right word, but reading the report I do not believe that it is; perhaps the words should be "supposedly supplied"—by the Post Office to its customers in inner London, its conclusions clearly apply with equal force to the rest of the country.
The only argument which the commission seems to be able to sustain in favour of the retention of what it admits to be an abusive monopoly is that if the monopoly was withdrawn those in rural areas, whom the commission was not considering, would suffer from a diminution of public service not compensated for by access to cheaper, if less reliable, services. Since the whole drift of the report is that competition, if it were allowed, would possibly be more expensive though more reliable, that is an even more profoundly mystifying conclusion than many other aspects of the report.
What we need now as a matter of some urgency is a statement from my right hon. Friend the Secretary of State for Industry, in the light of this report
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and in the light of the departmental investigation which he has conducted for more than nine months, about the desirability of continuing with a Post Office monopoly. I remind my right hon. Friend the Leader of the House that when the Secretary of State for Industry announced the departmental inquiry, he promised to announce the conclusion thereof early in the new year. Three months have now elapsed, and we are about to go into the Easter Recess. Therefore, this is becoming a matter of urgency.
That is my first point. I can raise the second point very briefly. My right hon. Friend the Leader of the House gave an undertaking at the beginning of the year that there would be an early debate on British Leyland's corporate plan. I must admit that when I heard him give that undertaking it did not occur to me that we would be rising for the Easter Recess without having had a debate. I must point out that £300 million of taxpayers' money is involved and that Sir Michael Edwardes informed the Secretary of State back in December that that corporate plan would have to be reconsidered completely de novo in the event of a shortfall in the corporation's cash flow. I suggest that there are reasons for questioning whether that event has not already occurred.
At any rate, from reading my right hon. Friend's answer to me in January, it would be difficult to have drawn the conclusion that we would be rising for the Easter Recess without ever having had that debate. I hope that my right hon. Friend can now assure us that he will give time for such a debate at an early moment after our return. Members of Parliament are answerable to their constituents for the enormous sums that are being put into that business. We need some opportunity to scrutinise whether that is a proper utilisation of public funds.
My third point is also of direct concern to my right hon. Friend. I refer to the report published yesterday by the Select Committee on the Treasury and Civil Service, which commented on the manner in which the Spring Supplementary Estimates are handled. As my right hon. Friend knows, I raised this matter only a few days ago on the Floor of the House, when we were invited to pass £850 million of Spring Supplementary Estimates on the nod.

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The Select Committee on the Treasury and Civil Service has basically come up with two recommendations, one of which we could all endorse. That is the appeal to my right hon. Friend to establish the new Procedure Committee as soon as may be, so that we can have a fresh look at the quite inadequate way in which Parliament at present scrutinises these enormous additions to public expenditure as they are supposedly put before us.
The second recommendation seems to raise rather greater problems, but again it is obviously a matter at which the Procedure Committee should look. Apparently, the Select Committee recommends that the Supplementary Estimates should be scrutinised by the relevant Departmental Select Committees. The trouble about that is that if one takes the latest Spring Supplementary Estimates, there were two serious defaulters with regard to breaching cash limits. One was the Scottish Office and the other was the Ministry of Defence. I put it to the House that one must ask whether the Select Committee on defence or the Select Committee on Scottish affairs represents the best substitute for proper scrutiny by the House of Commons as a whole of the way in which a Department has burst its stays and breached the cash limits which were set for it.
We must remember that to some extent Select Committees must inevitably be regarded as something in the nature of captive balloons of the Departments to which they are attached. That has always been the criticism which can be made about the system. At any rate, it would be desirable for the Procedure Committee, when it is set up, to look rather carefully at this aspect of the proposals that have now come from the Select Committee on the Treasury and Civil Service.
Perhaps the point of greatest relevance this evening is that we need the Procedure Committee. I must confess to my right hon. Friend that I was a little disappointed—I hope that this is not being ungenerous—by the terms of the reply which he made to our brief debate on the business motion the other day, when the subject of the Spring Supplementary Estimates was raised. I hasten to add that I was disappointed only with that
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part of his reply which referred to the establishment of the Procedure Committee. I would hate to suggest that my right hon. Friend was implying that this was a matter for the wild blue yonder, but on the other hand, from reading or listening to that part of his reply, I do not think one could get the impression that this was the highest item on his list of priorities. I believe that this is a matter of urgency. Again, if we cannot see progress before the Easter Recess—and I agree that time is short—I hope that my right hon. Friend will be able to offer the prospect of movement very early after our return.
5.36 pm
Mr. David Winnick: I believe that our discussions today have shown value of a debate on the motion which has been put forward by the Leader of the House. It would clearly be wrong to take that motion on the nod. This debate provides an opportunity for hon. Members to put various matters to the House which they consider to be important. While it is perfectly true, as the hon. Member for Knutsford (Mr. Bruce-Gardyne) said, that we do not believe that the end result will be that the House will not adjourn for the Easter Recess, nevertheless it is right and proper to have this opportunity of debating various topics.
The topic that I wish to raise is important. It concerns Britain's reputation. I refer to the possibility of the Government allowing arms to be sold to the Chilean authorities. The House knows that when the Labour Government came into office in 1974 they rightly decided that arms should not be sold to the Chilean junta, for the most understandable political reasons. A story appeared in The Guardian last Saturday which seemed to indicate that it is the intention of the present Government to reverse that policy. I hope that there will be some announcement before we go into recess about what the Government intend to do.
I also understand that my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), who is the Shadow foreign affairs spokesman has written to the Foreign Secretary expressing his strong concern at the possibility that arms will be sold to the Chilean authorities.

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In the last few weeks, much has been said in the House about represssion in the Soviet Union. As I understand it, Conservative Members, and, indeed, the Government, argue that it is not simply the Russian aggression in Afghanistan which should prevent sportsmen from participating in the Olympics but the lack of freedom inside the Soviet Union itself. Conservative Members have often taken the opportunity to tell the House how dreadful things are in Russia and in Eastern Europe generally.
I am one of those Socialists who does not deny for a moment that there is a complete absence of civil liberties in the Soviet Union. I think that is the view of most, if not all, of my right hon. and hon. Friends. But it would be utter hypocrisy if Conservative Members or the Government lectured us about the situation in the Soviet Union and yet were quite willing and enthusiastic to sell arms to the Chilean authorities.
The position in Chile has not changed a great deal since the coup in 1973. Then, of course, a democratically elected Government were destroyed by violence, and a group of people—army officers and the rest—took power in their place and pursued a policy of murder, torture and brutality. One of the people who was tortured was a British citizen, Dr Sheila Cassidy. As a result of the treatment that she received at the hands of the Chilean authorities, the United Kingdom ambassador was withdrawn. I believe that it was highly deplorable that we should have sent an ambassador back to Chile. Once again, it seems that a Tory Government show a willingness, to put it no higher, to collaborate with a Fascist regime.
There is an important difference between saying that we do not like the regime, but that is no reason why we should not have diplomatic relations, and saying that we should supply arms to the Chilean junta. I can see no possible justification for a policy of selling arms to people who still carry on a policy of murder and torture.
I argue that Britain's reputation will be tarnished if we decide to reverse our policy and sell arms to the sort of people who now rule in Chile. If there is a feeling that I am exaggerating, I turn from The Guardian to a quotation from The Times. I remind the House that when
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the coup took place in Chile The Times decided to justify it two days after the event, just as the Tory Government justified it. However, on 18 January this year The Times said:
"The regime is in fact resisting all attempts to account for the hundreds of people who have been tortured and killed since the military came to power. It has also retained the apparatus of oppression which enables it to hold down organized opposition, and still includes torture as a way of extracting information."
That is a quotation from The Times—hardly the voice of radical thought in the United Kingdom.
I hope that we shall get a statement before the House rises for the Easter Recess. It worries me that perhaps while we are away the Government's policy will be changed and we shall not have an opportunity to challenge it. That would be a most unfortunate way of carrying out such a reversal of policy.
I urge the Government to be consistent. They say that they do not like the lack of freedom in Eastern Europe. They say they are concerned about the lack of civil liberties. I agree that things are deplorable in Eastern Europe, but what consistency can there be if a Tory Government argue on those lines and yet are quite willing to allow arms to be sent to a repressive and brutal regime which continues to hold power in Latin America? I hope that this country will be consistent, and that the Government will pursue the same policy as the Labour Party pursued when it was in office.
5.42 pm
Mr. Ivor Stanbrook: I believe that the House should not adjourn until it has had the opportunity to discuss a matter of major importance, namely, the lengthening period of delay between committal for trial and the holding of the trial in criminal cases. This is an injustice which has been present for a long time in our system and which has increased considerably in the last few years.
To their credit, the previous Conservative Government managed to bring down the average period for those awaiting trial by the provision of a number of extra courts. In 1974 defendants on bail had a waiting time which averaged 11·2 weeks. Defendants in custody waited for an average of 7·1 weeks. Those were the best figures that we had had for several years.

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My right hon. and learned Friend the Attorney-General supplied me with some helpful statistics on 24 March which show that the figures have increased progressively every year since 1974. By 1979, defendants on bail were awaiting trial for an average of 19 weeks and those in custody were waiting for an average of 11·1 weeks. In other words, on average, after a defendant has been committed for trial, if he has been remanded on bail he must wait almost five months for the trial, and if he is remanded in custody he must wait three months in prison for his trial.
These figures conceal a horrifying reality. Being averages, they do not take account of the large number of cases in which those on bail or in custody wait a considerable time before their cases are heard. In fact, in some cases now being heard in the criminal courts up and down the country the defendants have been in custody for more than 12 months. That is disgraceful, and unfortunately the figures are increasing all the time.
In all cases, a gross injustice is committed to the defendants. That is particularly so when they are subsequently acquitted of the offence, so that in the eyes of the law they have never committed it at all. In such cases they have either been incarcerated in custody for a long time or have been on bail under suspicion and with the threat of imprisonment hanging over them. That gives rise to tremendous misery and hardship.
I am not concerned only with the problems of defendants. I am also concerned with the quality of justice. After 12 months, witnesses simply cannot remember the detail of what they may have heard or seen on the occasion which forms the basis of the facts on which the allegations of crimes are made. Many times in periods of far less than 12 months witnesses have gone into the witness box and been unable to remember details of identity, time and distance—details which are very often vital for the prosecution or the defence; its cuts both ways. The result is gross injustice.
What is more, our laws of evidence, which were framed in a more gracious, spacious and leisurely age, do not assist in this respect. It is no help to a court that is trying to get at the truth when the facts concerned occurred several months before and when the laws of evidence
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prevent the admission of evidence that might otherwise assist in getting at the truth. The result is not only injustice because of the quality of justice, and the misery and hardship caused to the defendants and their families, but overcrowding in our prisons, especially local prisons, and remand centres where people are remanded in custody to await trial.
One notices that on the Order Paper no fewer than 112 Members have signed early-day motion No. 536 which calls attention to this great problem within our prison system. Therefore, this is regarded as an important and difficult problem which must be tackled within the context of our penal system. However, I believe that it is in respect of the quality of justice that the matter needs urgent attention. One accepts that the Government are doing their best, but unfortunately this is not a subject which is often raised in the House or which often receives the most urgent attention from the Government. That is why this is the right time to raise it.
Mr. Ronald W. Brown: An added problem is that remand prisons are overcrowded. Unconvicted prisoners are now being moved to other prisons as category A prisoners. They are being refused the right to wear civilian clothes while in those prisons. They are being treated as convicted prisoners.
Mr. Stanbrook: I completely accept the hon. Gentleman's point. Speaking as a London Member, he knows of the hardships and miseries that are inflicted upon those in Brixton. That prison is overcrowded, and occasionally incidents have occurred. Overcrowding is a great strain on prisoners and on prison warders and staff, and that bodes ill for all concerned. The problem must be tackled urgently.
One recalls that the last Conservative Government were able to help by the provision of courts. They accelerated the building programme. Courts were built rapidly and provided great relief for an over-pressed system, and one must look forward to more courts being built. However, as a result of public expenditure constraints we may have to find fresh courts within existing buildings. I am sure that that can be done. We should make greater use of our court buildings.

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Perhaps we shall be told that it is a question not only of buildings but of staff. I suggest that we should adopt unorthodox methods for organising trials. For example, we could stagger court hours. Perhaps two courts could sit in the same premises on one day. One court could start at 8.30 am and finish at 2 pm, and another could start at 2.30 pm and finish at 8 pm, using a separate staff. The personnel rota would be organised accordingly. Something like that must be tried because the problem is desperately urgent. We may well see a horrifying explosion if we take no action. Justice may suffer from such delay. Justice delayed is justice denied. I hope that the Government will bring their proposals before the House as soon as possible.
5.52 pm
Mr. Tam Dalyell: My speech will be truncated because I have given notice to the three relevant Departments. My first point concerns the Department of Health and Social Security. It concerns the cost of kidney dialysis. Mrs. Elizabeth Ward, who has done sterling work for kidney patients, spoke on the radio this morning. She raised the point—as she did at a press conference yesterday—that the British Kidney Patients' Association can have a four-unit dialysis set-up for £42,000.
The average price for a similar unit for area health boards in Scotland and England is £150,000. That arises partly because they will not accept the Portakabin method. I checked with Mrs. Ward this morning, and that is known to the Department. Quite rightly, she is unwilling to make a personal issue of it and she will not name the authorities about which she is complaining. However, as there are lengthening lists of kidney patients, the Department should ask how the British Kidney Patients' Association can apparently do a job three times more cheaply than area hospital boards. I spoke to the Secretary of State on this point. I gather that his Department will comment.
The second issue concerns the Board of Trade. Again, I have given notice of my question. A very serious issue has arisen as a result of the dual pricing system carried out in the United States. It is operated by the American Government for energy supplies and for chemical feedstock. Areas such as mine and the con-
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stituency of my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) are greatly threatened because whole sectors of the European chemical industry will be at risk by 1984–85 unless urgent decisions are taken in relation to iso proponol, acrilonitrate, styrene and vinyl acetate.
Notice has been given to the office of the Leader of the House and to the Department of Trade. They know the precise nature of the problem. In the various international discussions that will take place before Parliament reassembles, I hope that the Secretary of State for Trade will make some argument for a common tariff on behalf of EEC countries.
The third issue of which I gave notice concerns my constituents, particularly those on North Sea oil rigs, who are involved at Hound Point and many other terminals. One of my constituents was among the lucky ones to be saved from the recent rig disaster. I ask the Leader of the House, in his capacity as Government business manager, to change the business of the House so that instead of discussing the Criminal Justice (Scotland) [Lords] Bill on April 14 we could discuss the Burgoyne report, "Offshore Safety."
Like many of my hon. Friends, I am very concerned about the minority report that comes from two trade union members, Mr. Miller and Mr. Lyons. They say, in paragraph 24, page 62:
"Meanwhile in the UK sector the position is really quite scandalous. In spite of UKOOA understandings with the Inter-Union Offshore Oil Committee (IUOOC) over trade union rights to access and recognition offshore, a battery of devices are used to minimise the trade union presence amongst permanent platform employees involved in production. To date there is only one collective bargaining agreement offshore, covering gas platform staff in the southern sector, and that was only secured after several years of resistance. Elsewhere pressure, intimidation, temporary bribes, and other means are used to hold back the development of bona fide trade union organisation and recognition".
Having said that, they think that the Norwegian set-up is slightly better. They conclude:
"We firmly believe that the alternative advice we have given in our report is vital to the aim of achieving the maximum possible reduction in deaths, injuries and dangerous occurrences offshore. So many of the other recommendations of the Committee, which we fully endorse, would, in our view, be overshadowed by the weaknesses of the Report that we have identified. We particularly desire to avoid a

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well-meant exercise in reviewing offshore health and safety standards being turned into the vehicle for an ill-considered attempt to exclude the HSE and the development of realistic, responsible tripartite consultation, from the North Sea".
For many decades the mining industry has accepted that those who are responsible for safety should not be connected with the sponsoring Department. I hope that my right hon. Friend the Member for Ebbw Vale (Mr. Foot) will have some sympathy with my argument concerning the discussion of criminal justice on Monday 14 April. We should turn our minds quickly towards offshore safety.
Among the various rig workers in my constituency with whom I have talked, I cannot detect any great panic. Of course, it is natural that their wives and families are worried. That is understandable. The sooner that we get down to detailed consideration of the Burgoyne report, the better.
I have two further points, the first of a domestic House of Commons nature. The summer is once again on us. Will the Leader of the House look at the Strangers Gallery at Question Time? We all know how difficult it is to run around like the proverbial fly, trying to get tickets for our constituents. At 3.5 pm during Scottish questions, a whole sector of the Gallery was empty. I had the curiosity to go outside, and I counted over 50 people sitting in the area leading from St. Stephen's entrance, and doubtless there was a further queue outside.
We should turn our minds to a proper system of allocating tickets. The fault lies not with the Serjeant at Arms and his Department but with ourselves under this system in which the House Committee insists that the tickets should be allocated. Colleagues who may be away on delegations or at the Council or Europe often put tickets into their pockets, which are not used, and those of us who may need tickets do not get the benefit of them.
Before the summer, could some consideration be given at least to a trial period to allow hon. Members to put in for tickets when they need them, without the allocation? None of us will apply for tickets unnecessarily, but any hon. Member who is unduly greedy will surely be sorted out by colleagues. A more rational system should prevail.
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From a comparatively minor matter, may I turn to a major matter? It will be in the recollection of the House that last Friday we had a five-hour debate on the Brandt Commission report. With qualifications from the Government and with the exception of one Conservative Member, there was unanimous support in the House for its recommendations, which were far-reaching. They included a tax on international arms sales and dealt with the basic issue of the North-South relationship.
With due deference to the hon. Member for Cambridge (Mr. Rhodes James), who raised the matter, it is of great importance that we have a two-day debate shortly after the recess on the whole issue of the Brandt report. Surely the Government are not satisfied with a Friday debate on such a major issue and will make time for proper House of Commons consideration of these vital issues.
Mr. Speaker: Before we continue, I have a brief statement to make. I hope to be in the Chair tomorrow morning from 9.30 onwards. It will therefore be necessary for private notice questions that hon. Members wish to table tomorrow to reach me by 9 am at the latest, otherwise I shall not be able to give them proper consideration before the House sits. Once I am in the Chair for Question Time, I cannot consider private notice questions.
6.3 pm
Mr. A. P. Costain: On these occasions the Leader of the House is expected to answer for all omissions of Ministers, real and imaginary.
I wish to raise matters of which my right hon. Friend the Leader of the House is well aware. The Public Accounts Committee has published seven reports which we have not yet had the opportunity to debate. That is a record number of outstanding reports. It is particularly important that these reports should be debated. At a time of financial stringency, it is necessary to draw the Government's attention to the waste of money that often occurs when politicians start construction works long before plans are properly prepared. At a guess, over 70 per cent. of the excess expenditure to which the Public Accounts Committee has to draw attention results from that.

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It is clearly demonstrated in the recent White Paper that due regard has not been given to the fact that plans should be prepared. The Treasury is so hidebound that it will not allow work to start on design work until funds are available for the entire construction. Over the years, with regard to schools, hospitals and town halls, it has not appreciated that the gestation period for a building is two to two and a half years. If we can debate the matter in the House, we may be able to get some sense into the Treasury to help Ministers in other Departments. I support the point made by my hon. Friend the Member for Melton (Mr. Latham) on the need for a debate on the building aspect of planning permission.
My hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) mentioned the concern over rate, water rate and sewerage rate demands. In my constituency it is even worse. We have our ordinary rate demands and then we have demands from the Folkestone and Hythe water company. Having got over those two shocks, my constituents receive a further demand from the Southern water authority. They cannot understand why they should have to pay for water twice when they were once able to pay for it in their general rates.
I never delay the House for longer than necessary. I hope that my right hon. Friend the Leader of the House will be able to give us some satisfaction in his reply.
6.6 pm
Mr. Bob Cryer: I shall be brief, as I have only two points that I wish to raise.
My amendment to the motion indicates my concern that the Government should make a statement on the disposition and control of cruise missiles. It is clear from their evasive replies that the Government do not have control. They have not produced any statement to show that the key to cruise missiles is in their hands. It is in the hands of the Americans.
Secondly, I have received information, which I have not yet had confirmed, that these sites are already being prepared, which is of great concern to East Anglia. A large number of meetings have been organised against the cruise missiles.
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I introduced a Ten-Minute Bill a few weeks ago, which was not opposed. The only interjection came from the hon. Member from Halesowen and Stour-bridge (Mr. Stokes) from a sedentary position. However, it appears that the hon. Member for Bury St. Edmunds (Mr. Griffiths), according to a report in The Guardian today, tried to intervene in the affairs of a district council seeking to hold a referendum on the missiles, when Forest Heath district council, through Brandon parish council, proposed to provide money for a referendum.
I prefer my Bill, and I hope that it will be given time. It would allow people within a radius of at least 30 miles of these sites, who may be devastated by planned or accidental retaliation, to vote on whether they accept them. I am sorry that the hon. Member for Bury St. Edmunds, who did not oppose my Bill, is now trying to intervene with local authorities that wish to permit the exercise of democratic choice.
Mr. Selwyn Gummer: Is the hon. Gentleman aware of the considerable local anger at the way in which, with no local knowledge or involvement, he has constantly sought to speak in this House for the people of East Anglia? Local Members of Parliament, including myself and my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), are closely in touch with parish, district and county councils that may be affected by cruise missile sites. Questions are constantly put down. The moment that any statement is made about where the sites are likely to be placed, we shall represent our constituents. We do not need the help of the hon. Member on how to run our constituencies.
Mr. Cryer: This is not a constituency matter. In any interchange of missiles the whole of the country would be affected. If the hon. Gentleman does not realise that, he is a bigger fool than he has appeared so far. He had the opportunity to oppose my Ten-Minute Bill. Why did he not do so? Why did not any other Conservative Member oppose my Bill?
Mr. Gummer: The reason why I did not oppose it is that this is a sovereign House, in which we can discuss such matters. Referenda are not the answer to matters about which we are elected to

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take decisions. When the Government bring forward their proposals for cruise missiles, we shall put forward the views of our constituents. We shall fight for them a great deal harder than the hon. Gentleman fights for his constituency.
Mr. Cryer: It appears that the hon. Gentleman will oppose the proposal to site missile bases in East Anglia. What he said confirms my point. He says that he is waiting for legislation and that referenda are not the right way in which to deal with his issue. I introduced a Ten-Minute Bill. The hon. Gentleman had the opportunity to oppose it. He could have gone to Mr. Speaker's office as did the hon. Member for Bury St. Edmunds, who subsequently withdrew his opposition. Why did not the hon. Gentleman do that? Why did he not get to his feet when I presented my Bill, open his mouth, and divide the House? Did he not have the guts to do so? He could have done that. I agree with the hon. Gentleman that Parliament is an important institution. It is the most important assembly in Britain, and he is inside it. He had an opportunity, but he did not exercise it.
Mr. Gummer: I did not oppose the hon. Gentleman's Bill because I believed it to be part of his continuous party political operation. He does not know anything about East Anglia. That is why he has to draw from his top pocket the name of the district council to which he referred. He does not know where it is, he has never heard of it, and he has never made any previous reference to it. The hon. Gentleman should confine himself to his constituency and to matters that he knows about, instead of constantly raising matters relating to other constituencies which have nothing to do with him and which he can leave to the reasonable legislative processes of the House.
Mr. Cryer: The hon. Gentleman is quite extraordinary. I received a telephone message from a person whom I do not know in an area that is concerned with cruise missiles. The message was about the cancellation of the proposed referendum to be held in Brandon, apparently under the expenditure provisions of the Forest Heath district council. I do not wish to reiterate my previous remarks. However, I promoted a Bill and the hon. Gentleman kept his counsel and kept his
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mouth shut. He did nothing. He had the opportunity to oppose the Bill, as did other hon. Members. However, he thought that discretion was the better part of valour.
Mr. Ronald W. Brown rose—
Mr. Cryer: I do not wish to give way too often. I am concerned that other hon. Members wish to speak. They are desperate to speak, as I was. I shall not give way on any further occasion.
I wish to emphasise one more point. The hon. Member for Eye (Mr. Gummer) said that the House is important, and he is absolutely right. Therefore, it was all the more disappointing that the Secretary of State for Defence took the decision to install cruise missiles in Britain. He is using East Anglia, or anywhere else in Britain—we do not yet know all the sites—as a parking area for American-owned missiles, without consulting the House. That is why special measures are necessary.
I have already spoken for seven minutes. I wish to complete my comments within the average of 10 minutes. I shall be as brief as possible. I should like the Leader of the House to comment on the circumstances in which the Government gave permission to a civil servant—Mr. J. D. Lippitt—to leave the Department of Industry and take up an appointment with GEC. There were no conditions placed upon his accepting the appointment as group director for exports at GEC.
I received a bizarre answer to my parliamentary question which stated:
"This reflects the Government's view that Mr. Lippitt can make a greater contribution to the country's interests in his new capacity." —[Official Report, 31 March 1980; Vol. 982, c. 34.]
That is a strange reflection on Mr. Lippitt, or GEC, or the Civil Service. I cannot detect to which it applies.
It is a factor that brings the public service into disrepute. Mr. Lippitt may be a man of the utmost integrity. However, when he was giving advice to the Department of Industry in favour of GEC—as was the case—we could not decide whether he was paving the way for his future career or whether he was giving his sound and independent judgment to the best of his ability.
Civil servants who are in a position of great responsibility and high authority are

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able to advise Secretaries of States and other Ministers. When such a person moves to a company that has close contacts and is intimately involved with the Department of Industry, people may say that there is an element of corruption involved because a man cannot stand apart from two masters. It is inevitable that that conclusion should be drawn.
This is not the first move that has occurred. It has happened under both Governments. A Mr. Odgers moved in similar circumstances. I was at the Department at that time, and I know that he was intimately involved with GEC. He was a member of the industrial development unit, which was part of the selective financial assistance group which presented cases to the Industrial Development Advisory Board, which in turn was chaired by the vice-chairman of GEC. When Mr. Odgers finished his three years' secondment from a merchant bank, he did not return to the bank—which was a condition of his employment—but went to GEC as a non-executive director.
The tentacles of GEC are too closely entwined with the Department of Industry. Arnold Weinstock was able to ring the Department at any time that he chose and talk to any of the deputy or permanent secretaries on first name terms and attempt—as he did—to set the Secretary of State for Industry against other Secretaries of State within a Labour Cabinet. Those relationships are too close.
The movement of Mr. Lippitt, a deputy secretary, indicates that something is very wrong. I hope that the Minister will give an assurance that in future there will not be such movements, that civil servants will help and advise companies—as they do on many occasions—uniformly and without any prejudice, and that they will keep such companies at arm's length. It is important to the maintenance of our public service that there should be an arm's length relationship.
6.18 pm
Mr. Ivan Lawrence: We should not go into recess before giving the Government an opportunity to place beyond any doubt or possible misunderstanding their attitude to Israel and the Palestinian problem.
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The outstanding achievement of the past 30 years in the Middle East has been the Camp David agreement between Egypt and Israel. As a result of that agreement, Egypt has given Israel its friendship, and Israel has not only given Egypt its friendship but made substantial sacrifices of territory and resources. That resulted in the major part of the Sinai returning to Egypt, with all that that meant in terms of the weakening of Israel's defences. Israel is now entirely dependent upon the importation of oil.
The other part of the Camp David agreement concerns negotiations for the autonomy of the West Bank and Gaza, on behalf of the Palestinians who live there. Any agreement on that matter will be difficult, and negotiations may be protracted. It is important that Jordan should be encouraged to join the discussions. If there is to be any hope of a solution to the Palestinian problem, it will come about only if the United States, Israel, Egypt and the European nations agree on their approach and if that approach does not contemplate any dealing with the Palestine Liberation Organisation.
Hitherto, that has been the Government's position. I hope that is still their position. Before we adjourn, I ask the Government to make it absolutely clear, beyond any question of misunderstanding, that that is their position.
Doubts have been raised in the media and elsewhere. We have supported a European approach. But one of the European countries, France, has recently made noises of friendship and support for the PLO.
No one can possibly expect Israel to enter into any agreement that will mean its suicide as a State. A third Palestinian State such as the PLO demands, sandwiched between Jordan and Israel, would mean suicide for Israel and a far worse Palestinian problem than the present one. Such a State would be completely unviable in terms of agriculture, industry and commerce. It would develop as a festering sore of discontent, no doubt irritated further by those whose interest it is to foment instability in the Middle East and elsewhere. The PLO is a terrorist organisation that is utterly determined to destroy Israel.

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Although attempts have been made to give the impression that the PLO is moderate, it is clear from the recent utterances of Yasser Arafat and other PLO leaders that the PLO has not moderated. If it appears to have moderated, that is merely a means of gaining time until it can drive Israel into the sea.
I refer to some of the recent statements by PLO leaders. On 21 March 1971, at Buenos Aires, Yasser Arafat said:
"There can be no compromise and no moderation … No, we do not want peace. We want war and victory. Peace for us means the destruction of Israel and nothing else."
In Beirut on 31 July 1976 Arafat said:
"We will not concede even an inch of Palestine. We will fight a prolonged people's war for the liberation of our territory. We will stand with our rifles in Haifa and Jaffa."
In April 1977 Arafat said:
"I am not a man who makes deals or compromises. I shall struggle until the very last inch of Palestine is regained … I foresee a new war, the fifth in the Middle East. This is a revolution of liberation, not compromises. We will never abandon any part of our lands, nor concede any one of our rights."
On 19 February 1979 Arafat said:
"Our activities will continue in Tel Aviv and elsewhere until we achieve victory and hoist our flag over Jerusalem and the other cities in the occupied homeland."
On 19 February Arafat said:
"We shall fight together, as one Moslem nation, under one flag. We are all zealous of the Moslem faith. We shall all stand together under the Moslem flag."
In June 1979 Arafat said:
"The Israelis have to remember that their State will not exist more than 70 years … and 32 years out of it are already gone."
In July 1979 Arafat said:
"The Palestine resistance will never agree to a cease-fire before the complete liberation of all Palestine."
Recently in Buenos Aires, in an interview in a newspaper, Arafat said:
"Peace for us means the destruction of Israel."
Any suggestion that over the years there has been a moderation of view is completely false. In April 1979 George Habash, the leader of the hard-line Popular Front for the Liberation of Palestine, a faction of the PLO, said:
"We repeat and emphasise that co-existence with Zionism is impossible, considering that our conflict with the enemy is a struggle of existence, and not a fight over borders."
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In Beirut in June 1979 he said:
"The crisis in the region could be resolved by the liquidation of the Zionist entity … We reject the presence of a Palestinian State whose price would be the consecration of the Zionist entity's presence in part of Palestinian territory."
There is no moderation there. There is no possibility that there can be established a PLO State that will not threaten the very survival of the State of Israel. The Palestine Liberation Organisation's covenant makes clear that that is the position. The danger of such a State sandwiched between Jordan and the existing State of Israel is obvious. It would be 21 miles to Haifa from the border. It would be nine miles to Natanya, 11 miles to Tel Aviv, 22 miles to Ashod and 10 miles to Beersheba. All those distances are well within the range of 175-mm artillery and would be covered in a matter of seconds in any air strike. That is the reality.
My right hon. Friend must be aware that any hint that the British Government —I do not think that they have given such a hint, but this is an opportunity before we rise for the Easter Recess to ensure that the hint is non-existent—are prepared to tolerate any dealings with an organisation that would be thus placed to give effect to its ambitions would be utterly unacceptable.
I ask my right hon. Friend to reaffirm that the Government intend to refrain from contracts with the PLO while it continues to have links with terrorism and so long as it fails to endorse the principle of a negotiated settlement in which Isreal's right to live in peace within secure and recognised boundaries is accepted. The Government should undertake that they will continue to give their support to Israel, Egypt and the United States in the implementation of the Camp David accords. I hope that we may have that reassurance this afternoon.
6.28 pm
Mr. William Hamilton: I shall refer to only one matter, the Civil List. On the very day that the Chancellor of the Exchequer was painting a grim picture of the deepening depression, the recession and hardship, the Royal payroll was announced for 1980. As the Chancellor was lecturing us on the need to stand on our own feet, to pay our own way and not to seek any more income than we properly earned, the list was

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published in Hansard. It appeared on Friday last. In effect, the Chancellor was saying—other Ministers have said it, too—that we must all share the Tory misety—all, that is, except those on £30,000 a year and those who are members of the Royal Family.
Let us consider the facts. Since the early 1970s there have been massive Royal handouts by stealth, or at least by means of a planted yearly question in the House of Commons. There is now no Select Committee to investigate in depth the justification for any claim that the Royal Family might care to make. That was regarded as much too great an intrusion into Royal privacy. It was considered unseemly for hon. Members such as myself to poke their noses into such magic and mystery. It was grubby and greedy, was it not, to talk about money? We just had to make the money available and shut up. That is what now happens every year.
The facts were published in Hansard, and I shall refer to one or two of them, but before doing so I point out that there are 10 named individuals on the list and that the total received by them in 1979 was £715,300. In 1980—the current year —the total for those 10 highly privileged individuals goes up to £849,000, an average per individual of £84,900. A footnote to that answer in Hansard states:
"All the increases are directly linked to increased expenses incurred in carrying out the Royal duties."—[Official Report. 26 March 1980; Vol. 981, c. 597–8.]
It was not long before the sycophantic press was seeking to demonstrate how hard working those individuals are. On 30 March The Sunday Times contained an article entitled "The productivity of Princesses". That article indicated that last year, contrary to commonly assumed assumptions, Princess Anne was the busiest. A list of her public engagements for last year was given. She had 121 official engagements—about two a week, sometimes three when she was working overtime. Princess Margaret was only slightly less hard worked, with 113 official engagements for the year, and Princess Alexandra had 79 official engagements—about three every fortnight. When the trade unions talk about shorter working weeks, they should take an example from their Royal betters.
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Princess Alexandra's 79 engagements last year cost the hard-pressed taxpayers £74,900—about £1,000 a visit. She is now to receive an increase of £10,500, so she will now receive £85,000 a year. Let me put that in perspective. A coal miner slogging his guts out at the coal face five days a week, taking home, say, £100 a week, would need to work 17 years before he earned as much as each of those princesses receives in any one year.
The allowance for Princess Anne leaps from £65,400 last year to £85,000 this year. Some press comment was less sycophantic than others. I quote from "Londoner's Diary" in the Evening Standard of 27 March. Under the headline
"The private cost of the Princess's public £20,000",
the article states:
"The questions raised by Princess Anne's extra £20,000 are not perhaps as indelicate as they may seem. For while the Princess and her husband seem to show no signs of cutting down their considerable expenditure on horses, the nation through the Civil List spends ever increasing capital amounts on Gatcombe Park which they will be passing on to their children.
The 32-room house in Gloucestershire in the middle of its 700-acre estate occupies a peculiar position in Royal finances. Although bought and redecorated for the couple with a reputed £750,000 of the Queen's private money, it became in 1978 a charge on the Civil List as the Princess's official residence. This change in status was agreed with the Labour Government at the time."
I should like to know whether that was ever agreed by the House, and what is the total cost incurred by the taxpayer on Gatcombe Park as a direct consequence. When a house such as that becomes an official residence, the taxpayer automatically becomes responsible for the complete maintenance of it—for everything except the interior decoration and furnishings. A considerable sum must have been expended on the house as a direct consequence of the Labour Government accepting it as an official residence.
To be fair, the Phillips' household has many commitments. The press made that abundantly clear when the increases in the Civil List were announced. A court spokesman said that they are certainly not being paid for what they do, and that the allowance helps to maintain a certain standard—such as maintaining, for instance, a 32-room mansion and an estate of 730 acres with a 16-unit horse stable

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complex which alone cost £100,000 to build. Somebody has to pay for that.
In his Budget Statement, the Chancellor clobbered the unemployed, the sick and the poor. Millions of people in Britain do not know how to make ends meet, and yet the Civil List figures are increased without a murmur of protest. I tried to speak during the Budget debate, and I requested a debate tomorrow. The reason why I am using this occasion is that it is the only opportunity that I have to put my views on record.
The justification for the claim for Princess Anne was that she suddenly discovered that Gatcombe Park had a leaky roof. She bought it from Lord Butler of Saffron Walden, who was a good landlord. She should have called in a surveyor before she bought the house, to determine whether the cost of the leaky roof should be charged to Lord Butler or to her. She should not expect the taxpayer to foot the bill.
When Captain Phillips accepted the sponsorship of British Leyland for £60,000, he said that he and Princess Anne were just a young couple with a mortgage. Some young couple! Some mortgage! Our hearts should bleed for them, but we should not foot the bills. They should be like every other young couple with a mortgage, and grin and bear it and manage their affairs without asking the taxpayers to foot the bills. They admitted that they had overspent by a few thousand pounds last year. That is their problem, not ours. We are hard pressed. Last week we listened to the grim two-hour speech of the Chancellor. We are hard pressed, and we should not have those burdens on the public sector borrowing requirement.
I turn now to the question of Princess Margaret. The Leader of the House must be disturbed by the behaviour of that lady. The Department of Health and Social Security recently appointed many hundreds of professional snoopers to catch the scroungers on supplementary benefit. Those snoopers would be much more profitably engaged investigating the higher echelons of our society than those that go into DHSS offices. There is a widely held view, even among pro-royalists, that nobody does more damage to the institution of monarchy than that wayward woman—
Mr. Speaker: Order. The hon. Gentleman knows that whilst he is as free as everyone else to criticise the Civil List, he must refer to the Royal Family in courteous language. It is one of the rules of the House.
Mr. Hamilton: What I said was relatively courteous, Mr. Speaker.
Mr. Speaker: It was exceedingly discourteous by my standards.
Hon. Members: The hon. Gentleman should withdraw.
Mr. Hamilton: I shall certainly not withdraw, unless I am directed to do so by Mr. Speaker.
The Leader of the House can have access to the correspondence that I have received from all sections of the community about the behaviour of certain individuals whom I have named. I know that Conservative Members and people in the highest positions of authority believe that certain behaviour is doing a disservice to the institution that they sincerely believe in. I do not happen to believe in it, but I know that there are people throughout the country who do but who deplore the kind of behaviour that has been going on. I do not need to spell it out, because it has been plastered all over the press. It is time that the Government made their views known. As taxpayers, we should not be asked to foot the bill for that kind of indefensible behaviour.
This is not a party matter. Despite all the anger and distaste, successive Governments have mollycoddled and cosseted with cash and accommodation over the years people whose behaviour has been reprehensible.
In the name of justice and sanity, can such behaviour go on any longer? One can expect it from a Conservative Government, because the institution is all part of the establishment to which they belong. But we expected much more radical approaches by our own Government. We did not get them. The sycophancy was even greater among Labour Ministers when we were in power. So in that sense it is no party matter.
There must be a return to far greater accountability to the House for what goes on in the institution of monarchy. It is no good pouring out money on the Royal yacht and the Royal flight of aircraft.

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which is to be modernised at a cost of God knows how many millions of pounds. There is not as much accountability to the House as there should be. There should be a return to the Civil List Select Committee procedure, under which claims would not be granted until there had been a comprehensive and detailed investigation to justify them.
I hope that the point has been made. The Leader of the House and I have crossed swords on these matters many times. This will not be the last such occasion. I know what the right hon Gentleman's views are, but I think that privately he will agree with some of the points that I have made. If that is so, the debate will have been well worth while.
6.44 pm
Mr. Selwyn Gummer: I had hoped not to trouble the House tonight, but some of the comments that referred to my constituency should be answered.
Therefore, I shall not deal with the speech of the hon. Member for Fife, Central (Mr. Hamilton), with his obsessive concern to make as many unattractive comments about the Royal Family as he can. The hon. Gentleman never mentions the enormous sums that they earn for this country in the form of revenue from tourists. They have also provided for the national Exchequer a great deal more money through handing over Royal lands to the State than anything the House has ever offered them.
Many of us believe that few people contribute as much to this country as the Royal Family do, and we are sad that small numbers of people who do not represent any noteworthy group constantly speak so offensively about members of the Royal Family. It is a pity that we have heard another playing of that gramophone record by the hon. Gentleman.
The question of the Government's responsibility to deal with the matter of cruise missiles has been raised. Does my right hon. Friend the Leader of the House accept that we need a clear undertaking that the Government will provide time, if not before the recess at least at a reasonable date before the missiles are put into position, for the House to discuss the whole nature of our nuclear defence?
I ask that question not on the basis of the traditional anti-nuclear stance of the
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hon. Member for Keighley (Mr. Cryer)—with the notes that he holds in his top pocket—but for a much more fundamental reason. This country owes a great deal to the consistent defence that has been provided by NATO since 1948. The peace of Europe has been defended for a longer period this century because of its strength than at any previous time. It would be wrong if we did not have the opportunity to welcome the establishment of cruise missiles in this country as a further significant contribution towards the peace of Europe and of the world.
It would be morally wrong for us so to weaken our defences that we encouraged aggression. There is no doubt that that is as immoral a stand as can be imagined. Many of us believe that the hon. Gentleman, with his constant demands, is trying to make party political propaganda out of matters that should be the subject of a much more serious debate than that which he invites us to have.
The hon. Gentleman flippantly suggested that because some of us did not oppose his Ten-Minute Bill we had avoided the issue. We felt, and I still feel, that to bandy words with the hon. Gentleman on the subject of referendums in East Anglia, when he cannot remember the name of the town from which he has received a communication, and when it seems remarkably likely that he cannot tell us where East Anglia is, is to lower ourselves to a level to which we are not prepared to go.
This is the sovereign Parliament of Britain. The Members for East Anglia are elected by our constituents to represent their interests in the House. It is our intention, as it has been in the past, when the exact locations of cruise missiles are proposed to examine them and discuss them properly here. We shall not be led astray by all kinds of populist comments from the hon. Gentleman. We shall ask the Government to give a proper opportunity to discuss the real issues: first, whether this country should be defended; secondly, whether the country is in any sense challenged by aggression; thirdly, whether that challenge must be answered by an updating of our nuclear force.
Those are three sensible points for discussion. They are not properly put down on a partial referendum proposed by the hon. Member for Keighley; they are suitable subjects for discussion in the

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House. I ask my right hon. Friend to give time for that discussion not because I wish to oppose the provision of cruise missiles in Britain but because I wish properly to examine the importance of defence against those countries whose aggressive purposes have been shown not only by the invasion and occupation of Latvia, Lithuania and Estonia but by their continued occupation of Czechoslovakia, Romania, East Germany, Poland—
Mr. J. W. Rooker: Georgia.
Mr. Gummer: Georgia, indeed, and the Ukraine. Those countries are under the thumb of Soviet aggression. I wish to discuss whether, in relation to those countries that the hon. Member for Keighley appears so easily to allow to be stronger than ourselves, defence is a necessary part of our policy.
Mr. Cryer Mr. Cryer I wonder why the hon. Gentleman did not press for this debate before his right hon. Friend the Secretary of State for Defence went to the NATO meeting without coming to this sovereign Parliament but going on television and explaining what he was going to decide. Why did not the hon. Gentleman press for a debate in this sovereign Parliament? Why is he now seeking a debate after the decision has been made? Does he agree with that?
Mr. Gummer: The hon. Gentleman suggests that I should have pressed for a debate on a subject on which the House had already decided.
Mr. Cryer: No, it had not.
Mr. Gummer: The House had decided upon it. Since Clement Attlee agreed to the first atomic bomb, the House has successively and continually supported the nuclear element in our defence. This is merely the next stage in that nuclear element. The hon. Gentleman is opposed to a nuclear element. He was a member of a Government who supported that nuclear element, but did not resign on that issue. Indeed, he joined a Government who were committed to the nuclear element.
Mr. Cryer: Not to cruise missiles.
Mr. Gummer: The hon. Gentleman now says that there is something qualitatively different about the cruise missile. Yet the cruise missile will mean the removal of over 1,000 nuclear warheads from this country. It is safer, it is far more flexible—
Mr. Cryer: And it is American.
Mr. Gummer: —and it is more protectable than the present situation. There is no difference between the control over the cruise missile and those missiles which are already here largely controlled by American forces. The hon. Gentleman can point to no difference between them, except that it is a populist campaign. The hon. Gentleman is not as concerned about Russian aggression as many Conservative Members are. The hon. Gentleman must not mislead the nation.
The time has come to ask the hon. Gentleman some clear questions, and I hope that my right hon. Friend will make sure that we have a debate on this subject so that the hon. Gentleman can answer these questions. The first question that I hope the hon. Gentleman will take the opportunity of explaining to this nation in such a debate is: why is he prepared to leave us defenceless against the Soviet Union? The second question is: why was he a member of a Government who were committed to the nuclear deterrent, and why did he resign on a totally different matter? The third question is: why is it that, whereas he believes in the denuding of our defences, whereas he accepts that this nation may reduce her defences against the Soviet Union, he has not been prepared to come out publicly in the constant attack on the Soviet Union which Conservative Members have mounted?
I believe that the debate for which I am asking is one that we must have. It is a debate that we need to have, not because we are opposed to the cruise missile but because we want to flush out from the Labour Party those whose concern for this country is less than that of those of us—
Mr. Cryer: Mass murderer.
Mr. Gummer: I have been called many things, but to be referred to as a mass murderer seems in some senses to be opposed—
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I think that the expression "mass murder" ought to be withdrawn.
Mr. Gummer: That seems a slightly unparliamentary phrase. Indeed, it sums up the comments of the Labour Party in my constituency. The Labour Party in my constituency, rather like the Suffolk Labour Party, has decided to dissociate itself from the Labour Party in the House because it is opposed to all nuclear defence and nuclear power as well. It has suggested that any kind of nuclear defence is wrong.
One of the reasons for the debate which I hope my right hon. Friend can arrange is to give an opportunity to the Labour Party to declare where it stands. Does it support the hon. Member for Keighley or does it continue in the tradition of the Labour Party, which is to be opposed to Russian aggression? That is the question that we have to ask. I hope that, when the opportunity arises, my right hon. Friend will arrange a debate on this subject so that the people of Suffolk will have the opportunity of hearing the representatives that they elected in an election in which those representatives made clear their position on nuclear arms say what we believe—namely, that the people of Suffolk are proud to help in the defence of Britain.
It is all right for Labour Members to laugh, but it was people like them who left this country defenceless against the Nazis. It was the Peace Pledge Union and the other Left-wing "wets" who left this country defenceless against the other Fascist group—not the Russian Fascists, but the black Fascists. [Interruption.] The Russians died only two years after they had fought on behalf of the Nazis—a fact that the hon. Member for Keighley often forgets.
Mr. Deputy Speaker: Order. Will the hon. Gentleman relate these remarks to the Easter Recess?
Mr. Gummer: I agree that relation with the Easter Recess is important. If my right hon. Friend cannot promise us a debate on this subject before the Easter Recess, I hope that he will promise one immediately after the Easter Recess. I was led astray by the animal noises from the Opposition Benches.
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Those of us who represent the people of Suffolk ask the House to give us an opportunity to state clearly that we respect the integrity of this nation. We are concerned with the defence of this nation. We are not prepared to be used for cheap party political propaganda led by the hon. Member for Keighley, who I doubt has set foot within East Anglia, of which we are proud. We would assert, and want the opportunity to assert, our desire to play our part in the defence of a nation for which we care.
6.58 pm
Mr. J. W. Rooker: I have listened to every speech today. The debate and the subjects that have been raised show the wisdom of the House in throwing out the recommendation of the Select Committee that the debate should not take place.
I do not criticise the right hon. Member for Down, South (Mr. Powell)—who is in, but not within, the Chamber—for making the points that he made. He used the rules of the House.
The subjects raised today justify our original decision, if only by flushing out some of the East Anglia Tory Members on the issue of the cruise missile. It does not matter whether my hon. Friend the Member for Keighley (Mr. Cryer) has been to East Anglia. I have been to East Anglia. I worked in East Anglia. I have family connections with the constituency of the hon. Member for Eye (Mr. Gummer). I shall be spending the Easter weekend in his constituency. I spend many bank holidays in that area. I can claim to have taken more work to East Anglia than the hon. Gentleman in that I have been responsible for moving industry into that area.
Mr. Gummer: If the hon. Member will state how many jobs he has provided for East Anglia, no doubt we could argue about that. Will he accept that some of us have put down a large number of questions about cruise missiles? We have constantly questioned the Minister on the subject. We therefore have a right to comment on it as it affects East Anglia. The hon. Member does not represent an East Anglia constituency, even though he may spend his holidays there. I am happy to invite him to East Anglia to discuss these matters.
Mr. Deputy Speaker: Before the hon. Member for Birmingham, Perry Barr (Mr. Rooker) is tempted to say how many jobs he brought to East Anglia, will he relate that to the Easter Recess?
Mr. Rooker: Everything that I say will be related to why we should not go into recess on the dates proposed. I do not know how many East Anglian jobs I am responsible for having created. The factory that I helped to establish there has grown enormously since it was built. It is not in the constituency of the hon. Member for Eye, but in Ipswich.
The hon. Member for Eye was an expert on Lewisham, West until the electorate there gave him his marching orders. Of course, it may be unfair for my hon. Friend the Member for Keighley to call him a potential mass murderer, but "carpet bagger" would certainly have been in order.
The last point that I wish to make in defence of my hon. Friend the Member for Keighley concerns the vicious personal attack by the hon. Member for Eye suggesting that my hon. Friend was not adequately representing his constituents. My hon. Friend's majority at Keighley is even smaller than mine in Perry Barr. His is only 78, but he was returned to this House at the last election against the national swing. We were both returned because—and I say this with all modesty—of our records in representing our constituents.
Mr. Deputy Speaker: Order. That has nothing to do with whether we go away for Easter. Will the hon. Member relate his remarks to that?
Mr. Rooker: The point is, Mr. Deputy Speaker, that if we adjourn for the Easter Recess I shall be in no position to come here and defend my hon. Friend from the attacks upon him by Conservative Members. However, I leave that issue to rest. The East Anglian Tories have been flushed out and we have brought out into the open the fact that they have not been doing their job properly in defending their constituents.
I now come to why the House should not go into recess. There are two reasons concerning my constituency. The central one is that for the past six weeks there has been a strike, stoppage of work or trade dispute at the Birmingham assay
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office. This matter is not so parochial as it might at first sight appear. There are only three assay offices in the country—at Birmingham, Sheffield and London.
The hon. Member for Macclesfield (Mr. Winterton) referred to an early Act of Parliament, and I now refer to one which goes back a long time. The Birmingham assay office was set up by an Act of Parliament in 1772. Since mid-February, 200 of the staff have been on strike because they were faced with a shortage of work, allegedly due to the increase in the price of gold and silver, which resulted in their being told that 43 workers would have to be made redundant. That number was whittled down to 38. Against the original wishes of the workers concerned, 21 volunteers for redundancy were brought forward, leaving only 16 jobs to be accounted for. All this has happened during the course of the dispute, when no work has been done.
Initially there was a sit-in, but the police had the workers thrown out after three weeks because, it was alleged, they could interfere with the extremely valuable goods in the assay office. The workers who were on strike voted to accept a £15 a week reduction in pay to fund the 16 jobs in question under a work-sharing scheme.
I raise this issue today because the workers are still on strike. They voted this morning to continue it until the bitter end. It may seem that there is no Government responsibility involved—the Government are opting out of industrial relations—but the work at the Birmingham assay office is of extreme importance to our valuable export trade in jewellery. Some 10 million items a year are hallmarked by the assay office in Birmingham.
Of the three assay offices, only the Birmingham office is unionised. Work at the Sheffield office dropped off 80 per cent. because of the rise in gold and silver prices. The figure for the London office was 40 per cent. However, there was no threat of redundancy at those offices, and the natural conclusion is that the Birmingham office has been got at because the trade union is recognised and active there. Much to the annoyance of the workers on strike, and to the shame of some people in this country, work has been diverted from the Birmingham office to Sheffield during the dispute even though the workers at Birmingham have asked Shef-

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field not to do it. There are some well-known trade unionists in Sheffield, so perhaps they ought to get a few of their members along to picket the assay office there.
The reason for our not going into recess and the Government's connection with this dispute are both to be found in section 20 of the Hallmarking Act 1973, which contains the power for the Secretary of State to
"cause a local inquiry to be held in connection with the discharge of any of his functions under this Act or … with any of the functions of assay offices."
So he has the statutory duty, if there are major problems in the assay offices, to order a local inquiry.
Mr. Douglas Hogg: He has the power, not a duty.
Mr. Rooker: Well, I am asking him to use the power. I am asking the Leader of the House to tell me that the Department of Trade will be contacted about the problem. It knows about the dispute. It has been continuing for six weeks. The employers in this case are a peculiar band known as the Guardians of the Standard of Wrought Plate. They number 36. When one of them passes on, another is elected by the remainder to take his place. Most of the members turn up for their meetings in their Porsches and Rolls-Royces. They have refused to get involved in the dispute. The chairman told the leader of the workers at the office that the Guardians could not get involved because that would tamper with tradition. I do not regard that as an acceptable reason for allowing the dispute to carry on.
The West Midlands police, who are guarding the assay office, have told the workers on picket duty that they have a duty to accept redundancy as have other workers in steel and in British Leyland, but not, I gather, in the police service.
Mr. John Sever: Because of the soundings that he has taken, particularly among the employees of the small jewellery companies that are situated in the centre of Birmingham—many of them within my constituency—does my hon. Friend agree that there is great anxiety about the difficulties and problems occasioned to them by the dispute and as a result of the wild
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fluctuation in gold and silver prices, and that these are placing almost unbearable burdens upon them? Does he agree that these people deserve the very support that he is seeking from the Government?
Mr. Rooker: My hon. Friend is correct. The jewellery quarter in Birmingham is probably the epitome of the small business. It is a unique part of the industry of Birmingham. Many of the companies cannot afford the time for their goods to be moved around the country to be hallmarked. Some of those firms will go bust if the strike is allowed to continue.
The Department of Trade can get involved. I make the plea now that it should do so. It will not be satisfactory for it to adopt the high-handed approach taken by the Department of Industry over the steel strike. Birmingham cannot afford the complacency shown by the Government towards industrial relations so far. Time is not on our side. About 186 employees of the assay office are still out on strike. A few have left during the strike, which is normal, because they cannot afford to be not working. The remaining workers have offered to accept work-sharing and a cut in pay—a most unusual arrangement and something that I should have thought would be applauded by the Conservatives. So far, however, there has been no response from the Government.
This is an important matter because of the unique and historic role played by the assay office. It is a classic example of the protection of trade. People buy products from this country because they trust the hallmarking process, established over two centuries, as giving good value for money. It is a tragedy that the dispute has been allowed to continue and that the Government have taken no action.
The second point that I wish to raise —I am sure that the Leader of the House will not be surprised that I return to it —is the Rossminster tax case. I last raised this issue on the Christmas Adjournment motion on 18 December. Since that debate, when the Leader of the House answered some of the points that I put, concern has been expressed inside the Inland Revenue that an attempt will be made to limit the scope of the tax

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fraud case regarding the Rossminster companies and group of companies. That is a cause for concern.
The allegation is that the fall-guy for the Rossminster case will be the hon. Member for Abingdon (Mr. Benyon), in order to give the Minister of State, Treasury and the Secretary of State for Trade a clear run out of the matter. That is the concern expressed inside the Revenue. My request is a simple one. If the Leader of the House cannot give a response today, I certainly require a response in writing at some future date.
Mr. Peter Viggers: In view of the fact that the hon. Gentleman has referred to another hon. Member, may I ask whether he observed the normal courtesy and informed that hon. Member that he intended to do so?
Mr. Rooker: I am in fact defending the hon. Member to whom I referred. I do not want the hon. Member for Abingdon to be the fall-guy in this affair while the others get off because the inquiries are limited. I am making no attack whatever. I am not impugning anyone's motives in this case. I have never done so. If anything that I say can be taken as an attack on the hon. Member for Abingdon, even though some might think that I have justification for doing so, let me make it clear that that is not so. I am saying that it would be unfair if he were the fall-guy, should these inquiries be curtailed.
I simply want an assurance that there will be no curtailment of the powers of the Revenue in this case. This case is not sub judice. There are no charges and no prosecutions pending. The fact remains that statements have been made by the Minister of State, Treasury in the last couple of months to the effect that the investigating powers of the Revenue ought to be curtailed. For him to make that statement while this case is under the perusal of the investigation officers of the Revenue can clearly be taken as a warning to the Revenue from him to "watch it". I want an assurance that the Revenue will not have to watch it and that it will have complete and total freedom to investigate, under existing laws, every aspect of this case and to interview every person who is involved, whatever his involvement.
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If there is concern inside the Revenue, I assure you, Mr. Deputy Speaker, that there is concern outside it. This matter has been quiet for the last few months, but Opposition Members have not forgotten it. Opposition Members, unlike Conservative Members, are concerned about any abuse in the public expenditure system, whether it is public expenditure in terms of benefits or public expenditure in terms of tax relief. One is as much a handout as the other. "Handout" is the wrong word. I think that my hon. Friends will understand what I mean.
We shall attack all forms of abuse wherever we see them. The Tory Party is defending those who wish to abuse the tax system. The number of tax investigators has been cut. Concern has been raised within the Revenue about the Rossminster case, and that has to be answered. It needs a fairly simple answer, namely, that the Revenue has carte blanche, under existing law, to pursue this investigation to the bitter end. I hope that it will be a bitter end for some Conservative Members.
7.15 pm
Mr. Phillip Whitehead: I should like to explain why the House should not adjourn without discussing a particular British institution that is widely respected abroad, earns revenue for the country and is generally held in fair esteem. I am not referring, as my hon. Friend the Member for Fife, Central (Mr. Hamilton) did, to the Royal Family. I agree with the sotto voce comment of my hon. Friend the Member for Ince (Mr. McGuire) that it was a great pity that the only princesses that could be sent back to the factory, if not up to specification, were those made at British Leyland.
I should like to raise the position of the British Council following the cuts made in its budget for 1980–81 and those that will follow for the next three or four years. I wish to say to the House and to the Leader of the House, who has an interest in cultural and educational matters, how disastrous and demoralising are these cuts. It is humbug to sit through the debate on the Easter Recess motion and hear a number of speeches from Conservative Members, all of whom have now departed, running down the BBC and various institutions of cultural exchange without ever mentioning the real harm

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done by the cuts now imposed on the BBC and the British Council.
The cuts on the British Council for the coming year will work out at about 11 per cent. of its total budget. I am told that they will amount to 27 per cent. of its total budget over the next three years. The effect of those cuts is extremely serious. I have some questions that I wish to put to the Leader of the House. The cuts will mean that, right across the world, there will be a massive cutback in the staff and activities of the British Council. This will affect, among other things, our export trade, the advisory tours that the British Council runs abroad and the specialist help given in overseas countries to British exporters. That should be a serious matter for anyone in the House who wishes to see this country paying its way.
I should like to refer to publishing and the book trade. The funds available for book promotion have been cut back seriously. I believe that the cut in the corning year is 40 per cent. The consequences for the book trade in this country will be serious. Those hon. Members, like myself, with a large publishing concern in their constituencies, which has returned pretty disastrous figures in the first half of the year, will know what is happening as a result of some of the Government cuts. We tend to regard cuts in the public sector as money that has been saved. When those cuts help to diminish the amount of orders that go into private industry, they help to diminish the buoyancy and production of the industry upon which everyone bases hopes for industrial revival.
Another topic I should like to mention is the teaching of English abroad. In many areas of the world our influence is trumpeted loudly by a Government spending more money on the Armed Forces and prepared to adopt a higher profile in defence matters but almost entirely destroying our cultural presence in countries where we wish to have influence. We are told that the Government are begging the British Council to increase its presence in Zimbabwe. But the British Council has been running down its presence in many parts of Africa and central and southern America—areas of the world that are in ferment and where a British presence in the cultural sphere is crucially important.
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Our European competitors take the reverse view. The French have just announced a strengthening of their cultural budget by about 15 per cent. They are increasing their budget, which in real terms, in any case, is far larger than ours, by precisely the same proportion as we are reducing ours. The result, as hon. Members who have recently been abroad will confirm, is that in most countries the British Council offices, if left at all, are housed in tatty buildings with a shrunken and demoralised staff and a diminished and decaying stock of books.
Down the road the Alliance Francaise has moved into new offices and is spreading the cultural presence of France and the francophone mission in that country with success and élan. This country is doing neither. We are allowing the British Council to run down. The consequence of the cuts imposed upon the British Council will almost certainly mean that over the next two or three years it will have to make a major decision on which it needs, as the House needs, the views of the Government.
Should the council try to preserve a wide overseas network as it has done up to now? Should there be a council presence in most of the important areas of the world? If it does that, it will not be able to maintain its main functions intact. If it maintains those functions intact—which is the alternative—that avoids an irrevocable dispersal of specialist knowledge and experience but it will also mean that the council's geographical spread is greatly diminished.
I want to hear from the Leader of the House what he thinks the British Council should do and what value he places upon it. Over many years he has made a contribution to the great debate about education and the arts and about the way in which those elements are enshrined in British national life. How much of a contribution in the overseas projection of this country and what it does—and, most importantly, in what it sells—will he allow the British Council to make? Which of the choices open to the British Council—to maintain a geographical spread or maintain its specialist services in contradiction to that geographical spread—would he advise it to make in the next few years?
If we look ahead—not just to 1980–81 but over a period of three or four years

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during which more cuts are projected—what will the right hon. Gentleman say to British Council staff to explain why they should continue to work there and why they are valued by the Government and the people of this country and what their promotion and expansion prospects are?
7.21 pm
Mr. Peter Bottomley: I apologise to the House for arriving late. I have just returned from the Requiem Mass for Archbishop Romero. I make my remarks before the Easter Recess in the hope that, during the Easter Recess, the Government will not think of reestablishing diplomatic links or sending back an ambassador to E1 Salvador.
It is important that people of all parties in this country use every opportunity we have as a democracy to emphasise to other countries that we care about what is happening to them. I hope that Right-wing politicians like myself will pay special attention to Right-wing countries where we might have some influence and that Left-wing politicians will do the same in Left-wing countries where they might have influence. It seems better to go about improving relations that way rather than by the Right criticising the Left and vice versa.
Ten days ago I did not believe that it would be necessary for me to raise such an issue as this. Nine days ago Archbishop Romero was assassinated. On Palm Sunday his funeral was disrupted by bombs and shootings and death. I believe that it would have been possible to avoid most of that if in 1977, when President Molina lost power to General Romero—no relation of the dead archbishop—the united Western world had stepped in to say that we would not tolerate the giving up of land reforms in El Salvador. We should have said in 1978 that we would not tolerate the getting rid of the relatively fair elections which gave victory to the opposition parties, an alliance between the Christian and Social Democrats.
Had we been faster off the mark, the deteriorating situation in E1 Salvador would not have got as far as it has. I hope we may learn from the tragedies of the last 10 days and be of help in avoiding the further tragedies that are likely to come.
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I hope that in this House of Commons we shall always find sufficient time to care for the troubles and the problems faced by others. We shall thus gain an understanding which will enable us to use our influence not only on our Government but also on our normal political contacts to make sure that the tragedy that is happening in E1 Salvador does not happen in too many other countries.
7.23 pm
Mr. Michael McGuire: You took me unawares, Mr. Deputy Speaker. I came in late for the debate and was deferring to my colleagues who were here before me. However, I am pleased to have been called.
I should like the Leader of the House to respond to three points. I know that the right hon. Gentleman has been pressed for debates on particular subjects—even for two-day debates—but I hope that he will be able to find time for a long overdue debate on the North-West. We have not had a full day's debate on the problems of the North-West for a long time. In the last Parliament I think we had one debate on it, in Standing Committee. We had a morning's debate when, if I can put it so, we were able to discuss almost anything, and that was next to useless. I have pressed on the Floor of the House for a similar debate because if we could get agreement through the usual channels we should choose one item and debate it thoroughly, though such debates are no substitute for debates in this Chamber.
The North-West has many problems. I am well aware of the problems of Wales, Scotland and the Northern region. But I think that my hon. Friends representing those parts of the United Kingdom have had, if not a good run, a chance to express their views. The recent debates on the steel strike have almost been mini regional debates. We were not able to draw the North-West region into those discussions because, unfortunately, we lost our steel industry a long time ago.
I was delighted that on 31 October we decided by a substantial vote to retain the opportunity for Back Benchers to raise the variety of subjects that have been raised today. It would have been a sad day if we had allowed the Government to rob us of this opportunity. We need a response from the Leader of the House on the important matter of a full

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day's debate—perhaps two days—on energy. We tend to touch on it early in the middle of the night in perhaps 1½-hour debates. Energy is of prime importance and every country in the world now has its attention directed to the formulation of an energy policy that takes note of the international situation.
We have had statements from the Government, and one three-hour debate and one 1½-hour debate. On each occasion the chances for Back Benchers to contribute were slim. On one occasion there were four Front Bench speakers in the debate, who more or less took up all of the time. It is of fundamental importance that the House should have at least a full day's debate on energy matters.
I sent a note to the Minister for Social Security about the unequal treatment which this House, unwittingly, has accorded to the families of people serving prison sentences in Northern Ireland. When this problem was brought to my attention, I did not believe it. I did not believe that anyone living on the English mainland would be denied the assistance necessary to visit a relative in prison in Northern Ireland. The family of a prisoner in England, Scotland or Wales would receive the proper treatment which the House—I cannot recall whether it is /aid down in an affirmative order—has laid down. Assistance is given by the DHSS to allow wives and families to visit prisoners as part of the rehabilitation process. That facility does not apply if the prisoner is serving his sentence in Northern Ireland and his near relatives live in England, Scotland or Wales.
I questioned the Secretary of State for Northern Ireland about the position of a Northern Ireland family which wants to visit a near relative serving a sentence on the mainland. I was told that such families are given assistance to visit prisoners in England, Scotland or Wales and Northern Ireland. The only people who are unfairly treated are the prisoners in Northern Ireland whose families live in Great Britain. The House will not, and should not, accept that.
I also questioned the Home Secretary, because he has overall responsibility. I asked why the situation had been allowed to occur. It seems to have been the result of an oversight. I asked what estimate had been made of the number of extra staff
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required to administer a fairer scheme. I did not need to be told that not many extra were needed.
The Minister for Social Security, who is in the Chamber, should take note that we believe that the situation is not acceptable. There is supposed to be equal treatment before the law for all the citizens of the United Kingdom, although we make different arrangements in some respects for people who live in Northern Ireland.
The present situation is neither right nor just. I do not believe that Ministers could, or would, want to defend it. The Minister of State has drawn the short straw. He should take speedy steps to remove the absurd anomaly. Our decisions on 31 October to retain Adjournment debates for Back Benchers to raise matters such as this is justified. We should be proud that we continue to give Back Benchers the opportunity to raise important constituency and national issues.
7.33 pm
Mr. Ronald W. Brown: I support the plea made by my hon. Friend the Member for Ince (Mr. McGuire) for a debate on energy. That subject has not been treated as seriously as it should be. We hope that the Leader of the House will arrange such a debate after Easter. I also agree with my hon. Friend that we should have a debate on a region. He will forgive me if my choice is different from his. I believe that we must have a debate on London and its 7 million people. They represent one-sixth of the country and are entitled to have their share of debates.
We must have a debate on London because of the anxiety that Government policy on housing in London in moving towards chaos. Yesterday, April Fool's Day, the GLC decided to divest itself of its responsibility for strategic housing in the Greater London area. It has disposed of about 148.000 hereditaments in its care. As a direct result, it is possible that local government tenants, who occupy about 78 per cent. of the hereditaments in my constituency, will he unable to transfer to any form of alternative accommodation.
The local authority can try to help by using resources to build and rehabilitate

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property to satisfy the needs of the elderly who need warden accommodation and families who depend entirely on help to obtain proper housing. About 12,000 or 36,000 people, families are on the waiting list. How do the Government react? The local authority attempted to help elderly people who need special care in warden-assisted property by imposing a compulsory purchase order on a site on which it planned to build a large number of dwellings. Before the Secretary of State had been in office long, he countered that compulsory purchase order in favour of a speculator—the Fairview company. That company has taken over the site. It will not build homes for the old people who are waiting desperately to be housed.
The same speculative firm has gobbled up an area in my constituency. It has hoarded up the area with corrugated sheeting. This is one of the great, dynamic speculators about which we hear so much. I complained bitterly. In one part of the site tenants still occupy houses. The company will not rehouse those tenants. It is busy trying to winkle them out by sending them to the local authority offices to urge the local authority to rehouse them, so that the company can take complete control of the site.
I wonder what we are talking about. It will cost about £50,000 for the local authority to rehouse tenants for a speculator. The local authority has already rehoused a large number of tenants. I have insisted upon that because of the appalling conditions. The owner of the site is a friend of the Government. The speculator will not carry out necessary work. One of my constituents lives in deplorable conditions. His home is damp, rain leaks in, vandalism is rife and the back of the house is being pulled down. The local authority environmental health officer is trying to put pressure on the speculator but he takes no notice. It is hypocritical of the Government to keep saying how much they are doing for housing in London under such circumstances.
The Government are cutting housing improvement programmes. Some of the inner London boroughs have a reason for
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wanting a substantial housing improvement programme, but the total sums have been cut drastically. The Government are sending out a flurry of instructions. Some of them are dated 31 March and others 1 April. The instructions say that local authorities should not begin any rehabilitation work on any of their projects until they have received affirmation from the Secretary of State.
Previously, there was a cost limit for which subsidies were paid. There was no argument between the Government and the local authorities. The local authorities could commence work and subsidies were paid up to the agreed limit. If local authorities went above that level, it was a matter for negotiation between the local authority and the Government. The local authority had to justify its action. If it succeeded the subsidy was paid, but if it failed it was not. The point of the argument was that the local authority had to be in a position to begin the rehabilitation so that people such as those in my area could be rehoused as quickly as possible.
I cannot understand why the Secretary of State has now decided to do business in this way, by sending out the instruction dated 1 April. We have to look behind that approach. There will be an enormous increase in the number of applications, because the other instruction requires that a far more detailed description of the work that is to be done be submitted. That is not all; a description of the work to be done on every individual property has to be submitted; previously the properties could be treated en bloc. This will mean that an enormous amount of work will come into the Department, and I ascertained today that it has only 14 architects to deal with such work in London. Additionally, there is a proposal that the number of architects should be cut by three. So, although the amount of work will be increased, the number of architects will be reduced.
The amount of work will be increased because the number of applications for approval will increase. The councils are told that they are not to start work until final approval has been given and are warned that they will receive no subsidies if they do not wait. The number of architects is being reduced, even though it is already too small to deal with the

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volume of work, which means that councils will wait that much longer for the final decision.
In London the DCL will be substantially exceeded, and the Government know that. That has always been so. The Government are aware, therefore, that the buildings will not be rehabilitated and they will continue to delay and vacillate and finally, because the DCL will be exceeded, the whole project will be turned down. That has already been done in one London borough; two schemes have been turned down because they exceeded permitted expenditure. One of those schemes was in a conservation area and the amount of work that could be done was limited. The other was a housing action area where a bulldozer could not be used.
When I asked the Department what should be done, I was told that we would have to create open space—that is in a housing action area where one is supposed to be building homes.
One can see the issue that is being raised here, especially in an area where the council has rehoused tenants from those two sites. Already a vast amount of ratepayers' money has been spent rehousing those people and now the sites are held vacant because the Minister will not give approval. One can only come to the conclusion that what the Government have in mind by imposing this Machiavellian legislation is to ensure that the number of these sites is increased so that councils are forced to hand them over to the greedy speculators at knock-down prices. So the ratepayer and the taxpayer will have paid for the rehousing of such people and the site is then handed over to the speculators who simply makes money.
What hypocrisy for a Government to pretend—as we have heard so often in the past few weeks—that the Department is actively reducing the number of planning delays and speeding up procedures while the Government are deliberately deciding to slow down the procedure in the way that I have described. In areas such as mine, where we have such a difficult housing problem, we shall be unable to solve it.
I am urging local authorities to erect information boards on all such sites informing people that the Conservative Government have deliberately created this
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situation. This information must be publicised, because one cannot rely on the newspapers. The public will thus be able to see exactly who is responsible for the conditions in which people have to live.
The housing problem in London is so bad that I urge the Leader of the House to see that we have a debate on this matter as soon as possible. There are many other problems in the London area, but I have highlighted this problem because of the flurry of instructions emanating from the Department of the Environment which, I believe, will have a catastrophic effect. I hope, therefore, that the right hon. Gentleman will arrange a debate on London as soon as possible.
7.44 pm
Mr. Robert C. Brown: Like the hon. Member for Woolwich, West (Mr. Bottomley), I returned to this country in the last 48 hours, having been a member of an overseas parliamentary delegation, to find correspondence on three issues that seriously affect my constituency, all relating to the excessively high unemployment figures which were published while I was overseas. The seasonally adjusted figure for the Northern region is 121,600. That is surely the worst figure that we have had in any normal period in the post-war years—indeed, I believe that it is over 40 years since we have had that type of figure, which represents 9·1 per cent. unemployed across the board in the Northern region.
The first major issue that was brought to my attention was a letter from the managing director of the Vickers Elswick works advising me that unless that company received an order by the end of this month the first tranche of notices of redundancies—about 350—would be issued. This follows closely on the closure of the Tress engineering works and the Vickers Scotswood factory, which is in my constituency. I should also say that the Vickers Elswick plant is in the constituency of my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans), although the bulk of the workers reside in my constituency.
I do not apologise for raising at this late hour the issue of the order for 77 Chieftain tanks, because I have raised it at least six times in the Chamber with the Prime Minister and the Secretary of State for Defence within the last few

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months and we are still no nearer an answer.
As Under-Secretary of State for Defence for the Army 18 months ago, I was told by the Army Board that we urgently needed a decision to purchase 77 Chieftain tanks to bring the war maintenance reserve of the British Army of the Rhine up to strength. I accepted the advice of the military members of the Army Board and convinced my right hon. Friend the Member for Sheffield, Park (Mr. Mulley), the then Secretary of State for Defence, that this order was necessary. It went through the machinery of government just as we approached the general election. Yet here we are, 11 months after the election, and still there has been no decision on this order, which I am convinced would have gone to Vickers Elswick.
I say to the Leader of the House that this is now an urgent issue. As I have said, the letter I have received from the managing director of Vickers Elswick clearly states that unless an order in some shape or form is received by the end of this month redundancy notices will become operative.
I recently spoke to a colleague of mine who has visited the BAOR. Personnel in BAOR are throwing their hats in the air because they believe that they will shortly be getting the Challenger tank, which is a revised version of the Shir tank. I quickly skipped through the defence White Paper and I saw nothing which could give the BAOR any confidence. There are only four lines on future tank plans and there is nothing which indicates any likely orders in the near future.
Secondly, I have received a mass of letters from constituents about the alleged decision of the Tyne and Wear county council to re-route tanker loads from the Al to the A69. I have not had time to contact the county council. I can only assume that my constituents have seen a press report. Nevertheless, I can understand their reasoning if the county council has taken such a decision.
Clearly the A1—part of which is the Tyne tunnel—is vulnerable to any form of tanker accident which involves either explosives or inflammable materials. However, the alternative is to re-routed
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down Ponteland Road, Silver Lonnon and Denton Road, which are all heavily populated areas. The only answer to this serious question, which is causing extreme concern among my constituents, judging by the type of letter that I have received, is to get on with the building of the western bypass. Again, I do not apologise for raising this matter. I have pressed the Minister of Transport over and over again. Such a development would have a major impact on unemployment in the area and would give a badly needed boost to the construction industry.
The third matter that was brought to my attention in correspondence is that at a time of appalling unemployment in the area the House has learnt—again, while I have been overseas—via a written reply that the Government grant to the North of England Development Council is to be cut savagely for the next three years. The North of England Development Council is a major employment and promotional body in the Northern region. In today's circumstances, surely its activities are more important than ever.
At this stage, I do not want to get involved in a debate on the best form of employment promotion body for the North of England. Obviously, there has been a fair bit of discussion about it. However, with the misery that we are facing as a result of such high unemployment and a multiplicity of calculated Government decisions, which will further increase unemployment in the North-East, it is nothing short of a criminal act to cut the money which is so badly needed for employment promotion.
7.52 pm
Mr. Michael Foot: I should like to comment briefly on the debate. If I do not touch on the speeches delivered by everyone, particularly those by my hon. Friends, I hope that they will not think it discourteous in any way. However, there are some remarks which my hon. Friends and other hon. Members have made to which I should like to add a few comments.
Every hon. Member who has spoken, and those who have listened, must agree that the House of Commons made a wise decision when it did not accept the advice of the Procedure Committee with regard to the organisation of this debate. I was glad to see that Conservative Members were not

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intimidated by the shameful and disgraceful pressures that have been put on them during the past two or three hours. We all watched with horror the scenes that happened, and I congratulate them on their independence and spirit as well as on their determination to resist pressures from any quarter whatever. I am sure that that will continue the tradition of the House with regard to these debates in the years to come.
First, I should like to refer to the speeches made by my right hon. Friends the Members for Manchester, Openshaw (Mr. Morris) and Swansea, West (Mr. Williams). They referred to the siting of the Inmos project and the developments associated with it. We believe that it would be wrong if any announcement about these matters were made during the recess. If the Government had any such devilish thoughts in their mind, I am sure that they have now abandoned them in view of the representations made by my right hon. Friends. I hope that the Leader of the House will tell us in a few minutes that any decision on this matter will be stated to the House, so that we can have the opportunity of cross-examination. We believe that there may have been some departure from the undertakings that have been given in the past. Such a project is of great importance, particularly to areas which are hit by heavy unemployment. I therefore hope that we shall have a proper answer on that subject.
My hon. Friend the Member for Derby, North (Mr. Whitehead) raised the same topic as I raised in the debate on the motion for the Christmas Adjournment. I referred to the injury which Government policies were inflicting on the book trade and the British Council as well as on some of the activities of the bodies associated with the publishing trade in this country. I hope that the right hon. Gentleman can give a better answer today, but, alas, it appears that Government policy is wreaking its miserable results in that area.
One of the most important aspects for the future of this country, to put it at its very lowest, as well as for the encouragement of trade, is to ensure that the English language continues to extend its supremacy throughout the world. Government measures which injure the sale of books and the activities of the British Council throughout the world in my
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opinion represent two most retrograde steps. I hope that even now the Government will reconsider the effects which those measures have had, and I hope that they will consider the representations that have been made by my hon. Friend.
I now turn to the speeches made by my hon. Friend the Member for Walsall, North (Mr. Winnick) and the hon. Member for Woolwich, West (Mr. Bottomley). They both referred to the attitude of the Government towards two countries in South America. My hon. Friend raised the extremely important question of the danger and disgrace of any projected renewal of arms sales to Chile, if that is indeed contemplated by the Government. It was bad enough for the Government to restore diplomatic relations in the circumstances in which they did. If that were to be followed by a reopening of the arms trade to Chile, we would regard it as a dangerous turn of events which would reflect no credit on the Government or on the reputation of this country in that part of the world. Therefore, I hope that the right hon. Gentleman will give my hon. Friend the assurance for which he asked.
The House should be extremely grateful to the hon. Member for Woolwich, West for the way in which he raised the subject of El Salvador. The House and the country have been horrified by the recent events there. I believe that the hon. Gentleman put the case to the House in the best possible manner, and I am sure that he will receive a response from the right hon. Gentleman.
When we were in power, we took steps to halt the arms trade to El Salvador. I believe that was the correct step to take. I hope that the response from the Government will be better than their attitude towards Chile.
The hon. Member for Halesowen and Stourbridge (Mr. Stokes) is not present, and perhaps I should not comment in detail on what he said. However, it is necessary to repudiate the attack which he made upon Sir Hugh Greene, who was a most distinguished servant of the BBC and of the country in the task which he performed. We were told by the hon. Gentleman that in recent times, partly as a result of the activities of Sir Hugh Greene, some appalling skits by playwrights who should have been banned were shown on the BBC.

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I did not quite catch the names which he mentioned, but I thought that he mentioned Congreve Wycherley, Vanbrugh, Beaumont and Fletcher. I think he also mentioned that William Shakespeare made some attacks on the British Army. If anybody reads what happened to Henry V on the night before Agincourt, as described by William Shakespeare, he will see that, according to the reckonings of the hon. Member for Halesowen and Stourbridge, that was not something that could be tolerated on the BBC at all. Therefore, I hope that the Leader of the House will not be too deeply swayed by the hon. Member for Halesowen and Stourbridge on these cultural matters. We know that the Leader of the House has great difficulty with his barbarian friends in the Cabinet and that he has perpetual difficulty in preventing them from turning further in the direction of the kind of activities that the hon. Member for Halesowen and Stour-bridge has recommended.
My hon. Friend the Member for West Lothian (Mr. Dalyell) put one or two questions—not the famous question that he has put on earlier occasions. I am glad to say that he has turned his attention to some other topic and this has been a great improvement. He raised a number of serious matters which should be debated by the House, and I fully support his recommendations.
The first matter that my hon. Friend raised was the appalling and tragic accident in the North Sea. That must mean that we should look afresh at the whole area of safety precautions in the North Sea. I agree with what my hon. Friend said about the necessity to distinguish between the sponsoring Department in such cases and the body responsible for health and safety precautions. That was one of the reasons why the last Government set up the Health and Safety Executive; it was precisely to ensure that it should be independent in these respects. In many areas the health and safety of workers in this country has been advanced by the way in which the Health and Safety Commission has gone about its business. However, there are many places, including the North Sea, where the commission has not been able to carry out to the full the work for which it was
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instituted. I hope that we shall soon have a general debate on that matter.
I also agree with my hon. Friend the Member for West Lothian about the necessity for a debate on the Brandt Commission report. I know that we had a debate on a Private Member's motion last week, but I do not regard that as a satisfactory discharge of the question. It is right that hon. Members should raise such questions in private Members' time, but the matter is of such great importance that it should be the subject of a debate for which the Government should provide time. I have no doubt that the Opposition would be prepared to provide some time as well. I know that there are a few Conservative Members who sit below the Gangway who do not think that this topic should be the subject of a major debate. I do not include the right hon. Member for Sid-cup (Mr. Heath), who is not in his place tonight, in that category. I know that there are fine distinctions to be drawn between the right hon. Member and some of his hon. Friends who sit below the Gangway. They belong to the same party, but they try to live that down. None the less, despite the association of the right hon. Member for Sidcup with the question of the Brandt Commission, we still believe that it is a matter of great importance which should be debated in the House.
I agree with my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown), who has pressed for a debate on London affairs. We hope that that can be arranged. We also believe that in the near future there should be further debates about the North-West and other areas of the country. In the past the Opposition have provided time for debates on particular areas of the country, and we believe that that tradition should be carried further.
My hon. Friends the Members for Keighley (Mr. Cryer) and Salford, East (Mr. Allaun) raised the most important question of peace and war. Certainly, I believe that we should have more frequent debates on this supremely important matter. When we return after the recess, we shall have defence debates. Perhaps these have been prevented in the past by the tedious interventions of the hon. Member for Eye (Mr. Gummer).

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He even filibustered this debate, and I am sure that he will receive a severe reprimand from his Whips. Every minute of that reprimand will be deserved. When the hon. Member protested that my hon. Friends the Members for Keighley and Salford, East were not entitled to raise these matters, it was nothing short of a piece of impudence on his part. Obviously these matters are of supreme importance for the future, not only of East Anglia but of the whole country. I hope that when the House returns we shall treat these topics in the serious way that they deserve.
There is one other aspect of this motion to which no reference has been made so far. The motion refers not only to the period of the Easter Recess but to the May Day holiday, for which provision is made. I am glad to see that the Government have now fully accepted the proposition that was made by the last Government that we should have a proper May Day holiday every year. We had a few objections previously from some of the more neolithic Members on the Conservative Benches who were apparently unaware of this country's history. If they probed more deeply, they would understand that there is a great tradition in this country for celebrating May Day. Some of us think that it should always be celebrated on 1 May, but nevertheless we have made some progress and I am glad that the Government have accepted the proposition.
Mr. Peter Bottomley: I thought that right hon. Member would raise this matter, so I waited until he did. When he brought in the May Day bank holiday, was he aware that it would not actually fall on May Day until 1989? Would we not be well advised to use the intervening years to move the holiday to the Monday on or before I May so that those who want to keep William Shakespeare on television and in other places can use the holiday for that purpose?
Mr. Foot: If there is any suggestion about altering the date, we would certainly be prepared to look at it. When we were in Government, we looked carefully at the proposition of always having a holiday on 1 May. Many of my hon. Friends, for many excellent traditional reasons, wanted to do that and I would still prefer that arrangement. I know
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that there have been objections from the CBI, which has put forward some fatuous financial arguments. We did not quite overcome those arguments when we were in power. At any rate, I am glad to see that the Government accept the establishment of the May Day holiday, and when Conservative Members fail to divide the House on the motion tonight they will be showing their acceptance of that principle.
8.8 pm
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): I can at least agree with one point that was made by the right hon. Member for Ebbw Vale (Mr. Foot). He said that the House had been wise enough not to abolish this debate. It is clear from the number of hon. Members who have spoken tonight—about 30 have taken part—that there is a demand for this debate. The House rejected the recommendation of the Procedure Committee to abolish this debate in the interests of efficiency. I am delighted that the House has resisted that pressure.
I must tell the right hon. Gentleman that it appears that some pressure was being brought on me to limit the length of my remarks. I assure the right hon. Gentleman that I have been quite robust in resisting that. As the right hon. Gentleman will recall, it was St. Patrick who preached for three days and three nights without ceasing. That is an excellent example, which I shall emulate in moderation. After all, Lloyd George's Budget speech took four and a half hours. That makes the recent speech by my right hon. and learned Friend the Chancellor of the Exchequer seem absurdly short.
The right hon. Gentleman referred to May Day and the May bank holiday. He wanted that holiday to take place on 1 May. He advised us to "probe a little deeper". I suggest that he should probe a little deeper. He will find, if he studies our traditions, that that is also a famous saint's day, that of St. Joseph. That day was celebrated long before Karl Marx had been heard of. We are delighted to have his support on this issue.
About 30 hon. Members have spoken in the debate. It is, of necessity, impossible to reply fully to all: hon. Members.

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I shall refer all the points to those of my right hon. Friends who hold direct responsibility for them. However, I shall endeavour to answer the points raised by all those hon. Members who are still in the Chamber. Alas, some hon. Members have faded away as the day has progressed. I regret that. If one raises a point, one should remain to hear the answer—inadequate as it may be. I shall not go on for too long about that. It is like denouncing those who have come to church for the empty pews. The only effect is to empty the pews yet further.
I shall comment briefly on the remarks of the right hon. Member for Ebbw Vale concerning my position in the Cabinet. I suppose that it was kindly meant when he said that I was the only civilised person in a Cabinet of barbarians. May I say the same to him? He is not exactly typical of the Shadow Cabinet. When I look at him, I think of an orchid among a field of turnips. He has an exotic quality, a little frayed perhaps, but definitely not typical of the attitude of his colleagues to the arts. If the Cabinet is so barbarian, it is remarkable that we have managed to give a record grant of £70 million to the Arts Council. That represents a 20 per cent. increase on the amount given by the Government of the right hon. Gentleman and a general increase in the arts grant of 18½ per cent.
The right hon. Gentleman must have a guilty conscience. His Administration excluded the most civilised person in the Labour Party. There he is, the hon. Member for Warley, East (Mr. Faulds), who is listening to the debate.
Mr. Andrew Faulds: rose—
Mr. St. John-Stevas: Only a barbarian Government would have excluded the hon. Gentleman for so long from their counsels.
Mr. Faulds rose—
Mr. St. John-Stevas: I am paying the hon. Gentleman a tribute. He should let me finish. Of Labour Members, he knows most about the arts and has done the most for them. He was excluded from office for many years. It is a measure of the degree of their desperation, resulting from the trauma of defeat,
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that at long last the Opposition have included him in the Shadow Administration.
Mr. Faulds: I am most grateful for the right hon. Gentleman's kind encornium. However, I appeal to him to desist from giving me publicly such a kiss of death.
Mr. Nicholas Winterton: Nasty.
Mr. St. John-Stevas: It is not nasty. It is comparatively nice if one considers some of the things that the hon. Gentleman has said about me. I assure him that that tribute was not made purely for polemic purposes aimed against the right hon. Member for Ebbw Vale. It was a genuine trouble. The hon. Member has done a great deal for the arts. I trust that that will be recognised even more fully by the Opposition Front Bench. I hope that the hon. Member for Nottingham, West (Mr. English) will be similarly recognised for his work on procedure.
The first contribution was made by the hon. Member for Brent, South (Mr. Pavitt). He rightly raised the grave question of the violence at Neasden Underground station that occurred earlier in March. I assure him in general terms that the Government attach the highest priority to the preservation of civil peace under the law. That is why we have taken steps to strengthen the police through increases in their pay. We believe that the strengthening of the police is the basic answer to crimes of violence. We must reduce the chances, that are so high, of getting away with crimes of violence. Unfortunately, that chance has increased to such a degree that the deterrent effect of punishment has been greatly reduced.
We also intend to give further urgent consideration to the specific issue of violence on public transport. My right hon. Friends the Home Secretary and the Minister of Transport are soon to hold a working conference on the subject, to which a wide range of interested organisations will be invited. They will consider in detail the nature of the problem and ways of controlling it, with particular reference to what more can be done.
The hon. Gentleman was right to use this opportunity to raise such an important question. While it is of constituency interest, it is also of interest to other hon. Members.

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My hon. Friend the Member for Macclesfield (Mr. Winterton) raised a question about the re-employment of officers by the Congleton district council. He expressed concern. I understand that the two officers to whom my hon. Friend referred are able to draw a full local government pension only while continuing to be employed in local government, because they were both local government employees on 1 April 1939. They opted to remain subject to the original Local Government and other Officers' Superannuation Act 1922 rather than the 1937 Act which came into force on that day. The 1937 Act introduced considerable improvements. Most of those who were able to would have opted to be covered by it. However, it contained a provision to the effect that if an officer retired and was re-employed his income from his pension and his new salary should not exceed his former salary. That provision was not included in the 1922 Act.
The decision to offer these officers reemployment was a matter for the Congleton district council. My hon. Friend the Minister for Local Government and Environmental Services has reviewed the position. He has given me no reason to believe that he thinks that this is a desirable situation. However, the law is as I have said. This is the first case of its kind that has come to the attention of the Department. My right hon. Friend would very much regret it if there were further cases of this type.
With regard to textiles, the Government accept the industry's continuing need for protection against low-cost imports. About 95 per cent. of our imports from low-cost sources are already subject to actual or potential restraints. Their share of our market is being held to around 12 per cent. under the present range of import restrictions, centring on those negotiated with supplying countries under the multi-fibre arrangement.
Secondly, with regard to imports from developed countries, the basis of Government policy is free but fair trade. If convincing evidence is provided, the Government can act against such practices as dumping, and we shall act if evidence is produced on dumping, subsidies or false declarations of origin, which cause injury to the industry.
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Regarding abuses of the import regime, the Government are determined to implement the present import regulation effectively. We do not allow quotas to be exceeded, and when significant quantities of quota goods enter the United Kingdom via other EEC member States we ask the Commission to suspend the free circulation rules.
The Government are vigilant, and we are grateful to my hon. Friend for once again drawing our attention to these matters.
I have asked my right hon. Friend the Secretary of State for Social Services to look into the question of the physiotherapists. It is not the Government's intention to make extensive use of the Clegg Commission, but my hon. Friend must await policy developments.
I turn to the important point raised by the right hon. Member for Down, South (Mr. Powell), who, with his usual courtesy and puctiliousness with regard to the procedures of this House, is in his place. I have consulted my right hon. Friend, and the right hon. Gentleman will realise that it is a point of expertise. Prescribed amounts used to determine the rate of family income supplement were increased twice in 1979. The second uprating exercise had to be undertaken at short notice, and in Northern Ireland trained staff had to be diverted from their normal assessment work. The right hon. Gentleman is right that that, compounded by the significant increase in the number of persons claiming benefit, led to delays in dealing with cases. Temporary staff have been appointed to deal with the situation. Unfortunately, it has not yet been possible to make quick inroads into the backlog, partly because of the need to train additional staff, but I am assured that every effort is being made to clear it as quickly as possible.
I am happy to be able to inform the right hon. Gentleman that the backlog has been reduced from 407 cases to 852, and nearly 300 claims are being received every week. I hope that the right hon. Gentleman will to some extent be reassured by that. He is quite right on the question of principle. We are doing our best to see whether the situation can be improved in practice.
Mr. Martin Stevens: Will my right hon. Friend give way?
Mr. St. John-Stevas: If I start giving way, other hon. Members will not have the opportunity to have their questions answered.
Mr. J. Enoch Powell: I believe that there was a misreading by the right hon. Gentleman, because he appeared to read a larger number as smaller than a smaller number.
Mr. St. John-Stevas: I am sorry. It is my enunciation that it at fault and not my figures. The figure was 1,407 and it was reduced to 852. That should reconcile any apparent discrepancy.
Turning to what my hon. Friend the Member for Melton (Mr. Latham) said about fees for building control, I do not believe that it is possible to have a debate now, and the scheme has to go ahead. It implements Government policy, because it enables local authorities to recover income assumed in assessing rate support grant. We believe that it will enhance the status of building control and could lead to a better relationship between building inspectors and developers. Given common sense, the scheme will be simple to operate, especially for developers with experience of the system in inner London.
There was widespread consultation. Details of the scheme were circulated four and a half months ago, on 14 November 1979.
With regard to my hon. Friend's constituent, the matter has been looked into and my hon. Friend the Minister of State, Home Office has corresponded with my hon. Friend. My hon. Friend was advised on 1 April that the Minister had agreed to the issue of a temporary travel document to enable his constituent to travel in May, on the understanding that he continues with his efforts to obtain a passport. If there are further questions on the matter, they should be pursued directly with the Minister.
With regard to British Gypsum, Leicestershire county council refused its application for planning permission for a gypsum mine and plaster board factory at Barrow-on-Soar. A public inquiry was set up, and the inspector recommended that planning permission be refused. The parties, however, were invited to submit further representations by 24 March to the Department of the Environment. These are being considered, and the Sec-
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retary of State will give his decisions as quickly as possible.
The hon. Member for Salford, East (Mr. Allaun), who is not at present in the Chamber, raised the question of defence, as did his hon. Friend the Member for Keighley (Mr. Cryer) in the nuclear context. The hon. Member for Keighley got into a dispute with my hon. Friend the Member for Eye (Mr. Gummer), who is in his place. I do not want to get involved in that dispute if I can possibly avoid it.
Mr. Rooker: It is a national issue.
Mr. St. John-Stevas: The dispute between my hon. Friend and the hon. Member for Keighley is of interest but hardly a national issue. Both Members are very distinguished, but we must have some sense of proportion. They gave each other as good as they got.
Turning to the issue of nuclear weapons, there will be an opportunity to discuss these matters in the context of the defence White Paper. As my right hon. Friend the Secretary of State for Defence has made clear, he will make a statement to the House as soon as possible as to where in the United Kingdom the ground-launched cruise missiles will be sited. He is still having discussions with the United States authorities, and no decisions have been taken.
The position on the control of cruise missiles was made clear by my right hon. Friend the Prime Minister on 21 December and by my right hon. Friend the Secretary of State for Defence and my hon. Friend the Under-Secretary of State for Defence for the Army in the debate on 24 January. Let me repeat what was said at that time. The understanding relating to the use by the United States of certain bases in the United Kingdom has often been referred to in the House, was first reached between Mr. Attlee and President Truman in 1951, and was confirmed in 1952 by Mr. Churchill and Mr. Truman. The understanding, which continues to apply today, provides that the use of these bases in an emergency would be a matter for joint decision by Her Majesty's Government and the United States Government in the light of the circumstances prevailing at the time. I hope that that

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will be of some reassurance to the hon. Gentleman.
The hon. Gentleman has raised the matter on numerous occasions. He is entitled to do so. Whatever our views on defence may be—and I do not share the hon. Gentleman's views—we should be aware of the terrible risks that we are running in an age dominated by nuclear weapons. We should be aware of the danger of proliferation. I happen to believe that the way forward is by multilateral and agreed disarmament.
Whatever our views on that may be, we should be increasingly aware of the dangers that every nation is being put in by the nuclear race. It is right that these matters should be raised in the House at regular intervals.
I turn to the point raised by my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery). He was concerned about the unfair system of rates. In principle, I agree with him that the rates system is unfair. It is a tax that is levied on a minority for benefits for the majority. There is no getting away from that. However, we have had that system for a long time, and the Government have made it plain that their first priority is the reduction of the weight of taxation rather than the reform of the rating system. We have not given up the idea of that as a long-term aim of reform.
With regard to water service charges, the Government have no plans to introduce a rebate system for domestic consumers. All water authorities provide facilities to allow bills to be paid by instalments. In addition, help is available through the supplementary benefits system.
My hon. Friend also raised the question of retail outlets used by oil companies. It is for the oil companies themselves to decide with whom they do business. As my hon. Friend the Minister of State, Department of Energy informed the House on 29 October and subsequently, we have obtained assurances from the major oil companies which safeguard our petrol supplies to rural areas and provide the best opportunity for retailers to remain in business. There is evidence that many retailers no longer supplied by the major companies have continued to trade successfully with supplies obtained from other sources. The matter is being kept
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under review by the Department of Energy.
The right hon. Member for Manchester, Openshaw (Mr. Morris) raised the question of Inmos. The National Enterprise Board has sought the approval of Ministers for a further £25 million funding for that project. The company has sought the approval of my right hon. Friend the Secretary of State for Industry for an industrial development certificate for a production unit at Bristol. It is a complex issue which is currently under consideration. My right hon. Friend will make a statement as soon as a decision is reached.
I turn to the remarks of my hon. Friend the Member for Halesowen and Stour-bridge (Mr. Stokes), who spoke with his customary candour, clarity and vigour. I do not wish to intervene in the debate on the rival merits of Lord Reith and Sir Hugh Carleton Greene. No doubt they both have their champions and their detractors.
My hon. Friend was acting well within his rights as a Member of the House in putting forward certain criticisms of the British Broadcasting Corporation. It would not be right for me, as a Minister, to express either agreement or disagreement with those animadversions on the BBC. It is a ministerial responsibility which rests with my right hon. Friend the Home Secretary. He is responsible for broadcasting authorities. I may have my personal view, as he has, but we have to be careful about what we say because of the ministerial responsibility involved.
Certainly it is good and healthy that hon. Members should express their views on the BBC in no uncertain terms. Those views are appreciated by the governors of the BBC. They may well listen to those views and, who knows, they may eventually percolate down to producer level. Let us hope that that is so.
The hon. Member for Rother Valley (Mr. Hardy) referred to unemployment, especially in Yorkshire and Humberside. We believe that it is crucial to tackle the root causes of rising unemployment. One of the main causes is the world recession. There has been an upward surge in oil prices. These are factors that are not within the Government's control. The

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unemployment problem has been endemic for some time. It is only by the creation of jobs that are economically based that the problem can be tackled in the long term. However, the Government can create conditions which will enable United Kingdom firms to compete successfully in world markets and so create a genuine demand for labour.
Hon. Members have referred to pollution. The Government intend to implement part II of the Control of Pollution Act 1974, but no timetable has yet been decided, nor can it be decided until we have better information about expenditure implications. These are being examined and an announcement will be made as soon as possible.
A further topic raised was that of social service cutbacks, especially in terms of area health authorities. About £1,300 million is spent on personal social services by local authorities, which in England and Wales were asked to reduce current expenditure on their services as a whole in 1979–80 by 1½ per cent. below the 1978–79 level and by a further 1 per cent. in 1980–81. I think that everyone deplores social service cuts, but until we have a more productive and wealth-producing economy the cutbacks are, unfortunately, inevitable.
BSC (Chemicals) Ltd. is a profitable company. It is making coal tar chemicals and various related products. It is among the non-steel-making assets that the corporation is considering selling to help to overcome its serious financial problems. The disposal of this asset is a matter for the corporation and not one for the Government.
My hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) referred to the Farnham Park rehabilitation centre. I cannot add to the parliamentary answer that was given by Lord Cullen on 31 March—namely, that the proposal to close the centre is currently the subject of public consultation locally in accordance with the normal procedures. It would be inappropriate for me to make a statement while the consultations are taking place. I am sure that the intervention of my hon. and learned Friend in the debate will have been noted in his constituency and that the arguments that he advanced will be taken fully into account.
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My hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) spoke about the postal services, and especially the report on London postal services. My right hon. Friend the Secretary of State for Industry will soon be discussing the report with the chairman of the Post Office, and he will be making a statement in due course.
I agree that a debate on the British Leyland corporate plan would be desirable. I hope to arrange such a debate not long after the Session resumes. I did not promise an early debate. I have checked the various remarks that have been made and it seems that a time limit was not given. I reassert my undertaking that there will be a debate on that corporate plan. In deference to my hon. Friend, I shall try to find time for a debate as soon as possible.
With regard to the Procedure Committee and the important issue of the review of the Estimates, which my hon. Friend also raised, I have considerable sympathy with the point that was made about the Supplementary Estimates and the amount of money that goes through on the nod in the House. It is not satisfactory that that procedure should continue when it is historically and constitutionally the first function of the House to grant Supply and to survey and control it. The relevant Select Committees, particularly the Treasury and Civil Service Committee, can make a considerable contribution to the question —rather more than my hon. Friend allowed.
With regard to appointing a new Procedure Committee, we have still not disposed of the remainder of the recommendations of the present Committee's major report on procedure. I hope to make further progress with that before appointing a new Procedure Committee. However, if an urgent need is shown for a new Committee, we can review the position.
The sale of arms to Chile—a point raised by the hon. Member for Walsall, North (Mr. Winnick)—is an important issue at the present time. As he knows, there has been an embargo on the sale of arms to Chile, and I assure him that there are no plans to lift that embargo at the moment. I hope that that answers the hon. Gentleman's question.

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I turn now to the point raised by my hon. Friend the Member for Orpington (Mr. Stanbrook), who was concerned about delays in trials. That has been due partly to the increase in serious crime and the consequent number and length of trials. We are doing all we can to reduce the delays. An increasing number of judges are being recruited, and a substantial building programme is being carried out to provide additional court rooms, particularly in London. As a result of those measures, there are signs of improvement. Outside London, in four out of five provincial circuits, 50 per cent. of all defendants, including those on bail in the Crown courts, come to trial within eight weeks of committal. In London and the South-East—about which my hon. Friend is particularly concerned —the position is still bad. To reduce the backlog, special arrangements have been made this year by which over 50 judges from circuits outside the South-East have volunteered to sit in London for a certain length of time.
I turn now to the variety of topics that were raised by the hon. Member for West Lothian (Mr. Dalyell). He raised the subject of kidney patients. I assure the hon. Gentleman that we fully support the cooperation between voluntary bodies and the National Health Service, and the generous offer from the British Kidney Patients' Association is an excellent example. However, the original suggestions would have entailed the provision of considerable supporting National Health Service funds, and the health authorities were bound to consider the implications of that on their other services. I understand that discussions are still proceeding with the authorities on possible ways of using the money to increase services for kidney patients, and we hope that they will lead to a satisfactory outcome.
With regard to the question of chemical feedstock and the related issue of price advantage, it is doubtful whether the price advantage enjoyed by the United States chemical and synthetic textile industries, through access to cheap feedstock, counts as a subsidy under the GATT code on subsidies. However, we have taken action to protect ourselves against the growth of imports from the United States of certain synthetic textiles, and we shall continue to monitor carefully the imports of other products which benefit from the feedstock price advantage. There is no
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evidence yet that the imports of these products are causing damage to the United Kingdom industry.
Careful consideration of the many and varied recommendations in the report of the Burgoyne committee on offshore safety is necessary, not least in regard to the aspects involving the machinery of government. Therefore, I believe that a debate at this stage would be premature, but ray right hon. Friend the Secretary of State for Energy has given me an undertaking that when the recommendations have been fully examined he will, later in the year, inform the House of his proposals. That would be an appropriate time for a debate.
Mr. Dalyell: Are we not to debate Burgoyne until later in the year—
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The right hon. Gentleman has not given way.
Mr. St. John-Stevas Mr. St. John-Stevas I think that I made it clear that we should debate the report later in the year. I cannot go further than to give that undertaking. I am sorry if it does not satisfy the hon. Gentleman, but there are complicated matters that must be reviewed. The work is going on.
I turn to the Brandt Commission report, a most important report on a vital problem facing the world. I am delighted that the House had an opportunity to discuss that significant report and to hear the Government's views in the debate on 28 March, on a motion moved by my hon. Friend the Member for Cambridge (Mr. Rhodes James). I congratulate him on raising that important subject, so giving the House an opportunity to debate it. There was also a debate on the subject in another place on 12 March. In those circumstances, I cannot promise a further early debate.
Mrs. Gwyneth Dunwoody: Disgraceful.
Mr. St. John-Stevas: It is not disgraceful; it is a matter of the timetable and the fact that we have just had a debate. I do not rule out another debate, but I cannot promise it at an early date. We have had a five-hour debate, but it is a vital problem and the House should have an opportunity to discuss it again in due course. Let us wait for further views on the report to come forward in

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the light of the discussion that is going on in the House and elsewhere.
My right hon. Friend the Secretary of State for Industry will pursue the matters that my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) raised about the construction industry. His point about the water rates has already been dealt with in my answer to my hon. Friend the Member for Altrincham and Sale.
With regard to foreign policy, our attitude to the State of Israel and the dispute in the Middle East—matters raised by my hon. Friend the Member for Burton (Mr. Lawrence)—the Government's objective is a comprehensive and lasting Middle East peace settlement guaranteeing a secure future for both Israelis and Palestinians. We support all constructive efforts to this end and hope that current negotiations on the future of the West Bank and the Gaza Strip will soon make progress. We are ready to make a constructive contribution, together with our European partners, if that is likely to be helpful. My right hon. Friend the Prime Minister made clear in a statement on 20 March the Government's attitude to contacts with the Palestine Liberation Organisation. I welcome the opportunity to reaffirm what she said then.
I turn to the remarks about the Civil List made by my hon. Friend the Member for Fife, Central (Mr. Hamilton). [Interruption.] I know that the hon. Gentleman is not strictly my "hon. Friend", but we are old sparring partners on this subject. I am delighted that chance has brought us together again on a subject on which we hold diametrically opposed views. Little has changed over the years. I am very familiar with much of the hon. Gentleman's speech. We heard again the same accusations as he has made over the years against the institution of the monarchy and its expenditure. There was only one new approach—over Gatcombe Park, Princess Anne's house. I could sum up his speech by asking: should one buy a secondhand house from Lord Butler? That seemed to be the gravamen—
Mr. William Hamilton: That is a good question.
Mr. St. John-Stevas: It is a good question. I think that I put it rather more
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graphically than did the hon. Gentleman, but it is a rhetorical question and I do not propose to answer it.
I am alarmed about one thing regarding the hon. Gentleman. He is becoming much milder in his strictures on the Royal Family. He seems to be mellowing. He is mellowing with age. I have heard him say much worse things about Princess Margaret than he said in the debate today. Perhaps he has been impressed by the article in The Sunday Times, which showed in that interesting table, to which I may refer as the productivity table of princesses, that Princess Anne came out top with 121 engagements, and second amongst the princesses came Princess Margaret with 113. I remind the hon. Gentleman that those bare figures do not give a clear or fair indication of the amount of work involved. One engagement in that list may involve between 10 and 20 other engagements. That gives a much fairer picture of the degree of activity undertaken by members of the Royal Family.
The hon. Gentleman said that he hoped that we would see this problem of the Civil List in perspective. I ask him to follow his own precept. Let him look at the Civil List, which amounts to £3 million-plus, in the context of the revenue from the Crown Estates which were surrendered, which amounts to over £9 million. Of that, £3 million has, as it were, been restored in the Civil List. I think that that is quite a good bargain for the taxpayer.
I should point out that the cash limits that are applied to the Royal Household are the same as those that are applied to Government Departments. I further point out that this concerns the salaries of the people employed by the Queen and members of the Royal Family. That is the vast bulk of the expenditure involved in the Civil List.
The evidence given by the Civil Service unions to the Select Committee on this subject indicated that it would meet with their very strong disapproval if comparable rates of pay were not kept up in the Royal service. They did not wish people to work for the Queen or other members of her family at reduced rates for the honour of so doing.
I should also point out to the hon. Gentleman that the private lives of various members of the Royal Family and

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what they do are financed totally out of their own income and have nothing to do with the Civil List or moneys voted by the House. I appreciate the hon. Gentleman's point of view, but I do not share it. There is something to be said for a splendid monarchy; there is something to be said for a republic; but for a mean monarchy there is nothing whatsoever to be said.
I turn now to the next contribution. It is no use the hon. Member for Bedwellty (Mr. Kinnock) sighing like that. He has not been present. I do not know where he has been. He has been to the Shadow Cabinet. No wonder he is sighing. It is a reasonable thing to do. It is a most exhausting process. It is even more exhausting than sitting here. But those of us who have been here for the last four or five hours, as I have, are entitled to conclude our debate in peace, uninterrupted by the hon. Gentleman's sighs.
I turn away from the sighing, and I notice the Patronage Secretary. I am caught in a crossfire of sighs. Nevertheless, I shall continue to do my duty to the House. I am Leader of the House, and I shall answer the questions that have been raised by hon. Members.
I turn to the points made by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who is assiduous in his attendance at these debates. I have asked my right hon. Friend the Secretary of State for Trade to look urgently into the situation that the hon. Gentleman has revealed at the Birmingham assay office. That is a national asset, and we should be concerned about it.
I am less sympathetic to what the hon. Gentleman said about the Rossminster tax case. He was less than fair in that. He defended his reputation with great vigour when he was under attack. I do not reproach him for that. He is entitled to do so. However, he must accept that the Revenue is an independent department. On the question of investigations, it does not act on the decisions of Ministers. It makes its own decisions. Previous connections of a person in a private capacity before he becomes a Minister are a matter for that period. They are not relevant to a ministerial career or to actions taken when in office. I ask the hon. Gentleman to accept that.
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I assure my hon. Friend the Member for Woolwich, West (Mr. Bottomley) that we are extremely concerned about the situation in E1 Salvador. I should like to congratulate my hon. Friend on his visit to that country on behalf of the British Council of Churches. Of course, the Government deplore the wicked murder of the archbishop. In the death of that man we have lost not only a great Christian champion but a great champion of human rights for all people. The crime was utterly deplorable and we have made clear our condemnation of it. I have drawn my hon. Friend's remarks to the attention of my right hon. and noble Friend the Foreign Secretary. I assure him that we are doing all that we can to see that there is a peaceful solution to the problems facing that country and to protect British nationals in E1 Salvador. The Government condemn that wicked crime utterly and without reservation.
The hon. Member for Ince (Mr. McGuire) wanted a debate on energy, and I shall bring his remarks to the attention of my right hon. Friend the Secretary of State. I have sympathy with his wish for a debate on the affairs of the North-West region. We have had many debates in this Session on regional affairs. I hope to be able to arrange, in the reasonably near future, a debate on the North-West, because that region faces particular problems that need to be examined. The hon. Member's point about pensions was heard by my hon. Friend the Minister for Health, and he will take the matter up.
The hon. Member for Hackney, South and Shoreditch (Mr. Brown) raised the question of GLC housing transfers. Orders transferring some 125,000 dwellings and the associated staff to the boroughs and districts that have requested them take effect as from Tuesday 1 April 1980. We think that this is a valuable step towards transferring the management of housing to the local level, with consequent benefits for tenants.
The hon. Member, with others, asked about the future of the GLC's remaining 100,000 houses. My right hon. Friend the Secretary of State for the Environment does not propose to take any initiatives to transfer those. If he receives a unilateral request for transfer, he will have to consider it and consult the parties.

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The hon. Member for Derby, North (Mr. Whitehead) raised a most important question about the British Council, which was referred to also by the right hon. Member for Ebbw Vale. I agree that the work of the council is vital to the future influence of Britain. Power in the nineteenth century sense has passed from us, but influence has not. I therefore fully support the work of the British Council and pay tribute to what it has done.
Unfortunately, we cannot afford for the British Council the level of support that other countries can afford for their councils. That is because they have a higher standard of living and higher productivity and more efficient industry. Certain reductions have had to be made but these amount to less than 10 per cent. of the council's total turnover. Nevertheless, I regret that the reduction has had to be made. I agree with the hon. Gentleman when he draws attention to the vital nature of the work that the council does. When we have a better economic situation, I trust that we shall be able to restore the situation to levels more acceptable to the hon. Gentleman.
I shall raise with my right hon. Friend the matter to which the hon. Member for Newcastle upon Tyne, West (Mr. Brown) referred.
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I am grateful to the House for the patience with which hon. Members have borne with these answers. I make no apology for them. If hon. Members raise a question that they consider important, they have a right to a reply. The hon. Member for Bedwellty would be the first to criticise me if I attempted to skimp this task. I do not intend to do that in this debate or in any subsequent similar debate.
Mr. Neil Kinnock: I love the right hon. Gentleman when he is angry.
Mr. St. John-Stevas: I am not at all angry. The hon. Gentleman should see me angry. He would get a shock. I am my good-humoured and equable self, despite the continued barrage of sighs coming from the exhausted member of the Shadow Cabinet. The House will be relieved to hear that this debate also covers the ill-fated May Day bank holiday. It will not be necessary to have a further debate before that day. I look forward, however, to answering hon. Members' questions on the debate on the motion for the Whitsun Adjournment.
Question put and agreed to.
Resolved,
That this House at its rising tomorrow do adjourn till Monday 14th April and at its rising on Friday 2nd May do adjourn till Tuesday 6th May.

SMOKING IN PUBLIC PLACES
9.1 pm
Mr. John Sever: I beg to move,
That leave be given to bring in a Bill to prohibit the smoking of tobacco products in the auditoria of cinemas and theatres during performances.
I resist the encouragement of hon. Members to make my Ten-Minute Bill speech last at least a quarter of an hour. I say at once that the Bill allows those attending cinemas and theatres who wish to smoke to do so during intervals, intermissions and other breaks in performances in parts of the cinema and theatre other than the auditoria.
The majority of British adults are nonsmokers. The Bill is designed to protect the majority in our community from the ill winds that blow across them from smokers in cinemas and theatres. I have been asked by a number of hon. Members whether I consider that the Bill should have been extended to cover other areas where smoking can cause discomfort and annoyance to others. I thought that it was advisable to ask the House to agree to accept the principle that smoking is particularly annoying to people who find themselves in relatively confined spaces for a relatively long time. I regard the inconvenience and irritation caused to smokers and non-smokers alike in the confined auditoria of cinemas and theatres for up to three and a half hours as specific annoyances, and I hope that the House will agree with that view.
I have received a number of letters and messages from those who have seen public references to the Bill. All except one agree with what is proposed in the Bill. A number of members of the public have written indicating that they think that smoking should be banned in many public places, such as public transport, restaurants and cafes.
Evidence that has recently been produced indicates that Britain has the highest rate of lung cancer in the world and that Britain is among the countries with the highest number of sufferers from the other three killers—coronary heart disease, bronchitis and emphysema. I think that when we are presented with evidence of that magnitude we should do whatever we can to encourage those who are trying to draw to the attention of the
532
public the dangers of smoking and the dangers that are caused, to a limited extent, to non-smokers by those who smoke.
The World Health Organisation expert committee report on smoking control, "Controlling the Smoking Epidemic", in its recommendations addressed to all countries last year, said:
"Non-smoking should be regarded as the normal social behaviour and that all action which can promote the development of this attitude be taken."
I think that the House would be regarded as having acted wisely in response to that recommendation if it were to agree to this measure.
I should like to refer to a recent report published in the New England Journal of Medicine of 27 March this year. That report referred to the problems of smoking in public places, and particularly to what is known as "passive smoking". Many of the chemical substances contained in tobacco smoke have marked irritant properties that cause nose, throat and eye irritation. This is particularly unpleasant when sitting in a confined space such as a theatre or a cinema.
Even for those in relatively good health, cigarette smoke is an irritant. For those who are in poor health —particularly those with bronchial complaints—the presence of considerable amounts of smoke in the atmosphere they breathe, possibly for two or three hours, is unsatisfactory. That is a problem on which I believe the House should comment.
In my view, we should do whatever we can to make the atmosphere in cinemas, theatres and other public places as pleasant and as fresh as possible. The removal of smoke pollutants from that atmosphere would help enormously. I am tempted to draw the attention of the House to all the other areas where I believe a degree of control would be helpful. I have been accused by those who smoke of proposing some sort of infringement of their civil rights and their liberty to smoke. Having referred to the fact that the majority of the adult population are non-smokers, I think that those who smoke should have proper regard for the feelings of the majority and curtail their anti-social behaviour accordingly.
There are a number of matters that have come to the attention of those who follow the effects of smoking, among them recent

533
surveys that have indicated quite clearly that, among smokers and non-smokers alike, a majority in the community are in favour of further restrictions in order to improve the general health of the community. For those reasons, I believe that the Bill should have support.
In conclusion, I thank ASH—Action Campaign on Smoking and Health—for the helpful advice and support it has given to me. I thank also my parliamentary colleagues, of all parties, who are members of the parliamentary group that supports ASH for the help they have given to me. I have pleasure, therefore, in seeking the recommendation of the House for the measure.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Sever, Mrs. Ann Taylor, Mr. J. W. Rooker, Mr. Austin Mitchell, Mrs. Sheila Faith, Mr. D. E. Thomas, Miss Janet Fookes, Mr. Gerald Kaufman and Mr. Laurie Pavitt.

SMOKING IN PUBLIC PLACES
  SMOKING IN PUBLIC PLACES (PROHIBITION)
  Mr. John Sever accordingly presented a Bill to prohibit the smoking of tobacco products in the auditoria of cinemas and theatres during performances: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed. [Bill 182.]

EDUCATION (No. 2) BILL (ALLOCATION OF TIME)
Motion made, and Question proposed,
That the Order of the House [29th January] be supplemented as follows:—
Lords Amendments
1.—(1) The proceedings on Consideration of Lords Amendments shall be completed at this day's sitting and shall be brought to a conclusion not later than at the expiration 5 of the period of four hours beginning with the commencement of the proceedings on this Order.
(2) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on Consideration of Lords Amendments.
2. If at the expiration of the period mentioned in paragraph 1(1) above the proceedings 10 on Consideration of Lords Amendments have not been completed, then, for the purpose of bringing those proceedings to a conclusion—

(a) Mr. Speaker shall put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the amendment of a Lords Amendment, shall then put forthwith the Question on any Motion 15 made by a Minister of the Crown, That this House doth agree with the Lords in the said Lords Amendment or, as the case may be, in the said Lords Amendment as amended;

(b)Mr. Speaker shall then put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments.—[Mr. Mark Carlisle.]

Mr. Deputy Speaker (Mr. Richard Crawshaw): The manuscript amendment in the name of the hon. Member for Berwick-upon-Tweed (Mr. Beith) has been selected. Copies are in the Vote Office.
9.10 pm
Mr. Neil Kinnock: We are faced with yet another timetable motion on the Education (No. 2) Bill. It would be unseemly, if not a dereliction of the Opposition's duty, if we did not refer to the need for a deliberate and thorough debate on the issues which have been raised yet again in the House of Lords amendments. Since the Bill started its journey in November, it has not gained any friends. Indeed, it has lost some of the friends that it had at the beginning.
We regard gleefully the decisions made in the other place. In order to abridge my comments later, I must say that although the House of Lords decision on clause 23 is welcome in the House and in rural areas by parents of children who attend denominational schools, one swallow does not make a summer. One welcome and progressive vote by the House of Lords does not make it a necessary part of our democracy. I hope that we shall not desert the substance of tonight's debate or abandon any proposals for the reform of the British constitution through the abolition of the House of Lords. That remains firmly on my agenda.
The Government hoped that the Bill would have received Royal Assent before today. The Bill had a hasty delivery. It
536
was one of the earliest to be debated on Second Reading this Session after we returned from the Summer Recess. We had a thorough but insufficiently long Committee stage. Two days were spent on Report and the Bill went to the House of Lords. In spite of the claims of my noble Friends, they failed to gain extra time for debate. As a result, not because of delaying tactics by the Opposition but because of the Bill's substance and the requirement for thorough discussion, whole areas failed to receive the scrutiny which they deserve. That is regrettable.
Responsible parliamentarians are aware of the facts of life involved in having a Government with a substantial majority. We acknowledge that the Government have the power and the right to secure their business. That is the essence of Parliament and its hallowed traditions. The Government had an excuse for trying to press the Education (No. 2) Bill through Parliament provided that they were trying to enact a Bill to permit the operation of their major and destructive reduction in expenditure for local education authorities.
Throughout the time the Bill was in the House and the other place, we claimed that the Government's haste was not only unseemly but unnecessary, and, because it was unnecessary and deliberate, that it was a conscious attempt to prevent the House from giving the kind of attention to the complex parts of the Bill that was required and justified. "That is not so", said the Government. "We are simply

537
undertaking the conduct of business in a way that will afford debate and consideration of the Bill."
Now we find in The Times Educational Supplement of last Friday that the Department of Education and Science has informed those who wished to ask that the implementation of important parts of this Bill cannot occur for another 18 months. We are also informed in that paper that
"Although the Bill will become an Act after the beginning of the new financial year—the Government's original deadline—this will not matter in practice. Local authorities are not planning to use their new discretion to charge for school meals and milk until the beginning of next term anyway."
So, despite the deadline that was set originally which dictated the progress of the Bill through the House, together with the sittings motions that the Government members on the Committee voted for and the guillotine motion that we debated a month or so ago, we have a bland and calm announcement that all that haste was unnecessary because some further weeks must elapse before the implementation of some parts of the Bill and a year and a half can be expected to elapse before the implementation of another part of the Bill.
Therefore, there was no justification for the kind of rush that has characterised the passage of the Bill through the House, with the Government using their majority to secure their business. Indeed, only that rush can explain the extraordinary circumstance revealed in the latest edition of the Bill which eventually emerged from the House of Lords. It will be seen that, while the Government accepted the will of the other place—and, indeed, did not even bother to press clause 23 or clause 25—we find in the explanatory and financial memorandum to the Bill as printed the following proposition:
"Relaxation of the present restrictions on the powers of local education authorities to charge for providing home to school transport (clauses 23 and 25) is expected to lead to a reduction in annual rate of net public expenditure for this purpose of at least £30 million in England and Wales and £2 million in Scotland."
I wonder whether the Government are taking their responsibilities seriously or whether, in their haste, they are prepared to commit that kind of inefficiency.
I will say little about the changes that have come about which directly affect the education system and the Bill since
538
we last debated the matter on Report and Third Reading, because we are anxious to move on and give the maximum possible time to consideration of the Lord's amendments and the amendments tabled by the Opposition and members of the Liberal Party. However, since those previous debates, we have seen a new public expenditure White Paper proposing cuts of nearly £1,000 million over the next few years on education. That will have a major effect on the implementation of the Bill. We have also seen the leak of the findings of the National Children's Bureau which would have had a major effect in supplementing the information available to hon. Members, and those interested outside the House, had they been published during the passage of the Bill, especially as regards clause 17, which deals with the assisted places scheme.
The assisted places scheme is based on the assumption that the non-selective maintained school system is incapable of meeting the needs of children of above-average ability. That proposition has been shot to pieces, as we understand it, by the National Children's Bureau, and I should have thought that the Secretary of State would have taken it upon himself to make those details available to the general public during the course of the months of debate on the Bill.
Finally, tonight we shall deliberate further on the public expenditure White Paper. We shall talk about cuts and the effect of those cuts on the implementation of the Bill and the way in which, in an arbitrary and varied fashion, those cuts will directly affect those affected by the various clauses of the Bill.
However, as with the annual conferences of the teachers' unions, this debate has taken place before the most crucial decision in this educational year has been made apparent to the public. I refer to the findings of the Clegg Commission. In that sense, we are debating these matters in the same way in which they will be debated at teachers' conferences this weekend, and in the same way in which they have already been debated at teachers' conferences in recent weeks.
This is an open-ended discussion which is without conclusion. It is taking place without the fullest information and without the most crucial and determining

539
figure being made available—the recommendations that will be made by Professor Clegg about teachers' pay and conditions of service.
I wonder at the Secretary of State not trying to expedite the publication of the Clegg Commission report, so that it can either be debated in this House or, more importantly, so that the information it contains is made available to the teachers' conferences which will take place this weekend.
We have considered the Bill. We should like to give it mote consideration. We shall try to make up for some of the deficiencies of time by discussing some of those matters this evening. I hope that we can proceed speedily to undertake that task.
9.22 pm
Mr. A. J. Beith: I beg to move, as a manuscript amendment, in line 18, to leave out from "Question" to end and to add:
"on each remaining Lords amendment, That this House doth agree with the Lords in the said amendment."
I shall explain the effect of the amendment in a moment. However, I am grateful to Mr. Speaker for allowing us to discuss this matter, thus ensuring that this feature of the timetable motion gets proper consideration.
The House of Lords spent about a fortnight of long, and in some cases all-night, sittings on the Bill. It did a very good job, both in detail and on a major principle. This House and people in constituencies such as mine have every reason to be grateful to their Lordships for what they did. We are now discussing how much time we should spend discussing the work that they have done.
That ought not to take us very long. It is reasonable that a limited amount of time should be set aside for a timetable motion of this kind. However, tonight we are dealing with a timetable motion the like of which I have never seen before. From all the inquiries that I have made of the Officers of the House, it seems that they have never seen the like of it before either.
The hon. Member for Lewisham, West (Mr. Price) has tabled another amendment relating to one of the points in the motion. I should like to refer to two other points, because I believe that these
540
are disgraceful proceedings, which may be taken as a precedent on future occasions. In my opinion, this will do great harm to the House and to the way in which it discusses Bills.
My amendment is designed to deal with that problem. When the guillotine falls at the end of the four-hour period that has been allotted for discussion, what will we do with the amendments to which the Lords devoted so much time and attention in so many long sittings? The ones which are left, and which have not been debated, will be taken en bloc, and one motion will be put to deal with them.
According to the motion,
"Mr. Speaker shall then put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments."
It is not beyond the bounds of human reasoning that there may be some amendments with which we agree and some with which we disagree. We are rather fortunate that the Lords have done an excellent job on the Bill. It is pretty hard to find anything with which to disagree, except in respect of Government amendments which have been inserted and which we think we can improve, indeed, attempts have been made to do precisely that.
It is ludicrous to put on the Order Paper a motion that prevents hon. Members from distinguishing between the amendments passed in another place. It is equally ludicrous to vote on them en bloc. That is an insult to the proceedings that have taken place in another place. Frankly, if the other place dealt with the Bill in the same way as we propose to do. I am sure that the House would have some strong criticisms to make. If the other place decided to take the whole Bill en bloc and had only one vote—irrespective of whether there were individual items with which it agreed or disagreed—those proceedings would be regarded by hon. Members as ludicrous. That is what we are proposing to do with the amendments that they have pressed. If we make a practice of this, we are entering dangerous territory.
My amendment enables us to single out the odd case where we may wish to take a different view of an amendment that we have not discussed. Why should the Government put hon. Members in a

541
position of voting for a block of amendments, some of which they agree with and some of which they do not? That is a ludicrous way of proceeding, and we should not give the Government the opportunity to continue with it. I hope that my amendment will gain widespread support.
The hon. Member for Lewisham, West beat me to it by putting an amendment on the Order Paper about an even more appalling feature of this timetable motion. I do not think that there is a precedent for this motion. If there is, perhaps the Government will tell us. In effect, they are saying that any time that we spend discussing the timetable motion will automatically be deducted from the time that we have left to discuss the amendments. [HON. MEMBERS: "Sit down".] Conservative Members are telling me to sit down. I thought they were elected to this place to defend parliamentary democracy and to ensure that we have an opportunity to discuss these matters properly. It seems reasonable that our Standing Orders should set aside a fixed and limited period to discuss the timetable motion, but that is not what we have here.
The Secretary of State for Education and Science (Mr. Mark Carlisle): The hon. Member is totally wrong and totally misguided. By putting the motion in this way, we allow four hours from the moment that the debate on the timetable motion begins. Since the timetable motion itself is limited to one hour, that means that the House can have anything from three to four hours, depending on how long it chooses to spend on the timetable motion. Had I put the motion down the other way and merely allowed the timetable motion plus three hours, the hon. Member would not have had the advantage of possibly having longer on the debate on the amendments.
Mr. Beith: It is entirely within the Government's power to give more time to the debates on the amendments. They could put down a motion to give us as much time as we need. I do not know why they want a timetable on the discussion of the Lords amendments. Why are they worried? The Lords amendments are not so numerous that we could not discuss them in a reasonable time. Many of them are Government amendments. The truth is that the Government
542
want to curtail the discussion on those amendments. The hon. Member for Lewisham, West was right to seize upon this point at an early stage.
The Government have got themselves into difficulties and have had to resort to a timetable motion, but their action is unnecessary. This is another illustration of their contemptuous attitude towards Parliament. Originally, they told the local authorities not to worry and that they would be able to charge for school transport for any number of children and at any level of charge, but in the course of the past few months they have run into difficulties and they have had to make concessions one by one.
First, there was the concession of a fixed rate of charge. Then there was the concession over the number of children —the charge could be made only for a limited number. Then the Government lost the clause altogether in another place, thus putting the few local authorities that were rash enough to go ahead into a position whereby the provisions that they had put in their budgets were no longer legally possible. The Government are still worried that they will leave the local authorities in the lurch in relation to some other aspect of the Bill. Therefore, they have had to compress the proceedings and rush through the Royal Assent tomorrow. They have even put a motion on the Order Paper to make sure that we sit around tomorrow waiting for Royal Assent. If there is any delay, we shall still be here at 7 pm tomorrow debating second, third and fourth Adjournments while the Lords discuss any amendments that we may make to their amendments. The Government are in a panic.
The Government have told local authorities "Do not worry, we can fix Parliament." The Secretary of State has told them that they need not wait to see whether the House of Commons or the House of Lords approves. They have told them that they have those bodies in the palms of their hands. The Government have said that they need only put the Bill before hon. Members for it to be carried. They have told local authorities to include those provisions in their budgets and that that will be all right. What has happened? They have lost. They have had to make concessions. Hon. Members from all parties object to the provisions. The Government have been defeated in another place on a massive scale.

543
Have the Government learnt the lesson that decisions are supposed to be made in Parliament? They have no right to tell local authorities not to worry about Parliament because they, the Government, are running the show. They have no right to tell them what to put in their budgets or to assure them that they will sort out any consequent problems. Both Houses of Parliament have effectively rejected that approach. Any local authority that has been taken in by the Government has had its fingers badly burnt.
The timetable motion is another illustration of the Government's desire to push Parliament aside and to run government by ministerial dictation from Whitehall. That is not the way that we are supposed to run the country. That is not the way to invite local authorities to play a part in the government of Britain. I ask hon. Members to stand up for the principles of parliamentary democracy.
9.31 pm
Mr. Christopher Price: The hon. Member for Berwick-upon-Tweed (Mr. Beith) has done the House a good turn because he has pointed to one of the flaws in the motion. I hope that Conservative Members will feel free—as they are not losing anything, and as no one will vote separately on the amendment—to accept the amendment. They have nothing to lose.
The Government know that it is not a matter of the Education (No. 2) Bill. If they insist on resisting the amendment, the House will draw only one conclusion, namely, that this motion has been brought in not to meet the needs of the Bill but to set a precedent for some of the other guillotines that the Government know they will have to bring in on Lords amendments to other Bills. They wish to prevent the House of Commons from voting separately on particular Lords amendments. I am sorry to be so suspicious. I am not sure whether the Secretary of State wishes to intervene. He seems to be on one haunch.
Mr. Mark Carlisle: Is the hon. Gentleman saying that the motion makes any new point?
Mr. Price: My amendment contains a completely new point. I do not know whether the hon. Gentleman's amendment is new. However, I spent a large
544
part of the years 1974–76, when I was in Opposition, successfully persuading the Labour Government to change the form of guillotine motions. In those days guillotine motions also wiped out Ten-Minute Bills. Indeed, we would have had no Ten-Minute Bill today if we had followed the old system of guillotine motions.
I am deeply suspicious of our business managers. They are always trying to slip through new forms and shapes of guillotine motions. They seek to prevent the House from undertaking the detailed scrutiny of legislation that should be employed. It is well to remember that at one time guillotine motions were introduced very sparingly. In the old days we spent a whole day discussing a guillotine motion. That discussion could be curtailed was a serious consideration.
The Government have put down a guillotine motion completely unnecessarily. There is nothing controversial in the Lords amendments. The Government are also putting down a form of block voting that is completely unnecessary. The official Opposition, a splinter group from the official Opposition or Conservative Back Benchers would not dream of voting against the amendments, save perhaps for the mad mullahs who would like to restore school transport charges. I can only conclude that the motion is to set a precedent for the Housing, Employment and other Bills. Beyond that, paragraph 1(1) in the motion is wholly unprecedented.
I understood what the right hon. and learned Gentleman was trying to say when he intervened in the speech of the hon. Member for Berwick-upon-Tweed—that it is an attempt to meet the convenience of the whole House, and have a flexible guillotine period that might run to the full hour allowed in the motion of 29 January or might be taken on the nod. The business managers on both sides would like to get the vote on the guillotine over and send everyone home.
I have sufficient experience of the House to be suspicious. Perhaps on this occasion it is for the convenience of the House to have a concertina clause as the first clause of the guillotine motion. In the past it has been clear. We had a guiltine clause motion that exactly specified the length of the debate on allocation of time and then an exact specification of

545
the time allocated to the remaining business. That is the proper way to do it. If we slip away from that approach, we shall have lost the chance to exert our rights in debating the guillotine motion and the remaining business to be guillotimed, because a precedent will have been set. It will have formed a footnote in "Erskine May". Before we know where we are, our rights will have been washed away.
I support the hon. Member for Berwick-upon-Tweed in this at least. The Government have got themselves into this muddle for one reason and one reason only. They have foolishly promised to legislate on a massive chunk of education policy in half a Session. Governments have never tried to do that before.
The Government made local authorities a range of promises quite outside their power. As a result, many local authorities, particularly those that planned to charge for school transport, find that their estimates and expenditure plans are in chaos. It was promised that they would be allowed to charge for school transport, and they so planned the remainder of their education budget. They now have to change every single heading to find the extra money.
The Government are at fault in two ways. I hope that they have learnt the lesson of rushing legislation. They are in a muddle because of the 4 April deadline, and they are willing to use every parliamentary device, fair or unfair, to rush the legislation through in time.
I may be wrong in my suspicions, but I doubt it. I believe that the Government have concocted, in order to form a precedent, a wholly new form of allocation of time motion that has no relevance to the amendments before us. I shall warmly support the hon. Member for Berwick-upon-Tweed if he decides to press his amendment. If the Government have any sense, they will accept it.
9.40 pm
Mr. Mark Carlisle: I shall reply briefly to the points raised. The Government have made it clear that it is their desire to pass the Bill before parliament rises for the Easter Recess. I make no confession or apology about that. We made that clear from the out-
546
set because of the clauses that allow for savings of money on school meals.
It is the desire and the wish of the Government that the Bill should receive Royal Assent tomorrow. Although there is little controversy in any of the Lords amendments, it was to safeguard that position that we felt it right to table the timetable motion.
I shall take up the two points made on the amendment and deal with the second point first. As far as I know, the timetable motion, which allows not for a specific time for debate but that the debate should end four hours from the moment that the timetable motion is moved, is a new measure. It was an attempt to meet what we thought would be helpful to the House.
Under the previous timetable motion passed by the House, the time allowed for the debate on the motion was one hour. Therefore, I could have merely moved a motion allowing for three hours' debate on the amendments, assuming that one hour would be taken on the timetable motion. That would give a total of four hours, which is usually accepted as a half-day debate. If the motion was passed in less than an hour, there would still have been a limited three hours for debate, By tabling this motion—should it be taken either on the nod or after a short debate—there would be a longer period, if the House wished it, to debate the Lords amendments.
It was in no way a deception. We intended to give a measure of flexibility by tabling the motion in this manner. We considered the substance of the Lords amendments. The Government will invite the House to agree with all of them. Many of them are of a drafting nature. That will leave ample time for debate.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) said that he has never before seen anything like the motion. The hon. Member for Lewisham, West (Mr. Price) said that he had been a trustee safeguard of the interest of the Back Benchers when be was on this side of the House between 1974 and 1978. There is a precedent for the paragraph in this timetable motion which provides that at the end of four hours' debate any outstanding Lords amendments shall be put

547
at once. During the period of the previous Labour Administration, every time table motion contained such a provision.
If the hon. Member for Berwick-upon-Tweed was watching interestedly, as he says he was, and the hon. Member for Lewisham, West was being a doughty safeguarder of the Back Benchers, I am bound to tell them that they failed to take the point that such a paragraph has been used on every occasion over the last few years. Therefore, I am following a perfectly proper precedent.
Mr. Beith: The Minister is right in one respect but wrong in another. He overlooked entirely that I moved a number of amendments to Bills in the previous Parliament, including the Aircraft and Shipbuilding Industries Bill, specifically designed to enable votes to be taken on amendments selected by Mr. Speaker and which were to be taken in
a block at the end of the guillotine period. He cannot charge me with having failed to take that point in the last Parliament or the one before.
Mr. Carlisle: With great respect, I can charge the hon. Gentleman with a slight lapse of memory. I heard him say clearly in his speech that he had never seen any timetable motion of this nature before. He is now saying that every time he has seen such a motion he has attempted to amend it.
The Lords amendments are non-controversial. At this hour, the sooner that we proceed with debating them the better. I hope that the House will approve the timetable motion.
Amendment negatived.
Main Question put:—
The House divided: Ayes 122, Noes 70.

Division No. 250]

AYES

[9.45 pm

Alexander, Richard

Griffiths, Peter (Portsmouth N)

Parris, Matthew

Aspinwall, Jack

Gummer, John Selwyn

Patten, Christopher (Bath)

Atkins, Rt Hon H. (Spelthorne)

Haselhurst, Alan

Patten, John (Oxford)

Atkinson, David (B'mouth, East)

Hawksley, Warren

Pawsey, James

Baker, Nicholas (North Dorset)

Heddle, John

Percival, Sir Ian

Bendall, Vivian

Hill, James

Prentice, Rt Hon Reg

Benyon, Thomas (Abingdon)

Hogg, Hon Douglas (Grantham)

Proctor, K. Harvey

Berry, Hon Anthony

Hunt, David (Wirral)

Rees-Davies, W. R.

Best, Keith

Hunt, John (Ravensbourne)

Rhodes James, Robert

Bevan, David Gilroy

Hurd, Hon Douglas

Rhys Williams, Sir Brandon

Body, Richard

Jessel, Toby

Robinson, Peter (Belfast East)

Bottomley, Peter (Woolwich West)

Jopling, Rt Hon Michael

St. John-Stevas, Rt Hon Norman

Bowden, Andrew

Kellett-Bowman, Mrs Elaine

Shaw, Michael (Scarborough)

Boyson, Or Rhodes

King, Rt Hon Tom

Silvester, Fred

Bright, Graham

Latham, Michael

Speed, Keith

Brinton, Tim

Lawrence, Ivan

Stanbrook, Ivor

Brooke, Hon Peter

Lawson, Nigel

Steen, Anthony

Brown, Michael (Brigg & Sc'thorpe)

Lee, John

Stevens, Martin

Bruce-Gardyne, John

Le Marchant, Spencer

Stradling Thomas, J.

Buck, Antony

Lennox-Boyd, Hon Mark

Tebbit, Norman

Cadbury, Jocelyn

Lloyd, Peter (Fareham)

Temple-Morris, Peter

Carlisle, John (Luton West)

Luce, Richard

Thatcher, Rt Hon Mrs Margaret

Carlisle, Kenneth (Lincoln)

Lyell, Nicholas

Thompson, Donald

Carlisle, Rt Hon Mark (Runcorn)

Macfarlane, Neil

Thorne, Nell (Ilford South)

Chapman, Sydney

MacGregor, John

Thornton, Malcolm

Clark, Hon Alan (Plymouth, Sutton)

McNair-Wilson, Michael (Newbury)

Townsend, Cyril D. (Bexleyheath)

Cockeram, Eric

Major, John

Trippier, David

Colvin, Michael

Marlow, Tony

Taylor, Teddy (Southend East)

Cope, John

Mather, Carol

van Straubenzee, W. R.

Costain, A. P.

Maude, Rt Hon Angus

Waddington, David

Crouch, David

Meyer, Sir Anthony

Waldegrave, Hon William

Dickens, Geoffrey

Miller, Hal (Bromsgrove & Redditch)

Walker, Bill (Perth & E Perthshire)

Douglas-Hamilton, Lord James

Moate, Roger

Waller, Gary

Dover, Denshore

Murphy, Christopher

Watson, John

Dunn, Robert (Dartford)

Myles, David

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

Dykes, Hugh

Neale, Gerrard

Wheeler, John

Eyre, Reginald

Needham, Richard

Wickenden, Keith

Fairbairn, Nicholas

Nelson, Anthony

Wolfson, Mark

Fenner, Mrs Peggy

Normanton, Tom

Fletcher, Alexander (Edinburgh N)

Onslow, Cranley

TELLERS FOR THE AYES:

Gow, Ian

Page, Rt Hon Sir R. Graham

Mr. Robert Boscawen and

Greenway, Harry

Page, Richard (SW Hertfordshire)

Mr. Tony Newton.

NOES

Alton, David

Campbell-Savours, Dale

Cocks, Rt Hon Michael (Bristol S)

Armstrong, Rt Hon Ernest

Canavan, Dennis

Cowans, Harry

Beith, A. J.

Clark, Dr David (South Shields)

Cryer, Bob

Dalyell, Tam

Home Robertson, John

Powell, Rt Hon J. Enoch (S Down)

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

Howells, Geraint

Powell, Raymond (Ogmore)

Dean, Joseph (Leeds West)

John, Brynmor

Prescott, John

Dewar, Donald

Johnston, Russell (Inverness)

Price, Christopher (Lewisham West

Dormand, Jack

Jones, Rt Hon Alec (Rhondda)

Richardson, Jo

Douglas, Dick

Kinnock, Nell

Roberts, Ernest (Hackney North)

Dubs, Alfred

Lyons, Edward (Bradford West)

Rooker, J. W.

Dunwoody, Mrs Gwyneth

McCartney, Hugh

Ross, Wm. (Londonderry)

Edwards, Robert (Wolv SE)

McDonald, Dr Oonagh

Soley, Clive

Ellis, Raymond (NE Derbyshire)

McGuire, Michael (Ince)

Spearing, Nigel

English, Michael

McNally, Thomas

Taylor, Mrs Ann (Bolton West)

Ewing, Harry

McWilliam, John

Thorne, Stan (Preston South)

Field, Frank

Marshall, Dr Edmund (Goole)

Wainwright, Edwin (Dearne Valley)

Fitt, Gerard

Maynard, Miss Joan

Wainwright, Richard (Colne Valley)

Flannery, Martin

Millan, Rt Hon Bruce

Welsh, Michael

Foot, Rt Hon Michael

Miller, Dr M. S. (East Kilbride)

Wilson, William (Coventry SE)

Foster, Derek

Molyneaux, James

Winnick, David

Grant, John (Islington C)

Morris, Rt Hon Charles (Openshaw)

Hamilton, W. W. (Central Fife)

Morton, George

TELLERS FOR THE NOES

Hardy, Peter

Park, George

Harrison, Rt Hon Walter

Parry, Robert

Mr. Ted Graham and Mr. James Tinn.

Haynes, Frank

Penhaligon, David

Question accordingly agreed to.
Resolved,
That the Order of the House [29 January] be supplemented as follows:—
Lords Amendments
1.—(1) The proceedings on Consideration of Lords Amendments shall be completed at this day's sitting and shall be brought to a conclusion not later than at the expiration of the period of four hours beginning with the commencement of the proceedings on this Order.
(2) Paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on Consideration of Lords Amendments.
2. If at the expiration of the period mentioned in paragraph 1(1) above the proceedings
550
on Consideration of Lords Amendments have not been completed, then, for the purpose of bringing those proceedings to a conclusion—

(a) Mr. Speaker shall put forthwith any Question which has already been proposed from the Chair and not yet decided and, if that Question is for the amendment of a Lords Amendment, shall then put forthwith the Question on any Motion made by a Minister of the Crown, That this House doth agree with the Lords in the said Lords Amendment or, as the case may be, in the said Lords Amendment as amended;

(b) Mr. Speaker shall then put forthwith the Question, That this House doth agree with the Lords in all the remaining Lords Amendments.

ORDERS OF THE DAY
  EDUCATION (No. 2) BILL
  Lords amendments considered.
  EDUCATION (No. 2) BILL
    Clause 4

      GOVERNORS' PROCEEDINGS AND TENURE OF OFFICE
      Lords amendment: No. 1, in page 5, line 15, at end insert:
      "( )Regulations under subsection (1) above shall make provision for the election of a chairman by the governors of any such school."
      9.57 pm
      The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): I beg to move, That this House doth agree with the Lords in the said amendment.
      This was a Government amendment agreed on Report in the other place and was proposed in response to arguments advanced from the Liberal Benches.
      Although the model instrument for county schools already provides for the chairman of a governing body to be chosen by election by the governing body itself, the Government accepted that in the context of the new provisions of the Bill it was desirable to enshrine this requirement in the statute to apply to all governing bodies.
      Mr. A. J. Beith: I welcome the Government's acceptance of the amendment, which I hope is a sign of Government and parliamentary faith in school governing bodies and in the principle that they should be independent, with self-confidence and self-respect. We should clearly spell out that they appoint their own chairmen. We particularly want to get away from the notion that the local governing body must be controlled by the education authority, which must put in its own chairman.
      The object of the amendment is to ensure that the local governing body
      552
      chooses as chairman any suitable person from among its own members. That is part of an assertion of its own independence.
      I welcome the ready way in which the Government have accepted the point made strongly by my noble Friend Lord Beaumont of Whitley.
      Question put and agreed to.

    Clause 8

      INFORMATION AS TO SCHOOLS AND ADMISSION ARRANGEMENTS
      Lords amendment: No. 2, in page 8, leave out lines 32 to 34.
      Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take Lords amendments Nos. 3, 4, 5 and 6.
      Dr. Boyson: These are quite complicated amendments. I can explain their intention at greater length if that is the desire of the House. However, I believe that hon. Members may prefer to move on to matters which have a little more blood in them. In view of certain alterations made in the other place, these are consequential amendments. Some are linked with the bringing of information to the parents of handicapped children. These amendments largely mean that the local authority may give information or direct that it be given out at times different from the times when it is going through an application for a school and appeals system. That is the only reason for these amendments.
      It being Ten o'clock, consideration of the Lords amendments stood adjourned.

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Limitation Amendment Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Cope.]

EDUCATION (No. 2) BILL
Lords amendments again considered.
Dr. Boyson: That interruption was bad for my nerves. I feel that I am under some degree of persecution. I was coming towards the end of a graphic description of these complicated matters. I commend the amendments to the House.
Question put and agreed to.
Lords amendments Nos. 3, 4, 5 and 6 agreed to.

EDUCATION (No. 2) BILL
  Clause 9

    NURSERY SCHOOLS AND SPECIAL SCHOOLS
    Lords amendment: No. 7, in page 9, line 27, after first "schools" insert:
    or to children who will not have attained the age of five years at the time of their proposed admission except that where the arrangements for the admission of pupils to a school maintained by a local education authority provide for the admission of children who will attain that age within six months after their admission those sections shall have effect in relation to the admission of such pupils to that school.
    ( ) None of the provisions of those sections other than subsections (5) and (6) of section 8 have effect in relation to".
    Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: It will be convenient to take also the following:
    Amendments to Lords amendment No. 7:
    Leave out 'five' and insert 'three'.
    Leave out from first 'admission' to the end.
    Lords amendment No. 8, in clause 12, page 12, line 17, at end insert:
    "excluding pupils who will not have attained the age of five years within six months after their admission".
    The following amendments thereto:
    Leave out 'will not have' and insert 'have not'.
    Leave out 'five' and insert 'four'.
    Leave out:
    'within six months after their admission'.
    Lords amendment No. 9, in clause 15, page 15, line 11, at beginning insert
    "Subject to subsection (1A) below"
    Lords amendment No. 12, in page 15, line 17, at end insert—
    "(1A) Where the age group in question includes children who will not have attained the age of five years within six months after their admission, those children shall be disregarded both in determining the number of pupils who are to be admitted and the standard number applying under this section."
    Lords amendment No. 21, in clause 26, page 26, line 5, at end insert—
    "(3) In the definition of 'pupil' in section 114(1) of the said Act of 1944 (which defines pupils as those for whom education is required to be provided under that Act) there shall be added at the end the words but includes a junior pupil who has not attained the age of five years.'."
    The following amendment thereto: leave out 'five' and insert 'four'.
    Mrs. Anne Taylor: As the Under-Secretary of State suggested, some parts of the debate will be controversial.
    We consider this section of the Lords amendments and the amendments that we have tabled to them to be important and significant.
    The amendments to the Lords amendments do two specific things. First, we have sought to reduce the age limit which is written into clause 9 so that the parents of children from the age of 3 should be entitled to information about school places and be able to appeal against the allocation or non-allocation of places by a local education authority.
    The Minister may tell us that the parents of 3-year-old children may not wish to use the facilities that we are trying to write into the Bill. However, we feel that some parents of 3-year-olds will wish to have information about school places and may wish to appeal against the refusal by a local authority to provide nursery school places.
    We also believe that many parents of 4-year-old children will want to take advantage of this kind of provision and will want information about nursery schools and classes and about the method of selection of pupils to go to nursery school classes. Certainly many parents of 4-year-olds will wish to be able to appeal if they are dissatisfied with the attitude of the local education authority on the allocation of places.
    Our second amendment seeks to leave out part of clause 9, which exempts a

    555
    large number of local education authorities from this provision. Clause 9 as drafted means that only authorities which choose to admit rising fives to their primary schools will be covered by the appeals procedure. Under the Lords amendment, it may be that only schools where the local authority has decided that rising fives should be admitted will be covered by the appeals procedure. That is far too restrictive and should be amended.
    The Government's attitude on this matter is extremely restrictive and is against the under-fives. This is a deliberate decision by the Government to discourage local education authorities from making provision for under-age pupils. It would have been extremely easy for the Government to encourage authorities to provide for rising fives and under-fives generally. If the Government had left the Bill as it was when it left the Commons, the under-fives would have had a much better deal than they will get from the amendments that the Government want us to approve.
    Hon. Members who served on the Standing Committee on the Bill will realise that the orginal provision which gave appeal facilities to the under-fives seems almost to have been a mistake by the Government. We all recall, no doubt, when, on 18 December, the Under-Secretary was pressed to be explicit about these provisions covering appeals for the under-fives. He is indicating that he remembers it. We certainly do, because it was only thanks to some kindly intervention by Labour Members that the Minister was able rapidly to obtain some advice from his officials enabling him to confirm our interpretation of the clause—namely, that it applied to the rising fives and 4-yearolds seeking places in primary schools.
    At the time, we welcomed the provision. We were surprised about it, but we thought it right that under-fives should be covered by clauses 6, 7 and 8. However, we should have known that it was too good to be true for the Government to be taking constructive action in the Bill. They are now backing down, changing their mind and withdrawing the provision. It is silly of them to take that attitude. All the items that are covered by the provision—parental preference rights, appeals procedure and information—do not mean that the auth-
    556
    orities have to provide places for all the 4-year-olds in their areas.
    Those of us who were on the Standing Committee know that there is a great escape clause in respect of appeals and parental preference. Clause 6 provides that parental preference will not apply if it is detrimental to the efficient use of resources. That means that local authorities can get out of many obligations if they wish. It would have been right for the Government to try to emphasise to the local authorities that they should continue to provide for the under-fives and that that was the kind of direction they should be following.
    It is strange that the Secretary of State and other Ministers have taken this course of action. On many occasions over the last few months while he has been Secretary of State, the right hon. and learned Gentleman and his colleagues in the Department have stated, both in speeches and in parliamentary answers, that they believe that there should be more provision for rising fives. The Under-Secretary of State has said that it is Government policy to encourage provision for the under-fives and to admit under-fives to primary schools wherever possible.
    If the Minister is serious about wanting to encourage local authorities to admit rising fives to primary schools, he should have left this provision in the Bill to bring pressure on local authorities such as Oxfordshire, which has no provision for rising fives, and Ealing, which has decided that it wants to stop all provision for rising fives. If Ministers are serious in what they say, they would not have introduced the amendment in another place and asked us to confirm it tonight. They would not be stating in press releases, as the Government did recently on their plans for expenditure cuts in education, that they anticipated a reduction in the number of places for under-fives in primary schools.
    We believe that the Government are not concerned about the situation for under-fives. They are not concerned about using the spare capacity that exists. They are concerned only about education cuts. That is the reason for the amendment which is before the House.
    The Government are getting themselves into a lot of difficulties. They are saying that there is no need to worry about cuts in nursery education and closure

    557
    of nursery schools and nursery classes. The Government say that instead of developing nursery education they intend to take more under-age pupils into primary schools, which is made possible by falling roles and spare capacity. At the same time, the Government are actively refusing to take advantage of a clause in the Bill that would allow parents and everyone involved in education to put pressure on local authorities to take advantage of the spare capacity and to make provision for the under-fives through that process.
    The Minister should be willing to tell the House why he thinks that it would be disastrous to keep the clause in the Bill. If he believes that something should be done for the rising fives, he must realise that the proposals that he puts forward are damaging to the interests of the under-fives and, therefore, damaging to many children's future education prospects as a whole.
    Mr. Christopher Price: I have also put my name to these amendments to the Lords amendments. It is important for the House to take the amendments seriously. I am prepared, if any of my hon. Friends or any Conservative Member would join me, to press the amendments to a Division. The Bill contains a new system of parental preference, appeals and information. Much of this was contained in the Labour Government's Bill. It could be said to be agreed legislation between the two sides of the House.
    However, the Government, in their amendments, are to apply this system of information and appeals, which ought to stretch right across the age range of children at school, to only part of that age range, and, in certain local authorities, only to children aged five and over. It is no excuse for the Government to say that the rules about nursery education have been changed and that, although there was some doubt in the past, there is now no doubt that there is no duty on local authorities to provide nursery education for children.
    There is no duty on local authorities to provide education for children over the age of 16 if they do not wish to do so. But because that is education which, on the whole, tends to he afforded to the
    558
    privileged rather than the under-privileged, it is generally provided by local authorities. Education between the ages of 16 and 19 is subject to parental preference, information procedures and everything else in the Bill.
    10.15 pm
    Anyone who served on the Standing Committee will know the nature of the panic the Government got themselves into over nursery schools when it was realised that there was a problem. That is an example of the danger inherent in rushed legislation. In this case it would have the effect of excluding some youngsters and their parents from the system, and it is not good enough that the Government should do that because they got into a panic.
    It is particularly dangerous for the Government to do that, because the school a child attends at 3 or 4 years of age determines the school it will attend at the age of 18. Conservative Members constantly regale us with stories of parents moving into particular districts so that they can pick particular primary schools and so be in a position to select the secondary school to which their children will go.
    If that is so, the system of parental preference, of provision of information and of final appeal should be as available to the parents of children of nursery school age—the rising fives—as it is available to every other parent in the school system.
    But it is worse than that. The Bill differentiates between local education authorities. The amendment states:
    "Where the arrangements for the admission of pupils to a school maintained by a local education authority provide for the admission of children who will attain that age within six months after their admission…"
    We are meant to have a national system of preference, information and appeal, but we are legislating for two classes of local education authority. The first class comprises those authorities which have decided to be mean about nursery schools—such as Oxfordshire and Ealing—and I am sure there will be other examples as this year goes on. The second class comprises those authorities which have decided to try to maintain their responsibilities for nursery education.
    Because of the importance of a child's first school, because of the undesirability

    559
    of creating two classes of local education authority by legislation, because of the need, when we legislate, for a national system which is available as much as to one parent as to another, thus avoiding discrimination, and, beyond that, because of the need to re-emphasise in this House something on which we might be broadly in agreement, pre-school education is a more crucial stage in the system than primary or secondary education. All the evidence from the National Children's Bureau states that the great differences in ability among youngsters appear not between the ages of 5 and 16 or between 5 and 18 but before the age of 5.
    I do not wish to make too much of this amendment. It is not central to the fabric of the system. However, it is an important erosion of the principle of having a national system. It arises not from mature consideration by the Government but from panic reaction to a reactionary local education authority—Oxfordshire—that could have been taken to court by the citizens of the county. The Government felt that they had to leap in and use the House to protect their political friends in Oxfordshire from being taken to court.
    Some Ministers feel that Lords amendments are an opportunity to be generous. I appeal to the Minister to accept the amendment and thereby achieve a national system.
    Mr. Harry Greenway: The hon. Member for Lewisham, West (Mr. Price) stretched the point a little when he said that a nursery school attended by a child of 3 or 4 years of age could determine what happened to that child when he was 18. However, I do not contradict his opinion that nursery schools have a deep and lasting value. I cannot agree with him about his comparison with tertiary education. I should like to restate my conviction that nursery education is valuable to all children who are ready for it. But not all children are ready at that age, and this fact must be remembered in all discussion on this sector. I am an educationist, and I know that that is so.
    Nursery education is especially valuable because it comes when children first begin to establish relationships with adults and other children. The earlier that they begin that process, the better. They also learn to handle materials, and
    560
    deprived children experience an environment which is brighter than that which they have at home. That is valuable.
    There is no substitute for a child's relationship with its mother and, as the hon. Member for Eton and Slough (Miss Lestor) reminded me on Report, with its father. For some children that is almost enough until they are 5 years of age. However, many children are ready for school well before they are that age. Society should recognise that.
    I support the concept of nursery education. It is valuable in itself. I would give priority to deprived children—the children who live in an unacceptable and unhappy and a socially unstructured environment. All such children should attend nursery school. There is nowhere else for them at that age.
    Additionally, some nursery education should be provided in areas where there is none at present. In principle, education should be available to all children who can profit from it at the beginning of the term in which they reach their fifth birthday. That cannot be made compulsory. We do not want more compulsion in education; it can be damaging. From there we might grow downwards chronologically towards the age of 3 and bring aid to children when they are little able to help themselves and when parents in particular and society in general have an extra duty towards them. This is an age when children are at their most robust and when they are most ready to learn. They are also at their most vulnerable, and we must always remember that vulnerability is of concern to us all and when children are involved it is of special concern.
    The Secretary of State for Education and Science (Mr. Mark Carlisle): I realise the great sincerity with which my hon. Friend the Member for Ealing, North (Mr. Greenway) speaks when he makes clear his belief in the importance of nursery education for the rising fives. I am sure that those he represents will take note of what he has said.
    In replying to the amendment moved by the hon. Member for Bolton, West (Mrs. Taylor), I shall deal with the whole group of Lords amendments that are being taken together. Although the amendments have rightly, in the judg-

    561
    ment of Mr. Speaker, been taken together as a group, I do not know whether the House realises that they deal with four totally different points. However, from the way in which the amendments are worded it is clear why they have been grouped as they have.
    First, Lords amendment No. 7 deals in part—this is what the amendment of the hon. Member for Bolton, West was about—with the application of clauses 6, 7 and 8 to the rising fives but not those below the age of rising fives. Secondly, Lords amendment No. 7, in its second part, deals with the important point about the publication of information on special schools, which I think will be welcomed by all hon. Members. Thirdly, Lords amendments Nos. 8, 9 and 12 state that the clause 15 procedure shall not apply to education at an age below that of rising fives. Finally, Lords amendment No. 21 is a technical amendment dealing with the definition of a pupil under the 1944 Act arising out of the decisions that the House took on nursery education.
    Before I turn to the effect of these various amendments, I should like to say one thing to the hon. Member for Lewisham, West (Mr. Price). He made the same point as was made by many Opposition Members when I moved previous amendments on nursery education. I was attacked on that evening by many hon. Members who said that I was moving the clauses merely to allow my political friends in Oxfordshire to get off the hook. The hon. Member for Lewisham, West repeated that today. The hon. Member is always very fair in debate and I am sure he will agree that that was not the way my political friends in Oxfordshire apparently saw it. In fact, on the following day they announced that, in view of the Government's decision not to allow the closing of nursery schools, they had withdrawn their proposals to close nursery schools in Oxfordshire. Therefore, what I said in my speech in introducing the purpose of those clauses and attempting to get a balance was proved more right than some of the comments made by the hon. Member for Lewisham, West and some of his hon. Friends on that occasion about my motivation.
    562
    Having said that, I turn to the amendments now before us. I shall deal first with the part which I describe as wholly non-contentious, which is the effect of the second paragraph of Lords amendment No. 7. It will require local education authorities to publish information about their policy and arrangements relating to special educational treatment. That resulted from an undertaking, which I gave to the House on Report, that we would look at this matter before the Bill reached the other place. I said that we would see whether we could at least do something about the information clauses in the other place and that we could look at the other points beforehand.
    10.30 pm
    The House will know that early in March I made a statement indicating the Government's proposals with regard to Warnock. Also, we moved the amendment in the other place the effect of which is to provide that the information parts of clauses 6, 7 and 8 apply to children at special schools. For technical reasons, I believe that that was as far as we could go in this Bill. I think that we are right to deal with the other matters, as I said we would, in the Warnock legislation.
    Mrs. Ann Taylor: The right hon. and learned Gentleman has in part answered the point that I wanted to raise. However, I think he will accept that when he spoke on Report the indications which he gave were slightly stronger than the undertakings which he has fulfilled. They applied not only to the provision of information but to a degree of parental preference in regard to children in special schools, as well as to the appeals system. Some of us would take some convincing that the technical difficulties were so great that those points could not be encompassed in this Bill rather than in future legislation.
    Mr. Carlisle: I did not want to get into a controversial frame of mind, because that is not the mood that I am in tonight. However, I cannot accept what the hon. Lady has said. What I said was:
    "I still believe that the Warnock report should be considered generally. If my hon. Friends think that it will help, I give the undertaking to reconsider the information clause and to do anything else that is possible before the Bill goes to another place".—[Official Report, 12 February 1980; Vol. 978, c. 1427.]

    563
    I also made an announcement on Warnock on 3 March, in which I said:
    "The legislation will also define and protect the rights of parents to adequate information and consultation about the education offered for their children, taking account of the relevant recommendations of the report and in the spirit of the provisions about information and parental preference embodied in the Education (No. 2) Bill":—[Official Report, 3 March 1980; Vol. 980, c. 42–3.]
    In fact I went further, because I discovered that we could meet the limited information point in the other place. With the greatest respect, I think that carries out in its totality the undertaking which I gave:
    "to reconsider the information clause and to do anything else that is possible before the Bill goes to another place".
    I believe that I have succeeded in doing that.
    Mr. Neil Kinnock: I am in a controversial frame of mind, as ever, but not a churlish one. The right hon. and learned Gentleman's statement on the Warnock proposals was made on 3 March. It is now 2 April. Given that he could coin important amendments to section 8 of the 1944 Act in respect of the statutory definitions on the provision of nursery education, and given the right hon. and learned Gentleman's modest aims to make statutory changes with regard to the rights of parents and other matters—such as the needs of the disabled or children in need of special education—why has it not been possible for him to bring forward amendments which would have provided such parents with those rights 18 months in advance of the time when they can now look forward to them?
    Mr. Carlisle: For the reasons which I gave the hon. Gentleman when I made my statement on the Warnock report. In practice, I believe that the hon. Gentleman will find that there is no time gap between the implementation of that part of the Bill and our hopeful implementation of Warnock legislation. Of course, I cannot assume what will come in the next Loyal Address, and I do not attempt to do so. That is not my decision; it is for my right hon. Friend the Leader of the House.
    I stick to the view that we have held throughout. In fact, the appeal provisions as laid out in the Bill do not apply suitably to parents of children
    564
    with special educational needs. That matter will be better dealt with under the provisions of our proposed Warnock legislation. However, in the other place I was able to meet the point with regard to the information clauses. The hon. Lady's second amendment to Lords amendment No. 7 would remove that totally.
    The first part of Lords amendment No. 7 is to apply clauses 6 to 8 to the admission of pupils below compulsory school age, but only if they are what is known as rising fives—that is, within six months of their fifth birthday. I realise that the hon. Lady's amendment would wish us to go further and apply clauses 6 to 8 to any child over the age of three. I do not believe that it is realistic to do so. Had we left the Bill as it was, there would have been confusion. In principle, I agree that where local authorities have normal arrangements for accepting rising fives, the provisions of clauses 6, 7 and 8 should apply to them. Equally, I must make it clear that it is not Government policy that the clauses should be used as a method of appeal in areas where the local authorities have chosen not to make such provision.
    It was argued that although there was no provision for the education of children under five in a particular area, and although there is no compulsion on local authorities to make such provision, nevertheless parents might attempt to use an appeal under clause 8, claiming that they had been refused an application to a school when the local authority made no such provision. To make it clearer, we have said specifically that where arrangements are made for the education of rising fives parents should have the same rights as parents of children above compulsory school age.
    Mrs. Ann Taylor: Will the Secretary of State comment on the areas which do not make any provision at all for the rising fives? Is his Department quite content to sit back and let the clause apply only to local authorities which choose to have it apply to them? If that is so, local authorities could say that they did not want to be bothered by appeals and, therefore, they would have no provision at all. Is that really satisfactory?
    Mr. Carlisle: The hon. Lady is probably more correct this time than she was earlier. It is true that these clauses will not apply to children under the age of five in an area where there is not normally an arrangement for accepting rising fives. It will still apply to the schools for children of compulsory school age. If we are talking about nursery provision, it is a question of whether it is there or not. It is not a question of which nursery school one wishes one's children to attend. While we are anxious to make it clear that the clauses apply to children under five, it is not right for us to leave a confused situation in which it might be argued that these clauses provide a right of appeal for parents for education of children under compulsory school age in an area where a local authority had made no such provision.
    Mrs. Ann Taylor: In the remarks that the Secretary of State has just made, he referred to nursery education. We are talking about rising fives who are admitted to primary schools. Surely that situation is different.
    Mr. Carlisle: If arrangements are made—this touches on Lords amendments Nos. 8, 9 and 12 as well—for the acceptance of rising fives, these clauses will apply. Had we left it at compulsory school age, the advantages of these provisions would not have applied to the parents of children who had begun school under 5 years of age.
    Where authorities do not make provision for rising fives—
    Mrs. Ann Taylor: The Secretary of State is not bothered.
    Mr. Carlisle: I shall answer the hon. Lady's question. Where no provision has been made for those under the age, of 5, these clauses cannot bite, because it is an appeal against the school to which one's child has been allocated. If there is no such provision, those children will not have been allocated to a school. There is a degree of confusion. Indeed, I am sure that there is now that I have attempted to explain the law. However, we put down our amendment to alleviate that confusion.
    Mr. Beith: The situation is very confusing. The right hon. and learned Gentleman is trying hard to explain it.
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    He is doing so in a clear manner. However, the situation remains confusing. He speaks as if a clear-cut distinction can be made between the situation when rising fives are admitted to school and when they are not. He assumes that any area will find it readily apparent whether the clause bites in such cases.
    Perhaps the right hon. and learned Gentleman will apply his mind to the position that he and other hon. Members have sought to encourage. The issue is very flexible. In one year, a school may say that it has extra space and that it will consider applications from rising fives. However, the situation may change the following year and the school may find that it has too many children of compulsory school age. Within a small town, one school may admit rising fives and another may not.
    A parent might exercise the system by pointing out that in the previous year a school had admitted a child who was only 4 years and 7 months old. He might point out that the school had refused to accept his child the following year. The position is often more fluid than the Secretary of State has described. Parents may say that at another time or place a child had been allocated to a school in comparable circumstances and that the case for pressing his own child's case could therefore be made.
    Mr. Carlisle: I do not dispute the hon. Gentleman's remarks. The situation is fluid. It is not entirely black and white. However, a limit must be set to the application of these clauses. Our amendments seek to make clear that the clauses apply to schools—whose arrangements on admission procedure will now have to be published—which claim to admit rising fives. They will not apply to children under the age of 5 in areas where local authorities do not make arrangements for them.
    Mr. Kinnock rose—
    Mr. Carlisle: I must now turn to the other amendments. I do not wish to mislead the House. Lords amendments Nos. 8, 9 and 12 specifically exclude the effects of clause 15 from rising fives. The reduction in the numbers of rising fives—even if over 20 per cent. in a standard year—would not require the publication of proposals in an area.

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    We believe that we have given protection by implementing and introducing nursery schools for the first time, under the old clause 13 procedure. From tomorrow, that clause will become section 12. They cannot be closed without application to the Secretary of State. If the removal of nursery classes were to make a significant alteration to the type of school, that would be a matter for clause 13. Tomorrow that clause will become section 12. We have made adequate provision for nursery education.
    We are right to say that clauses 6, 7 and 8 should apply to rising fives but not to those below that age. The provisions contained in clause 15 about limiting the size of a class should not include those below compulsory school age.
    10.45 pm
    Mr. Kinnock: I am grateful to the right hon. and learned Gentleman, especially for his last point. Is he aware that in Committee, when the rights of parents to be exercised under clauses 6, 7 and 8 arose, the Under-Secretary of State, without any intention to mislead, gave the strong impression that the right of appeal would exist throughout England and Wales? It was not limited to the local education authorities which on a previous occasion, without notice, warning or anticipation of the change in the law that the right hon. and learned Gentleman proposes, had adopted a policy of accepting rising fives in their schools or making nursery provision for them. We responded on that basis. Had we been aware that the criterion of whether the writ of the law would run on the exercise of parental rights was limited to LEAs which already had arrangements for the admission of rising fives, our attitude would have been very different. Our amendments would have been different in substance and intensity.
    May I raise two further small points? The right hon. and learned Gentleman talked of the appeal being against allocation. That is correct, but it omits the powers that a parent has under section 6 to express a preference. Presumably that preference can be expressed in favour of securing education at a particular age for a child, and not only in terms of securing allocation to a particular school.
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    I wonder how the principle of recoupment between local authorities works in relation to a policy that says that the right of a parent to secure admission of his rising five child to a school will be denied in an area that does not already have provision, yet in another part of the Bill there is provision for children to be moved across borders, with recoupment and rights for the LEA written in. Does the same consideration apply to rising fives as to rising elevens, fifteens or sixteens?
    Mr. Carlisle: With great respect, the hon. Gentleman must realise that it is totally illogical to use clauses 6, 7 and 8 where there is no compulsory schooling below the age of five.
    To take the hon. Gentleman's example that the parent of a child under 5 in an area which has no provision for children under 5 should be able nevertheless to express a preference for a school, I would point out that, the preference having been stated and the local authority having refused to take the child because it was not making provision for educating children under 5, the parent could not appeal, because there was no school in the area at which a child under 5 could be educated.
    The only logical, sensible answer is to say that these clauses do not apply to children other than of compulsory school age, except—this is a concession that we made to meet the points made by the Opposition—that where a local authority has arrangements for taking rising fives—and under clause 8 authorities will have to publish their arrangements for admission—these clauses shall apply.
    Mr. Christopher Price: I know that the Secretary of State is trying to be helpful, but he sometimes uses the word "authority" and sometimes "area". When he uses the word "area", does he mean coterminous with the whole authority?
    The hon. Member for Berwick-upon-Tweed (Mr. Beith) was right. Very few local authorities are totally against rising fives. The whole point of the Bill, emphasised by the Under-Secretary of State in Committee, is that it is allowing far more free places than before. Did the Secretary of State mean "authority" when he said "area"? What does he mean by "area"?
    Mr. Carlisle: On reflection, I am probably wrong to use either word. The requirement of the Bill is that the local education authority—I should not have used the word "area"—is required to state the arrangements for admission to its schools. Therefore, the admission arrangements to its schools in part of its area may be different from those in other parts. Clauses 6, 7 and 8 will apply to schools that admit rising fives. A parent will be able to express a preference and will be able to appeal. It would be illogical to continue and extend these clauses to schools where no provision is made for rising fives.
    I do not hesitate in taking time over these amendments. Among other things. I find them extremely complicated, even if they do not appear so to the rest of the House. Taken with these amendments is Lords amendment No. 21. It is a technical amendment which changes the definition of "pupil".
    If we did not change the definition, a pupil would be defined only as a child beyond the age of 5. The provisions in the Bill, which impose certain statutory responsibilities on local authorities with regard to children at school, would not apply to any child under the age of 5. We are amending it to say that "pupil" shall mean not only a child of compulsory school age but shall include
    "a junior pupil who has not attained the age of five years."
    The effect of the Opposition's amendment would be contrary to what they intended. It would mean that a pupil was a child under 4 or over 5 but that between 4 and 5 he would not be a pupil.
    Mr. Beith: I had not intended to intervene, but we have stumbled upon a difficulty and a complication. As I understand the clause, it appears to apply to a specific school. As the Minister conceded, the concept of an area, whether a local authority or a district area, is not what we are discussing. Therefore, if a parent specifies that he wishes his child to be admitted to Holly Road infants school, which is admitting children at the age of 4½, the parent can appeal against a refusal. He can say that he wishes his child to be allocated to that school because it admits rising fives.
    The local education authority may have a perfectly good reason on which to
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    win the appeal, for example, by arguing that there is no room at that school because it is full of children of compulsory school age. I am anxious that that matter should be made clear. If that is not the case, I anticipate that we shall have a nasty side-kick from the clause. If it were the case that the whole area was affected, the authority could say "We have only one or two schools admitting rising fives, but if we stop that altogether we will free ourselves from any reference to rising fives under the clause." Some hard-pressed education officer may say that it is better to scrap all the rising five provision than to become involved in such a problem. I am sure that that is not what the Minister intends, but he should realise the side effects.
    The interpretation that we appear to have arrived at through discussion is that we are referring to individual schools and that the right of appeal will apply.
    Question put and agreed to.
    Lords amendments Nos. 8 and 9 agreed to.

  Clause 15

    REDUCTION OF SCHOOL PLACES
    Lords amendment: No. 10, in page 15, line 11, after "where" insert "(a)".
    Mr. Mark Carlisle: I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may take Lords amendment No. 11.
    Mr. Carlisle: The purpose of the amendment is to remove the duty on local education authorities and governors of voluntary schools to publish proposals when they intend to restrict admission to primary schools where the standard number of admissions is fewer than 20. It in no way affects the need of local authorities to publish notices in the normal way under section 12 if they attempt to close a school.
    It was argued in another place that to include clause 15, which deals with reducing numbers by over 20 per cent., and to publish notices was not appropriate for schools with 20 or fewer admissions. The effect of the clause would have been to

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    oblige them to go through the process of publishing notices under section 12 if, for example, they reduced admissions by four pupils a year.
    Mr. Kinnock: The Opposition are worried about the whole of clause 15 and the new addition. We accept that in the event of a proposal to close a school the normal section 12 procedures will have to be operated. What will be the situation if a school is transferred from the wholly maintained sector to the voluntary aided sector? Will the same safeguards apply?
    An example is likely to come before the Secretary of State, although admittedly it is in the secondary sector. In the borough of Ealing it is proposed that the Twyford comprehensive school should become a Church of England school, and that its management and decisions about the basis of selection or admission should be moved to a different body and from the local education authority.
    I do not wish to labour the point. I hope that there will be other opportunities to discuss the matter of Twyford. There is overwhelming support in the community for those who are trying to prevent the change.
    11 pm
    With specific reference to amendment No. 11, we wonder whether it is possible—because of the inclusion of primary schools, especially those with a small annual intake—that a change could take place which would result in a system of selectivity which would prejudice the general provision of education in the area.
    We should also like to know, if the Secretary of State is disposed to respond—we have no power to insist that he does so—with reference to the primary school provisions, but also more generally, what criteria he will employ in making his decision on whether the intention under clause 15(2) to reduce the number of pupils, either in secondary or in primary schools, is satisfactory.
    Mr. Beith: I am also worried about the amendment, not simply because of its intention but because of its possible wider effects.
    Lord Ridley, who was chairman of the county council in my constituency—we do not share the same party, but we share the same county—pointed out that attendance at schools with small numbers of
    572
    pupils could fluctuate considerably because of a change of numbers of families in the area. That applies in many parts of my constituency.
    A classic example is a school in my constituency which serves families of shepherds living in the hills. The shepherds change jobs at May each term-year, and if three shepherds with families leave the valley in one year the attendance at school can decrease from 20 to five. Classes at that school are then suspended temporarily. It reopens if the numbers increase again when two or three shepherds come into the valley at the next May term.
    That is simply a natural change. The amendment would not affect it, and the amendment is not necessary to deal with it. Those changes have happened because families have come and gone. We are dealing with the prevention of administrative complications if a local authority wishes to use this procedure to reduce the strength of the school by reducing admission numbers. I cannot imagine its doing that. It seems extraordinary. In practice, when local authorities start trimming down the small schools, they do so in other ways—by narrowing the catchment area of the school. I know of one or two cases where a local authority has intended to close a school, and it has narrowed down the catchment area to the smallest area of the village and has shipped all the children from outside the village into another neighbouring school.
    Schools with fewer than 20 pupils have a place in the rural education scene, and they can work effectively. Often they are one-teacher, or occasionally two-teacher, schools, or in some cases with which we are experimenting in Northumberland there is one full-time teacher and a shared teacher. It is often right to keep those schools in existence—even if attendance drops to 10 pupils in a particular year—in order to prepare them for a build-up of 16 or 20 pupils in a future year.
    I hope that we can make it absolutely clear that, in trying to cut down the bureaucratic complications that would arise in the very undesirable and unlikely event of an education authority's applying the provisions of the clause to such schools, we are not trying to say that we disapprove of, or would want to

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    discourage, these very small schools where they have a role to play in isolated communities.
    In my constituency there is an island which has a one-teacher school. I have valleys where there are one-teacher schools. They exist in other parts of the country, too, They can work very well with talented teachers, and we should defend and maintain them.
    To make this exception would be of academic consequence. I hope that no local authority would want to start applying this sort of provision to such schools in any case. But let us be clear that we do not want authorities to do so.
    Mr. Mark Carlisle: The hon. Member for Berwick-upon-Tweed (Mr. Beith) is quite right: it was Lord Ridley who first raised the matter.
    I share the views that the hon. Gentleman has expressed. We believe that in dealing with schools of the size in question authorities will close the school entirely, in which case clause 12 still applies, or there will be pressure to try to enlarge the school rather than deliberately to reduce its size. Therefore, the provision in the clause was unnecessary, and we thought it right to exempt such schools.
    I assure the hon. Member for Bedwellty (Mr. Kinnock) that his point about the transfer of the school is in no way affected by clause 15, which relates merely to a reduction in the size of the school. Any application by a local education authority to cease to maintain a school, even if another body is taking it over, would still have to come under clause 12 in the normal way.
    Question put and agreed to.
    Lords amendments Nos. 11 and 12 agreed to.
    Lords amendment: No. 13, in page 15, line 27, at end insert—
    "( ) The published proposals shall be accompanied by a statement of the effect of section 12(3) or, as the case may be, section 13(3) as applied by subsection (2) above."
    Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.
    The amendment simply ensures that the rights of objectors are published when
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    proposals are made to restrict admissions to a school. This provision is already made in relation to proposals submitted under clauses 12 and 13. The amendment clarifies the position as regards proposals under clause 15. A local authority that wants to cut the size of a school by 20 per cent. must go to the Secretary of State for permission, so schools cannot be run down intentionally.
    The only reason for the amendment is to make sure that, as is already ensured under other clauses, objectors know their rights. Their rights to object are to be publicised at the same time as publicity is given to the fact that the local authority wants to reduce the size of the school.
    I do not think that this is a contentious matter.
    Question put and agreed to.

  Clause 16

    PROVISIONS SUPPLEMENTARY TO SS. 12 TO 15
    Lords amendment: No. 14, in page 17, line 13, at end insert:
    "(6) Section 14(1), (2) and (4) above shall apply, and subsection (6) of the said section 13 shall not apply, in relation to proposals for the matters referred to in paragraphs (a), (b) and (c) of section 14(1) above—

    (a) which are approved under the said section 13 on or after the date on which this subsection comes into force; or

    (b) which have then already been approved under that section but in respect of which specifications and plans have not yet been submitted under subsection (6) of that section;

    and, in relation to any such proposals, subsection (7) of the said section 13 shall apply as if references to specifications and plans being approved or not required under that section were references to particulars being approved or not required under section 14 above.
    (7) In subsection (6) above references to subsections (6) and (7) of the said section 13 include references to those subsections as applied by subsection (9) of that section."
    Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.
    It is pleasant to be involved in non-controversial amendments tonight. It may be out of character, but it is good character training.

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    The amendment simply allows the Department's new building control procedures to come into operation immediately and not have to wait until clauses 12 to 16 come into force. The object is to cut down the number of regulations.
    Mr. Kinnock: I am relieved by the Under-Secretary's explanation, because, with all the education journalists having gone to China recently, I thought that they had returned and drafted the amendment. My hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) and I tried, with the assistance of the 1944 Act, to work out precisely what was intended.
    Although I realise that the amendment applies to building regulations, problems arise from the clause. Not the least of the reasons is that we could not spend too much time on it during our other deliberations. This may be an appropriate time to draw attention to a problem that will apply both as regards the clause and in the implementation of the clause.
    Subsection (1) has implications for the remainder of the clause, including the amendment. The clause includes the words:
    "but the Secretary of State may in any case allow such steps to be taken pending compliance with those provisions and the giving of any necessary approval as he considers reasonable in the circumstances of the case."
    As this is what is called the speeding-up clause, which permits the expedition of a local authority's intentions to make changes in the provisions for schooling, we are bound to wonder whether a Secretary of State, having received a section 12 notice—it was a section 13 notice under the 1944 Act—on further assessment of those proposals, will have to contradict his own judgment. In the first instance, having allowed such steps to be taken pending compliance—permitting the local education authority to proceed towards its objective of making changes—and then having received objections from parents or other electors in the community, he may come to the conclusion that his decision to allow such steps to be taken was ill-advised and have to change his mind.
    We are not afraid of the embarrassment of Secretaries of State having to change their minds. We are afraid that, having in their judgment permitted local
    576
    education authorities to take such steps, they are unlikely to change their minds. Therefore, they could perpetrate changes in school provision which would be contrary to the express wishes and best interests of the local community served by a particular school.
    Dr. Boyson: I take the hon. Gentleman's point. It is involved not in this amendment but in the clause. There is a degree of deprivation as we did not discuss this matter in great depth in Committee. Therefore, whatever we say on this matter tonight will have no bearing on the extent of the Lords amendment.
    Any Secretary of State must be responsive not only to the requirements of a local education authority but to the opinions of people in the area. Knowing how quickly people's opinions are passed not only to their local councillors but to their Members of Parliament and how quickly those Members send their views to the Department, I cannot envisage a situation whereby a Secretary of State would not be aware if there really were strong feelings in an area.
    I have a note which has just descended from heaven, and it may help if I read it so that we can interpret it between us. The note says:
    "The provision in clause 16(1) allowing for preliminary work to he undertaken repeats a provision already existing in section 13."
    This is obviously of great importance to the hon. Member for Bedwellty (Mr. Kinnock) and me. I think that we both agree on that matter. I cannot envisage the Secretary of State not being responsive to strong feelings in any area in view of our lively democracy and the speed with which Departments are made aware of local opinion and feeling.
    Question put and agreed to.

  Clause 17

    ASSISTED PLACES AT INDEPENDENT SCHOOLS
    Lords amendment: No. 15, in page 18, line 28, leave out "it" and insert "the scheme"
    Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.

    577
    I think that the hon. Member for Bedwellty (Mr. Kinnock) will have difficulty on this one, even with the time that we detained the Committee on this matter. However, I must not take that for granted. At any rate, I do not think this matter will worry the Secretary of State.
    This is a question of a floating "it". There is an "it" which does not mean anything. No one knows how and why this "it" continued until it came back to us tonight. It is a lesson to us all. I know how carefully the Opposition have looked through every jot and tittle of the Bill. I came away from the Committee stage believing that nothing had been missed by the eagle eye of the Opposition. The Bill went to the other place and the Lords noticed this floating "it"—a lonely, unbalanced and meaningless word. Our desire is to settle the matter now or the word will float for all time like something in outer space. I ask all hon. Members of compassion on both sides to agree that we should sink this "it" and replace it with "the scheme" so that we may bring meaning to this part of the Bill. If we do not, the clause will be the subject of terrible textual analysis and would become a question in O-level and A-level examinations in future years.
    11.15 pm
    Mr. Kinnock: I thought that when the Under-Secretary spoke of a floating "it" in orbit he was committing a grave disloyalty by referring to the right hon. Member for Leeds, North-East (Sir K. Joseph). The matter is to be taken up with our resident classics scholar on the Committee, my hon. Friend the Member for Lewisham, West (Mr. Price), since we shall be forced to call him to account on how he could possibly have missed this floating "it" and the offensive syntax that thereupon arises.
    Nevertheless, we note that subsection (8) of the infamous assisted places scheme clause refers to the requirement of the Secretary of State
    "to consult such bodies as appear to him to be appropriate".
    Both Under-Secretaries will recall with clarity and pride the sessions of debate and rigorous analysis which we employed in Committee in our discussions on clause 17.
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    We made the point then that the requirement in the Bill that the Secretary of State shall
    "consult such bodies as appear to him to be appropriate"
    provided an inadequate safeguard for those local education authorities whose whole planning of secondary school admission and, indeed, planning of primary school curricula could be detrimentally affected by the introduction of an assisted places scheme in their areas.
    Mr. Deputy Speaker: Order. "It" is only a small word, and I do not think that that entitles the hon. Gentleman to cover the whole of clause 17.
    Mr. Kinnock Mr. Kinnock I would not dare to attempt that, not even at this time of night, Mr. Deputy Speaker. I am expressing these views precisely in relation to subsection (8), and since the"it"is, as the Under-Secretary said, a matter of orbital, not to say interplanetary, significance, it seems appropriate to consider the implications of the subsection, which imposes on the Secretary of State a very loose duty to undertake certain consultations.
    The case I am putting is in order—I hope—because of the reference in Lords amendment No. 15 to the substance of the subsection. I hope that that is the case, because the last thing I want to do as we move towards Easter, of all times, is to offend the Chair.
    In Committee we expressed grave reservations about the looseness of the obligation. Similar reservations were expressed by the Society of Education Officers, by the local education authorities and by other bodies and organisations concerned about the possibility, which we consider to be strong and definite, of assisted places scheme pupils being creamed out of the maintained schools system.
    We are bound to wonder, too, since the subsection refers directly to consultations, whether the bodies that the Secretary of State would consider it "appropriate" to consult would include the National Children's Bureau. Mrs. Shirley Williams, when she was Secretary of State, initiated a survey and in the light of that the bureau came to certain conclusions which were provided in draft form to the Secretary of State as long ago as November. Its findings had a direct reference

    579
    to the ability of secondary schools in the maintained sector to cater for the needs of children of above-average ability. The publication, even in a digest form, of those findings would have been of considerable use to us in our deliberations and to bodies of opinion outside Parliament wishing to form a perspective of the assisted places scheme. I hope that after further deliberation the Secretary of State will deem it appropriate to consult the National Children's Bureau or similar research bodies.
    Dr. Boyson: Never has the word "it" been stretched as it has this evening.
    Consultation is taking place on the assisted places scheme with local education authorities and schools. The National Children's Bureau—or the NCB—should not be confused with the National Coal Board. I have no doubt that the Secretary of State will consult the bureau. The word "it" is to come out and for all time the words "the scheme" will take its place.
    Question put and agreed to.

  Clause 22

    SCHOOL MEALS: ENGLAND AND WALES
    Lords amendment: No. 16, in page 20, line 24, leave out from "such" to end of line 26 and insert—
    "facilities as the authority consider appropriate for the consumption of any meals or other refreshment brought to the school by such pupils."
    The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): I beg to move, That this House doth agree with the Lords in the said amendment.
    Mr. Deputy Speaker: With this we are to discuss Lords amendment No. 18.
    Mr. Macfarlane: The amendment provides that it is for the local authority to decide on appropriate facilities for children to eat their own food on school premises. Without the amendment, there could be dispute about how far local authorities should go in providing facilities. A local authority must provide suitable accommodation but is not required to provide cooking facilities. In certain circumstances it might be appropriate to make arrangements for storing
    580
    food, but that is for the authority to decide.
    I am grateful to the hon. Member for Bedwellty (Mr. Kinnock) for not wishing to move his amendment to the Lords amendment. He will acknowledge that certain factors could be attached to his proposition.
    Mr. Kinnock: I did not move my amendment because of the implications. We considered our opposition to the amendment to be more a matter of principle than of detail.
    This is one of the most serious amendments to come from the Lords. It has not had the publicity which was attached to Lords amendment No. 17, which caused something of a sensation. We were led to believe during deliberations on clause 22 that the changes would place upon local authorities an absolute statutory obligation to provide pupils who brought their own refreshments or food to school with facilities for consuming that food on the premises. That was the safeguard offered. That was the undertaking and the reassurance. It was supposed to blunt fears that, given the power not to provide school meals, local authorities would interpret that provision literally and not even provide facilities for meals or refreshments on the premises.
    Although our fears and the fear of people outside were not abated by the reassurances of the Government, at least they were written into the Bill. Unless we have grossly misinterpreted the meaning of Lords amendment No. 16, it appears that the force of the obligatory word "shall" at the beginning of clause 22(1)(b) is neutralised by the words
    "as the authority consider appropriate for the consumption of any meals"
    which appear in the amendment.
    In clause 22(2)—I use it only for the purpose of illustration—we have the phrase
    "as appears to the authority to be requisite."
    This caused a great deal of dissension, and counsel's opinion was taken by the Child Poverty Action Group and others as to the implication of that phrase. Exhaustive consideration could also be given to the phrase
    "as the authority consider appropriate".
    I understand what the Under-Secretary has said. In his opinion, it is substantially

    581
    a matter of the kind of accommodation that should be provided by a local education authority, and he has no qualms about saying that the authority will be expected to provide accommodation. He said that in very definite terms. As he said, it is very much a local authority matter—and I believe I quote him precisely. It is also up to the local education authority to decide whether to provide facilities for additional refreshments, such as a drink of water, or for the storage of food.
    I do not want to be unduly harsh but a few examples have been accumulating in recent weeks of LEAs that are being over-zealous—I use no stronger term—in their interpretation of the new freedoms that the Government have given them under the Bill. Some local authorities have extended those freedoms to the point where they have become dead liberties. I have in mind Kent, Surrey and, to some extent East Sussex. East Sussex has applied the freedoms that the Government proffered to it in the Bill and has even anticipated those freedoms before the Bill has received Royal Assent.
    The LEAs, under their present control, not just their political control—their "philosophical tendency" is the phrase that would be used if they were Labour controlled, but perhaps the Conservative Party does not have tendencies—are given the freedom to decide what is appropriate and have no obligation to serve the interests of the community other than very general obligations. The members of the local community have no power under the Bill to say to the Secretary of State "Would you come and help us because the interpretation of the word of the law by our LEA has been much too literal? It has let it be known that it does not consider it appropriate to provide a decently lit, heated and hygienic room that is kept clean and swept daily." In Kent, of course, the pupils will have to sweep the room themselves.
    Members of the community have no power to say to the Secretary of State that they do not have facilities for liquid refreshment or for storage of food. Such sophistications are beyond their wildest dreams—"Our local authority does not even consider it appropriate to provide facilities for the consumption of meals."
    582
    That would happen because the clause, as amended, would read
    "shall provide such facilities as the authority consider appropriate for the consumption of any meals or of other refreshment brought to the school by pupils."
    The onus has moved and become much more a matter of the will, whim or predilection of the local education authority. It is no longer one in which the right of pupils or, indeed, parents are upheld. Compared with this amendment, the original form of words was strongly preferable. I find it difficult to understand—even given the view of the Minister that all power should be given to these latter-day soviets and that the local authorities should be complete masters in their own domain—why the form of words in clause 22 (1) (b) which caused no problem earlier should have been amended in this way.
    11.30 pm
    I hope that we may have further explanation on this point, because it will cause consternation and concern among those bodies and pupils who will be relying upon a satisfactory standard of provision of facilities for the consumption of snack meals, sandwiches or whatever on school premises.
    Mr. Macfarlane: The hon. Member for Bedwellty (Mr. Kinnock) has raised a number of points, with which I shall try to deal as briefly as I can. I am surprised at the hon. Member's sudden turnabout within the past 18 months or so. He said that the Socialist Party was one which had tendencies. He certainly had some tendencies 18 months or so ago when he was one of the most indefatigable antidevolvers in the House. Now he is showing signs of not wishing to devolve any powers to local authorities.
    The Conservative Party is the party of principles. I hope that I shall be able to convince some Labour Members that this amendment from their Lordships is worthy of acceptance. The hon. Member for Bedwellty and I have often clashed over the question of how one should view the role and responsibilities and commitments of local education authorities and school teachers. I do not believe that the local authorities or the school teachers are irresponsible. It is in their social interests and in the interests of the whole community that they provide these

    583
    facilities and control the way in which food is consumed on the premises.
    Hon. Members have graphically illustrated the problems which can arise if schools do not control pupils during the lunch break. I am confident that this amendment will result in those involved acting authoritatively and responsibly. I have faith in the capacity of head teachers to control pupils during the lunch break.
    While the hon. Gentleman has every right to raise a few beacons over some of his fears and to take the opportunity to do a bit of "Conservative bashing" with certain selected local authorities, I am convinced that the head teachers will provide the facilities which they consider appropriate for the consumption of any meals. This question has to be left to the local education authorities. We believe that this clearly includes accommodation, furniture and supervision which will enable pupils to eat in a civilised manner, in suitable conditions, the sandwiches they have brought from home. The duty would not extend to providing facilities, for example, for cooking or heating food. That is straightforward. It is the intention of my Department to provide guidance to local authorities at the appropriate stage.
    I hope that with those words—
    Mr. Douglas Hogg: I have read the amendment with some care. Would I be right in supposing that, if the local authority decided that it was inappropriate to provide any such facilities, it would be under no obligation to do so?
    Mr. Macfarlane: I draw my hon. Friend's attention to clause 22(1)(b). As amended, it would state clearly that local authorities
    "shall provide such facilities as the authority consider appropriate".
    I would deem that to be an obligation.
    Mr. Hogg: Is not the first question for the local authority that of deciding whether it is appropriate or inappropriate? If it decides that it is inappropriate, there is no mandatory obligation.
    Mr. Macfarlane: There is. Clause 22(1)(b), as amended, would state that the authority
    "shall provide such facilities as the authority consider appropriate".
    I should have thought that my hon. Friend would take the view that local
    584
    education authorities, chairmen of education committees and chief officers of local education authorities would recognise their commitment to pupils to provide facilities. If my hon. Friend takes an opposite view, I think that he is being gravely and unnecessarily critical and disparaging of some extremely responsible people, and I hope that his fears—
    Mr. Kinnock: It is a matter of interpretation.
    Mr. Macfarlane: It is a matter of interpretation, but I should have thought that, given the social responsibilities of local authorities and local head teachers, hon. Members on both sides of the House could have their fears allayed because of the commitments and responsibilities that exist.
    Mr. Kinnock: I had hoped that at this late stage in our consideration of the Bill—indeed, right at the buttock of the Bill—the hon. Gentleman would not employ his favourite stratagem of dodging behind his praise of local education authorities, chief executive officers, headmasters and so on—a view that we share in full—to avoid the question that has been put to him both by myself and by the hon. Member for Grantham (Mr. Hogg). Is it not the case that the obligatory "shall", which precedes the subparagraph, is neutralised, neutered, rendered eunuch-like, by the inclusion of the phrase
    "as the authority consider appropriate"?
    Is it not the case also that if the local education authority, for whatever reason, considers it not appropriate to provide facilities in a school, neither the hon. Gentleman, with the best will and with his high motivations, which we share, nor any parent or anybody else will be able to do anything to change the will of that authority by the employment of the law against it, short of excluding the clause from the Bill? Why did not the hon. Gentleman take the opportunity to do that now and leave the Bill in its original form?
    Mr. Macfarlane: Again, it is a question of interpretation of words. I can understand the concern of my hon. Friend who has raised the matter. One has to look at the phrase
    "such facilities as the authority consider appropriate".

    585
    That is an interpretation of the facilities that will be provided. It may be a classroom, a kind of refectory, a converted refectory, a small dining room or some accommodation on the school premises.
    Mr. Kinnock: Or it may be a bicycle shed.
    Mr. Macfarlane: I should have thought that that was putting the clock back to some Mid-Glamorgan-type view. I should have thought that the matter was clear, and I hope that hon. Members will accept the amendment.
    Question put and agreed to.

  TRANSPORT: ENGLAND AND WALES
  Lords amendment: No. 17, in page 21, line 14, leave out clause 23.
  Mr. Mark Carlisle: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker: With this we may take Lords amendments Nos. 19, 25, 26, 27 and 28.
  Mr. Carlisle: I shall be brief on these amendments—[HoN. MEMBERS: "Hear, hear."]—that is, if I am allowed to be.
  The House will be aware that another place voted to delete clauses 23 and 25. The House will also be aware that on 18 March I informed hon. Members that the Government had decided not to attempt to reintroduce the clauses. The purpose of these amendments is to delete the clauses and to make the necessary consequential changes.
  Mr. William van Straubenzee: I make no secret of the fact that I am very resentful at the action of another place, and I say that for three short reasons because we are working against time.
  Mr. John Home Robertson: No respect.
  Mr. van Straubenzee: I do not have the cowing respect of the hon. Gentleman for a hereditary Chamber.
  The first reason why I resent what has been done is that the other place has thrown out—this is quite the right analogy
  586
  in an Education Bill—the baby with the bath water. The other place has thrown out a few admittedly objectionable babies, but it has also thrown out a good deal of bath water and we are back to the two-and three-mile limits, which I think all hon. Members, whatever their views, find objectionable and about which we receive a large number of letters, which are not generally addressed to their Lordships.
  We must live with this every day. There were some very good schemes. For brevity, I shall cite merely one. In the part of the county which I represent, a scheme was in preparation and was ready to be brought into operation under which there would be no charge for any child attending any primary school. All the usual exemptions, which are properly regarded by the House as important, would have applied. The exemptions set down by my right hon and learned Friend would have applied. For 28½p a day for the remainder, we would have raised £580,000 in a full year. Frankly, that money must be found from alternative sources. I believe that it was a proper use of resources and a proper use of priorities. It placed the expenditure at the place where it ought to be placed.
  Secondly, I am resentful because, in all my modest experience in the House, local education authorities have consistently asked for the freedom which the clause gave them in part. The trouble was that a very small number of them abused it. If ever there was an undertaker for this clause, it was the Conservative leaders in the county of Kent. The warning is extremely clear, and my party had better take it very much to heart, because there is a warning for us in this episode. If one operates a policy, or gives the appearance of operating it, in an extreme way, one incurs reaction and resentment from a great weight of middle opinion. That middle opinion must be taken along with any Government who anticipate, as we confidently anticipate, governing the nation for a considerable number of years. I give the briefest of examples so as not to stray out of order. There are lessons in that with regard to employment policy and so on.
  Thirdly, I am resentful and sad because I think that the opposition in some quarters was conducted with a stridency which was not appropriate for the occasion. It

  587
  was conducted with an assumption which was not valued—the assumption that in 1944 a settlement was made which was absolute and which had not been altered on either side. As I have said before, three times within the last 21 years the crucial part of that settlement, which is the capital ratio between Churches and State, has been altered. It was altered rightly, with good will and by Governments of different political colours. On the last two occasions, in 1967 and 1975, with other hon. Members I was very close to the negotiations which led up to it.
  Those compacts were changed because conditions had changed, money had lost its value and the State understood and recognised that there should be changes. Yet when the State, for equally valid reasons and with the same kind of background, sought to make changes, that was denied.
  My real anxiety is that when once again the Churches approach the State—I do not believe that it is "if", in a modern, inflationary age; I believe that it is "when"—some of them will find that their stridency has considerably prejudiced their case. I mean that very deeply. What we are seeing today is an example of a battle being won but a war being lost. In strategic terms, I believe that the decision is very short-sighted.
  11.45 pm
  My hope is that we shall make a considerable change. I shall draw the House's attention to a most remarkable speech on this matter by the Duke of Norfolk. The rules of the House do not permit me to quote it verbatim. He told the House of Lords that he would use the language of the barrack room, acquired over 30 years. He then used very quiet words, so I think that the barrack rooms in which he lived were not those that I experienced as a young man. He said that he hoped he could say "Roll on Christian schools". I think that that will be the way in which it will work. We shall see the denominational schools making way for schools of all denominations combined.
  I wish to make a small constructive suggestion. The political reality of what we are seeing tonight is that no Government of any colour will touch this subject again in the foreseeable future. All politicians have burnt their fingers on this issue, and there is now a deadlock.
  588
  Why not let us see whether the House, which has put us in this position, might not, by its membership, have the ability to assist the nation to see its way through? Would it be possible for some distinguished Member of another place—there are many such persons with experience and education—to bring together a grouping, crossing party lines? Perhaps out of that grouping could come a solution to a state of affairs that we simply cannot leave as it is. I accept without question that, given the political realities at the time, there was no other alternative open to the Secretary of State. I believe that from the start he was right and another place was wrong.
  Mr. Kinnock: We have just heard a typically direct, brief and pungent speech from the hon. Member for Wokingham (Mr. van Straubenzee). There is a great deal in what he says. This could be the time for a certain gleeful celebration, but we must lace heavily our joy about the morale-boosting effect of the Government defeat, which was accomplished with the help of 96 Labour Members of the other place, with concern for the implications of the action which they took.
  I think that they took the right action. Indeed, the amendment that they passed was precisely the amendment that we put before the Standing Committee. Unfortunately, despite the efforts of the official Opposition, Liberal Members and one or two courageous Conservative Members, our effort was not sustained. Obviously, I am not critical of what the Lords have done, and I do not join with the hon. Member for Wokingham to that extent.
  Despite the expected savings that the hon. Member for Wokingham and his local education authority hoped would be made, the experience of local authorities, with which I have close acquaintance, is that they would have had to make such broad omissions and exemptions from the general rule of imposing charges that their actual savings would have been a fraction of those originally intended.
  Those original savings, although fractional, would have been secured at the expense of further fractures in the community. They would have been secured at the expense of further differentiation between those attending denominational schools and those attending others. I know of two cases in which children have attended schools where Welsh was the

  589
  medium of expression. Those additional burdens would have had to be borne by the community. In addition, parents would have had to pay charges. Exemptions would have imposed a bureaucratic surcharge on the operation of the scheme.
  The proposal would have varied in its effect from area to area, class to class and family to family. However, the proposals contained in the original Education (No. 2) Bill would not have provided the opportunities imagined by the hon. Member for Wokingham. As a student of politics, I warmly applaud the hon. Gentleman's advice to his Front Bench colleagues. As a member of the Labour Party and as a Socialist, I fear that advice. The hon. Gentleman echoes the Lord Privy Seal and other eminences in the Conservative Party when he says that the consensus should not be breached, that the centre should not be offended and that no impression of being didactic or ideological should be given. He implied that peril lay ahead for the Conservative Party if that were done. The hon. Gentleman is correct.
  In a partisan sense, I take considerable joy from the type of smash-ups that occur, and will occur, as a result of pursuing an intransigent and uncharacteristically ideological course. Some people have warned of its effect. For the country's sake, I hope that the Government implement that advice. I hope for the sake of the Labour Party that they continue to ignore the hon. Gentleman. I am sure that the hon. Gentleman knows what I mean.
  It was not merely the relationship between Church and State that led to contention in debate on clause 23. Although the noble Lady the Minister of State, Department of Education and Science put up a sterling struggle in the other place, especially in the closing stages of debate on clause 23, she made similar reference to the concordat and to the benefit provided for religious denominations as a result of changes wrought since the enactment of the 1944 Act. I still believe that the most fearsome, effective and telling opposition to clause 23 came from the rural areas. Those who accepted the closure of schools and those who were faced with enormous imposts on the sad level of wages earned in rural communities made their voices heard.
  590
  Regardless of which party is in power, I hope that heed will be taken of our experience of clause 23. I hope that the organisations and mobilisation presently in existence will be maintained. Recognition should be given to the fact that the rural community is forceful and articulate. It does not have to obey anyone's will merely because it has been dictated. The interests of the rural communities should be asserted. That has not been done for many years. Perhaps those interests have not been asserted since the days when Rebecca and her hosts rode the turnpike roads of West Wales. Let us hope to have not a "Jacquerie"—although the Government deserve that—but an articulate, effective and assertive rural lobby that will confront any Government. That is good for democracy and for the protection of the countryside and its people. All Governments would then be more cautious about rural interests.
  The most important effect of the decision not to leave clause 23 in the Bill, which in general delights me, is the impact on the financial resources available to local education authorities. We have said continually, and I still hold it to be the case, that the savings or additional resources made available to local education authorities as a result of implementing clause 23 would have been much smaller than the estimate in the financial memorandum to the Bill of £30 million in England and Wales and £2 million in Scotland. Had it been even one-half or one-third of that figure, £10 million would still have had to be withdrawn from expenditure in the classroom and associated activities. We always felt that that was unjustifiable and unnecessary. That figure is now more likely to be £30 million.
  When the Secretary of State conceded on 18 March that the changes wrought in the House of Lords would have to be acknowledged by the Government in this place, he did not announce that a further subscription was to be made through the rate support grant or in some other form to enable local education authorities to sustain their obligations to provide transport for children who need subsidised or free transport. Even more recently, in the press release published on Budget day and in the accompanying

  591
  papers, the right hon. and learned Gentleman said:
  "The Government will consider in the course of the 1980 Public Expenditure Survey, in readiness for the 1981–82 RSG settlement, the implications of the decision of the House of Lords on school transport which I accepted in the House of Commons on 18 March."
  At the very least, during this financial year there will be £30 million less than expected in the Government's previous public and education expenditure pronouncements.
  There is no guarantee that in this year's expenditure survey the Government will have a change of heart and reduce education expenditure—a course on which they are already set—by £30 million less than otherwise. They have acknowledged that it is unfair to anticipate a policy of reducing expenditure, accept defeat and then have to concede not only the wisdom of that majority decision but the financial implications for education.
  I plead with the right hon. and learned Gentleman and his colleagues, as we did on 18 March, that as he has conceded that the proposition has been defeated I give him every thanks and accolade, because he still would have had a majority—the obligation that he takes on is to secure an additional £30 million, so that there is no danger of an even greater cut into the flesh and bone of the education provision. I hope that he will encourage us with news of such efforts or at least indicate that in the course of the expenditure survey in this financial year he will try to convince his right hon. Friends that they should find that additional £30 million.
  It is out of order for me to quote the words of another place. It is a quaint custom, and on this occasion it denies the House the ecstatic pleasure of reading the speech of Baroness Young in her concluding remarks in the debate on clause 23. I have whet the appetite of the House, and I hope that I am in order in suggesting that hon. Members should rush out and purchase all remaining copies of the House of Lords Hansard of 13 March and note in columns 1270 and 1271 the remarkable insight provided into the thinking of the Minister of State, Department of Education and Science. She holds an entirely responsible opinion. It is a respectable perspective of our society in transition. It is one of the most extraordinary social surveys that I have
  592
  ever had the pleasure of reading. I hope that it will be widely read in the House.
  12 midnight
  I have given the Minister and the Government full credit for facing the realities of what was done in another place on 13 March. I hope that they will now face the realities of our education system and ensure that people shall not pay as a result of this decision.
  My final point arises from the remarks of the hon. Member for Wokingham. He said that, having seen one Government burn their fingers on the vexed subject of school transport, he was sure that no other Government would make the attempt. I hope to contradict that by demonstrating that the policy of the Labour Party—which we enunciated in our manifesto at the last election—is to ensure that there are no demarcations of treatment between people living on one side of the border and people living on the other. We acknowledged the heavy cost of school transport, even over relatively short distances, and the necessity of transport to school because of the hazardous conditions on our roads. I hope that we can honour that commitment at some future date. It seems to be the only sensible way, in justice, in which we can make developments in the absolute guarantee and assurance that children can travel to school in as great safety as the local authority and the State can guarantee and at as low a cost as possible—and, therefore, the least disincentive—to parents.
  Mr. Mark Carlisle: Was it not the proposal of the Labour Party, when in Government, to introduce flat-rate charges for transport to school?
  Mr. Kinnock: When Labour was in Government, that was among the proposals. We referred to that in Committee. I do not think that that proposal was ever put in any precise form, and certainly it was not promoted as part of the legislation.
  The Labour Party policy which preceded or superseded—that is a matter for debate—that proposition was a development of that and a movement towards the provision of free school transport where necessary. I shall not make any promises from the Dispatch Box that would be idle gestures. We have considered the matter on other questions arising from the Bill. Whether it is the Conservative Party or

  593
  the Labour Party that brings this about, the necessities of our modern, crowded society—with its dangerous roads, with communities that are becoming increasingly isolated, with falling school rolls and with a concentration and rationalisation of schools and school population—will continue to impose on any Government an obligation to ensure that children are able to travel to school at costs that are not only not prohibitive but are conducive to the involvement and assistance of parents in taking their children to school.
  That requirement will eventually boil down to the provision of free school transport. I hope that it will be found out of a Vote other than the education Vote. That is a campaign on which we can join hands across the Table. Nevertheless, that will be the only way in which this continuing dilemma, which is becoming harsher by the year, will ever be resolved.
  Mr. Home Robertson: I was ex-extremely pleased to hear what I think was a clear undertaking from my hon. Friend the Member for Beclwellty (Mr. Kinnock) that in due course a Labour Government will be in a position to provide free school transport for every pupil who needs it, whether in rural areas or elsewhere. I was grateful to my hon. Friend for the tribute that he paid to the campaign that was waged in the rural areas of the United Kingdom to preserve the existing degree of free school transport. A strong campaign was mounted throughout the United Kingdom. It is ironic that the representatives of the overwhelming majority of rural families who sit on the Conservative Benches let down their constituents. Those families had to rely on another place to protect their interests.
  I was delighted to hear that the hon. Member for Wokingham (Mr. van Straubenzee) was not cowed by the ideas of those in another place. If he had as many members of another place residing in his constituency as I have in mine, he might pay more attention to them. I had the genuine privilege not long ago of taking part in a meeting of the Royal British Legion in my constituency, at which Lord Haig of Bemersyde, a constituent of mine whom my hon. Friend the Member for West Stirlingshire
  594
  (Mr. Canavan) frequently quotes, was present. I paid tribute to the noble Lord in public on that occasion for his vote in the proceedings in another place. He took the opportunity to protect the interests of those in rural areas.
  I am not in the habit of detaining the House at this time of night, especially when a number of Scottish hon. Members have trains to catch, but I have been goaded into contributing to the debate by a half-witted reply today from the Secretary of State for Scotland. Two weeks ago I tabled a question to ask the Secretary of State for Scotland by what amount he had reduced the rate support grant to the Borders regional council and Lothian regional council for 1980–81 as a result of his decision on school transport. It appeared as question No. 25 on the Order Paper. As a result of the verbosity of some of my hon. Friends, some Conservative Members and Ministers, the question was not reached. In due course I received a written answer to tell me that the deletion of clause 25 of this Bill would not result in any reduction of rate support grant.
  I said that that was a half-witted reply, and I meant precisely that. How could the deletion lead to any further reduction of the rate support grant? The reduction had already taken place. It had taken place in all local education authorities throughout the United Kingdom. It had taken place in the Lothian regional council, as the hon. Member for Edinburgh, North (Mr. Fletcher), the Under-Secretary of State for Scotland, probably knows better than I do because the whole of his constituency lies within that council. As many hon. Members will know, the council had decided, in common with all local education authorities in Scotland bar one, not to impose school transport charges.
  It may interest the House if I refer to the one local education authority in Scotland which decided to impose school transport charges, which includes a part of my constituency, namely, the Borders regional council. I quote what the convener of the council said in a press statement. Major Jock Askew, the Conservative convener of the council, said:
  "The Borders Regional Council is faced with having to consider a rate of 63p, an increase of 17p, and at the same time cut its

  595
  services. As Convener, I view this situation with the gravest concern. I can appreciate that ratepayers faced with paying substantially more for a reduced service must be both perplexed and angry."
  How true. That represented an increase of 37 per cent. on the rates and considerable cuts in public services, including the imposition of a charge for school transport. That appears in the papers that the council circulated, namely, item No. 41:
  "Introduce a flat rate charge of 10p per day per pupil for transport to and from school £100,000."
  I appreciate that that is peanuts compared to the figure that some of their reactionary brethren in the South-East and in the county of Kent have in mind. That is the figure for the Borders. Presumably, considerably more had already been deducted from the rate support grant to the other regional councils within Scotland by the Secretary of State for Scotland. We are given to understand that the total is about £2 million.
  Even if I were to refrain from dwelling on the shortcomings of the Borders regional council, it must be accepted that in anticipation of the implementation of this clause—which has rightly been deleted by the House of Lords—the Secretary of State for Scotland took £100,000 from the Borders regional council. Overall, he has taken over £2 million from all education authorities in Scotland. As a result of the decision, which the Secretary of State has rightly accepted, that £2 million will have to be deducted from other education services in Scotland. That is outrageous.
  The Secretary of State has accepted the decision of the House of Lords, and the decision and the will of the people in rural areas. If he accepts that decision, he should also accept that he is duty bound and honour bound to give back the money which he took away prematurely from the local education authorities. I sincerely hope that he will take the opportunity of this debate to make an appropriate announcement.
  Mr. Beith: The House of Lords did a grand day's work on this clause. It did so with a combination of Conservative peers, Liberal peers, Labour peers, Cross-Bench peers and bishops. It did it not merely with a decisive majority, but with
  596
  a massive majority. In doing so it brought relief to hundreds of thousands of people in Britain, particularly in rural areas where there was real fear about families on wages just above family income supplement level—
  Mr. Mark Carlisle: They were egged on by the hon. Gentleman.
  Mr. Beith: Indeed. I am glad that the Secretary of State is saying that the peers were egged on by us.
  Mr. Carlisle: I said that the fear was egged on by the hon. Member for Berwick-upon-Tweed (Mr. Beith), who deliberately and persistently exaggerated, totally without regard to the provisions I included. I remember a speech in which he talked about figures which had no relationship whatever to the sort of figures that were being requested. That is fear-mongering by the Liberal Party.
  Mr. Beith: They were the figures of the Kent county council. The hon. Member for Wokingham (Mr. van Straubenzee) has already described the mess into which the Kent county council put the Secretary of State by putting flesh on the bone, quoting figures and bringing them before the—
  Mr. Carlisle: In that speech—which I remember well—the hon. Gentleman did not mention Kent once. He talked about people living in his constituency and the appalling amounts that the council would have to charge at a time when it said that it would not charge anything. He was responsible for any fear that was created by the intentions of the Government—not the Government's proposals. That is the sort of propaganda put forward by the hon. Gentleman.
  Mr. Beith: The propaganda was entirely true. I suppose that the Secretary of State is now saying that I misled Lord Butler, the Duke of Norfolk, half the bishops, and the majority of Conservative peers. The Conservative peers, with the aid of the Liberal peers, would not have needed the 96 Labour peers who voted in the House of Lords for what I am advocating. There were enough Conservative peers—misled by people such as myself—who pointed to the effects of these proposals.
  My county council was one of the first to say that it wanted nothing to do with

  597
  those provisions. It did not wish to implement them. The Secretary of State cannot say that it would have been all right in the hon. Member's constituency because the county council was refusing to do what I told it to do. Because it had extensive school transport obligations, it would have had to cut far more services than other authorities in order to satisfy that requirement. I welcomed my county council's decision, but it was not made thanks to the Secretary of State. The council was acting directly against his advice.
  12.15 am
  The fears were real. They were based on the charges that could have been imposed—not only in my constituency but in many other parts of the country where the threat was made by some local authorities—upon families whose incomes were marginally above the family income supplement and supplementary benefit level. Those charges could have been enormous.
  It took a long time before we had the concession that the charges must be uniform. That did not come out at the beginning. It was wrenched out of the Government. It was not until the Bill went to another place that there was the concession that not all the children of large families would be affected. Never during the passage of the Bill through this House did any Minister say "We are prepared to make a concession. Only two children will be affected." The Government had to see the peers chasing them before they made a concession. The charges could still have mounted up to a high level for families with two children.
  Great relief is felt by rural families, especially families that had gone through the whole traumatic business of having village primary schools closed, with the result that their children had to go further away, and families that had gone through secondary reorganisation, not simply in the past few years but throughout the years since the war, involving their children in travelling 15, 20 or even 25 miles to school, with the parents being expected to pay for that privilege.
  The amendment has also brought considerable relief to the Roman Catholic community. Here I entirely dissent from the view of the hon. Member for Woking-ham. He may think that when people
  598
  genuinely state their objections and anxieties in strong terms they are being strident. I do not find such expressions in any way objectionable. No letter or other representation that I received from the Roman Catholic community could be criticised in any way for having been other than a genuine expression of concern about the implications of the Bill. I totally disagree with the hon. Gentleman's view that it is somehow improper for people to express their views in those terms.
  Perhaps in the clubland of London or the higher reaches of society there are discreet and polite ways of gently tipping the wink, saying "This isn't on, old boy. It's not quite the thing." But Roman Catholics in my constituency and in other parts of the country speak their mind in simple and straightforward terms. They said that they saw the proposals as a threat to their schools, and that view was strongly held throughout the Roman Catholic community—parents, teachers, headmasters and clergy. They put it to us honestly and straightforwardly. Some Members disagreed with that view, but nobody challenged people's right to put it, and it carried a great deal of weight in another place.
  A number of hon. Members have said tonight that the Government must make up the money. I am not sure that I go all the way with that. My own local authority was among the first to be prepared to face up to making cuts elsewhere, and I must recognise that it was possible to do that. But at every stage when we argued with the Government about the assisted places scheme they said "If we dropped the scheme the money would not come back to education. It comes out of some other fund, a special new fund for projects that we really like. There is access there to funds that are not generally otherwise available to education."
  I have never been able to understand the philosophy that there is a special kind of money that can be obtained from elsewhere. However, the Government have waived it at us often enough. It is time we waved it back at them. If they can pluck money out of the air for the assisted places scheme, they can mitigate the impact of the sensible and necessary decision that school transport must continue to be provided.
  Mr. Douglas Hogg: There are two important criticisms to be made of the speech of the hon. Member for Berwick-upon-Tweed (Mr. Beith). First, the Liberal Party goes on emphasising through the country the importance of local government. I agree. It says that this, that and another thing should be left to the discretion of local authorities. I agree about that, too. What I find astonishing is that the hon. Gentleman seeks to reconcile that general view with his virulent attack on clause 23.
  The clause did one thing, and one thing only. It empowered local authorities to charge. I happen to believe that, generally speaking, they should not charge. I was very pleased that the Lincolnshire county council decided not to do so. But I also think that this is precisely the kind of area in which local authorities should have a discretion. If we are to have local authorities, it is very important that decisions of great consequence be left to them. I do not think that it is possible to reconcile the hon. Gentleman's remarks with the general principles that the Liberal Party purports to profess.
  The other point that I want to make is this.
  Mr. Dennis Canavan: What about council house sales?
  Mr. Hogg: I shall deal with that matter in another debate—not tonight, because time is short. I shall deal with it when the hon. Member for West Stirlingshire (Mr. Canavan) intervenes in a proper way, and not until then.
  Mr. D. N. Campbell-Savours: Will the hon. Gentleman give way?
  Mr. Hogg: I shall give way when the hon. Gentleman intervenes in a proper way, and I am referring to the hon. Member for West Stirlingshire, who is sitting down. As he is incapable of intervening in a proper way, I do not propose to deal with the point.
  Mr. Campbell-Savours: Will the hon. Gentleman give way?
  Mr. Hogg: No.
  The second point that I should like to make on the speech made by the hon. Member for Berwick-upon-Tweed concerns his suggestion that the position of the Roman Catholic church was justi-
  600
  fled. I think that he was wrong. If one goes back to the Education Act 1944, one sees that the only obligation on local authorities was to transport pupils to the nearest appropriate school. The denominational schools to which most pupils were being transported for free were not the nearest appropriate schools in all cases. The local authorities could, in the majority of cases, refuse to transport those pupils. In fact, the local authorities, exercising an undoubted discretion, chose to transport those pupils for free. I have no reason to suppose that that policy would have changed as a result of anything in clause 23.
  Mr. Beith: Will the hon. Gentleman give way?
  Mr. Hogg: I shall give way in a moment if the hon. Gentleman wishes to intervene.
  The position has been made worse, because, as the local authorities are going to find it difficult to raise money as a result of the deletion of clause 23, they may stand on their undoubted statutory right to decline to transport pupils to denominational schools if they do not happen to be the nearest appropriate schools. That was the second area in which the hon. Member for Berwick-upon-Tweed made a major mistake. Because I am a courteous fellow, I shall give way to the hon. Gentleman.
  Mr. Beith: Three-quarters of what the hon. Gentleman said is correct, and the Roman Catholic community knows it very well. Most of the transport of Roman Catholic children to school is at present discretionary. But what the hon. Gentleman neglects to understand is that if local authorities were charging to convey non-Catholic children to the nearest appropriate school, it would be virtually impossible for those same local authorities to continue to provide free transport for Roman Catholic children to schools at a similar distance from their homes.
  Mr. Hogg: I disagree. I must tell the hon. Gentleman what my right hon. and learned Friend the Secretary of State told him. The Catholic community did not appreciate the true position. One reason why it did not appreciate the true position was the speeches made by Opposition Members who repeatedly misled people as to the true statutory position.

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  The hon. Member for West Stirlingshire, who is sitting on his backside at the moment, has a great deal to answer for on this particular point.
  Mr. Canavan: It is perhaps a measure of this extremist and reactionary Government when the Department of Education and Science and the Scottish Education Department try to take up a position which is even more Right-wing than the Right-wing House of Lords.
  The Secretary of State for Education and Science, the Secretary of State for Scotland and the Under-Secretary of State for Scotland ought to be thoroughly ashamed to be members of a Government who had to be forced and almost kicked by the House of Lords into the position in which they are now. I think that we can all thank the grand old Duke of Norfolk to get this nasty clause deleted from this nasty Bill. It appeared that there was agreement across party lines in the other place. Indeed, many of the friends of Conservative Members voted against them in the other place. I think that one of the junior Ministers, who has a smile on his face, is grateful that the House of Lords let the Government off the hook on this matter.
  Mr. Tristan Garel-Jones: Does the hon. Gentleman recognise that the vote in the other place simply underlines the fact that the Members of that place are no more than running dogs and lackeys of Conservative Central Office?
  Mr. Canavan: I never ever said that they were. If the hon. Gentleman reads my speeches criticising the House of Lords—especially those I made during the lifetime of the last Parliament—he will see that I never described them in the terms in which the hon. Gentleman has just used. Perhaps even I may take back some of the things I said about them. I may even postpone bringing forward my next Private Member's Bill to abolish the other place.
  However, it is quite clear that on this crucial issue there were a minority of courageous Members of the Tory Party in this House—the hon. Member for Rugby (Mr. Pawsey), for example, and one of his benighted hon. Friends whose constituency I cannot recall—who led the
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  attack against their party here. Most of the lapdogs obeyed the three-line Whip when they voted. However, Members in another place decided to take a strong line on the matter. It was quite clear that it was not just the Tory Party that was divided on this issue. Families were divided. The hon. Member for Edinburgh, South (Mr. Ancram), for example, voted in this place for the retention of the clause, whereas his father the Marquess of Lothian and his uncle-in-law the Duke of Norfolk voted for the deletion of the clause in the other place.
  I noticed on checking the Division list that the father of the Secretary of State for Scotland did not even turn up to support his son. I do not know whether that was a conscientious abstention. It may have been that Viscount Younger had been persuaded by the eloquence of his local Member of Parliament, because he happens to live in my constituency. I used to ask "Can anything good come out of the House of Lords?" This was one good result which did.
  The hon. Member for Wokingham (Mr van Straubenzee) referred to anomalies which occur under the existing legislation and which will continue because of the two and three mile limits which have been restored. The hon. Member for—Hailsham, is it?
  Mr. Douglas Hogg: Grantham.
  Mr. Canavan: The hon. Member foz Grantham (Mr. Hogg) referred to the desirability of giving a certain amount of discretion to local authorities. There is no contradiction between the two. One can lay down a national statutory minimum while giving local authorities a discretion to be more generous. That is precisely what the two Labour-controlled education authorities in my constituency—Strathclyde and Central regional councils—do. The former, for example, imposes a limit of one mile for all primary schoolchildren and two miles for all secondary schoolchildren. There is, therefore, no contradiction there, and I look forward to hearing the hon. Member's justification for his rather ambivalent stance in wanting to give discretion to local authorities on school transport but not on the sale of council houses.
  In general, I think that those local authorities, the churches the National

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  Farmers Union and the trade unions, expecially those representing the workers in rural areas, ought to be congratulated on their campaign. It was reasonable. The adjective "strident" has been used. Sometimes one has to be strident in this place, and even in the other place, to attain one's objectives.
  12.30 am
  I turn now to another important matter—and I hope that the Under-Secretary of State for Scotland, who is responsible for education, has not yet fallen asleep. The Rate Support Grant (Scotland) Order 1979 states:
  "Provision for education is 4½2 per cent. in real terms less than the coresponding figure for 1979–80. It has been assumed that authorities will be able to effect substantial savings in expenditure on school meals, school milk and school transport as a consequence of the increased freedom that they will have in providing and charging for these services under the Education (No. 2) Bill now before Parliament."
  That wording was misleading. Instead of "increased freedom", the Government should have talked about deprivation of children's rights to free school transport. That is no longer applicable. There has been a change of circumstances. The Bill, as proposed by the Government when the rate support grant was approved by the House, has been substantially amended. It affects the rate support grant.
  The financial memorandum states that the amount that the Government hoped to cut or save by removing children's legal rights to free school transport in Scotland was £2 million. That means that the Government should now introduce a supplementary rate support grant order for Scotland providing at least an extra £2 million. I hope that the Minister will comment on that.
  The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): I am surprised that the hon. Gentleman, who was a member of the Committee on the Bill, does not realise the position. As usual, the hon. Member for Berwick and East Lothian (Mr. Home Robertson) was mistaken about his constituency. Before the Lords amended the Bill all Scottish local authorities had made it clear that they would not charge. I presume that they therefore adjusted their 1980–81 budgets accordingly. In those circumstances, there is no need for an alteration to be made to the rate support grant for this year.
  Mr. Canavan: Nevertheless, the total rate support grant to the Scottish local authorities was calculated on the assumption that £2 million would be cut. Now the legal obligation is to be continued, the rate support grant should be increased by at least £2 million to enable local authorities to fulfil their statutory obligation.
  The Ministers will say that no money is left in the kitty. Earlier this week was the closing date for submissions on that tatty document on the assisted places scheme. There is little if any support in Scotland for that silly scheme on which he proposes to spend £5 million a year. Let us scrap the assisted places scheme and find at least £2 million in rate support grant so that local authorities can continue to provide free school transport.
  Mr. Harry Ewing rose—
  Mr. Mark Carlisle: Not the hon. Gentleman as well.
  Mr. Ewing: The Secretary of State is not entitled to say that, because the Scottish Office played little or no part in the debate, in spite of three major clauses in the Bill which refer to Scotland. It is not right to slip Scottish clauses into a Bill and complain when Scottish shadow spokesmen and hon. Members take part in a debate. It is not up to the Secretary of State's usual standard to complain about our contribution to a debate. That is out of character.
  I shall direct most of my remarks to the deletion of clause 25 but I shall say something about the debate so far. There is a feeling that we should debate all over again whether local authorities should have discretion to grant free transport or whether a statutory obligation should be placed upon them.
  The effect of the deletion of clauses 23 and 25 is to leave local education authorities in England, Wales and Scotland with the statutory obligation to provide school transport within certain limits. Beyond those limits they have discretion. I take it that the House is not engaged in a debate about the principle.
  What surprised me was that when the hon. Member for Wokingham (Mr. van

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  Straubenzee) was making what I regarded as a courageous speech—I did not agree with it, but I regarded it as courageous—the Secretary of State kept nodding in agreement and apparently saying "Hear, hear." If that is so, it leads us to the clear conclusion that the Government simply have not had the courage to overturn a decision of the other place which is not acceptable to them.
  Instead of having the courage to overturn that decision, the Government are saying in the most generous terms they can muster that they will accept it but will not provide the money—as my hon. Friend the Member for West Stirling-shire (Mr. Canavan) said—to implement their acceptance.
  When clauses 23 and 25 are taken out of the Bill, there will be a statutory obligation on LEAs throughout Great Britain to provide free school transport. The Secretary of State has made it clear that he is imposing that obligation by virtue of the fact that he is accepting the decision of the other place. There can be no ifs or buts about that. As a result of that acceptance, the Secretary of State is saying "I shall still go ahead and punish the LEAs, and I will not give them the money."
  Mr. Beith: Before the hon Member develops his argument on the financial point, may I ask whether he has not been intrigued, as I have been, by the fact that since the Lords defeat the Government have kept saying "All we were trying to do was to give the LEAs what they asked for—the freedom to charge for school transport and relieve them of the statutory obligation"? I asked the Secretary of State for Scotland this week whether the removal of the statutory obligation to provide free school transport was done at the request of the Convention of Scottish Local Authorities and I got a one word answer—"No".
  Mr. Ewing: I am grateful to the hon. Member for Berwick-upon-Tweed (Mr. Beith). The simple fact is that there is nothing in the Bill in relation to Scotland that has been done with the agreement of the Convention of Scottish Local Authorities. As the Minister knows, the Convention is strongly opposed to the Government's provisions on school meals,
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  milk and transport. The Bill has no friends in Scotland, and the Minister well knows it.
  That brings me to the financial aspect, and I shall relate my remarks exclusively to clause 25. I get the feeling that the Minister simply does not understand the rate support grant in Scotland. He certainly does not understand the Education (No. 2) Bill. The rate support grant settlement was not agreed with the Convention of Scottish Local Authorities; it was imposed on Scottish local authorities. In that rate suport grant settlement imposed on Scottish local authorities, there was a reduction of £2 million to take account of the Government's decision to abolish free school transport.
  I take it that the Minister accepts that the explanatory and financial memorandum says that £2 million less will be made available because the Government have decided—it is in corporated in the Bill—that free school transport for children should not now be available but should be at the discretion of the local authority.
  I shall take the Secretary of State through this stage by stage. Does he accept that £2 million less will be made available? I have to spell it out in simple terms for the right hon. and learned Gentleman. Having taken him through the first stage—that the rate suport grant settlement leaves £2 million less available to the Scottish local authorities because he decided that free school transport should be a discretionary aspect of education at the disposal of the education authorities in Scotland—I should tell him that the position has now changed. What the right hon. and learned Gentleman is saying is that Ministers have changed their minds. Whereas, before, school transport was to be discretionary, it is now mandatory. I take it that the Minister agrees with that. That is the implication of accepting the amendments from the other place.
  If the Minister accepts that the provision of free school transport is now mandatory and that there is a statutory obligation upon local authorities in Scotland to provide this, his decision has been changed. He is, therefore, under an obligation to restore to the Scottish local authorities the £2 million. If he does not do so, basically he is stealing £2 million

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  from the local authorities in Scotland in respect of school transport.
  In response to my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson), the Minister said that the arrangements made no difference to the budget plans of the regional authorities. That is misleading, to say the least. It is not true and the Minister knows it. Of course, the authorities budgeted on the basis that they would not have the £2 million. But they did so on the advice given by the Scottish Office that free school transport would no longer be available. That is not what the Minister is now saying. He is saying to local authorities in Scotland that, as a result of the decision in the other place, free school transport is a statutory obligation, but the Government will not give back the £2 million which they took away when they thought that school transport provision would be discretionary. There is no dispute about that.
  Earlier today, the Minister sought to answer questions about a reduction in rate support grant to various Scottish authorities. The question was not about the effect of the deletion of clause 25 from the Bill, and the Minister knows that. He is an expert at not answering questions. He knows that the question was about the reduction in rate support grant. We shall press him and we shall find out—whether he wants to tell us or not—how much each of the Scottish regional authorities is having stolen from it by him as a result of the Government's refusal to restore the rate support grant.
  While I join my hon. Friends in welcoming the decision of the other place, I do so, not with regret but certainly with mixed feelings, because I wish that the other place had had the courage to take matters to a logical conclusion and remove the provision inserted by the Government concerning school meals and school milk. The other place, while it has done us a service in one respect, has done us a disservice in another. It could have made a major contribution. We owe a debt of gratitude to Lord Butler, to whom I freely give thanks. I wish that the other place had deleted those other provisions.
  The Secretary of State is about to reply. I can understand his touchiness. No one likes to receive the humiliating defeat
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  which he has had to suffer on this clause. I hope that, in replying, the right hon. and learned Gentleman will complete the answer he gave to us on 18 March and tell the House and local authorities throughout Great Britain that he accepts the decision fully, that he will not punish local authorities and will restore the rate support grant, and that he will also ensure that common sense prevails in the Scottish Office so that the rate support grant is restored in Scotland, too.
  Mr. Mark Carlisle: I start by apologising to the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) for what I said when he got to his feet. It was not that I objected to his intervening as a Scottish Shadow Minister. It was merely that there had been one speech from the Opposition Bench and I did not realise that we were to have two. If the hon. Member felt that I was discourteous to him, I apologise.
  Perhaps there is one thing to be said for this matter. If it means that, for the first time, Labour Members are ready to accept the importance of a bicamarel legislature, some good will come out of the decision made by the Lords.
  12.45 am
  I am immensely grateful to my hon. Friend the Member for Wokingham (Mr. van Straubenzee) for the support that he attempted to give me on this clause throughout the passage of the Bill through this place and for his speech tonight. I regret the decision that was made in the other place. I made that clear at the time, and I made it clear in my statement when I said that, nevertheless, the Government, being realistic and seeing the size and composition of the majority in the other place, thought that the only right thing to do was to accept the decision. The fact that one accepts the decision does not mean that one necessarily believes that the other place was right, and, for the reasons that my hon. Friend the Member for Wokingham gave, I regret the decision that it took.
  The hon. Member for Stirling, Falkirk and Grangemouth spoke about the penalty on local authorities. His hon. Friends the Member for Bedwellty (Mr. Kinnock) and for West Stirlingshire (Mr. Canavan) demanded that I should put back into the rate support grant the money that had been allowed for to provide school trans-

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  port. I must repeat what I said quite clearly in my statement on 18 March in accepting the decision taken by another place. The fact that it is not now open to local authorities to make savings in this way in no way withdraws from them the need to make savings in their education budgets.
  The Government made it clear at an early stage last summer that they would look for savings in public expenditure because they were essential in the public interest. We believed that it was right that in looking for those savings local authorities should have the opportunity, if they wished, to make part of those savings by bringing in charges for school transport. Parliament has decided that that option is no longer open to them, but that does not mean that those savings do not still have to be made. The rate support grant has been fixed, the cash limits have been fixed, and the fact that this is a matter for local authorities is confirmed by the fact that the hon. Member for Berwick-upon-Tweed (Mr. Beith) agreed that several counties had decided to make the savings that we were looking for in other ways.
  Local authorities have always realised that we were looking for savings of a certain percentage in their budgets and that it was up to them to decide how they were made, but many of them asked that in looking for those savings they should be able to look for them in transport provision. So it is not a question of penalising them. It is not a question of putting money back. They recognise that the savings that have to be made will have to be made in ways that do not include modest charging for transport.
  I totally agree with my hon. Friend the Member for Grantham (Mr. Hogg). It is extraordinary that the Liberal Party, which seems to support the concept of giving more power to local authorities and is always arguing for the devolving of power to local authorities, objected to a principle when this occurred. I can only assume that the principle of devolution to local authorities was outweighed by the principle that Labour Members did not want to support anything that might be unpopular with the electorate.
  The hon. Member for Berwick and East Lothian (Mr. Home Robertson), who, unfortunately, has left the Chamber
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  —I know why he has had to leave—said that he was glad to hear the clear undertaking by his hon. Friend the Member for Bedwellty that the Labour Party was now committed to free school transport for all. I did not think that the hon. Member for Bedwellty was quite as clear as the hon. Member for Berwick and East Lothian thought he was. I thought that the undertaking was hedged around with ifs and buts and "I should like to say but I really cannot quite."
  If that was a commitment by the Opposition, the hon. Member for Bedwellty might like to reflect on the cost of it. The cost of school transport in the current year is likely to be £125 million, and it benefits only one of 10 families. If one considers for a moment the cost of providing free transport for the other 90 per cent. of children, I think that the hon. Gentleman—if he gave that clear undertaking, which I rather doubt—may live to regret the fact that he did so.
  Mr. Kinnock rose—
  Mr. Carlisle: I have sat down.
  Mr. Kinnock: I have wanted to put a question to the right hon. and learned Gentleman.
  Question put and agreed to.
  Mr. Kinnock: On a point of order, Mr. Deputy Speaker. I wanted to put a brief question to the Secretary of State before he sat down, and I wonder whether I can ask it during our discussion on clause 25.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): We have not reached that stage yet.
  Lords amendments Nos. 18 and 19 agreed to.

Clause 26

  NURSERY EDUCATION: ENGLAND AND WALES
  Lords amendment: No. 20, in page 25, line 42, after "8" insert "(1)(a)".
  Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.
  This is a purely technical drafting amendment. The clause at present refers to
  "section 8 of the Education Act 1944".

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  The amendment makes it clear that the reference is to section 8 (1) (a). The amendment was first moved by a Member of another place in pursuant of greater clarity, and the Government accepted it in the spirit in which it was offered. I do not think that this is a contentious matter.
  Question put and agreed to.
  Lords amendment No. 21 agreed to.

Clause 31

  PROVISION OF CLOTHING FOR PHYSICAL TRAINING ETC.
  Lords amendment: No. 22, in page 29, line 28, after "years" insert
  "(other than a registered pupil at a school)".
  Mr. Macfarlane: I beg to move, That this House doth agree with the Lords in the said amendment.
  I think that hon. Members who served on the Committee will recognise that there was some discussion in another place with regard to who should be liable for payment for PT clothing provided that a person is over 18. That power is given under section 5(6) of the Education (Miscellaneous Provisions) Act 1948. The regulations made under that Act limit the amounts which can be recovered to whatever can be afforded without financial hardship.
  The Government considered it right that the parent should continue to be liable so long as the recipient of the clothing was a registered pupil at the school. In other cases of over-18s, it would be the recipient himself who would be liable to be asked to pay if the authority considered it appropriate to do so. There was much debate on this, and I am sure that the House will agree that the amendment should be accepted.
  Question put and agreed to.

Clause 36

  DEFINITION AND REGISTRATION OF INDEPENDENT SCHOOLS
  Lords amendment: No. 23, in page 32, line 39, after "under" insert "subsection (1) of".
  Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.
  Like amendment No. 20, this is a purely technical amendment. Clause 36 refers to section 70 of the 1944 Act. The amendment makes it clear that the reference is to section 70(1).
  Question put and agreed to.

Schedule 2

  SCHOOL ADMISSION APPEALS
  Lords amendment: No. 24, in page 40, line 44, leave out "simple majority vote" and insert
  "a simple majority of the votes cast and in the case of an equality of votes the chairman of the committee shall have a second or casting vote".
  Dr. Boyson: I beg to move, That this House doth agree with the Lords in the said amendment.
  We discussed the amendment in Committee for quite a long time. Looking back, I remind the House of several things which were said. The hon. Member for Stockport, North (Mr. Bennett), who is not with us tonight, said that there should be a casting vote in the case of a conflict. The hon. Member for Newham, South (Mr. Spearing), who played a big part in our Committee discussions, similarly pressed for a casting vote. All the amendment does is to state that where there has to be a majority vote, obviously on the decision of the appeal, the chairman shall have a right to a second or casting vote.
  We said in Committee that we would look at this again, and in another place this amendment was moved. We should be able to achieve a degree of unanimity on this matter.
  Question put and agreed to.
  Lords amendments Nos. 25 to 28 agreed to.

  LIMITATION AMENDMENT BILL [LORDS]
  As amended (in the Standing Committee), considered.
  Order for Third Reading read.—[Queens Consent, on behalf of the Crown, and Prince of Wales's Consent,

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  on behalf of the Duchy of Cornwall, signified.]
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, with amendments.

MEDICAL FACILITIES (EUROPEAN RECIPROCITY)
Motion made and Question proposed, That this House do now adjourn—[Lord James Douglas-Hamilton.]
12.56 am
Mr. Bernard Conlan: The circumstances of the case that I wish to bring to the attention of the House tonight highlight what I consider to be a serious anomaly within the rules governing reciprocal medical treatment between this country and the other countries of the EEC.
The specific case concerns 13-year-old Siobhan Jernskaw, who plans to spend the Easter holidays in Italy with a party of children and teachers from the St. John Fisher school in Gateshead, where she is a pupil.
During the preparations for the holiday it was discovered that Siobhan, for reasons which I shall explain, was not eligible for, or covered by, health care in Italy in the same way as the other children and the teachers. In view of this, I understand that at one stage Siobhan's continued inclusion in the party was in grave doubt. On my advice, she obtained private insurance cover which will meet the cost of any medical treatment that may be required while she is in Italy with her school friends. The disappointment of missing the holiday has been prevented, but this girl, at a tender age, has been cast in the role of being somewhat different from the rest of her school friends. There is no possible justification for this highly embarrassing situation, because Siobhan is no different from her friends and, therefore, should be treated in the same way.
The categories of person covered by the EEC regulations are explained in the leaflet SA /28/30 /June 1979 published by the Department of Health and Social
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Security. Briefly, to be covered for reciprocal medical care one must be a United Kingdom national and currently insured as an employed person. Siobhan is a United Kingdom national—she was born here and has never lived anywhere else. Being a child, Siobhan obviously cannot be insured, but children are normally covered by virtue of their parents' qualifications.
At this stage the difficulties began. Although Siobhan is a full British national, her father is a Norwegian national who married a British girl and established the family home here in Gateshead 16 years ago. In almost every respect this is an ordinary, normal British family. Siobhan's father is gainfully employed. He pays his full national insurance contributions and pays all the taxes required of him. He is exactly like millions of other fathers throughout the land. He meets in full his family, economic and social responsibilities. Because he has not chosen to renounce his Norwegian citizenship, his children are discriminated against in a very embarrassing way.
When Siobhan has been abroad on other occasions, she has travelled on her mother's British passport. During my inquiries into the circumstances of the case, I discovered that she could have been treated in the same way as the other children on the visit if her mother, who is a United Kingdom national, had been currently employed and insured.
Like millions of other mothers who have a young family to care for, Siobhan's mother is not insured. Her full-time occupation is that of looking after the family and the home. This is a classic "Catch 22" situation. The father is insured. He pays all his United Kingdom taxes but is not a United Kingdom citizen. The mother is a British subject but is not insured because of her family responsibilities. In the meantime, the poor, innocent child must suffer. The EEC regulations are in need of urgent amendment in order to clear up this anomaly and many others that undoubtedly exist. Once a person is covered, his dependants are also covered, irrespective of nationality and of whether the covered person travels with them. If one can believe it, stateless persons and refugees are covered.

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I do not claim that that should not be the case. However, I strongly maintain that the claims of Siobhan Jernskaw are immeasurably more justified. This single case highlights the anomaly that exists. There must be many more similar cases. I strongly urge the Minister to use all the power at the Government's disposal to bring about changes and to ensure that justice is done and is seen to be done.
1.2 am
The Under-Secretary of State for Health and Social Security (Sir George Young): I was particularly interested to hear the remarks of the hon. Member for Gateshead, East (Mr. Conlan), as my two children will shortly go overseas on a school holiday. I could well imagine their concern—and, indeed, mine—if they were to be confronted with the problem just described. I welcome the initiative that the hon. Gentleman took in recommending the option of private insurance and in enabling the girl to go on holiday as she had planned. He is to be commended for giving the correct advice to his constituent. I commend him also on the way that he has presented the case.
I welcome the opportunity of explaining the basis on which United Kingdom nationals may receive medical care when on holiday in other member States of the European Community.
The National Health Service provides care only while a person is in the United Kingdom. If he should be taken ill or have an accident while abroad, he will usually have to pay the full costs of treatment. However, the European Community has regulations which enable the majority of citizens to get urgent medical treatment free, or at reduced cost, during visits to other member States from the sickness insurance scheme of the country concerned, on exactly the same terms as its own insured people.
As I will explain, not everyone is covered by the Community regulations. Medical treatment in other countries can be extremely expensive, and my Department advises those who are not covered by the regulations to take out adequate private insurance to cover emergencies. Travel agents and insurance brokers are accustomed to giving advice in those cases.
The question of entitlement under or cover by the regulations is, I fear, rather complicated, because the purpose of those
616
regulations is to co-ordinate the social security schemes of nine individual member States. I emphasise that the aim is to co-ordinate, not to harmonise, and there are bound to be difficulties where national provisions and national priorities differ. The regulations were revised in the light of experience of their operation even before we entered. They reflect largely the insurance-based health care schemes of the original Six, and on joining we had to accept them as they stood.
It will be necessary for me to give some explanation of the regulations before I can explain the action taken in the case of Siobhan Jernskaw, which has given rise to this debate.
The arrangements for free or reduced-cost medical care for visitors to other EEC countries are made under the EEC regulations 1408/71 and 574/72
"on the application of social security schemes to employed persons and their families moving within the Community."
While the EEC regulations provide cover for medical care in a variety of circumstances, the most commonly used provision is that for the visitor who, while still employed in and contributing to the social security scheme of his "home" country or in receipt of benefits as the result of such employment and contributions—for example, retirement pension —goes for a short period, for example, on holiday or business, to another member State. If he falls ill, and provided that he is covered by the EEC regulations, the visitor is entitled to immediately necessary treatment from doctors and hospitals operating under that State's national medical care scheme.
Treatment is given on the terms and conditions that apply to insured people of the other country. To ensure that he receives free or reduced-cost care under the EEC arrangements, the visitor must usually show the authorities of the other country a certificate of entitlement to treatment—form E111.
It is the duty of the appointed "competent institution" in each of the member States to issue certificates only to those people to whom the EEC regulations apply. My Department is the competent institution responsible for the issue of forms El11 in the United Kingdom.
As the EEC regulations do not apply to everyone, the certificate of entitlement

617
cannot be issued without confirmation that the applicant is a person covered by the regulations. Therefore, a form of application containing statements giving such confirmation is necessary. That is incorporated in an explanatory leaflet, SA28/30:
"Medical treatment for visitors to other EEC countries".
Mr. Harry Cowans: I appreciate that the hon. Gentleman is trying to make out a case, but to a 13-year-old child leaflet XYZ does not make a great deal of sense. Can the hon. Gentleman defend the situation where a man living in this country pays a contribution lawfully geared by the NHS and suddenly finds that he is not fully covered? The man has paid his dues and yet a 13-year-old child suddenly finds that she is different from her people. All the leaflets and numbers in the world cannot explain that.
Sir G. Young: I hope to outline the action that the Government are taking to try to remedy the injustice. The case that I was developing was that it is not within this Government's power to alter regulations that apply to other countries. We have to proceed by consent.
The leaflet that provoked the hon. Gentleman to intervene explains who is covered by the EEC regulations and how and when to apply for form EIII, and the procedure to obtain treatment in each of the other countries is summarised.
The sickness insurance schemes of the Community countries vary and none is comparable with the NHS. Nevertheless, most member countries provide their insured people with free medical and hospital treatment—although, as in the United Kingdom, there are some charges for dental treatment and medicines—and similar treatment is therefore available to visitors from the other EEC countries.
Three countries—France, Belgium and Luxembourg—have national sickness insurance schemes which require their insured people to be personally responsible for a proportion—usually 25 to 30 per cent.—of the costs of any treatment received.
Visitors to countries which require payment of a part of the costs of any treat-
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ment are advised to take out private insurance to cover that risk. Forms E1ll are generally issued from local social security offices, which also hold stocks of leaflet SA28/30. There is a provision in the EEC regulations that if a visitor does not obtain form El11 before going to another EEC country, and requires treatment there, the sickness insurance institute of the country concerned will apply on his behalf for the form El11 to the sickness institute with which the visitor is insured. In the case of a visitor from the United Kingdom, that would be to our overseas branch at Newcastle-upon-Tyne. If for any reason use of this procedure is impractical, and thus full charges are made for treatment, the visitor may apply on return to his home country for a refund of the costs.
Article 2 of regulation 1408/71 provides that the regulations shall apply to workers
"who are nationals of one of the member States or stateless persons or refugees residing within the Community and also to members of their families".
In other words, in order to have access to social security and health benefits in other member States, it is necessary for two conditions to be fulfilled. The first of these is the nationality condition. The regulations do not apply to people living and working in the Community who are not nationals of one of the member States, although there is provision to cover stateless persons or refugees residing within the Community and their families.
On signing the Treaty of Accession to the European Community, Her Majesty's Government made a declaration that, so far as the United Kingdom was concerned, the term "nationals" should, for the EEC purposes, be taken to refer to persons who were citizens of the United Kingdom and colonies, or British subjects not possessing that citizenship, or the citizenship of any other Commonwealth country or territory, who, in either case, have the right of abode in the United Kingdom and are therefore exempt from United Kingdom immigration control; and persons who are citizens of the United Kingdom and colonies by birth or by registration or naturalisation in Gibraltar, or whose father was so born, registered or naturalised.
A person who is a United Kingdom national for EEC purposes will hold a

619
British passport endorsed at the top of page 5 as follows:
"Holder has the right of abode in the United Kingdom".
Persons who are United Kingdom nationals for EEC purposes, but who hold British passports issued before the United Kingdom's accession, may apply to the Home Office to have the endorsement added.
The second condition is that the regulations apply only to "workers" and their families, and this is related to employment. Briefly, the following groups come under the heading of "workers" for the purposes of the regulations: those currently insured as employed persons, and those who are employed but are not liable to pay contributions; those who have at some time in the past paid contributions as an employed person, and are now paying contributions as self-employed persons; those who are not working but who have, in the past, paid contributions as an employed person and are now either paying non-employed contributions or are receiving a social security benefit or pension. The Department's leaflet SA28/30 sets out in detail the conditions for cover.
These conditions are, I accept, complex. But this arises, as I have said, first of all because the regulations were designed to meet the needs of the original Six in co-ordinating their legislation, and they cannot therefore be expected, even after adaptation, to fit in as neatly with our rather different national health and social security schemes. In the second place, it has proved possible, with experience of the regulations—which are made under article 51 of the Treaty of Rome—to extend the meaning to cover various categories of people who are currently self-employed or non-employed but have at some time been employed. It is in the nature of case law that such extension, whilst to the advantage of individuals, complicates the rules.
As the hon. Gentleman said, the Community's social security regulations do not cover everyone. The majority of self-employed and some non-employed individuals are, as a result of the case law decisions, now covered, but there are still a number excluded from the scope of the regulations and we have been negotiating in Brussels for some time to have the
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regulations extended so that the self-and non-employed, and their dependants, from this country should also have access to treatment of immediate necessity through the State health schemes of other member countries when visiting them. The hon. Gentleman is right to say that amendment is needed. These negotiations continue.
A draft regulation to this end is at present under consideration in the Council, but we have met more difficulty, and therefore delay, than we originally expected. Other member States have reasons which they consider, in their particular national contexts, give rise to difficulty in accepting the charges proposed. I accept this, but we have put a lot of effort into this. The Commission has given us assistance and other member States are cooperating in an endeavour to solve the problems which have arisen. I therefore hope to make progress and reach agreement. When we do, all EEC nationals resident in the United Kingdom will be entitled to medical care of immediate necessity when visiting other EEC countries.
I turn to the case under discussion. Siobhan Jernskaw is 13 years old, born in the United Kingdom of a British mother and a Norwegian father. As is usual for a dependent child, on application for a certificate of entitlement for her, form E111, covering a visit to Italy, was made by her father. This was sent with a number of applications for other children by the headmaster of St. John Fisher comprehensive school to the Department's Gateshead office on 5 March 1980.
Following the usual procedures, the application was considered and it was found that Mr. Jernskaw was not a national of an EEC country and form El11 could not, therefore, be issued to cover his daughter's visit to Italy. A written notice of the reason for rejection of the application was sent to Mr. Jernskaw on 7 March 1980. In a subsequent telephone conversation with him the possibility of cover being provided for his daughter through Mrs. Jernskaw was suggested but, although a United Kingdom national, his wife does not meet the "workers" condition as she has not been in employment for a number of years. As is usual in such cases, the father was advised to take out private insurance to cover Siobhan's visit. I am content that the action taken by the Gateshead local office was right.
Mr. Robert Parry: Does the Minister agree that the various circulars and regulations to which he has referred are typical of EEC gobbledegook?
Sir G. Young: I prefaced my remarks by saying that the regulations were exceedingly complex. I should prefer my own description of them rather than "gobbledegook". However, they are the regulations with which we have to cope. We are seeking to get them amended to deal with this case. It is a matter of regret that Siobhan, who was born in and has lived in the United Kingdom, is not eligible under the EEC regulations for medical treatment while visiting another member State.
I think that there is no disagreement between us. As I have explained, we are aiming to remedy the situation by having the regulations extended. If the extension to the regulations as presently drafted is agreed, Siobhan will be covered both in her own right and because her mother would gain entitlement.
However, people like Siobhan's father will still be outside the scope of the regu-
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lations because they are not EEC nationals. The United Kingdom does not have the power to grant nationals of third countries living within its territory access to Community social security benefits. Only the Community as a whole is able to do this through co-operation agreements with third country Governments, which would, of course, need to be reciprocal.
Mr. Jernskaw is Norwegian. Norway has not joined the Community and nor has it made an association agreement with the Community which would give him cover.
I accept the deep sense of injustice that this girl must feel. The Government recognise her case as an anomaly. We have put specific proposals before the Community for extending the regulations so that the anomaly may be removed and a fairer situation is brought about. I ask hon. Members to bear with us while we seek to persuade the other member countries to make the much-needed alteration in the regulations.
Question put and agreed to.
Adjourned accordingly at eighteen minutes past One o'clock.

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

GENETIC MANIPULATION AND ECC DIRECTIVE
Lord WOLFENDEN: 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 agree with the conclusion of the Thirty-ninth Report of the European Communities Committee on Genetic Manipulation (DNA) that the draft Directive 5899/79 would be too restrictive, and that a Council recommendation would be more appropriate; and if so, what steps they are taking in the Council of Ministers to secure that objective.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young): My Lords, the Government agree that it is the case that the draft Directive would be too restrictive. Our views about possible alternatives, including the possibility of a recommendation, have been made known informally to officials of the Commission of the European Communities. We understand that the Commission is considering these, together with the views of other Member States.
Lord WOLFENDEN: My Lords, I am most grateful to the noble Baroness, Lady Young, for that reply, which I am sure will give considerable satisfaction not only in this House but outside. Further, might I ask whether the Government have in mind any steps that might be taken to remove from the public mind fears in this whole field which, the experts assure us, have been much exaggerated?
Baroness YOUNG: My Lords, in so far as there is such public worry, we have in the Genetic Manipulation Advisory Group an expert body which is particularly
1338
concerned with safety hazards. The group publishes periodic reports, and I would draw your Lordships' attention in particular to the relevant paragraphs of the second report of the group, which was published last December. The group has on it both scientists and representatives of the public interest.
Lord AVEBURY: My Lords, will the Minister not agree that it is highly desirable for the Commission, so far as possible, to attempt to harmonise the rules on genetic manipulation with those to be introduced in the United States?—bearing in mind that a great many of the companies which are involved in this field are multinationals and can readily move their research and development, and, indeed, their production from one country to another, and that they will tend to go where the regulations are least onerous. Will the noble Baroness also not agree that in the United States very powerful scientific advice is available to the Government in formulating the recommendations, and that therefore it is unlikely that more restrictive rules would be necessary in Europe?
Baroness YOUNG: My Lords, yes, the Government recognise the points which the noble Lord, Lord Avebury, has made on this matter. As regards consideration of the matter within the European Communities, the Economic and Social Committee at a meeting in July 1979 considered that in general compulsory notification of experiments—that is, without prior authorisation—would be sufficient. The committee is likely to look at the Commission's proposals again, particularly if they are substantially revised. The European Parliament has not yet considered the draft Directive, but is due to do so. Following representations from Member States—not least from ourselves—we understand that the Commission of the European Communities is reconsidering its proposals.
Lord ASHBY: My Lords, biologists working in this field will be deeply grateful to the noble Baroness, Lady Young, for the reply which she has given to this Question. I should like to ask her whether she would be willing to press the matter a little further with the Council in two ways —or ask her honourable friend in another place to do so—when the Council meets. First, will she reinforce the recommendations in this report by drawing the

1339
Council's attention to the fact that it was scientists themselves who alerted the world to these potential dangers? They declared a moratorium on their work and have behaved very responsibly ever since, without dictation from Governments. Will the noble Baroness also ask those who go to the Council to transmit this second point, that already the European Science Foundation and the European Molecular Biology Organisation have given a great deal of attention to this matter, and their interests cover not only the European Community countries but others like Switzerland, where very important work is being done in this field?
Baroness YOUNG: My Lords, the Government will certainly take note of the important points which the noble Lord, Lord Ashby, has made. As he will know, the draft Directive, which originated from within the Commission, has not yet been submitted to the Council of Ministers. It is due for discussion in the European Parliament, and until that discussion has taken place it is unlikely to go before the Council. The Government believe that it would be premature to raise this matter in the Council of Ministers yet, but we are in close touch with Her Majesty's Government's permanent representative in Brussels and he will give us adequate warning of any impending submission to the Council. We shall consider what further action to take in the light of the situation at that time.
Lord RITCHIE-CALDER: My Lords, will the Minister please affirm our concern that during the discussions— whatever may result from the Council of Ministers— they will bear in mind what the noble Lord, Lord Avebury, said, that this is not a matter which concerns merely the Community; it is not a matter which concerns a country; it is a vast international problem with very large impending developments? We have been talking reassuringly, and I am sure that everyone here will be reassured by the fact that up to now the matter has been handled fairly responsibly. Indeed, as the noble Lord, Lord Ashby, pointed out, this was on the initiative of the scientists themselves. But we are now moving into commercial development, and that is where we really need—
Several noble Lords: Question!
Lord RITCHIE-CALDER: My Lords, is the noble Baroness aware that we are now going into the field of commercial development, and that it is important that we should have all the safeguards that we can possibly secure?
Baroness YOUNG: My Lords, yes, we are aware of the importance of this. Whatever might come out of all these discussions, we accept that it is a matter of worldwide interest, and it may well be that whatever is decided within the Community may be a first step in getting some kind of international policy on this matter.

GUINEA: MINISTERIAL NEGOTIATIONS
2.44 p.m.
Lord HATCH of LUSBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the negotiations they recently undertook with the ministerial delegation from Guinea.
Lord TREFGARNE: My Lords, at the initiative of the Guinea Government a goodwill mission visited the United Kingdom from 19th to 24th March to discuss debts and arrears due under the 1976 Debt Rescheduling Agreement. Two courses of action were proposed and will now be considered by the Guineans. We await their decision.
Lord HATCH of LUSBY: My Lords, I thank the Minister for that statement. Will he accept my congratulations both for his own Government and the Guinea Government in their constructive approach to breaking this impasse? Is the noble Lord aware that during their visit the Minister leading the delegations pointed out that Guinea is rich in bauxite, iron ore, gold, diamonds and uranium, and that this offers an excellent opportunity to British business to collaborate with the Guinea Government in an important, new industrial venture oversees which could help our overseas trading balances?
Lord TREFGARNE: My Lords, we are indeed aware that there are some good prospects in Guinea for British businesses, but the principal difficulty remains, as I think the noble Lord knows, that ECGD cover is not at present available, except for short-term business to Guinea, arising out of the debt arrears to which I referred.
Lord HATCH of LUSBY: My Lords, is the noble Lord also aware that the President of Guinea, M. Sékou Touré has just last month announced a new investment code? Could I ask the noble Lord whether he would ensure that this new code is widely distributed among British businessmen?
Lord TREFGARNE: My Lords, we are aware of the improving climate for British businesses in Guinea. I should have to look at that code before I could undertake to distribute it further.
Lord MERRIVALE: My Lords, in view of what I think is recognised as a definite change of attitude on the part of President Sékou Touré, and the fact, too, that in effect he now has friendly relations with neighbouring States, would the Minister he willing to look into the question of the opening of a mini-Mission in Conakry, bearing in mind that at the moment our Ambassador in Senegal covers six countries, and also bearing in mind the potential for the future of Guinea?
Lord TREFGARNE: My Lords, as I mentioned when the noble Lord, Lord Hatch, raised this matter in December, in view of cuts in overseas representation announced in the Government's expenditure White Paper published last November, we are unable to give further consideration to raising the status of British diplomatic representation in Conakry at the present time. However, in addition, the usual visits to Conakry by our Ambassador and his commercial staff have been stepped up considerably.

EEC/UK RELATIONSHIP: PROSPECTS
2.48 p.m.
Lord SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a Statement before the next summit conference on British relations with the EEC and the prospect of settlement of differences.
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords, the Government remain determined to secure an equitable settlement of the budget problem. We shall treat other problems, such as the Common Agricultural Policy and Common Fishery Policy and sheepmeat, on their merits, and work for parallel progress.
Lord SHINWELL: My Lords, is the noble Lord the Foreign Secretary aware that I take note of his cautious and somewhat diplomatic reply but, on the whole, find it unsatisfactory? Is the noble Lord aware that the differences are not diminishing, particularly with the French, but accelerating? Is he aware that the Minister for Agriculture, Mr. Walker, who has just returned from the Continent, found himself profoundly dissatisfied at what had occurred? Is the noble Lord also aware that some French farmers had the impudence to stage a demonstration outside the House of Commons? What is likely to happen if we retaliate by sending a deputation to demonstrate outside the Chambre des Deputés in Paris? Is he aware that it is likely that at the summit conference the Prime Minister will fail to attain her primary objective in relation to our contribution to the EEC? In those circumstances, is it not desirable that, before the summit conference, and for the satisfaction of those millions of people who voted to enter the EEC and expected a settlement long before now, the Government should make a Statement?
Lord CARRINGTON: My Lords, I confess to being rather surprised that the noble Lord should want to welcome an incautious and undiplomatic reply to this Question. What he says I do not agree with; I do not think the differences are worse than they were. I believe that over the last few months there has been a realisation by our partners in the Community that this country faces a real problem. It was certainly not so in July last year at Strasbourg. I think that from

1343
the time of Strasbourg, followed by Dublin, until now there has been a change of attitude on the part of our partners. We still have a long way to go, but I am quite convinced that if we all try in a spirit of friendship we can get a satisfactory solution.
Lord HARMAR-NICHOLLS: My Lords, is my noble friend aware that, whatever merit there may be in eventually having a Community-based settlement for shecpmcat, energy and fish, the contribution should be dealt with quite separately because that is something that will have to go on for years? The possibility of these two problems being merged might help a temporary settlement, but it would be much better for the contribution to be put on a proper and permanent basis.
Lord CARRINGTON: As I said in my original Answer, my Lords, we shall treat these matters on their merits.
Lord WIGG: My Lords, although there are many, of whom I am one, who thought our entry into the Common Market would be disastrous because conditions would arise which we could not fulfil, may I ask the Foreign Secretary to bear in mind and persuade the Prime Minister that the one thing that must not happen is that this country should welsh on its obligations? Is he aware that it is of paramount importance that this country's word should be respected throughout the world? So, however objectionable and rough the going may become, whatever we have entered into, that we pay, at twenty shillings in the pound.
Lord CARRINGTON: My Lords, all these matters are considerations which the Government are taking into account.
Lord BLYTON: My Lords, is the noble Lord aware that we who opposed our entry into the Common Market prognosticated the terrible price we should have to pay as a result of entry'? We all now know that it was a catastrophe when the referendum took place after we had been taken into the Market. Mrs. Thatcher need not think she will get anything. In the face of the terrible opposition we are receiving from the French, and our getting kicked all over the place, does the Foreign Secretary not think that we should now
1344
have a referendum to see whether people believe we should stay in the Common Market?
Lord CARRINGTON: My Lords, I think it is a great mistake to assume that this is an Anglo-French dispute. It is not; this is a matter which all the Members of the Community have to solve between them, and we must see that it is solved.
Lord SHINWELL: My Lords, may I ask the Foreign Secretary a simple question? He says that each of these matters must be judged on its merits. Would he honestly say—and I expect an honest answer from him—that the attitude of the French at the present time, and for some time past, is based on the merits of the case, or on prejudice of some kind?
Lord CARRINGTON: My Lords, as is usually the case in these matters, in different places these issues are seen from a different standpoint, and I have no doubt that the French are just as sincere in their attitude as we are in ours.
Lord GLADWYN: My Lords, is it not obvious that the Government should not make a statement before, but after, the coming meeting of the European Council?
Lord CARRINGTON: I thought I had made a kind of statement, my Lords.
Lord GORE-BOOTH: My Lords, may I, before asking my question, suggest that there is an unhappy atmosphere between the French and ourselves, however serious it may be, standing in the way of negotiations? Has the noble Lord thought in terms of doing the kind of operation which ultimately led in 1906 to an entente with the French? Might not something on that rather dramatic scale at least do something to improve the atmosphere, if it did not achieve concrete results very quickly?
Lord CARRINGTON: My Lords, nobody would be happier than I should to see that our relations with all the Members of the Community are good. I believe that once we can get this issue out of the way there is no reason whatever why our relations with all our partners should not I be excellent.
Lord WIGG: My Lords, will the Foreign Secretary bear in mind that in 1906 there was a Foreign Office fiddle which ultimately destroyed the British Army and destroyed this country's standing in the world; that we went into France in 1914 with six divisions on the French left, which was military nonsense; and that the ultimate result was that from being in a position of paramount power, we ended up what we are today?
Lord CARRINGTON: My Lords, perhaps one of the advantages at the moment is that the European Community excludes the subject of defence.

LTE AND RUSSIAN AIRLINE ADVERTISEMENT
2.56 p.m.
The Earl of KIMBERLEY: 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 are aware that the London Passenger Transport Board are now advertising, on the full length of a double decker bus, "Aeroflot welcome to Moscow".
Lord MOWBRAY and STOURTON: My Lords, I thank my noble friend for the information. But I must point out that Her Majesty's Government have no direct responsibility for London Transport or its advertising. By statute, the Greater London Council has overall control.
The Earl of KIMBERLEY: My Lords, I thank my noble friend for that Answer, which is rather what I expected. Would he not agree, however, that in view of the situation with Russia and Afghanistan, the advertising department of the London Passenger Transport Board might be informed by Her Majesty's Government that this is in complete contravention of the Government's policy towards Russia at the moment?
Lord MOWBRAY and STOURTON: I would accept what my noble friend says, my Lords; the Government regret the appearance of these advertisements. I think I can say that the leader of the GLC
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has already made clear his acceptance of the Government's view about not supporting our going to Moscow for the Olympic Games, and in due course he may—or he may already have done so—make his views known to the London Transport Executive.
Lord HALE: My Lords, would that not be political censorship of the worst possible kind? Have the Government ever—I acquit them of this in advance—suggested that they wished to put an embargo on the publication of advertisements of existing and reputable services in respect of any country in the world with whom at the moment they have a quarrel or disagreement? After all, there are some conflicts going on which the noble Lord, Lord Carrington, handled with his usual and customary good sense and grace. Is it to go out from this House that the Government want people to consider, on political grounds, what advertisements to accept or not? If so, perhaps the noble Lord would have a conference with some of the leading British newspapers.
Lord MOWBRAY and STOURTON: My Lords, I have the greatest regard for the noble Lord, Lord Hale, and I would hesitate to say that the Government's views on any matter should ever be dictated to the country. We have views; other people have views. The noble Lord may want all noble Lords to go to Oldham for their holidays. Other noble Lords may want to go to Moscow, others to Paris. We are merely indicating our wishes.
Lord FERRIER: My Lords, is the Minister aware of the large measure of amazement with which this advertisement has been greeted by many members of the public; and will he ask London Transport to get their advertisers to get the grammar right?
Lord MOWBRAY and STOURTON: My Lords, I will make my noble friend's views known.

HUMBERSIDE BILL [H.L.]
2.49 p.m.
The CHAIRMAN of COMMITTEES (Lord Aberdare): My Lords, I beg to

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move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Aberdare.)
Viscount St. DAVIDS: My Lords, I think it right that I should rise very briefly because on certain clauses, as a number of noble Lords will know, I had intended to move an Instruction to the Committee dealing with the Bill. However, I am happy to tell your Lordships that the proposers of the Bill have now promised to alter certain Parts of it which were thought to be inadvisable, and now there is no need for me to move the Instruction. Therefore, all that remains is for me to thank those noble Lords who would have supported me and to say, is this not a happy state of affairs, saving much time and money, and does it not show that this House has a useful purpose, by simply moving an Instruction, to protect us from some of the worst forms of the taking of unnecessary powers by local authorities?
On Question, Bill read 2a.

WESLEY'S CHAPEL, CITY ROAD BILL
Read 2a, and committed to an Unopposed Bill Committee.

THE BUDGET AND PUBLIC EXPENDITURE
3.1 p.m.
Lord BYERS Lord BYERS rose to call attention to Her Majesty's Government's Budget and public expenditure proposals and their likely effect on the social, economic and industrial life of the nation; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion that stands in my name on the Order Paper. We put down this Motion so that your Lordships' House could have an early opportunity of commenting on the Budget while it was fresh in our minds, and I should like to begin by congratulating the Chancellor of the Exchequer on two aspects of his Budget policies. The first is one which my colleagues and I have put forward for many years; namely, the need to establish a medium- to long-term look at the economy, and to set some targets
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which we shall strive to achieve over that period. Even if we do not get things absolutely right, I believe that it is better to have something to aim at, rather than to stagger backwards and forwards on a yearly basis. We can at least measure in broad terms the success or the failure on the way.
The second feature of the Budget on which I offer limited congratulations to the Chancellor is the package of policies and reliefs designed to help small businesses. This at least is a good start, and coupled with the enterprise zones it should enable a good deal of impetus to be injected into some of the inner city areas and induce new firms to start up and existing ones to expand.
As a member of the council of the London Enterprise Agency naturally I am keen that this opportunity should be grasped by all concerned in it, and especially by those large, socially responsible companies in the private sector which are even now helping small, innovative firms to stand on their own feet. I believe that the enterprise zones scheme, limited as it is in scope, may well help us on the way.
But, my Lords, I ask, why has the Chancellor to be so half-hearted in his encouragement? Why, for instance, is the registration limit for VAT to be raised by only £3,500, instead of, say, doubling that figure? And why could not the Chancellor have been bolder on capital gains, in a way which would encourage investors to disengage from some of the equities of large companies and put the cash into the smaller ones, on which the future of this country, to a very large extent, depends?
I believe that the incentives are far less than they should have been for real encouragement in this area of small businesses; but I believe, also, that the real obstacle to small business survival and expansion is the very high rate of interest. It is an amazing thing, but I get the impression—I hope I am wrong—that both the Chancellor and the Prime Minister are almost complacent about the rates of interest which are being charged at the present time. It really is absurd to stress the importance to the economy of industrial revival while at the same time to permit the stranglehold on business of overdrafts at 20 per cent. per annum.
I ask therefore why we cannot reexamine this situation and possibly look at the French system of establishing selective interest rates. After all, the banks could stand it. I understand that French banks lend money for agricultural enterprises at about 4 per cent., and for industrial projects which can show that their development schemes will promote employment and productivity, money can be raised at rates varying from 8 to 12 per cent. It would make a tremendous difference in this country if we could get an approach of this sort. I believe that this should be encouraged, and it would be far preferable to imposing a windfall profits tax, because it would be the way to generate efficiency and reduce unemployment, which is what we want to achieve. I shall not dwell further on small businesses and their problems because my noble friend Lord Mackie of Benshie will deal with this question later in the debate.
We agree with the Chancellor that the principal enemy of this country is inflation, and we shall support any policy that is likely to bring it under control. However, it is at this point that I express some doubt on the overall strategy of the Budget, largely because one of the most important features of the inflation-generating mechanism has been completely ignored; namely, the high-wage settlements which are divorced from both improved productivity and efficiency. In our view, we cannot simply leave pay policy in limbo; it must be taken into consideration.
We agree with everything that the Chancellor said about the evils of inflation. It must be conquered, but I do not believe that this will be achieved if we ignore the part that high unearned pay settlements play in pushing up the cost of living. I believe that we should have another look at how we can achieve a sensible and just remuneration for our workforces. I fully understand the distrust of the sort of inflexible pay policy which we have had over the last few years, and in particular the distrust that there is of the pay freeze. I think that the real difficulty is how to get out of a freeze at the end of it, other than through an uncontrollable explosion in wages; this is the problem.
But it is by no means the only policy open to us. I suggest that the first
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requirement in pay policy is a far better system of informing and educating the public about pay claims in very clear, simple and absolute terms. I wish to goodness! that we could get away from these wretched percentages. I should like to see used cash figures, instead of the misleading percentages that we have had recently. I believe that people should be told the cash figures that are involved in the claim. We should be told what the cash response of the employers would mean. We should be told the effect on the firm involved of implementing a pay claim, as well as the effect on national inflation figures and on the targets which have now been set for us to achieve in order to bring inflation under control.
I believe that we need a modest, but realiable organisation, capable of analysis and interpretation at a very early stage of pay negotiations. In addition, we need some form of standing conference of representatives of employers, trade unions, political parties and the Government to discuss the trends in growth, productivity, pay inflation and other basic factors affecting the economy, so that we can provide an informed backcloth against which pay settlements can be seen and can be judged. I say this because public opinion plays a very important part in the final solution of a pay claim such as we have witnessed in the steel strike.
Education and information is only part of the solution, but I consider that there is much that can be done by employers and employees working together, as indeed they do in Japan. I should like to see many more corporations in both the private and the public sectors taking up the three to five-year look adopted by the Chancellor. What I have in mind is the abandonment of the haggling confrontation in favour of agreed targets of achievement over a period much longer than one year; agreement on the productivity which can be achieved and which can then be related to the additional pay which this productivity could generate; and the argument could be about what is going to happen not in a particular pay round, but for the corporation and the company over the next three to five years.
At this point I want to say that I think the Chancellor is somewhat myopic about share-ownership and profit-sharing. I welcome what he has done; of course I

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do. But he appears to regard it as some minor irrelevance, whereas we who negotiated its introduction with the last Government under the "Lib-Lab Pact" regard it as a formidable tool for increasing profitability and for ensuring that the workforce has a vested interest in that profitability, and therefore a vested interest in a strike-free stability in the corporation or the company. An imaginative share-ownership scheme would be far less constraining than the improved terms (which we welcome) which were announced by the Chancellor. It would be far less constraining because it would have as its aim the incentive to make profits; an incentive to eliminate industrial disputes, and many other advantages. I am all in favour of the incentives which have been given for people to hold shares, but I should like to see individuals holding many more shares in the undertakings in which they are working.
I do not believe that profit-sharing and share-ownership should be regarded as something in the same category as a Christmas bonus. It should be looked upon as a really important vehicle for sustained growth in the unit in which people are working. Even loss-making corporations, like the BSC and British Leyland, faced with a slimming-down process, could produce a programme for improving productivity, achieving profit and then sharing that profit equitably among all those, management and workers, who have contributed to it. I believe that the share-ownership and profit-sharing rules as we have them now may well have to be substantially improved if we are to use share-ownership and profit-sharing as a means of reducing inflation.
Next, I wish to say something about expenditure cuts. I agree that public sector spending has got out of hand and that it must be brought under control, but what I think offends common sense is the blunt instrument approach; the unselective nature of the cuts. Added to this, there is the almost religious belief that there is some magic in a public sector borrowing requirement of £81/2 billion. Considering the appalling Treasury record of forecasting, I cannot see the reason for this fetish about a particular figure. I think it is fantastic to be locked in because you really believe that
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you are going to get as close as £81/2 billion. We are going to get nothing like it; it will be £1 billion either side, probably, or £500 million either side. The Lord Chancellor says, "Which side?" This is the point; but I believe it is worth while taking a slight risk for another £500 million at least, instead of risking the severe unemployment which adherence to this particular figure may well produce. Some tolerance around that figure is, I believe, essential; just as there is a need for greater scrutiny and for selectivity in the cuts, and so on.
I am not going to venture into the social services field, because that will be dealt with by my noble friend Lord Banks; but it makes me hopping mad to contemplate, for instance, the closure of a magnificent professional institution such as Farnham Park Rehabilitation Centre, of which I have particular knowledge, at a saving of about £100,000 to £200.000, when we are going to spend £25 million on assisted places in the educational system. This is what I call the blunt instrument approach, and it just is not good enough.
My Lords, before I conclude I want to mention one point about the Budget and about occupational pensions, in which some of your Lordships will know I have a special interest as chairman of the Pensions Information Centre. This may be regarded as slightly technical, but I should like to get it on the record because, in reducing public expenditure, one of the Government's policies, incorporated into Clause 5 of the Social Security (No. 2) Bill, is to cut back the unemployment benefit of people who retire and draw an occupational pension before the age of 65. The effect is to cut the unemployment benefit by 10p for each 10p by which their occupational pension exceeds the figure of £35 a week. The effect of this could be to discourage some people from making proper provision through their occupational pension schemes, and that would mean that they were more dependent on the State. The fact is that many of those who are drawing unemployment benefit while they are in receipt of an occupational pension are doing so in order to earn the credits necessary to enable them to get the full State retirement pension when they reach the age of 65. I would hope that the Government would be able to confirm that these

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credits will continue to be earned, both in the case of a man whose occupational pension is high enough to reduce the unemployment benefit and also in the case where the pension is high enough to eliminate unemployment benefit altogether. I should be grateful if we could have the Government's views on that point.
My Lords, my last point is to express my very deep regret that the Chancellor should have dropped the lower tax band of 25 per cent. on the first £750 of income. This was a measure which we extracted from the Labour Government under the "Lib-Lab Pact" and which at that time was hailed as a progressive move in the right direction. Now we have reverted to the, I consider, retrograde idea whereby the initial impact of tax for many people, some of them not very well off at all, is going to be 30 per cent. of earnings. I think that is a mistake. I believe that the Government have become the prisoner of their own inflexibility. We may well find that the restrictive figure of the public sector borrowing requirement at £81/2 billion, coupled with strict adherence to monetarism, will cause much unnecessary suffering without producing the desired result. My Lords, in that case there will be an inevitable U-turn, and that U-turn will make a session on the skidpan look like child's play. I beg to move for Papers.
3.17 p.m.
Lord WELLS-PESTELL: My Lords, we on this side of the House are grateful to the noble Lord, Lord Byers, for giving not only ourselves but the whole House an opportunity to remind the Government of the consequences of the acts that they have undertaken recently in their proposals. I do not presume for one moment—and I never have—to be able to speak for the man in the street, any more than I can speak for the vast majority of people. I only know what those around me and those whom I meet think at the present moment. I sometimes wonder whether the Government realise the deep feeling that is being generated against them among quite large sections of the community, including the daily newspapers, as to the outcome of their policies. It was brought home to me most vividly last night, while I was seeking to keep out of the heavy downpour of rain at one of
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our open underground stations. Standing next to me was a man I had never seen before and am unlikely ever to see again. He looked at me, then he looked up at the sky, and then he said, "Think—all this and Mrs. Thatcher too!" He went on to say that he lived in her constituency, and he was finding it very hard, although he had been there for years, to get anybody to admit that they had voted Conservative. My train came in, and that was the end of the conversation; but I think it indicates how an ordinary person is feeling at the present moment.
It is perfectly true that the Government have had to put up with quite a hit from this side of the House, and it would not be the first time that the noble Lord, Lord Cockfield, has been called in to shoulder his responsibility to defend the Government's actions, It is the duty of the Opposition to oppose, but to oppose when there is justification to do so. I believe that there is considerable concern in the country, and I think it was demonstrated beyond all reasonable doubt when the Southend East by-election result became known. Surely that must be a pointer to the Government as to what people are thinking. It may be that they are not thinking rightly; nevertheless, it is thinking that cannot be ignored.
In less than a year the Government have, in our view, succeeded in marching us down the road towards the conditions of the 1930s, in the sense that we are facing, and not overcoming, a serious depression, with the resultant fear that it strikes in the hearts and minds of ordinary people, who always bear the brunt of trade recession and retrenchment. We on this side have always felt that there is a deep divide between the philosophy of the Conservative Party and that of the Liberal and the Labour Parties. The policy pursued by the Government is primarily concerned with profit and financial gain, flavoured occasionally, I admit, with a little compassion for the masses.
I am not suggesting for one moment that there is anything wrong with the profit motive or with financial gain, but I believe that it becomes injurious to the life of the people when it has the supreme importance that it is being given at the moment. For us and, I believe, the Liberal Party, it is the quality of life and human values

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which really matter. It may well be that people in our community who are in a position to make a far greater contribution than they are making at the present moment will have to make that contribution for the benefit of those less fortunately placed. I do not think that anywhere in history is Conservative Party policy recorded as squeezing the rich, who I believe can afford it; in my view the Conservative Party will have to look at that situation and get people in this country who are in a position to make a far greater financial contribution to do so.
The Chancellor of the Exchequer talks about "cutting our cloth according to our means", but we would do well to ask ourselves why the purse is empty. Malcolm Dean of the Guardian, whom I know personally, wrote in the Guardian on 26th March this year:
"Of the £3,500 millions handed out in tax cuts in the first budget last June, about 40 per cent. of that went to 51/2 per cent. of taxpayers. For the £30,000 a year man, this meant a cut of £4,000 in his tax bill, and for the £20,000 a year manager a reduction of £2,000 a year".
One cannot give £40 a week tax-free bonuses to £20,000 a year executives and expect anything to be left for the really poor people in this country. I gather from what I have read recently that the Chancellor believes he will have large sums of money, something like £2,500 million, from his fourth Budget, and something like £3,500 million from his fifth Budget—if he survives that long—which could be used to repair some of the devastation he has caused in the public service or, to put it at its lowest, as an election bribe by giving tax cuts.
The Prime Minister quoted in May 1979 from St. Francis of Assisi, "Where there is discord, may we bring harmony ". Let us face the fact that all she has succeeded in doing at the present moment is to bring harm. The figure added to the salary tax assessment of a man earning £10,000 a year with an 1800 cc company car for his private use will mean that he will pay an extra £15 a year in tax, while the rest of us—most of your Lordships and people of limited means who live in country areas and who cannot do without a car—will be paying another £10 a year on our road fund tax, not to mention the increase in the cost of petrol.
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All I am asking is—and I do not want to be critical in the sense of being aggressive about this—that the Government should look rather more closely than they have looked recently at the plight of a large number of people in this country and say to those who can afford it that they cannot expect us to give them what we have already given them. There was no justification for giving away £3,500 million in tax relief to people who in the main could have done without it. If any Government spokesman says that they did it so that they could encourage people to produce more or to work harder, there is no evidence at the present moment that it has had that desired result—if that was the desired result in the first instance.
I am concerned, as your Lordships are aware, with the family. There are at least five measures which together place a heavy financial burden on the family. There is the ending of the old electricity discount scheme, which helped no fewer than 4,500,000 people, as opposed to the Government's new policy which will help 350,000 people—about one-thirteenth of the number helped by the last Government. It could be argued that some of them perhaps did not need it. One cannot always be certain that whatever is proposed is being properly applied. But the difference between something like 4,500,000 and 350,000 is over 4 million, and I cannot believe that if 4 million people needed it just over a year ago they do not need it now. There is the heavy increase in rent and rates; the increased cost of school meals; the withdrawal by some authorities of educational maintenance allowances, which will result in children leaving school earlier, and that is precisely what we do not want them to do; and the ending by some authorities of the necessitous clothing allowance.
About 9 per cent. of our people, the poorest of all, receive supplementary benefit, and the new rates next November will mean that 3,250,000 people will be better off. However, what I am concerned about is the 1,750,000 people in receipt of supplementary benefit now who will be worse off. The child benefit is going to be increased by 75p, which would be well below the inflation rate even if it were paid now. It was said to your Lordships yesterday, I think by the noble Lord, Lord Banks, that an increase of something like £1·20 or £1·25 was

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necessary to keep pace with inflation. It is a matter of some comfort to us that a number of Conservative Members of Parliament have precisely the same feelings, and we on this side of your Lordships' House shall be interested to see whether they will take some action in the matter.
1 think I am right in saying that just before the election, when the Prime Minister was asked whether there would be any increase in prescription charges, the answer was in the negative. Before the year is up they will have gone up 500 per cent. Although elderly people do not pay and children do not pay, there is a vast number in between in need of regular medication who will have to pay that money.
I am concerned, as no doubt will be a number of noble Lords, with the position of unemployment. It is a shocking thing to say—and I would not say it if I did not believe it"—but it would appear that it is the Government's policy to create a substantial pool of unemployed. I have to ask the Government whether they realise the effect of prolonged unemployment on the person concerned and on the family. May I say that we on this side of the House have been much closer to unemployment than any noble Lord on the other side of the House. We know its effects. Some of us have experienced it. We know how soul-destroying it is, how demoralising it is; how the status of the man withers because even his own children sometimes get taunted by other children that their father cannot be any good because he cannot find or hold down a job. At the present moment, we have many thousands of people who have not worked for over 12 months. It is really necessary to do something to stop what can be the most devastating thing that can possibly happen to a family.
I am really appalled that the Government have decided that unemployed people should not receive the earnings-related benefit. As I understand the position, they have paid for that; they have paid for that in their National Insurance contributions. National Insurance contributions went up in order to provide for an earnings-related benefit. By what right do the Government decide that they are not going to continue that particular
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provision? I wonder what we should think if, having contributed to something with a view to getting a certain thing in return, we were suddenly told that we were not going to have it. It does not seem to me, to put it at its highest, the right way of doing things.
It has been said that there are some who feel that the creation of unemployment could be a deliberate design to force workers and trade unions into accepting ultimately, when work is available, a lower wage structure. I say that there are some who think that. I do not claim to think that; I cannot think that anybody would sink that low. But we have had experience of this. We have had experience in the 1930s, when it was not a case of two men chasing one job but of a dozen men chasing one job—and the result was that wages went down and down.
My Lords, I want to say a word about housing. I want to ask the noble Lord the Minister—and perhaps this is not a fair question to put to him; for it is not his field and I would accept that one cannot always have all the replies one wants—whether it is true that the Government are considering ending council house building by 1984 and cutting the housing budget from £5,372 million to £2,790 million—a reduction by 1984 of £2,582 million in four years. If that is so, what about the Conservative Party policy: "A home of your own."
My Lords, I want to say a few brief words about education, because in a newspaper which I understand is very acceptable to Members of the other side of the House, I read that 59,000 teachers over the next three years no longer will be needed, with a large number of children being unable to gain admission into our primary schools. It makes a farce of the discussion on education that we had in this House a short time ago, when speaker after speaker drew attention to the inadequacy of our present educational system, to the fact that we could not provide sixth formers with the kind of training they needed in certain fields and how important it was that we had the right people in the early stages of education. Yet 59,000 teachers will disappear in the next three years.
I want to say a word about strikers. I have no time for unofficial strikes and I

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do not believe that there are many behind me who have time for unofficial strikes; but one of the things that I think is of supreme importance in this country is that we have always recognised the right of people to strike if they want to. Sometimes the strikes are well founded; at other times, they are not well founded; but we recognise the right of men to do this and we have seen this as part of democratic freedom in a democratic society. We have said: "All right, if you come out on strike we will not give you, the breadwinner, any help; but we will see that your wife and your family do not suffer." And now the Government are contemplating reducing by £12 a week anything to which they are entitled. Can one honestly say that this is a right thing to do in a democratic society?—to punish the wile and children because the husband and father has exercised his democratic right. I would ask the Government to think again about this; it is not too late. I think that it is a malicious thing to do.
My Lords, strikers rarely claim family benefits. It may be said: "If they do not claim, what are you worried about?" It is the principle that matters. I hope that we shall never forget that principles are important in our society and in our own lives. That last available figures that I could obtain were for 1977, when only 14.7 per cent. of those eligible to receive benefits took them: and, in some years, only 7 per cent. of all strikers applied for benefits.
My Lords, I think that the only other thing that I want to say is this. I want to ask the noble Lord why the Government did not seek to recover some of the money that the banks have made as a result of Government policy. The minimum lending rate, as the noble Lord, Lord Byers, has said, is high. The banks are charging over the minimum lending rate and they are affecting big business as well as small businesses. I believe that the figures of bankruptcy for this year, when they become known, will shock a good many people. In 1979 the National Westminster Bank, before tax, made £4441/2 million; the Midland Bank £3151/2, million; Lloyds Bank, £276·6 million, totalling over £1,000 million. We do not know what Barclays have made because they are not declaring their figures until the end of the month. Certainly the year
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before last they made £373·3 million. There is likely to be something like £1,400 million which the banks have made as a result of Government policy. I would have thought that the Government would do what they have done with some of the other firms, the utility companies, and take some of that money. If they would do that, it might help them to make better provision for some of the people in our midst who really need (shall I say?) greater help than is given.
I want to appeal to the Government to look again at some of the things they are doing, because in the last analysis it is the mass of people who are responsible for producing. I have never in my life produced anything that could be sold. In a sense, I have lived, like so many people in the community, on the efforts of other people. It is not people in your Lordships' House, in the other House or in other places, who are really producing the wealth. I am referring to the production of things that are sold. It is on production that we depend for our exports, and very often—as we see at the present moment—those who produce are the people who, in a situation of crisis, are treated much worse than they should be.
Viscount MONCKTON of BR ENCHLEY: My Lords, before the noble Lord sits down, he and I normally think alike on many things and we often speak against our parties. But I hope that the noble Lord will agree that the number of teachers must have some bearing on the number of children being born and coming to school age. The generation after us have not bred as well as my generation did. The other point I would have thought was true also is that those of us who leave work, whether it be by strike or for any other personal reason, can afford to do so for about 12 weeks on our tax reclaim. Both of these points should at least be thought about.
Lord WELLS-PESTELL: My Lords, I do not want to enter into a debate with the noble Viscount. He is perfectly right. The number of teachers whom we need in this country will depend on the birth rate. But one has to bear in mind that, at the present moment, schools are being closed. There will come a time in the not I too distant future when there will not be

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schools for the youngsters and the juniors. I was complaining of this.
3.43 p.m.
The MINISTER of STATE, TREASURY (Lord Cockfield): My Lords, the House is grateful to the noble Lord, Lord Byers, for tabling this Motion, which gives us an opportunity of looking both at the strategy underlying my right honourable friend's Budget and also the detailed proposals that he put forward last week. It is true, as the noble Lord says, that the battle against inflation lies at the heart of the Budget strategy, and we are grateful to him for his support in this matter.
One only has to cast one's mind hack to the winter of 1978–79 to see the appalling evils that inflation produces in our society: industrial strife and disruption; falling output; soaring imports; excessive wage demands, which were bound to store up trouble for the future; and the disgrace of hospital supplies disrupted, schools closed and the dead unburied. These were the fruits of an inflationary society. Not even the Labour Government who were then in power sought to defend such a situation.
Our first task therefore—and it remains the pre-eminent task—is to strike at the roots of this inflation. Only if we can destroy inflation can we stop it destroying us. Only in this way can we restore cohesion and peace in our society, reduce industrial disruption, restore the old-fashioned but enduring qualities of enterprise, initiative and self-reliance and thus pave the way for higher output and ultimately a higher standard of living for all of our people. I have never attempted to disguise the fact that the maladies from which we suffer entail a difficult and painful cure. In speaking in the debate in your Lordships' House on 13th February, I said that the road we needed to travel was a hard and stony one.
If, as is manifestly the case, our problems flow in such large measure from inflation, then it is inflation that we must first and foremost deal with. As with so many problems, the effects are plain for all to see: the causes are not so obvious and are often shrouded in mystery. For this reason, it is natural that people should clamour for the effects to be dealt with, for
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that is what they see. It is all too easy for politicians to bow to this clamour for they then appear to be taking action, and action which people understand. This is the origin of demands for prices and incomes policies; for control over dividends; for limitation of profits; for import controls; for industrial strategies and national plans. All have been tried and all have failed.
We believe that the right course is to seek out the causes of the problem and to tackle it at source. The trouble with economists is not so much that they differ from one another—if they did not what sport would there be for the rest of mankind? The difficulty is that they succeed in presenting perfectly simple ideas in a form which baffles comprehension by the ordinary man. Most people would accept it as self-evident that if the total of goods and services available to be bought remained constant, and we were all suddenly endowed with twice the number of pound notes we had before, then if we leave on one side the people who would bury their pound notes in the ground or use them to light their cigars, the effect of this dramatic increase in the number of pound notes would be to drive prices up; and, ultimately, one would expect prices to double in the same way as the number of pound notes had doubled. It is only by applying such erudite terms as monetarism to this simple proposition that economists succeed in disguising from people that they are only being asked to believe that if twice one is two, then twice two is four.
Of course, in the modern world the situation is complex with all the problems of paper money, credit creation through the banks and so on. There are problems in deciding on an appropriate measure of the money supply—indeed, different countries use different measures. Equally, there are problems in exercising control, particularly in the shorter term, as the fact of publication of the consultative document on monetary control indicates. But these are problems of financial engineering; they have no bearing on the validity of the principles involved.
It is because the money supply is the critical factor in determining the level of inflation that it is crucial both to set monetary targets and ensure that the money supply is kept within the specified range. When we came into office the

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money supply, measured in terms of sterling M3, was growing at a rate of about 14 per cent. per annum—well above the target range set by the previous Government. The money supply continued to grow at that rate for a period of four months after the June Budget last year; but in the following four months, assisted by measures taken in the June Budget itself and by the further measures taken in November, the rate of growth fell to an annual rate of 10 per cent.
There is a wide range of measures of money supply other than sterling M3. Currently all these other measures are showing a lower rate of growth and the narrow measure, M1, has actually shown a fall over the last four months. So far as the coming year is concerned, the target range for the period to mid-April 1981 has been set at 7–11 per cent.; as the intention is to bring sterling M3 down to the centre of that range. This itself involves a further substantial slow-down in the underlying rate of monetary growth.
Setting monetary targets is not, of course, the end of the matter. It is essential to ensure that they are observed and this in turn means that every effort must be made to ensure that the targets do not come under excessive strain. The one area—and indeed the only area—that the Government can directly control are their own operations and therefore their own expenditure. The money the Government need to borrow—the public sector borrowing requirement—is the measure of the demand the Government themselves impose on the money supply. And it has been the excessive level of the PSBR which contributed so much in recent years to an excessive rate of growth in the money supply and hence in the rate of inflation.
The central part of the Budget strategy. therefore, is to bring down the PSBR. This coming year it will be reduced to below 4 per cent. of the GDP—about the same figure as in 1977–78 when, all too briefly, the IMF succeeded in imposing a measure of discipline on the Labour Government. Long term, the PSBR must come down further: but the reduction from 51/2 per cent. in the last year of the Labour Government's life, to 43/4 per cent. in the year just ended and now to less than 4 per cent. this coming year is a good start.
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The noble Lord, Lord Byers, attacked the figure of £8 billion on two grounds: first, he said that there was a potential margin of error in the figures, and, secondly, he said the figure might well and properly have been set higher. Obviously, so far as the first point is concerned, all estimates or forecasts have a margin of error in them, but that margin can go just as well one way as the other, and that argument would point just as firmly to taking the lower figure as to taking a higher one. So far as his second point is concerned, I noted with pleasure that he applauded the Government's efforts by way of publishing medium-term financial targets. Those financial targets indicate that we propose over this period of years reducing the PSBR from just over the £9 billion that it was last year to a figure of.£21/2 billion in 1983–84. If you want to reduce the PSBR, you do not start by putting it up. What you do is to bring it down, and that is what the Government propose doing.
So much for the part the Government can and will play. But a very heavy responsibility rests upon the private sector too—and this does not just mean management; it means workers as well. Excessive pay settlements—and both sides of industry must shoulder responsibility for this mean that companies need more money to finance their activities. With firm control over the money supply this drives rates of interest up so that when employers complain about high interest rates they need to recognise their own responsibility in this matter. Equally, when union leaders complain about high interest rates they need to recognise their responsibility too.
The effect of high interest rates is that some companies will be unable to finance their activities at the inflated level of pay settlements they have agreed or which have been forced upon them by union negotiators. The result must be a fall in the level of activity, a fall in the level of employment and, at the extreme, insolvency for the company and redundancy for the worker. This is a simple matter of cause and effect; and no amount of rhetoric can alter it. Water does not flow uphill and no amount of talking, no fiery speeches, no demonstrations—not even strikes—will ever make it.
When the noble Lord, Lord WellsPestell, refers to certain people, accusing

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the Government of creating unemployment —a charge which is totally and completely untrue—I would remind him of the responsibility that rests upon the shoulders of union negotiators, because if, in fact, they secure settlements which are in excess of what the companies concerned can afford, what they are really doing is negotiating unemployment for their members. This is one of the major sources of the present level of unemployment.
It is not surprising that in the difficulties we face many people like the noble Lord, Lord Byers, turn to incomes policies. Essentially their argument is this: if, they say, people insist on behaving in a stupid and self-destructive fashion, then we must make them behave reasonably: if they cannot see the light themselves, we must make them see the light. Experience, however, shows that such an approach does not achieve a fundamental or lasting change in attitudes. So long as the curbs remain, resentment builds up and when the curbs are lifted the pent-up waters surge over the dam or, if the curbs are not lifted in time, the pressure of water bursts the dam, as happened in the dark winter of the dying days of the Labour Government. The rising prices from which we are suffering now are a reflection, to a considerable degree, of the pent-up wage demands which followed the breakdown of Labour policy. There are, of course, other prices to be paid for incomes policies in terms of rigidity and lack of flexibility in the economy.
We have tried repeatedly in this country to work incomes policies. We have tried innumerable variants. Some of them which the noble Lord himself is now suggesting are very reminiscent of what happened in 1962 with Neddy, which was set up as a body on which the three sides could meet and which would educate people as to the effect of the economy. We had of course the experience of the Prices and Incomes Board, and indeed I think it is fair to say that no country could have struggled more valiantly than we have to make such policies a success. But the simple truth is that we did not succeed, and the conclusion which must be drawn is that such policies cannot be made to succeed.
There is a specific point which the noble Lord, Lord Byers, raised, in con-
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nection with the restriction of unemployment pay in the case of people who are over the age of 60 retiring on occupational pensions. As the noble Lord himself indicated, the restriction applies only to the excess of the pension over £35 a week. This means that a person in this position with an occupational pension will still be £35 a week better off than a person without such a pension, even taking into account the gradual withdrawal of the unemployment benefit. There could not, therefore, be a disincentive to people to enter occupational pension schemes. I am happy to confirm that a pensioner who registers for unemployment can still claim credit to preserve future benefit entitlement, even though the new restrictions would prevent him from receiving unemployment benefit.
I have been talking so far about the overall strategy of the Budget. Within this overall strategy, the Budget has two major objectives, First, it sets out to help industry, to free the economy and to remove distortions; in short, to further our policy of encouraging the supply side of the economy. Secondly, within the limited resources available, it has given priority to the poor, to the needy and to families.
I start with the economy and with industry. We have since coming into office taken many important steps to free the economy and to remove distortions, and the Budget takes us further along this road. There are two particularly damaging distortions which we propose dealing with. First, there is the level of payments which strikers have been able to claim from public funds. There may be a democratic right to strike. There is no democratic right to expect the victims of your strike to pay you for going on strike. We propose dealing with that. The present situation is one which the public have rightly resented. Secondly, we propose dealing with the freedom from tax of unemployment and sickness benefit, when the fruits of working have always been taxed.
While there is no room this year for reducing the general level of taxation, we propose a large number of measures to help the smaller businesses, and I am glad that these were welcomed by the noble Lord, Lord Byers. I will refer to a few of them: tax reliefs and other relaxations to help the new enterprise zones; special

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reliefs for the new factory workshop schemes; a reduction in the rate of corporation tax on small businesses; the ending of apportionment of trading income for close companies; relief for the cost of raising loan finance; the removal of tax obstacles to demergers; reliefs to encourage investment in small companies through the venture capital scheme; and reliefs to encourage and improve share option schemes and profit-sharing schemes.
We have also been able to provide special relief for those companies whose stocks have been drastically reduced by the steel strike or other special causes, who would otherwise have had to face a "claw back" of stock relief given in previous years. This is no negligible relief; it will cost the Exchequer £210 million this year and £125 million next year—a total of £335 million. And, of course, what the Exchequer loses industry gains, so that industry will be better off to the extent of £335 million as a result of this new relief.
We have not, however, been able to provide any general relief for industry. We realise that the finances of industry are under considerable pressure, but, in part at any rate, this is due to excessive wage settlements and the remedy here rests in industry's own hands. But there is another reason why we cannot do more this year. Further tax relief reductions would simply increase the public sector borrowing requirement and that would drive interest rates up further. We recognise that the present level of interest rates is a severe burden for industry, and the best service we can do for industry is to ensure that interest rates come down. That means reducing, not increasing, the public sector borrowing requirement, and that is what our policies are designed to do and will do.
The changes which we have been able to make in the capital taxes are also slanted in the direction of encouraging initiative and enterprise. The increase in the exemption limit for the capital transfer tax to £50,000, the new"rollover"relief which avoids a double charge to capital gains tax and capital transfer tax when a business or other property is transferred by way of gift, the new £3,000 capital gains tax exemption—and I am interested that the noble Lord, Lord Byers, thought that the figure should be
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higher, although I sense that the noble Lord, Lord Wells-Pestell, thought it should be lower—are all designed to help the small business which has often suffered greatly from these taxes, although of course they will help other people as well.
Before I leave the question of the economy, I would say this: Governments cannot run industry; they have neither the knowledge, the experience nor the expertise to do so. What is required is the minimum degree of intervention by Government, not the maximum. Industry must be left free to create wealth and he given the encouragement and the incentive to do so. But this freedom carries responsibility with it. The leaders of industry must accept that it is not just their freedom but their responsibility to create the wealth on which the future of the country, and our hopes for a rising standard of living, must depend. There have been many debates in your Lordships' House on the need to increase output, to reduce costs, to improve productivity and to improve labour relations. The message which has gone out from those debates is of even greater relevance today.
I will now turn to the social side of the Budget. We simply cannot, in a year as difficult as this, protect everybody from the results of inflation. But within what resources are available the Budget, together with the other measures taken by the Government, has set out to protect the position of the poor and the needy, and families in particular. In the case of the income tax, where we simply could not afford full indexation for everybody, we have nevertheless been able to increase the thresholds in line with prices, and this has kept the poorest out of the tax net. Tax reductions for the married are larger than those for single people. For one-parent families, the threshold goes up in line with the threshold for two-parent families.
There has been an improvement in FIS in real terms; the average payment is up by no less than one-third. Child benefit is being increased to £4.75 a week per child. This goes to all families with children, and will be of particular help to those not in receipt pf social security benefits. The additional payments to single-parent families is going up by 50p to £3 a week. The rates of supple-

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mentary benefit are being increased in line with the expected rise in prices, so that they are fully price protected. Additional help is being given to FIS recipients and to those on supplementary benefit with children under five who are faced with rising fuel costs. This will be an automatic entitlement of £1.40 a week, equal to £72.80 a year, and it covers all fuels.
There are two other areas where, in a difficult year, we have nevertheless been able to make progress. They are charities and the national heritage. We wish to encourage people to help others and nowhere is this more important than in the field of charities. The Budget contains a number of proposals to help charities. The exemption from CTT for charitable gifts, for example, is doubled to £200,000; the period for deeds of covenants is reduced from the familiar seven years to four years; and relief for higher rate tax will be available within a ceiling of £3,000 a year. All these changes should provide a valuable stimulus to charitable giving, and I am sure they will be welcomed on all sides of your Lordships' House.
Concern for the national heritage is also one of the things that transcends party boundaries. There is an important and indispensable place for museums and art galleries. But the great virtue of the British national heritage is that it is a living heritage. People should be able to see great houses as essentially dwelling places, with the living breath of people still in them, not as cold and dusty museum pieces. It is for this reason that we have greatly improved the provisions which will enable the owners of such houses to set up maintenance funds for their preservation and support, and we have extended the ambit of these maintenance funds. Public access is, of course, a necessary condition of these tax reliefs, and this represents a reasonable and well-accepted bargain between the owners of the property, who have of course to shoulder the burden of maintenance, and the public at large.
This Budget is the second step along a road which will take us from the failure of the 'seventies to the new hope of the 'eighties. The policy of the previous Government was one of gritting their
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teeth, shutting their eyes and hoping that North Sea oil would rescue them from disaster. North Sea oil has come. It has not solved our problems, and by itself it will not and cannot do so. The onus rests upon the Government to provide the right monetary, fiscal and financial environment, and to go on doing so. That responsibility we have shouldered and will continue to shoulder. It is the responsibility of the Government, too, to pro'ide the conditions under which individuals can give of their best: where there is encouragement and reward for work, for promotion, for enterprise, where industry can prosper and grow, can become more efficient and in the process create more wealth for the nation and more employment for the people. And having created these conditions, it is for the Government to step aside and leave the people free to get on with the job. We have already taken the first steps along that path. We need to take many more and, as time and opportunity offer, we shall do so.
Lord BLEASE: My Lords, before the Minister sits down, would he not agree that his reference to the wage-bargaining role of trade union officials was partisan and narrow? Would he not also agree that wage bargaining can be positive and dynamic and that it can contribute to pushing forward the frontiers of productive investment, technological innovation and real wealth creation?
Lord COCKFIELD: No, my Lords, I do not agree with the noble Lord. I have made it abundantly clear that excessive wage settlements can have only one result: to reduce the level of activity and thereby to reduce the level of employment. This is one of the facts of life that union negotiators, and employers as well, need to keep continually in mind.
4.16 p.m.
Lord DAVIES of LEEK: My Lords, I am sure that the whole House listened with pleasure—and sometimes not—to the noble Lord who has just spoken. Nevertheless, at the end of his speech he, too, got into the realms of poetry; I thought he was ending with a sonnet. He was telling us what the Government were going to do. At first during the debate we were told the Government were not going to touch

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industry, but the policies the noble Lord has mentioned have to be put across to industry and must influence it. All intelligent men and women will agree that by rioting, shouting or screaming about the situaton we cannot change what is happening in society and in the world.
The noble Lord's own Government, despite accusing the Labour Government of depending on oil, must well remember that after they came to power after the general election the balance of payments showed a deficit of £3,300 million after benefiting to the extent of £6,900 million from North Sea oil and gas. It is no good pointing at the Labour Government over the treasure of North Sea oil and gas. North Sea oil and gas saved the present Conservative Government from a major catastrophe during this last period. Some of us on both sides of the House have been saying that more interest should be taken in another side of industry—in invisible exports like insurance, shipping and tourism. The question is: What has this Budget done about that?
I am not going to accuse the Government of being dishonest, but I am going to accuse them of being misdirected in their theory of monetarism. There are scholars and journalists of financial standing who decry monetarism. One must not worship at the shrine of monetarism and hope to escape. To be fair to the previous Conservative Prime Minister, Mr. Heath, he gave all the incentives possible to British industry to invest, and he himself decried the fact that British industry, having been given the opportunity by a Conservative Government, which should have encouraged investment at home, did not invest at home. This is the real fact, no matter how quietly, and sometimes in a funereal fashion, the noble Lord, Lord Cockfield, spoke. He must recognise that his was one of the most one-sided speeches that has been made so far today. Naturally he would do so because he was put there to do it.
Imports of manufactured goods rose by 18 per cent. during this period. The annual rate of inflation has doubled since the Conservatives came to power. It rose from 8·4 per cent. to 17·2 per cent in December 1979. These are statistics from the Government's own sources. I want to put those facts on the record. I am not going to speak for too long—I shall try
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to finish in 10 or 15 minutes—but it is an important subject that needs to be tackled.
First, this Budget was the most leaked Budget of the century. Before the Budget came out, I knew all about it by reading the financial columns of the Financial Times and the Observer. If security is so sure inside the Cabinet, I want to know why it was that financial journalists, and the best newspapers, were able to give the most accurate forecast of a Budget that I have listened to during 36 or 37 years in Parliament.
Let us not bother about all the television discussions about Friedman. They tried to deal with cowboy territory in which there were no rearmament and no nuclear bombs being produced at a cost of billions of pounds. They tried to put this philosophy to a sophisticated society as though monetarism was the answer. It was stupid to attempt such an exercise. We live in the real world, not cowboy territory. Let us examine the subject of monetarism. An increase in the quantity of money, although not the sole cause of inflation, is a necessary condition of it. When the quantity of money is prevented from growing as rapidly as price rises, credit becomes progressively tighter. That is axiomatic. Stock Exchange prices fell and industrialists reduced the rate of investment in modern plant and equipment partly because they see recession deepening on the horizon around them. I do not think anybody can contradict that.
I contend—and there is academic scholarship and much journalistic opinion to support this point of view—that the link between the size of the public sector borrowing requirement and the behaviour of the quantity of money is very erratic. I should like the opinion of the noble Lord, Lord Cockfield, on this point, because he speaks with great erudition. If he does not tell me in the House, perhaps he will tell me around the corner afterwards.
That brings me to the point made by the noble Lord, Lord Byers, about inaccurate Treasury forecasts. The Treasury would not accept that this relationship was erratic, and call in aid algebraic convolutions and calculus to arrive at so-called mathematical precision, without allowing for the effect of the Kingdom of Heaven and the things they cannot control. This point is put beautifully by Schumacher:

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"In the vast modern towns the urban dweller is more isolated than his ancestors were in the countryside. The city man in a modern metropolis has reached a degree of anonymity, social atomisation and spiritual isolation that is virtually unprecedented in human history".
I am seeking to make the point that the growth of bureaucracy in modern society is a danger to the evolution of economic theory and to the evolution of good living. I once heard Nye Bevan say that bureaucrats have a tendency to move people around as though they are dealing with bits of paper. He was right, and we must get rid of that attitude.
Let us consider growth and the quantity of money, which relates to another fundamental point made by the noble Lord, Lord Cockfield. Such growth depends on the size of the balance of payments deficit on current account, and this determines the extent to which foreigners are prepared to finance. I consider that to be an accurate appraisal. I wish to ask what the present Budget has done to that factor and the borrowing requirement. This depends on the desire in the private sector for gilt-edged securities and on the joint policy of the Government. Perhaps the Minister will explain what he feels gilt-edged securities will do in this coming period.
Modern methods of control by the banks and the banking system, the financing of borrowing requirements by the banks, can be largely instrumental in enabling the expansion of credit to be greater than it should be. The Government in their present difficulties should have penetrated into the coffers of bank profits. Some of those profits could have subsidised the cuts which have been made in children's education. If this nation wants to be great in the future in this electronic world, the world of automation, our children must understand the kind of world in which we live. However, they will no longer be able, in the numbers we require, to enter the sixth form colleges and to benefit from the type of education provided by the polytechnics and the technical colleges. The money could have been obtained to subsidise that quite legitimately from some of the banking profits— and it would not be robbery.
The Chancellor of the Exchequer has deliberately resorted— and he has done so on advice because he is not a wicked
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human being; he has done so because he knows no other way—to the creation of a slump. We appear to be able to provide full employment only if we re-arm or if we prepare for war or are at war. Many of us remember 1938. Many of us lived through the miseries in Wales when the population faced massive unemployment. We saw eyes brighter and smiles broader on the faces of Welsh housewives when work was created, because every day the nation was getting nearer to war. Judging by what is being said in the Press and the speeches which are often made, mankind once again is working towards the recrudescence of the cold war. We follow behind the United States presidential elections like a lot of scared rabbits, instead of making our own decisions. All these factors influence the economy.
Perhaps I may beg your Lordships indulgence to take another five minutes. A reserve army of unemployed suited the old economics. We must shake ourselves out of that attitude. Both sides of the House must get together to try to shake ourselves out of it.
Let us examine the swingeing petrol taxes imposed by the Budget. I do not believe the policy has been thought through. I do not think anybody sat down and thought, "What will be the effect of this massive increase in petrol prices? Let me tell your Lordships. I do not know whether those who are in the business will agree, but I believe that the result of the petrol taxes will in the long run undermine the Government's proposals to help small businesses. Furthermore, the 15 per cent. VAT is wicked tax, which is slowly destroying the British theatre. If one asks, "Why talk about the British theatre in a Budget debate? ", let me tell the uninitiated the answer. British tourism earns more money than the export of our motor cars. We are making London the biggest rip-off in civilisation. For example, in our hotels one can pay £ 5.20 for a melon and £13.50 for salmon. Not all the visitors who come to this country are millionaires. We want ordinary people to see the decent way of British life. It is time that London hoteliers pulled their socks up and stopped being so greedy.
What has the Budget done? It has destroyed the British theatre in which my granddaughter was daft enough to

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join Equity and go on the stage. God knows! I think she has had 12 weeks' work up to now. What is the result? We have 15 per cent. VAT; and for any visitors coming over here the British stage and the theatre, which is the finest in the world, will be undermined and ruined by this VAT. Was there any discussion with Equity before the Government put the 15 per cent. charge on the British theatre? It may sound a small point but I think I am accurate in saying that tourism in Britain is one of the biggest dollar and other foreign currency earners that we have. Surely those who drafted the Budget should have thought about that in the transition period.
One other point. The truth is that the Budget, too, is undermining the great bonanza markets—the hypermarkets of Britain. In 1974 there were 77 superstores in England and Wales. The Co-op. had nine of them and a little later it was about 20 per cent. The superstores were on the fringes of towns and in Caerphilly the first one—Carefour—was built on cheap land. At the weekend the whole valley—and it was true of the Rhymney Valley and other valleys—erupted, with little cars running down to the supermarket which could give cheaper prices. What is going to happen as a result of the petrol increase? The hypermarkets and the big stores are already feeling the draught, and only the other day in Merseyside one was closed down.
Car-borne shopping from the supermarkets has been a great social phenomenon. At one time every weekend the whole of the Welsh valleys seemed to be motoring down the narrow roads towards Caerphilly to the great hypermarket. These hypermarkets have opened on the edges of big cities, on cheap land and are able to sell goods in some cases 10 or 17 per cent. cheaper. But of course the attractiveness of car-borne shopping wanes as petrol prices increase. Superstores are no longer the money spinners they were. Some of these are still small businesses and they are not encouraged.
There are high interest rates and high local rates, and although the noble Lord spoke about high wages no mention was made of the influence of local government on the housewife. I have just paid my water and sewerage rates for a garage
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which has no sewerage in it at all, and it is about four times higher than it has ever been before. What about the ordinary families and the cottages and the houses which people are buying at 17 per cent. mortgage rates through building societies? All this is of vital importance. This nation of shopkeepers will end up as a nation of shoplifters, and there will be riots unless we can do something about it.
The Chancellor framed his Budget to help the City. As I said at the beginning of my speech, I wish that we gave more consideration to the brilliant work that is done in our offices in London by people who deal in invisible exports—shipping and insurance. I want to make an appeal. The noble Lord, Lord Shackleton, sent me a note about the world commodity centre when we had a short debate the other night. Despite all the difficulties, I hope that the Conservative Government will sincerely look in depth into the problem of setting up here in London a world commodity centre. I have spoken for 17 minutes and I think that is long enough.
4.34 p.m.
Lord THORN EYCROFT: My Lords, I think the House is indebted to the noble Lord, Lord Byers, for initiating this debate, and it is certainly indebted to the noble Lord, Lord Cockfield, for an eloquent and penetrating speech about some of our problems, to which I think the whole House listened with deep respect and enjoyment. The noble Lord, Lord Davies of Leek, asked me why the Budget appeared in the Observer newspaper. If I could answer him, naturally I would, because it would be a matter of courtesy in this House to reply where one can, but I do not know. Like Mr. Harold Macmillan, I was brought up in an age where the pound floated and before Cabinets started to leak, so it was not done in those days. I am hound to say that I found it rather helpful. So I make no complaint, and I do not think the noble Lord did either.
I think the noble Lord, Lord Davies of Leek, would agree with me that this Budget is original at least in one sense, that it was actually a Budget. That is to say, it dealt with both income and expenditure, and it is a very rare thing to find a Government actually dealing with income and expenditure in the same speech. I was

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delighted that in his Motion the noble Lord, Lord Byers, coupled these two matters together. Indeed, if one wants to go to the kernel of the Budget it seems to me that Cmnd. 7841, the expenditure paper, at paragraph 10 on page 5, deals with it most succinctly. If the House will forgive me I will read just a few lines:
"The Government is determined not merely to halt the growth of public expenditure but progressively to reduce it. The reduction achieved in 1980–81 is only the beginning of a trend which provides for a level of public expenditure in 1983–84 about 4 per cent. lower than the expected out-turn in 1979–80…expenditure in 1982–83…will be 11·5 per cent. (nearly £9 billion in 1979 survey prices) "—
that is constant prices"—
"lower than planned by the previous Governmerit".
I think that really goes to the very root of what the Government are about. If you like your liquor straight, they will tell you that the growth in money supply sterling measured in percentage M3 will be 6 per cent. in 1983–84 compared with the much higher figure today. Personally, I prefer the rather cruder housekeeping language of the noble Lord, Lord Cock-field, in this. The fact is that very substantial steps to reduce expenditure, marking a really sharp change in national policy, have been introduced in this policy today, and however one may express it, these changes are, I think, brave, dramatic, controversial, painful and right. The background is a debt which is estimated at £4,500 per household in this country. The interest payable on that debt is more than we pay in housing, more than we pay for all the defences in this country. Between 1974 and 1979 we were paying more in interest on our debts than we were in pensions to the people of this nation. If the policies outlined by the noble Lord, Lord Cockfield, are implemented in 1983–84, that position will be reversed and we shall be spending more on pensions to the elderly in this country than we are paying in interest on our debts.
What then is the strategic object of the Budget? I am not going to talk about the detail; I am only concerned with the strategy, and I do not want to make a long speech. I think the noble Lord, Lord Cockfield, put his finger on it. It is an attempt to reduce and to curtail inflation, for inflation degrades society. It shakes the confidence of the investor; it erodes savings; it discourages thrift; it sucks
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in imports; it cuts deep into the social services of this country; it encourages powerful unions to abuse their privileges and their immunities under great pressure in the circumstances in which inflation puts them; it sacrifices jobs. Inflation is an evil thing in society. It is more than an economic thing; it is something that goes to the roots of the way people live in society together.
I am not concerned to argue technically about inflation; there are others better qualified than I to do that. But I would say that inflation is concerned, however you look at it, with the amount of money that is going about and the amount of goods that are available. A policy to deal with inflation must inevitably be a policy which has something to do with spending less and producing more, and in very simple terms that is the basis of the Government strategy. The object of this Budget is to spend less, and there is considerable uproar when you spend less. Everybody will agree in general principle that you should spend less, but when you come down to the detail you are bound to be under very powerful attack for every individual item you put forward.
An object of the Budget is to cut the public sector borrowing requirement. It is all very well saying, "Do not be pedantic about it; it is capable of misjudgement in estimating what it is going to be ". All that I accept, but to say that the public sector borrowing requirement is irrelevant in some way to inflation is, I think a proposition that nobody who thought about it very seriously would put forward. Another is to reduce interest rates, for the interest rates, as noble Lords on all sides have said, are the most punishing burden on any man starting up or expanding in a business. And, above all, to encourage production. These things cannot be done overnight. What we are dealing with is a trend which has been going on for more time than that of the last Government: it has been going on in this country for ten or fifteen years. I would not hesitate to say that many men, perhaps many Members of your Lordships' House, have made a notable contribution to the general way all that has gone. It is not something sudden; it is a long-term deep-seated growth. The idea that you can take a situation of that kind with all the graphs running

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against you and suddenly get them all running the other way in a matter of months is an illusion.
So as we move forward there will be some who howl that we should go faster. We are under great pressure at the moment to go faster on what is called the Employment Bill, dealing with the unions, and may I say that the pressure to go faster is not coming just from old-fashioned Conservative voters; a great deal of that pressure is coming from trade union members themselves. When you see what the steel workers have suffered recently without ever being asked whether they wanted to engage in it, one can see that they would like in some way or another to see the Government move faster. Well, we are under pressure there to go faster. Others urge us to go slower. They say that we are too impetuous in cutting back expenditure, that we should go more cautiously, less abruptly, less fast in trying to switch from direct to indirect taxation, and encourage incentives and all the rest. I do not blame the Government for any of these things. It would be impossible to go down this road except under constant attack from both directions. For my own part, I must say I compliment the Government. I compliment the Prime Minister and the Chancellor of the Exchequer in particular for the courage and the caution with which they advance along what is, I know, one of the most dangerous and difficult roads any Government could choose.
There are three strands to the policy. The first is the cutting of spending. May I say I am delighted to see increasingly entering into that debate the cutting of numbers too, because you really do not cut spending effectively unless you can reduce the massive overhead which has been built up in both central and local government. I increasingly see the pressure that is being brought to bear to try to cut down the numbers. It does not mean massive redundancies. It does mean that central Government departments and local authorities should refrain from seeking to re-employ new people for everyone that disappears. If they would only do that over a not very long space of time that would make a quite remarkable difference.
Another strand of the policy is to remove the disincentives to production. Thus the
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reductions in the last Budget in direct taxation, rather criticised by the noble Lord, Lord Wells-Pestell, are nevertheless I think right. And may I say they were not limited just to the rich; many thousands of skilled workers benefited. Many thousands of skilled workers have got to go on benefiting if we are going to get production and incentives really going—I think of the capital gains tax, and dealing with the powers, the privileges and the immunities in the unions.
We have just seen the unhappy event of a national steel strike. May I say that when we talk about it we should do so with restraint and some compassion and understanding for the men who work in the steel industry. Indeed, that industry has a proud record. Some of your Lordships will remember Lord Douglass, for many years an honoured Member of this House, a very great leader of the steel unions. All our hopes are that after this the good relations which have always existed in that industry will build up again, and management and the unions will go forward with the immensely difficult task they have to re-establish that industry. So there is creation of opportunities.
The noble Lord, Lord Cockfield, gave a list of the inducements and help being given. I would only mention one, advance factories. I was up in North-East Lancashire the other day and every advance factory that falls vacant today is snapped up at once. So do not let anybody say there are not new things growing in this country; new things are growing. They will take time to develop. There are great difficulties in front of everybody: there are great difficulties in front of small business. But there is quite a good package, referred to in what Lord Cock-field said to us today, of help and incentives to small people starting up and beginning to employ people again and build up the economy of some of these areas which are desperately in need of it.
So, as I say, these are the main strands. But the main theme must be the pulling back of inflation, the balancing of the economy, the increase in wealth. I want to say only this in conclusion. I do not see any alternative to what the Government are doing. There is the alternative which has been tried—and, if I instance the last Labour Government, I have already indicated that they are not the only

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people to have tried it; they were spending much too much. Mr. Healey now says that he wants to increase the public sector borrowing requirement by another £2 billion.
I do not think that anyone could believe that increasing the public sector borrowing requirement by £2 billion, with all the increased debt that it envisages and the interest payments that would have to be made—and rates of interest will inevitably go up the more we borrow—can be an answer. There are other answers, and some of them are not to be dismissed too readily. There is Mr. Helfer and Mr. Wedgwood Benn. I see that the noble Lord, Lord Davies of Leek, is smiling at me. However, let me say that there is a type of wild logic, at any rate in the policies that they pursue and for which they argue, in the kind of corporate system that they seek. They deal with wages because Mr. Benn fixes the wages; they deal with prices because they would fix the prices; and they determine the imports because they keep imports out. As my noble friend Lord Cockfield has said, they deal with all the symptoms of inflation without ever touching the causes.
However, those are the alternatives on offer. I do not think that either of them, or—with great respect to those who want a centralist position—anything in between them, will really provide any very useful solution to our problems. Therefore, I commend the Budget. I commend the men and women who have the courage, caution and good sense to put it forward. It will not solve all of our problems, but it may create a framework in which we can, together, fight our way out of some of our difficulties.
4.52 p.m.
Lord MONSON: My Lords, first let me apologise to the noble Lord, Lord Byers, to the noble Lord, Lord Cockfield, and to the House for the fact that I shall, unfortunately, have to leave before the end of this debate because of a very longstanding engagement. Because of the constraints of time, and in view of the very long list of speakers, I shall take the opposite course to that of the noble Lord, Lord Thorneycroft. I do not intend to deal with the Budget strategy, although I do have my own views on that. Instead, I should like to comment upon some of the
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Chancellor's tactics. The first—and here I should like to take up what the noble Lord, Lord Byers, said—is the abolition of the reduced rate band of income tax. Obviously where there is a standard rate of 30 per cent., a reduced rate only slightly lower at 25 per cent. is a nonsense. The answer is surely not to revise the reduced rate upwards so as to amalgamate it with a standard rate, but to revise it downwards.
As I pointed out in a letter published in The Times three weeks ago, and as the Liberal Front Bench spokesman pointed out in the Commons last Thursday, no other industrialised country has a starting rate of tax as high as 30 per cent. or indeed as high as 25 per cent. The average is under 20 per cent. and in France. for example, it is only 5 per cent. If the reduced rate in this country had been lowered to 20 per cent., and if at the same time this band had been narrowed to the first £400 of taxable income, as opposed to the first £750 that applied up until the end of last month, the Exchequer would have been only £54 million worse off as a result, in a full year. Had an extra 5p tax been put on to a packet of 20 cigarettes, not only would that £54 million have been covered, and more than covered, but enough extra revenue would have been generated to enable the child allowance to be lifted from the £4.75 proposed in the Budget to £5 a week. I shall return to the subject of child allowance in a moment.
However, let me revert to the question of reduced rate bands. It is noteworthy that they are nothing new in this country. Indeed, a few years ago there were no fewer than three reduced rate bands. Tax started at Is. 9d.—that is to say 8.75 per cent.—on the first £60 of taxable income. The next £150 was taxed at 21.25 per cent. A further £150 was taxed at 31.25 per cent. and the balance was taxed at 38.75 per cent.—in other words 7s. 9d. in the pound. The interesting point is that that state of affairs prevailed at the beginning of the 1960s, when the Conservative Party was very firmly in the saddle. So obviously there is no inherent incompatibility between reduced rates of income tax and Conservative beliefs.
The second matter that I want to deal with is capital gains tax, where I think too much has been done for the speculator,

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and far too little has been done for the serious medium- and long-term investor. I do not see how the more favourable tax treatment accorded to traded options in the Budget will help the regeneration of British industry. Against that, a failure to distinguish between short and longterm gains, or alternatively to introduce indexation or tapering, is a serious blow to the long-term investor. The noble Lord, Lord Cockfield, was kind enough to reply at some length to a letter that I had written him on the subject and in doing so he pointed out the administrative expense inherent in trying to make this form of capital taxation rather less rough and ready, and more fair. None the less, upon further reflection I still think that the answer is to introduce indexation, and to cover the higher administrative costs by raising the rate from 30 per cent. to 40 per cent. I do not suppose that many of us, whether as individuals or trustees, would object to paying 40 per cent. tax on a genuine gain, provided we did not have to pay 30 per cent. on a paper gain that might, in real terms, he no gain at all, or even a loss.
Thirdly, I should like to deal with stamp duty on house purchase. I am not too concerned about the apparent meagreness of the concessions here, because I suspect that the law of supply and demand would have ensured that larger concessions overall might well have led to even higher house prices, thereby cancelling out most or all of the benefits of such concessions. However, merely to raise the existing thresholds—as the Government have done —perpetuates some of the existing injustices and anomalies. Let us take the case, for example, of two families buying almost identical houses on the same estate. The first family pays £35.000 for its house and the second family, by virtue perhaps of having specified a few additional kitchen fitments, pays £35,100. Family No. 1 will pay £525 in stamp duty, under the Government's proposals; and family No. 2 will pay no less than £702. In other words, the additional £100 purchase price attracts an effective tax of 177 per cent.
Anomalies like that could be remedied if stamp duty were levied at, for instance, 2·5 per cent. only on that part of the purchase consideration which exceeds a
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figure in the region of £20,000. The noble Lord, Lord Cockfield, was kind enough to let me know that in such an event the precise figure above which duty would have to be levied in order that the same amount of tax should come into the revenue, would be £17,000. That would mean that most, although by no means all, of those paying less than £25,000 for their houses, would pay just a little hit more in stamp duty. Those paying between £25,000 and £85,000 for the houses would pay less; and all those paying from £85,000 upwards would pay more. Meanwhile, the progression would be a much smoother one and there would be no anomalies or inadvertent injustices. I urge the Government to look seriously upon some such scheme the next time round.
I now turn to the proposal mentioned in particular by the noble Lord, Lord Wells-Pestell, to relieve taxpayers of part of the burden of subsidising those who decide to come out on strike. This is something that I can support unreservedly as I have often pointed out that Britain is the only country in the world to act in this Alice-in-Wonderland fashion, not excluding the Socialist-orientated Scandinavian countries. In those countries loans are made to strikers, certainly: but gifts, no. This is really an issue that should be evaluated in a calm and rational way. I sometimes think that those who become so hot under the collar about proposals of this nature—not so much in this House as in the other place—are really mentally living in the Victorian era. In those days, men, of course, did come out on strike in order to be able to buy clogs for their children, instead of their children going around with bare feet. If that were still the case today, obviously we should take a very different attitude towards this proposal. But nowadays people are far more likely to come out on strike in order to try to raise the money to replace a 21-inch colour television set with a 23-inch colour television set. Of course they have every right to withdraw their labour; of course they have every right to come on strike. But they should not expect the other taxpayers to support them financially while they do so.
There is also the national interest to consider. I never expect people to behave in a way contrary to their own economic

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self-interest, except perhaps in time of war. It is perfectly understandable that, if people are paid almost as much for coming out on strike as for staying at work, they will be all the more inclined to be ready to strike at the drop of a hat. This may make perfect sense from the striker's point of view, but it does not make sense from the point of view of the country's economic recovery, and, therefore, I do not see why the country should go out of its way to support it.
On the other hand, I am entirely with those who are complaining—not only from the Labour and Liberal Benches but also from the Government Back-Benches in another place—about the child allowance having been raised by considerably less than the rate of inflation. I pointed out earlier that an additional 5p duty on a packet of cigarettes would finance a rise in the child allowance to £5 as well as allowing part of the lower rate income tax band to be salvaged. It is probably too late now to do anything about the tobacco duty.
However, we ought to remember that in his Budget the Chancellor deliberately and understandably omitted to budget for any reduction in Britain's contribution to the EEC Budget. If, as might be hoped, we secure a reduction of £650 million—and I cannot see any self-respecting British Government settling for less—then we might legitimately expect £250 million of that to be applied to raising the child allowance fully in line with inflation; in other words, to £5·20 a week; the balance might best be spent in reducing the employer's national insurance surcharge, thereby stimulating both production and employment.
Many have accused the Government of bad faith over the child allowance, and many more accuse them of bad faith over the proposal to eliminate earnings-related unemployment benefits. Indeed, this point was made particularly strongly by the noble Lord, Lord Wells-Pestell. I am sure that the noble Lord was right in this, although I think we should not forget that for many years now the term "national insurance" has been just a little bit bogus. What is paid in bears not much relation to what comes out. For the most part national insurance is a crude form of additional taxation.
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Be that as it may, there are surely strongly pragmatic arguments as well against what the Government have proposed. Among the many vices anglais are a predilection for overmanning, excessive conservatism with a small "c", resistance to change, resistance to moving, and so on and so forth. How much more obstructive and resistant to greater efficiency and rationalisation people will be if they think that such rationalisation will lead to a very sharp fall in their standard of living, once the sum they receive by way of redundancy money runs out, in the event of such efficiency measures bringing about their own redundancy.
In conclusion, I fully support the Government in their attempts to make people face the facts for the first time in years, after the profligate 1960s; to make them realise that money does not grow on trees; to make them understand that there is no such thing as Government money—that it is all taxpayers' money—and that there "ain't no such thing as a free lunch" as the saying goes. One day they may even succeed in convincing Labour Front Benches that when a Government cut direct taxes, they are not giving anybody anything at all; they are merely allowing people to retain a higher proportion of their own hard-earned money.
None the less, the inculcation of economic reality is not enough. Good housekeeping though absolutely vital, is also not enough. We need a little hope; and certainly the prospects of an inflation rate still in double figures in three and a half years' time is depressing in the extreme. We need to see a little more light at the end of the proverbial tunnel. The non-interventionist philosophy of this Government is doubtless right, but we need rather more inspiration. It is this, I hope, upon which the Government will be concentrating in the months to come.
5.5 p.m.
Lord BALOGH: My Lords, we are all grateful to the noble Lord, Lord Byers, for having introduced this debate. Although the Budget is still in one's mind, it is rapidly disappearing among the new difficulties and new problems. We must also thank Mrs. Thatcher for having produced a perfect monetarist experiment which will stand out—almost like an experiment in physics—to be judged by

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where it leads. I have no doubt where it will lead, but then perhaps Mrs. Thatcher and I differ on that question too.
I shall talk only about three aspects of the Budget and even then in a rather restricted way. The first aspect concerns the tax changes and especially PRT; the second is the attempt to weaken union bargaining power as a substitute for an incomes policy; finally, there is the fervent belief that a complex, flexible and very complicated economy can be managed by influence on one sole aggregate—the money supply—which cannot even be defined very accurately. On any restriction substitutes for money itself appear and, therefore, it is impossible to say, without knowing the velocity of circulation, and so on whether or not a measure has succeeded in being restrictive. The longer the noble Lord the Minister spoke, the more despairing I became about his own economics.
Turning to the first theme concerning PRT, I must congratulate the Minister unreservedly. He has accomplished something which must be very difficult to accomplish, because I could not do so. I could not do so because the official advisers to the then Government were so terrified of the possible results on North Sea exploration of increasing the rate of PRT to the extent that I judged necessary, that it was given up. In the last few years it has been the Treasury—especially Sir Leo Pliatzky—who painted the blackest picture of the consequences of the activity in the North Sea if there were ally increase in taxation, which was less than is proposed now.
However, there is something to be said here, and I offer my services to the Government free of fees. The PRT is a very bad tax. I never wanted it. It is a complicated tax which has been introduced because the Inland Revenue—of which, unfortunately, the noble Lord is no longer a member—did not understand that it would be better to have an excess profits tax rather than a single key tax with all sorts of very complicated exemptions. Inasmuch as the oil industry, and even the gas industry in the North Sea, are extremely complicated, and inasmuch as the profitability is not in the least connected with some objective, physical characteristic, the present system
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does not put the burden where it should be, as between the oil companies. A thorough review of the tax and its consequences on cash flows, et cetera, is indicated and should be undertaken as soon as possible. As the noble Lord has such persuasive powers I am sure that he will be able to do it.
I now turn to the second problem, the weakening of the trade union bargaining power in wage bargains by governmental action. Of course one can always say, like the noble Lord said, that it was not really the Government's action; it was the action of the trade unions which produced the difficulties and increases in unemployment. But this is a question of who began. There is no doubt that the beginning was made by the Government. They are very proud of it, and I do not see why they should deny it.
I do not believe that this method of controlling inflation is a good thing. It is not good first because it creates periodic quasi-class war situations in this country which we have no reason to suppose will help us out of our difficulties, which are very great. Secondly, it is aesthetically offensive to force people to withdraw labour instead of discussing it with them. In the end of course, as in the coal strike in 1972, I think it was our colleague the noble and learned Lord, Lord Wilberforce, who delivered the goods; now it was Lord Lever who charmed them into accepting splitting (not equally) the difference.
Why should one believe that this sort of incomes policy is a good thing whereas an incomes policy based on a continuous and thorough surveillance of the field is somehow creating enormous difficulties and rigidities? As if, for instance, rigidities had been eliminated by Lord Wilberforce or by Lord Lever. What happened was that they increased wages by a certain amount, and now there will be a row between the various trades unions' members as to differentials.
The noble Lord spoke slightingly about incomes policy. I do not think that he was right to do so. He ought to be, on the contrary, propagating the reasons for having an incomes policy. What is an incomes policy? It is a wage bargain. It is a wage bargain like any other wage bargain, except that it embraces the whole important labour field. This is

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important because the leapfrogging is thereby very much diminished. Leapfrogging as between professions and trades and as between industries has been one of the most important causes of inflation.
I was astonished that the noble Lord, who after all is an eminent economist (although he hides his light behind three bushels), has not mentioned the eminent success of Austria. Austria is the only country in Europe which has had, from the time of the Empire, corporate bodies which can be used for speaking for their members. There is a body for trade; a body for finance; a body for industry; a body for labour. What happens in Austria? Their unemployment is 2.4 per cent.; their inflation rate is less than 3 per cent.; their physical expansion was the highest in Europe. There has been one strike in the last five years, and that strike could not be expressed in the statistical year book because it had too few numbers.
It seems to me that one ought to learn. One also ought to learn from Japan. It is wrong to say that Japan has not got an incomes policy. It works like all Japanese things, sort of automatically. It is the only automaticity in economic life that I know of. All the others have disappeared. The problem is why should we have an incomes policy from a deeper theoretical point of view. I shall tell you. The sort of market which you are talking about and which Mrs. Thatcher is talking about does not exist any more. They did exist. When Alfred Marshall was a young professor in Bristol, when Jevons was a very young professor in London, there existed the sort of markets you are talking about; that is myriads of producers competing against one another and myriads of workers. But this does not exist any more. You have bilateral monopoly on the wages side and you have oligopoly on the goods side. This can be easily shown statistically, because despite the fact that we have unemployment we also have inflation. If there were myriads of producers competing with myriads of consumers, unemployment would mean that prices would fall and not increase.
From time to time you might ask somebody about—though four advisers all come from the London Business School
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so they probably have not read unorthodox works—oligopoly. It is an interesting subject to read up. Please read it up. It is very necessary to know about it and it would do the country a great deal of good. We really cannot spend every winter in the sort of situation in which we were last year. To be quite frank, I am as shocked by the trade unions as I am by the Government for having lent themselves to a vicious campaign against incomes policy last year and thereby made any continuation of a civilised policy impossible.
I now turn to the last point, and that concerns the balance of payments. This is one of those themes which really can best be discussed in a "looney bin" because it is in the framework of a "looney bin" that our exchange policy is conducted at the moment. We have benefited by some £6 billion from oil and gas. One does not quite know how much it is, because obviously the balance of invisible payments has to be debited with foreign profits and loans, and it is not complete; therefore, we do not yet know how much our net profit will be. Anyway it reaches into the billions. We had this tremendous injection of resources. Nevertheless, we are now piling up short-term debt, which is a fantastic situation. If the oil and gas would not flow and we wanted to maintain the present amount of amenity and industrial activity, depressed as it is, we would be running a deficit of between £5 billion and £7 billion a year. That of course would be impossible and there would be a large amount of unemployment and a depression of the standard of life as great as the Tories accuse the Labour Party of having caused.
Why do we do that? It is because we have an interesting theory, which we heard today from the Minister, that inflation is caused by the money supply. I have already mentioned that it is difficult to know what money supply is because of the substitutes for money like credit cards and so on. However, there is a further problem here: How does money become effective on the service and commodity markets? It cannot act, so to speak, like gravitation over distances; somebody must use the money to buy something. We have received between £2 billion and £3 billion from the Arabs, and this has been lodged mainly in short-term debt because our short-term interest is very high—it is

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terribly and enormously high—and so it has been lodged with the banks on short term.
Do the Arab sheikhs eat that money? Do they buy things with it? What in fact they do with it is to keep the main bulk of it—some of it of course is used to buy lovely English houses—stuck in the banks, and the Minister in his cynical superiority told me to look at the money that is not put into the sand. However, that is precisely where it is being put—into the sand, into the bowels of the banks never to come out—and as a result of that, because it is kept sterile in the banks, the volume of active money decreases; and if it is not brought up to the previous level again, there is net deflation, and what with oligopoly on the one hand and high rates of interest on the other, we are in our present mess.
I have, since the fatal Bretton Woods conference, been preaching higher investment, more investment, more rationalisation and expansion, but the new battle cry is not that; it is, Let us cut this off. Let us throw this away. Let us throw in the British culture. Let us weaken the base element of the young people". That is the cry, but why? I do not go as far as the so-called Cambridge Group of economists. I agree with their diagnosis in regard to dis-industrialisation; of course I agree with that, and how could one not agree with it? But what I do not agree with and find very orthodox—oddly enough, because in other ways I am much more conservative than they are—and what I find so odd, is that they want a uniform tariff. However, a uniform tariff is a half of devaluation, and we have tried devaluation twice already since the war and it did not succeed. So why should half of devaluation succeed now?
What we want are discriminating tariffs, or quotas preferably, with a supervised reorganisation of British industry and the possibility of withdrawing the protection if the reorganisation process does not attain a certain speed. That is how we can get out of it. We cannot get out of it by relying on the market. We have relied on the market for 150 years, and look where we are. I very much hope that this period will end soon and that it will not teach us that the only thing which history teaches us is that it does not teach us anything.
5.26 p.m.
Lord RENTON: My Lords, it is with some diffidence that I speak following such an experienced economist as the noble Lord, Lord Balogh, for I am but a simple lawyer and I have always found that economics is a strangely inexact science on which economists frequently disagree, as indeed the noble Lord himself pointed out. They seem to disagree even more than lawyers do on some legal matters. The noble Lord started by referring to Mrs. Thatcher and said he was grateful to her for her monetary policy. But lest monetarism should become a sort of football in the political-economic game, I would remind your Lordships that Mr. Denis Healey, when opening his Budget statement in another place in April 1978, said:
"Monetary policy will continue to play a central role in our attack on inflation".
That is the place the present Government give to it as well, so I do not think there is much need for us to quarrel about monetary policy.
I wish to concentrate on what seem to me to be the two main causes of inflation and of our economic decline: first, excessively high Government expenditure leading to excessive borrowing at high interest rates and, secondly, wage increases unaccompanied by higher productivity, which send prices up and are often preceded by damaging strikes which interfere with production and do economic damage in that way. As my noble friends Lord Cockfield and Lord Thorneycroft pointed out, Government expenditure under the last Government was so high that, in spite of an immense tax burden, the public sector borrowing requirement reached 51/2 per cent. of the gross domestic product, and indeed reached the very large sum of £10 billion with accumulated interest payments of £3 billion.
It is perfectly plain that we could not go on like that, and again I refer to some words of Mr. Denis Healey, because in 1976, in his famous letter to the IMF, he said he did not intend to go on like that. The present Chancellor of the Exchequer has decided to do something about it, and it is a difficult exercise of judgment. If we study closely the way he is going to do it, we find that it will not be perhaps as tough as it might have been.

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On page 5 of the Blue Book which is called a White Paper, we find, although the PSBR will come down by 4 per cent. per year over the next four years, that the debt interest, which was estimated in the financial year which has just ended at £3,300 million, will rise to £3·5 billion in 1980–81, will remain at that figure in 1981–82 and will not start to fall until 1982–83, coming down to £3 billion in 1983–84. Perhaps it would be helpful if my noble friend Lord Cockfield, when he replies to the debate, would be good enough to point out to what extent these figures include interest on money already borrowed, and to what extent, with a progressive. decline, they will include amounts which relate to fresh borrowing in the coming four years.
In any event, owing to the considerable size of the PSBR, the so-called cuts which the Chancellor is making do not justify the extravagant and scaremongering talk that we have had—though not, I hasten to add, in your Lordships' House today. Indeed, one could say with deep respect that the Budget has been "praised with faint damns" for the most part. However, we have outside heard extravagant talk about cuts in social services and in the standard of living, and I ask your Lordships to bear with me while we examine the effects.
Let us consider, for example, spending on the National Health Service. The figures produced by the Chancellor of the Exchequer show that spending on the Health Service will continue to grow at the same rate as was planned by the last Government—this is in real terms—and it will be a rate of 2 per cent. a year. There does not seem to be much hardship involved there, or indeed anything on which we could disagree, because that is what the previous Government also intended.
With regard to social security, the cost of that has grown by 50 per cent. in the last 10 years, largely because benefits were improved in anticipation of a growth in production which did not occur. Indeed, the other day the Chancellor called it "a striking example of the nation's capacity for spending money before it had been earned", which is one of the troubles with which we have been faced. Your Lordships might have expected big cuts on social services. But, no, my Lords.
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In the financial year just starting social security will cost £20 billion; that is an average of £1,000 a year for every household, and it will account for one-quarter of the total public spending which is planned. So taking it in the round, there would not seem to be any reason there for allegations of lack of compassion or anything like that.
What about education? Some economies were undoubtedly overdue and were feasible, as was brilliantly pointed out by my noble friend Lady Young in our debate on the Education (No. 2) Bill. At the end of the speech of the noble Lord, Lord Wells-Pestell, my noble friend Lord Monckton of Brenchley asked the noble Lord whether the fall in the number of pupils, which we know will take place, would not justify a fall in the number of teachers. The noble Lord, Lord WellsPestell, immediately agreed: yes, it would be so; that would be justified.
However, may I give your Lordships the figures. The position is that in the next four years the number of pupils is expected to fall by 13 per cent. but spending on schools is to fall by only 6 per cent., and, thanks to a majority of your Lordships, there will be no charges for school transport beyond three miles. As has been said, there is scope for economies in education without interfering with teaching.
Your Lordships may know, because I have said so more than once, that I am particularly concerned about the mentally handicapped, and I am glad to be able to tell your Lordships that I have had personal undertakings from my right honourable friends the Secretary of State for Health and Social Security and the Secretary of State for Education that the interests of the handicapped will be safeguarded in their departmental spending programmes—in both departments. However, one must point out that much of the effective spending on behalf of the mentally handicapped (as in other matters) is undertaken by local authorities, and there is no doubt that the local authorities are hard pressed financially—some of them, at any rate—and we shall have to watch out to see what happens.
While speaking about the mentally handicapped, may I add that I am delighted by the various tax provisions in the Budget

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which will help them by enabling people to form charitable trusts and to take action in other ways so that they can part with their money knowing that it really will help the handicapped and other charities without the Government snatching it back. Bearing in mind the situation which the Government inherited at the last election, as well as the need to limit public expenditure, I therefore say that the various social services have been treated much better than might have been expected.
For some years we have been under-spending on defence, and I am glad that this is being put right. May I mention that following the debate in your Lordships' House three weeks ago we eagerly await the statement on the Home Defence Review, yet provision has not been made where one might have expected to find it—on page 83 of the Expenditure White Paper—for any increase on civil defence. I hope that that is not the last word on the matter. It is not a large sum that would be required in order to confer upon this country the necessary advantage of having a revival of civil defence.
Now I come to wage increases and their effect upon inflation. Is it not absurd that people who are in work, and who do not strike, should subsidise strikers, many of whom do not want to strike, by the payment of full supplementary benefits to their families and by immediate tax refunds made to strikers? I am glad that we now have a Government who are doing something—as has been said by my noble friend Lord Thorneycroft—with courage and caution to save the nation from what a former Labour Chancellor of the Exchequer called
"unnecessary and damaging disputes which are totally incompatible with our economic objectives".
That was said by Mr. Roy Jenkins as long ago as 1969.
Industrial democracy and organised labour are phrases often used to describe trade unions. But, alas! their strike practices are sometimes completely undemocratic and, as has been shown by recent ballots, are forced on the members by the union leadership, sometimes contrary to their members' wishes. Then we have the phenomenon of mass picketing and secondary picketing, used for enforcing
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strikes so unpleasantly. These activities sometimes cause, and indeed I am sorry to say, seem to be meant to cause—because this is the natural result—maximum disruption to other workers as well as the loss of their employment. Successive Governments have asked the trade unions to put their house in order, but apart from vague promises and talk of codes of conduct nothing has happened. But now, thank goodness!, we have a Conservative Government, who are starting to deal with the matter.
In conclusion, my Lords, may I presume to utter a friendly word of humble advice to noble Lords opposite? I would say to them that for them there is no party advantage to be got out of this Budget—but no doubt they will continue to praise it with faint damns!
5.40 p.m.
Baroness GAITSKELL: My Lords, we are all grateful to the noble Lord, Lord Byers, for introducing this debate. Personally, I always enjoy his speeches, and I did so today. I very often agree with him; and not only is he a good speaker, but he is the least self-indulgent speaker in this House apart from myself. I am also grateful to my noble friend Lord Wells-Pestell for his absolutely marvellous speech. It was so restrained—a restraint which, in a way, I think he sometimes finds difficult. I must go on to my noble friend Lord Davies of Leek, who made a thumping speech which was full of vitality and which no one could fail to enjoy. There was also my noble friend Lord Balogh. Today I enjoyed his speech because he spoke a little in front of the microphone. I would have enjoyed it even more if he had a more intimate relationship with the microphone.
I do not feel quite so reverential to the Government as has appeared from some of the speeches which have been made. I am not an economist, and I shall be brief. The Chancellor has broken the record on long speeches, but the gulf between the Government and the Opposition has been widened. The Budget was tailored for the politically unsophisticated members of our society, and the ones who are generally uninformed about economics. It seems to me that, somehow, the Budget is full of promises and promises, which at the moment I cannot see being fulfilled.

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In fact, they keep on warning us and putting off the time when these wonderful promises will come into effect. Monetarism proclaimed itself the miracle cure of all known economic germs, yet there was a prevalent nostalgia for the 18th and 19th centuries in the Budget speech. On the one hand, they have this monetarist platform, and, on the other, all their measures go back to the 18th and 19th centuries, where monetarism fits quite comfortably.
The Budget appeals to complacent people who do not believe in equality of any kind, or desire to take steps to achieve it in education or in standards of living. From this ingrained attitude, a slide towards blaming the poor is easy to come by. When people are poor it is because they are lazy. They are not clever or capable, so they are to blame, and it has nothing to do with Government policies. This attitude is due, not just to the fact that the Government have run out of ideas or because they have abandoned the Welfare State: it shows clearly that the Government have run out of compassion. That is the point I should like to stress. In our last debate on the economy some weeks ago I said that this Government were the most hard-hearted and the most short-sighted Government of this century. I should like to alter that just a little. Today, I think it is the most short-sighted Budget of the century, since the Budget proposals do not seem to have done anything to create jobs, only to raise hopes and make promises. I should therefore like to alter that dictum in that respect.
As I have said, the Government are short-sighted. Everything they are doing now is short-sighted. There have been a few proposals, and I shall dwell for a moment on one of them—the hounding of those people we call scroungers, and the fiddling of social security benefits. How low can the Government fall in dealing with things like that? I watched a programme and heard Reg Prentice explain the urgency of this matter. I hope Mr. Prentice is sitting comfortably. He was questioned about the savings he could make —the £50 million, apparently, which is involved in the fiddling by these dishonest people. The question put to him was, "How has that figure of £50 million been arrived at?" The answer was that the £50 million was a speculative figure!
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How ridiculous can we become when talking about the scroungers? There are other such speculative figures, and the mind boggles at these mean, scavenging statistics. We should have a glance at the taxation evasion figures, and put them side by side with these figures given for fiddling.
We pride ourselves on being a very democratic country, and we are one of the most democratic countries. Why, then, do many Tories often ask the question,"Why are there so many people out of work when there are so many jobs to be filled?"Again, it sounds very reasonable. Usually, it is unskilled jobs that we are talking about. We have an example of double standards on this. The workers who do the unskilled work, which is often the dirty work, are the people we are talking about mostly. Should they have less choice than the clever and the more highly educated? This is where our democracy is not so democratic after all. It is only those who are more gifted and educated who have a priority for the jobs which are going. Surely the difference between a democracy and a communist State rests on this freedom of choice about jobs. People do not usually associate it with jobs, but, after all, communist countries boast that they have no unemployment. They have no unemployment because they force people into jobs, but, surely, we are supposed to be above that.
Nothing can ever convince me that throwing people out of work and increasing our unemployment numbers is going to bring us to prosperity. All the economists in the world can go on talking about this, but they will not convince me at all. I would quote the title of an article written by David Donaldson in the Sunday Times at the end of January. The headline of the article was:
"Why are the Tories continuing to discourage work, encouraging idleness and weakening the family?".
These are not the things that they talk about when speaking politics. Is this the result which will be achieved by this particular Budget? Is it really because they have run out of ideas? I cannot believe that. Personally, I believe that it is because they have run out of compassion; and so, as I am not an economist, as this is a plain woman's speech on the Budget, I think I have said enough.
Viscount MASSEREENE and FERFARD: My Lords, the noble Baroness accused the Government of abandoning the Welfare State. Would she say that spending £20,000 million a year on social security is abandoning the Welfare State? As my noble friend Lord Thorneycroft has pointed out, that amounts to costing every family £1,000.
Baroness GAITSKELL: My Lords, if I may answer the noble Viscount, I am not a monetarist and I will not bandy millions with him. I think he is not right because the education service, the health services, the social security services—all these services really do not have enough money. The Government are not giving them enough money. To mention a figure of £20,000 million does not answer this problem at all.
5.51 p.m.
Lord NUGENT of GUILDFORD: My Lords, it is always a pleasure to follow the noble Baroness, Lady Gaitskell. She started her stimulating speech by proclaiming that she had no particular reverence for the Government or for Ministers. I understand that, and I think that her speech was in the vein that I should have expected from her. No doubt my noble friend on the Front Bench took note of the dialectical arrows which struck him from time to time. However, I shall have to disagree with the noble Baroness where she deplores the record of this Government and charges us with running out of compassion. Really, this is just not true. I would credit noble Lords and noble Baronesses opposite with as much compassion as we ourselves have, but I claim that we have compassion, and indeed we are aiming for the same results as they are.
What we have to look at is the situation that we picked up when we inherited government just under a year ago. We see the record there. Speaking of unemployment, which the noble Baroness particularly deplored and charged us with increasing, during the five years of the last Government unemployment was doubled. The noble Baroness, her noble friends and her right honourable friends, did everything they could to try to check that decline, to try to turn it back and to increase employment. They spent thousands of millions of pounds; yet they
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failed to do it. The challenge was to my noble friends, my right honourable friends and my party. When we inherited the Government, it was clearly hopeless to continue with the same policies that the noble Baroness had been backing. It really would have been fruitless to do that. Those policies had failed. It was up to us, if we were to justify the confidence of the nation, to use our brains, our conviction and our courage, to evolve new policies which, in our belief, would give a better chance of stopping unemployment, of reversing the decline, of increasing prosperity and getting employment increasing again. That is what I believe we are doing. It is a long and difficult task, as my noble friend Lord Cockfield has so lucidly described in his opening speech, because the initial steps are inevitably, in my opinion and in the opinion of the Government, those of controlling Government spending.
I would, if I may, turn back for a moment to thank the noble Lord, Lord Byers, for giving us the opportunity today to take part in this debate, a very interesting debate, and to thank him for his extremely stimulating opening speech. It occurred to me, as part of the dialectic, that it would be no bad thing to mention the great principle of his distinguished predecessor of the last century, the great Gladstone (the noble Baroness, Lady Gaitskell, was talking about the 19th century) who used to say,
"Let the wealth of the people fructify in the pockets of the people ".
That is certainly the thought behind the mind of the Conservative Government today. We are never too small-minded to inherit the thoughts of great men of the past whether from that Bench or any other.
The reason I wish to welcome the Budget is that this is the first time for many years that the financial strategy of the Government has set out to end borrowing. My noble friend Lord Thorneycroft well made the point that the Budget and the Financial Statement of Expenditure appeared together. What a good thing to do! If you want to provide enough money to cover your spending, produce the two statements together. But Table 9 in the Financial Statement shows us that our public borrowing (PSBR) will be tapered off over the next three years to something very small indeed.

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I believe that the massive borrowing of the last five years is undoubtedly a major cause of our national decline. We may argue about how the figure is computed from year to year, and the economists say that it is impossible to be exact; but what is certain is that the total amount added to the national debt over the last five years is some £40 billion and that the annual debt service is now nigh on E81 billion a year—which certainly we have now got on our backs for the rest of our lives, and even the younger people for the greater part of theirs. This is enough to finance a complete Government service. This is the result of the Government covering their expenditure, where their revenues were not enough, by borrowing year after year. This, I believe, is the path to disaster. There is no difference at the end of the day between this Budget and our own little budgets that we made at home—those that the noble Baroness and I make, on how we manage to pay our way and avoid getting into debt. In the budgets one compiles when running a business, one does the same thing. If you start borrowing to cover current spending you are on the path to disaster. It is a rake's progress and you will be insolvent in a short time. In my judgment there is only one justification for borrowing, and that is if you have a productive project in which to invest which is going to make a return for you, which is going to make a profit so that you can pay it back and thereby create new wealth. The practice that Governments have slipped into over the years of borrowing enormous sums year after year is disastrous.
It has been astonishing to me—and, unfortunately, I was in a position, as Chairman of the National Water Council, where I had to be"neutral"because it was my responsibility to co-operate with Labour Ministers, and I could make no comment—that the financial experts in the national dailies and in the weekly papers made no comment on this at all. It is quite the worst financial sin that you can commit; you are bound in the end to destroy the whole house. We have gone too far down that path already. Whatever the economists may argue, undoubtedly the amount of annual borrowing is one of the main factors in increasing money supply from year to year and thereby fuelling inflation.
Lord DAVIES of LEEK: My Lords, if the noble Lord will allow me to interrupt, it is fascinating; I am fascinated by the national debt because it is the power of the tomb over the living. The only trick is that we pass on to the unborn the burden of our sins today, and one can do that in perpetuity. Those gladiators who want to go to war with Russia know that the only way that we shall pay for the war—none of us will be alive to benefit—will be by borrowing and printing money.
Lord NUGENT of GUILDFORD: My Lords, no. This Government policy sets out very clearly—I refer the noble Lord, Lord Davies of Leek, to Table 9 in the Financial Statement—that it is the Government's intention year by year, up to the year 1983–84, progressively to reduce the amount of this borrowing. They have set their target obviously very carefully. They are reducing total Government expenditure by 4 per cent. over that period. That is a good deal. Many noble Lords and Baronesses opposite have complained that what we are doing is harsh, but in my judgment the Government are doing it at a moderate pace. Compared with the cut which the Labour Government imposed in 1976–77 at the instance of the International Monetary Fund, which was a 6 per cent. cut, this figure of 4 per cent. over three years is really very moderate. It does not show a lack of compassion. In many ways, from the financial point of view, it would have been easier to have gone faster, but I believe the Government are right to go slower because the implications could be serious.
This Government's strategy is here set out and they have indicated that they are going to reduce Government expenditure to come within the nation's capacity in its annual revenues, at the same time reducing taxation to increase incentives. That is the way to reduce inflation and to reverse the decline.
The forecast in Table 9 is very conservative in its forecast of GDP, and I congratulate my noble friend Lord Cockfield on that. This year it is estimated at something like minus one, next year and the following year increasing by about 1 per cent. I hope that, in response to the policies we are following, we shall do a little better than that. If we do a little better the margin will grow; we shall be

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able to proceed a little faster in reducing taxes and in the amount of borrowing that we do.
Baroness GAITSKELL: My Lords, if the noble Lord, Lord Nugent of Guildford, would be so kind as to give way, he is leaving out something to which I should like a reply. What about the people who are being thrown out of work? Where does that question come in the whole of the Government strategy? They are throwing thousands of people out of work every month.
Lord NUGENT of GUILDFORD: My Lords, if the noble Baroness will allow me to proceed with my speech, I have a few words to say about that. In my judgment the Government are getting the horse and the cart in the right order. As the noble Lord, Lord Cockfield, said, it is no good just attacking the symptoms. One has to get at the causes, and one of the major causes of our decline is this vast Government borrowing year after year. That really is a disaster. Therefore, the Government are quite right to proceed to eliminate it.
Turning to the other side of the picture, I commend particularly the Government's measures to help small businesses. This is an area of huge numbers of businesses: in manufacturing, something of the order of between 70,000 and 80,000 businesses are classified as"small"in the Wilson Report; in the retail business the number runs into hundreds of thousands; possibly we are talking about half a million, taking the two together. Here is an area where there are possibilities of one extra man in each firm and our problems are well on the way to being solved—they would be even if it were one to every other firm.
I want to see also the start of a number of new small businesses, such as one man working on his own, employing one man, or working with his brother. That is the kind of beginning that we want to see spreading across the country, stimulated by a range of very valuable measures about which my noble friend has told us. The total value of these is of the order of £160 million a year. I do not doubt that it will have a most stimulating effect on young men and women who want to start up on their own.
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In particular I should like to commend something not mentioned today, the special enterprise zones. I believe this idea was a gleam in the eye of my right honourable friend the Chancellor of the Exchequer, and it is a most imaginative one. There are in some of our major cities decaying areas that really need new stimulus to revive life there. The areas I am thinking of in particular are the docklands in London and in Liverpool. The docklands in London are of particular interest to me in my role as chairman of the London and Regional Planning Standing Conference, because we have been particularly concerned to try and check the outflow from London and get a revival in these decaying areas. The thought is that in these special enterprise zones, as they are called, areas of about 500 acres, rates and taxes and controls will all be reduced to the minimum so that any enterprising young or old person who wants to have a go there will have the maximum opportunity to do so.
These are imaginative ideas, and they will touch right on the point about which the noble Baroness and I are concerned, especially in these areas where unemployment is very high. It is very high in London, but in Liverpool it is infinitely worse. That presents a prospect of people starting new businesses in these decaying areas where nothing has been going on before. It will provide jobs for them and for other people. We may get the double benefit of a valuable contribution to relieving unemployment and creating new work at the same time as curing one of our very serious demographic problems in this country.
I conclude by congratulating my right honourable friends, the Prime Minister and the Chancellor of the Exchequer and my noble friend Lord Cockfield, on taking this stony path. We would all like to give all of the good things to everybody; we are just as compassionate as noble Baronesses and noble Lords opposite, but we know that those methods have failed. We have to take the more difficult path of dealing with the causes, and then in due course we shall obtain the benefits that everybody wants. I believe that if our people, both the employers and the workforce, will respond to the opportunities that the Government are giving, then we shall see those benefits that we all want so very

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much in the future, of rising employment, rising wealth and lowering inflation.
6.8 p.m.
Lord SPENS: My Lords, if my remarks appear to be somewhat disjointed to start off with, I hope to pull the threads together to make my points. Before the noble Baroness leaves the Chamber, may I say that I hope she does not think that I am a complacent person because I like this Budget. I think it is very exciting and I cannot quite understand how she can call it short-sighted, because there is not much joy in it today, but I think there is a lot of hope and encouragement for tomorrow. In particular, like the noble Lord, Lord Nugent of Guildford, I like the parts devoted to small businesses and the special enterprise zones. Small businesses are now becoming very popular. They even merit a heading in Hansard. If your Lordships will read the report of the Chancellor's speech in Hansard of 26th March, at col. 1485, you will see that the heading reads:" Specific Measures to encourage small businesses ".
I shall now go off at a tangent. Was it a useful coincidence that I received in the Budget week my copy of the latest production from the Institute of which the noble Lord, Lord Harris of High Cross —who I am sorry to see is not here at this moment, as he is down to speak a little later—is the Director. This is a booklet taken from a recent seminar about the role of the entrepreneur. It is a very interesting booklet, but I have not had time to do more than skim through it at the moment. I want to take three short quotes from it, two made by Mr. Nigel Vinson, the first of which is:
"Premises and the cost of money are the two key factors in entrepreneurial success or failure ".
The second one is:
"Entrepreneurial endeavour is like a pyramid. At the apex one in a hundred will survive if interest rates are at 20 per cent. At the base 50 out of 100 will survive if interest rates are at 5 per cent ".
Then there is a quotation from Sir Arthur Knight (who I think is now chairman of the National Enterprise Board) which is as follows:
"Industrially the next decade in this country is going to be determined for good or ill by the performance of the large businesses. The top 400 account for something like 80 per cent. of our total industrial production ".
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I go off at another tangent. Last week we Cross-Benchers had the opportunity and privilege to hear a most interesting speech on the implications of the silicon chip. While the speaker was not prepared to give us any time factor for what is likely to happen, he emphasised the point that the chip will bring about large decreases of labour employed in manufacturing industry. But he thought that there would be or should be large increases of new businesses and also in the repairs, maintenance and sales sectors of existing businesses, if the full benefits of the increased productivity that will come from the chip are to be realised.
So what does the Budget do about all this, my Lords? It is very sad that it cannot bring down interest rates at present. I know the reasons, but we are at the apex of Mr. Vinson's pyramid, and it will be terribly dangerous to stay there for too long. But there is hope and encouragement in the Chancellor's statement that he proposes that losses on equity investment in unquoted trading companies may be set off against income, and that the present conditions for the relief for interest paid on money borrowed for investment in or lending to a close company will be significantly relaxed. The Chancellor went on to say that this would provide added incentive for outside investment in small firms.
There is one small point which I ask the Minister to clear up for me, if he can, because I see from page 5 of the Financial Statement that this relaxation of the conditions does not go the whole way. It seems that the borrower will still have to have some material interest in the company in which he wants to invest. This is in the middle of page 5:
"… to allow relief for interest paid on money borrowed for investment in a close company to borrowers having a material interest, but who do not work for the greater part of their time in the company's business ".
It is that phrase,
… having a material interest ",
which seems not quite to be what the Chancellor said in his Statement. There are other good proposals for finance which have been mentioned and which I do not want to deal with here.
Mr. Vinson's other point was about premises, and I am glad to see that there

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is to be a three-year experiment in giving 100 per cent. capital allowances for new small workshops. I think that is an excellent idea. I hope it will encourage the speed with which the new small businesses will be able to be set up. However, it is here that I would remind your Lordships of the implications of the chip. Our speaker last week said that there would be increases not only in new businesses but—and he particularly stressed this to us—in the maintenance and repairs area of existing businesses and in their sales forces. That is not covered at the moment by this Budget, except—and this is the interesting aspect—in the enterprise zones. Capital allowances are given there not only for industrial property but also for commercial property. It is a marvellous idea and will enable the enterprise zones to be re-created very quickly. I realise that it will not be possible to give similar allowances throughout the country, but I suggest that the present definition of the industrial building allowance should be relaxed to cover these repair and maintenance workshops which we hope to see set up. In due time there ought to be more encouragement to firms to increase their sales forces. I think, as I said before, that the Budget is exciting. I wish that I had the time to go on to talk about other exciting parts of it. I congratulate the Government on this very good start to getting the country back on its feet.
6.18 p.m.
Lord WALSTON: My Lords, I start off with thanks to the noble Lord, Lord Byers, for giving us this opportunity to discuss this most important matter. I follow with apologies to both the noble Lord, Lord Byers, and to subsequent speakers that unfortunately, owing to a commitment that I entered into long before I knew this debate was to take place, I may not be able to remain in the House until the end of the debate. I can assure noble Lords who will be speaking later that there is no discourtesy on my part.
I am not going to damn this Budget with faint praises. I am not going to praise it with faint damns. I am going to condemn it but not because it is leading us along a rough and stony path. We all accept that in our present economic
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situation the path inevitably must be rough and stony. That does not matter —we are prepared to put up with that—as long as the path leads in the end to a place where we want to go. This Budget, I suggest, does not do that. The economic troubles from which we are suffering are twofold. One of them of course is inflation, there is no doubt about that. The second one and, to my mind, by far and away the most important one, is unduly low production throughout the whole of the country. I deliberately say, "production", and not, "productivity", because it is the total wealth that is produced within the country, whether by the whole labour force or the labour force minus a million or the labour force minus 5 million. That is what matters; that is what conditions the standard of living that we are going to enjoy, and that is what determines the amount of help we can give to others and all the expenditure that we can make, whether it be on social services, defence, capital improvements or whatever.
The Chancellor's first Budget recognised this fact and, as I understand it, had a two-pronged attack. It had an attack on inflation directed by what is loosely called a monetarist policy, and an attack upon low production, which was to be solved by incentives and by lowering personal tax rates so as to give people more incentive to work harder and produce more. Many of us, not only on this side of the House, felt that was an ineffectual weapon to get people to work harder. We did not believe that reducing the high tax rates for the £20,000, £40,000 or £60,000 a year man would make him work harder. It appears that the Government have now come round to our way of thinking because this Budget contains no incentive of that kind by reductions of any significance at all in the higher tax levels, or indeed in the lower levels. For that one must be grateful, but I would have hoped—in fact I would think it was essential if this Budget was to achieve what I consider to be its main objective of increasing total production—that they would have come up with some new ideas in order to encourage total production in our industries. Broadly speaking, what the Budget has done is simply to concentrate on monetary restraints. The Government appear to have become so hypnotised by inflation that they can think

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of nothing else: the curing and the conquering of inflation is the be-all and end-all of Government policy.
I would remind your Lordships that while we have lived, uncomfortably, with inflation for a good many years, the last Government were able to reduce inflation from something in the neighbourhood of 14 per cent., or, at any rate, a high figure, to below 10 per cent. They did have modified success in doing that, but I have to confess that they had no success in increasing production. That suggests, if no other reasons are put forward, that neither the curing nor the diminution of inflation is going to solve our problems. It is no good having a nil inflation rate by 1984 if at the same time we have 2 million or 3 million people out of work and the country is littered with bankrupt industries and empty factories; but that is where this stony path is leading us.
How can industry flourish when there is the present squeeze on profits and liquidity, and a bank rate which means that one can borrow money at 20 per cent. or more? How can noble Lords opposite—and they are far more skilled in industry and business management than are the majority of noble Lords on this side of the House—assert that that is the recipe for increased production? How can research and development flourish? After all, it is upon research and development, technology, micro-chips and so on that the industrial future of this country rests. How can individual companies increase their expenditure on research and development in the circumstances that obtain today, with the bank rates that obtain today? How can the wider forms of research and development from the Government-sponsored research institutes develop and produce more results for the whole of our industry when they are squeezed by the present cuts that are being imposed on them? How can we prevent the brain drain abroad, of which we used to hear so much in years gone by, of our best scientists and industrialists when they are denied promotion—as is the case in many research establishments today—and are unable to get the equipment they need because of the cuts that are being imposed? How can we expect them to remain in this country in those circumstances? Naturally they are tempted bit by bit to go overseas to those countries where these
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facilities are offered to them in greater quantities.
Surely we must agree that our first priority must be to stimulate industry. We have heard from the noble Lord, Lord Nugent, and from other noble Lords, of helping the small industries. I welcome that, but we cannot honestly say that these useful but minor incentives are really going to have a galvanising effect on our industry. A large part of them only take effect when a small industry is handed over from father to son with a reduction in the amount of CTT or CGT that has to be paid. And while these — what are they called?—special enterprise zones may have something to be said for them, I must say it comes oddly from noble Lords opposite and their friends in other places to find that special subsidies are being given to encourage businesses and industries, whether large or small, to locate themselves in areas which the natural economic forces have shown to be uneconomic and from which they have, of their own volition, moved away because they found they were undesirable sites. Is it right, and is it wise, to spend money in order to entice them back into those areas which free enterprise has decided are not suitable areas?
Lord NUGENT of GUILDFORD: My Lords, would the noble Lord give way for one moment? He seems to be addressing the question to me, as I-had commended it. The areas I am particularly speaking of in Dockland have ceased to be useful for the kind of dock work for which they were used before, because of the changes in the size of freighters and so forth. Therefore a massive redevelopment is needed, which is enormously expensive. But the start of it would be to establish some small businesses there which would begin to get people back again and thus justify the redevelopment. This is the problem and it is a very special one.
Lord WALSTON: My Lords, I know it is a very special problem, but I should have thought it was more consistent with what I understand to be Conservative policy to leave this sort of thing to private enterprise and not to have Government intervention in order to encourage industry to go where it would not otherwise go. But perhaps that is a rather detailed de-

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bating point. I would say, further, that regardless of the rights or wrongs of the special development areas, it is unfortunate that something of enormous importance to the overall regional planning of the country should, as it were, slip in through the back door under a different hat in the Budget, rather than being a special part of the whole regional development policy. However, I do not believe, whether it is successful or not, and whether it is right or not, that it can do any more than skim the surface of increasing the total production in this country.
As I have said, and as the Government by implication have admitted, tax incentives to individuals to increase production have proved ineffective. Tax incentives to industry can be of some help. I am not a tax expert. I could not and should not elaborate as to what these might be, but I would suggest, in view of the present rate of inflation, and indeed the future rate, that there would be considerable incentives to all industries if depreciation allowances were geared to the cost of replacement of the articles needing replacement rather than to the historic cost of what was paid for them so many years ago. In other words, although there are certain ways in which this can be done, at the present time, as I understand it, if you have bought a machine in the past for £10,000 and have to replace it now for £20,000, you do not have the £20,000 available with which to pay for it because your depreciation has not covered the inflated value.
That, however, is not of enormous significance. What is far more important is the lowering of interest rates, so that the liquidity position of industry of all kinds is greatly improved and facilitated. I am quite sure that the scheme, which I think the noble Lord, Lord Byers, mentioned, and which operates very successfully in France, of differential interest rates is something which should be looked at with the greatest urgency by the Government. Those industries which are considered important, and which in the years ahead will be important, will then be enabled to borrow at rates comparable to those at which their Continental competitors can borrow, rather than at the rates which, quite rightly, people who wish to buy a
1412
new television, a new deep freeze or even a new house have to pay.
I hope, too, that there will be a restoration to research institutes of all the cuts which have been made, because they must be regarded as the foundation of our future economic wellbeing in this country. Of course, we must have cuts in public expenditure; none of us can deny that. It is an easy thing to say. It is very much harder, as I know full well, to decide where those cuts should fall. But I believe it is absolutely vital, when we are deciding where those cuts should fall, that we should distinguish very clearly between public expenditure which is investment, and public expenditure which is on current account.
The noble Lord, Lord Nugent, very rightly made the point that, if you borrow to finance your current expenditure as an individual, as a business or as a country, you are on the road to bankruptcy. If you borrow in order to invest in something which is going to produce more wealth, then, if you are shrewd and wise, you are on the road to economic success. It seems to me that there has been no differentiation in the Government's attack on public expenditure between these two very different forms of expenditure. Surely, it cannot be sensible to cut our expenditure on our infrastructure, such as our roads, our harbours and our railways, which will take at least five years to fructify, at a time when we have idle resources and a million and a half unemployed; when we are not making use of those resources and that manpower but in five years hence, when recession will have departed—certainly, world recession will—we shall not be properly equipped with the infrastructure to cope with the increased economic activity which will come.
I now come to inflation. Of course, the disease has been rightly diagnosed, even though I do not believe that the disease is quite as lethal as the Government think. But that does not mean to say that the cause has been correctly diagnosed. I am not an economist and so here I tread hesitantly. But, as I understand it, there are broadly speaking two forms of inflation. There is the old classical inflation caused by too much money chasing too few goods. If you have that form of inflation and if, for one

1413
reason or another, you cannot sufficiently quickly produce more goods, then by all means restrict the money supply so that there is not too much money. They then come into equilibrium.
However, if your inflation is, as I suggest is the case today, due, first, to the enormous increase of energy costs over which we have no control and, secondly, to the enormous explosion of wages over which it appears we have no control, and to which I shall return in a moment, then simply restricting the money supply cannot have any effect whatsoever upon this form of the disease of inflation. Therefore, curtailing money supply blindly like that can have no effect in curing this disease.
I repeat that that does not mean that there should not be a curtailment of public expenditure, and private expenditure, too, where it is not for investment, but a blind restriction of money supply, particularly when it is coupled, as it inevitably must be, with these inordinate interest rates, can have only a very little and very slow effect upon curing inflation and will have a disastrous effect upon the economy as a whole. In fact, I believe that monetary restraints have the opposite effect from what is required, because we must do what we can to restrain the wages explosion; we have no control over oil and other things coming from overseas.
However, we have tried a wages policy. I am not as despondent about a wages policy as are other noble Lords who have spoken. I believe that it gave some results. It could, given time and skill—and a certain amount of skill was undoubtedly lacking last year or the year before—have some beneficial effects. But, above all, there must be co-operation, understanding and a genuine working together between organised labour, organised industry and Government, and the monetary policy is making that, if not impossible, then infinitely more difficult than would be the case without it, as it is at the present time. The whole of British industry's inventiveness is being stifled by this policy and the trade union movement is being antagonised by it, instead of being encouraged.
We have now come to the stage where there is a genuine world recession, where every country is suffering, and where we
1414
suffer perhaps not as much as we should as a result of oil. It might have been rather better for us if oil had not come at the present time, because it has cushioned the effects. But we are suffering together with other countries. What we must surely do now is to make sure that all forms of public and private expenditure that are not going to be productive, or are not going to yield a dividend, are restricted; that the cuts that inevitably fall on the whole of the community are distributed in such a way that the poorest sections of the community, and the potential future producers of the community, do not suffer; that there is a feeling of justice and of equity in the whole of the policies which we are being asked to follow and the whole country must be united behind them; and that we should take steps now to ensure that, when world recession departs, we shall be in a position to regain the markets that we have lost, to produce for our own consumption far more goods than we have been producing over the past decades and to export competitively with other countries to meet the demands which will grow when recession is over; in other words, to ensure that our industrial base is sound and that our industrial and labour relations are sound and happy. That must be our objective and I submit to your Lordships that this Budget fails lamentably to achieve that.
Lord NOEL-BAKER: My Lords, before my noble friend sits down, may I ask him whether or not he agrees that world armament expenditure is a major cause of the inflation of which he has spoken? He has quoted the classical definition of inflation given by every economist since Adam Smith: too much money chasing too few goods. World armament expenditure has been running recently at more than £200,000 million a year. This enormous purchasing power in the hands of the members of the Armed Forces, of the workers in armament factories and the manufacturers of arms comes out into the market with no goods whatsoever having been produced.
Several noble Lords: Speech!
Lord NOEL-BAKER: May I ask my noble friend whether he agrees, as I said before, that this is a factor which can be cured only by the world disarmament measures which the Special Session of the United Nations put forward in 1978?
Lord WALSTON: My Lords, my noble friend tempts me to continue with the second part of what I wished to say in my speech, but out of deference to your Lordships I forebore. I would undoubtedly agree with my noble friend that the more that is spent on armaments which are not available for consumption the more inflationary pressure must rise.
6.41 p.m
Lord MACKIE of BENSHIE: My Lords, I will not take so long. I hope other noble Lords will not, either. I will be down, having said what I have to say, within nine minutes, otherwise your Lordships may shoot me! Everybody has praised the noble Lord, Lord Byers, my Leader on these Benches, for his speech, but I wish to complain bitterly about that part of it in which, with immense and succinct brainpower, he summed up the situation of small businesses, put in a word of praise and some excellent criticism, and then said, having said all that there was to say,"But of course my noble friend Lord Mackie will fill this out ". That is the privilege of leaders, from which we all suffer!
The next thing I want to do is very quickly to dissociate myself, and these Benches, from the advances of the noble Lord, Lord Wells-Pestell, who seemed to equate the Liberal Party with the Labour Party's thinking on these matters. I must say in all seriousness that we regard the poverty in this country, which forces the cuts being made in the social services, as the fault mainly of the attitude and policies of the Labour Party which have kept this country poor since the end of the war and which have lamentably failed to be put right by the Tory Party.
The noble Lord, Lord Balogh, instanced Austria as a country where an incomes policy has resulted in a successful economy. Japan, Germany and Austria are the three countries most often quoted as being successful, but nobody ever says that this is because of the vigour induced by the fact that they were beaten into the ground during the war and knew that they had to pull themselves up by their bootstraps, that nobody else was going to do it for them and that the world did not owe them a living. That is the attitude which we in this country have had, very largely, since
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the end of the war, and any corrective to that attitude must be good. It is an attitude which still obtains, as I perceived very plainly in the speeches made today, in the Labour Party. Anybody who looks at the evidence knows that this must be wrong. Before we get into a forward position we have to work for it. Nobody owes us a living! the whole country has got to work.
Having said that, I find that the attitude of the Conservatives is occasionally somewhat simplistic. We agree with them that we have got to harbour our money—that we cannot throw it about and that we cannot print it to correct every mistake that the Government make. But the noble Lord, Lord Cockfield, whose speeches I greatly admire, is a little wrong and needs a lesson in plain physics. Water can run uphill. If you syphon it, then (as every petrol thief knows) the water runs uphill. If you build a dam, it does not necessarily follow that the dam will bust; it will bust only if you know nothing about engineering, if you do not understand how you are building it, or if you rush it up in a great hurry as a panic measure. I will not go on with the metaphor for too long, otherwise I shall no doubt get it wrong.
A wages policy, as a panic measure, has been applied by both Labour and Tory Governments, but the Labour Party are not allowed to believe in it—the trade unions will not let them—and the Tory Party have not got around to believing in it yet; they are perfectly prepared to believe what the Liberals said 100 years ago, but they are not prepared to believe in any more up-to-date liberal philosophy until it is too late. There is no question, as the noble Lord, Lord Balogh, said, that in several successful countries policies which have been designed to control the rise in incomes, not to stop incomes rising altogether, have been successful and should be a useful adjunct to the crude control of the money supply. The money supply is an entirely different matter. The noble Lord, Lord Balogh, was quite right, he will be pleased to hear, when he said that there is a difference between the economies of 100 years ago and the controlled economy which we have today.
If I may return to small businesses, we welcome several of the measures. It will

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be very interesting to see how this enterprise area—a variation upon various other schemes which have been tried—helps. I am sure it will help many of the areas which are badly in need. But s mall business is facing an appalling situation at present. If you start to budget thinking that you need profit to cover, first, a 20 per cent. Inflation—it is no good simply making some money and inflation then swallowing it all up—and then you look at 20 per cent. interest and then you look at a reasonable degree of profit for manufacturing industry, which you need to put at 20 per cent. then you are really into an area of profit of something like 60 per cent. over costs, which is virtually impossible to achieve.
The small businesses of this country are in a condition of very severe squeeze. It is no good eventually conquering inflation if, in the process, the patient has died of lack of oxygen, or something of that nature. Surely that is what is going to happen. In addition, therefore, to the policies that they have announced, may I urge the Government to look at some method of getting risk capital to small businesses at a reasonable rate of interest.
The methods of saving in this country have altered out of all recognition, due mainly to long term foolish Government concessions on taxation, insurance and other matters. No longer do people let their money fructify in their pockets or in a small business, thinking that it will keep them in their old age. Instead, the Government encourage them to put it into insurance companies, which inevitably put it into some form of development which has nothing to do with manufacturing. It is no good asking insurance companies to take risks, since they regard themselves as the safe and siccar guardians of other people's money. They are not there to take risks. Therefore the Government should develop, probably rather better than the last Government did, lending agencies like the SEA in Scotland, the NEB and the Highlands and Islands Development Board, and they should see that they have a reasonable supply of money to lend at a reasonable rate—I think about 10 per cent. would be reasonable—to businesses which want to expand or to businesses which need to be saved. This is perfectly possible. It is being done
1418
through the European Investment Bank, but that is far too complicated a process. In the business of which I am chairman we borrowed some money from the European Investment Bank at a very good rate, 91/2 per cent. However, it took us six months' negotiations of a complicated character before we got it. We can go to our own bank and get that money in five minutes, but unfortunately at an enormous rate of interest.
The Government should examine whether they might lend to the European, Investment Bank and, secondly, should, supply direct to these bodies. That is the only way I can imagine of getting past the system and helping small businesses. I hope that they will take that action I. am now about to conclude my speech, after addressing the House for only eight minutes. I ask the Labour Front Bench in particular to note that fact.
6.51 p.m.
Lord ALPORT: My Lords, it is always a great pleasure to follow the noble Lord, Lord Mackie of Benshie. He brings to our debates the fresh air of the Highlands and good, canny Scottish wisdom. I know that the noble Lord will forgive me for not taking up his general argument. My remarks will be of a political rather than an economic nature. We have had a good deal of economics in the debate so far. There is only one fact that I have not yet heard mentioned in relation to economic theory and practice. That fact is that inflation is always in the interests of the debtor: that anybody who borrows money has an interest in paying that money back at a cheaper rate than the rate at which it was borrowed. The Government, as the greatest debtor in the country, have a vested interest in the continuance of inflation. The only problem is that when it gets out of hand and has social consequences which are thoroughly undesirable, it then becomes the Government's duty to try to mitigate those consequences:
I shall shortly explain why I am not competent to talk about economics. What was, to me, the most surprising thing about the Budget was the fact that it has passed into history without making any real impact on the political consciousness of the public. Mr. Callaghan called it "mean", the Morning Star

1419
described it as "vicious" and the Economist said that it was a "Dog Day's Budget." Its provisions for the most part comprise a selection of sensible and overdue modifications in the current field of national taxation. When it was controversial, as in the case of strikers' pay, it surely gave effect to the Conservative manifesto at the last election. There was nothing in the Budget to justify Mr. Healey's histrionics or Mr. Murray's extravagant condemnation. Perhaps the best comment was the fact that the pound lost a few cents on foreign exchanges and that the FT index dropped a few points, too.
So far as I am concerned, it is not the short-term implications of the Budget which are important. It is the Chancellor's commitment to a four-year programme of monetary policy which will, so far as I can see, compound the disagreeable effects—social and industrial—which, on good evidence, lie ahead of us from the current world recession. This has sent a shiver of fear down the backs of even the most hardened commentators. The Investors Chronicle put it this way: "Hell bent on recession", said its headline, and it went on:
"The Government is now so deeply committed to its own brand of monetarism that only a disaster will deflect it from the path it has embarked on. The most important element in the Chancellor's Budget speech was the announcement of a medium-term financial plan. Within four years the Government intends to cut the rate of growth of money supply by half, and the public sector deficit to a mere £21/2 billion from the current level of £9.3 billion. The costs of this strategy could prove horrendous".
Some weeks ago I wrote a letter to The Times commenting on an address given by Sir Ian Gilmour in Cambridge. This letter seems to have contributed to inspiring the very able editor of that paper to produce a leading article, which seemed to say that, while those who thought as I did—in the Prime Minister's terminology the "wets" of the party—were the good guys whose hearts were presumably in the right place, we did not know anything about economics. Therefore, the bad guys who did know all about economics, who agreed with the Prime Minister, the Chancellor and Sir Keith Joseph, must be supported in their efforts to make our countrymen and women face the grim realities of a nation which is alleged to be decadent, workshy and economically dis-
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oriented. I suppose that is a terrible thesis, but if I had to choose between being a good guy and an economist, on the whole I would prefer to be a good guy. However, I do not think that really is the problem. I know, for instance, that Sir Keith Joseph, who for a couple of years was my PPS, is as compassionate as anybody in public life; and some of those who are categorised as "wets" can be extremely tough and ruthless when they think circumstances warrant it.
To me, what the basic controversy is about is whether, in the 1980s, those in power should allow economic theory and politics to dictate their political actions, or whether their political actions should be designed to bring about certain desirable, and indeed essential, economic consequences. To put the matter another way, the question is whether in governing Britain in the 'eighties, in the search for increased productivity, of which the noble Lord, Lord Walston, spoke, and the pursuit of efficiency in industry, in ensuring the co-operation of organised labour through the trade unions, in giving confidence and incentive to management and bringing about in the minds of the public generally a sense of purpose and optimism, economic theory should be elevated into being the mistress, or should be regarded as the handmaid of political action.
To illustrate my point, let me take organised labour and the trade unions. I remember that somewhere among Professor G. M. Trevelyan's sonorous studies of England in the eighteenth century, he notes that the English working class of that day expected to enjoy a higher standard of living for less work than their opposite numbers in continental Europe. Our trade unions differ in many important respects from those in Germany, Austria, the United States or anywhere else. The attitudes which today dominate their leaders and the rank and file derive from our industrial revolution generally and, more particularly, from the large-scale unemployment and economic insecurity of the inter-war years. Theirs is fundamentally a defensive psychology committed to safeguarding their members' standards of living, their security of employment, the demarcation of their responsibilities between unions, the pay differentials between the skilled and the

1421
unskilled. As we have seen so often, particularly sadly recently, all this is sometimes achieved regardless of the effects of their actions on the wellbeing of the public generally or on other workers in other industries in other parts of the country.
My Lords, the art of government, at any rate in a democracy, is the art not only of what is possible but, far more, the ability to persuade, and if necessary to compel, people to do what appears to the Government of the day to be right in theirs and in the national interest. Government is a matter for politicians who understand history, who should be trained to make allowances for the prejudices and reflexes of a nation whose memory is inherited from the triumphs, disasters and struggles of the past. It is not a matter for the ephemeral theories of some contemporary economist, even though he is a Nobel Prize winner.
Therefore, I ask your Lordships, is it wise, for instance, to suppose that what motivates the workers in Germany, France and the United States of America will make a similar impact upon the British worker in the South of Wales or in Yorkshire, or indeed in London? Is it wise, when the attitude of the trade union movement is conditioned by the spectre of unemployment in the 1930s to pursue as the kernel of the Government's policy—no doubt for the most immaculate reasons of monetarist theory—a constant nagging of industry with regard to overmanning, and a series of deflationary measures which are calculated to increase unemployment to 2 million and perhaps nearer 3 million in the lifetime of this Parliament, and thus to invite a direct confrontation with the trade union movement in areas which are best designed to exacerbate their fears and their suspicions?
Of course there are evil elements, and there are certainly irresponsible elements, in the trade unions. Of course it is vital that there should be a change of attitude in all sorts of respects to the industrial organisation of this country and to economic efficiency on the part of both management and workers. But do your Lordships think that this material and psychological revolution which we all seek is going to be brought about by the conscientious application of Professor Milton Friedman's ideas or the resurrection of
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Mr. Gladstone's free market economy in Great Britain of the 1980s?
My Lords, Professor Friedman's ideas are not new. It was the free market economy of the 19th century and the early 20th century which conditioned the character of the British working class movement and has left its legacy of fear, suspicion and class division to which our country as a whole, and the trade union movement in particular, are now the unhappy heirs. I have no right to claim to speak for anyone except myself—
Lord ROBBINS: My Lords, I am sorry to interrupt the noble Lord, but would he really contend that the frame of mind of the working people conditioned by the policies of Bismark was superior to the frame of mind of the working people conditioned by the policies of Mr. Gladstone?
Lord ALPORT: My Lords, I do not think that the attitude of mind of the working peoples conditioned by Bismark was attractive. It has led probably to two world wars, but that is a very different thing; and there is one thing that I would not say—I am sure that the noble Lord who has just interrupted me would join me among the "good guys" who are the"economic illiterates", as we are maintained to be. I am an easily identifiable "wet" or, more agreeably in the opinion of the editor of The Times, one of the good guys who are economic illiterates. I do not believe that any Government which, in the words of the Investors Chronicle (which is not the normal mouthpiece of "wets" like me) is—let me repeat,
"Hell bent on recession"
and
"so deeply committed to its own brand of monetarism that only a disaster will deflect it from the path it has embarked on"?
should be allowed to go along that path without challenge.
Flexibility, pragmatism, the ability to make a timely U-turn before disaster intervenes: these are the essential characteristics of a party Government which realises the fallibility of human judgment and the limitations of political power. If any Government want to get the best out of the British people they should not spend their time in depreciating, dividing, lecturing and nagging the people of this country; they should not commit them?

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selves four years ahead to a policy which could lead to disaster when historic experience flashes its warning signals.
In such circumstances, wise and sensitive political leaders should seek to mobilise that indefinable factor in the make-up of the people of Great Britain which transmutes indolence into effort, which makes personal hardship and sacrifice an acceptable contribution to its progress and success, and which feeds the confidence in themselves and in the community which surmounts the difficulties and dangers before which ordinary people quail.
What I am trying to say to your Lordships and to anyone outside this Chamber who may care to listen, is that what one writer called "the endless adventure of governing man" cannot successfully be determined by any narrow theory, whether monetarist or socialist or anything else. It requires an understanding of the historic forces which dominate a nation's attitude of mind and which, if properly handled, can mobilise those forces to ensure its success in the future.
No doubt those who think as I do have earned the epithet "wet". I remember that "Tory "was originally the abusive epithet for Irish Catholic brigands in the era of a different controversy. Perhaps time and events will bring about a similar transmogrification of that epithet which is now widely used in the Press as a term of abuse. The designation "wet" may in due course enter the political vocabulary of Great Britain to represent those who, in the old Tory Party, seek to maintain the historic decencies and practical wisdom in the conduct of national policy which it has always been our aim to achieve.
7.6 p.m.
Lord UNDER HILL: My Lords, I, too, should like to thank the noble Lord, Lord Byers, for initiating this debate. A number of different views have been put forward, but the debate will be notable if only for the speech of the noble Lord, Lord Alport, which I hope all your Lordships will read very carefully to ascertain exactly what he is proposing.
There are many issues on which I should like to comment, but I propose to take just three points before coming to the general
1424
situation. Yesterday we dealt at length with the matters of social security and therefore I will not comment on the proposal to link pensions in future with prices instead of the option between prices or earnings; but I am very concerned with the other proposal, which is to fix short term benefits five percentage points lower than the price increases. In effect, this means a cut in real terms for short-term benefits in respect of sickness and injury, invalidity, maternity and unemployment. Surely there cannot be any social justification for fixing these benefits at five percentage points lower than the price increases. If the noble Lord who is to reply to the debate says that it is done on economic grounds, then surely your Lordships will think that there must be other ways with which to deal with this matter, other than by attacking the sick and the unemployed, because that is what we shall be doing, and I am not being emotional when I say that.
I believe this will be the first Government in 50 years which, in effect, would have reduced the benefits for the unemployed. Perhaps I may say in passing, if it is suggested that there must be equality of sacrifice I can recall the election of 1931 and I can recall a particular political party's leaflet which was issued saying"10 per cent. cut all round", and there was the ladder. The only trouble was that when the man at the bottom moved down one rung he went under the water! Therefore when we speak of equality of sacrifice we must recognise that there are people who will be caught in the poverty trap.
This has been brought up in debate after debate in your Lordships' House, but I have never yet heard a sound answer from the Government Benches. Of course if it is believed that any cut in unemployment benefit—because that is what it really is—will force people to go to work, then frankly it is ludicrous to talk about men finding work when there is no work in industry for them.
I will also just briefly comment on prescription charges: these charges were 20p when the Government came into office and had been unchanged since 1971. We often hear about manifesto commitments. I looked at the Conservative manifesto before I rose to speak and I can see no reference there to an

1425
increase in prescription charges, and I believe that point was denied during the election campaign. So we find them up to 45p in July 1979, going up to 70p in April and up to £1 in December. To save what? In a full year £30 million. What is the justification? We were told yesterday by the noble Baroness, Lady Young, that 60 per cent. of the persons who have prescriptions will get them free. But again what about those in the poverty trap? These are the people who get caught every time. People really do not go to the doctors just for fun. If anyone feels that some do, I would point out that doctors do not prescribe prescriptions unnecessarily. I hope this matter is one which may be given further consideration.
Looking at the Government's White Paper, we find that overseas aid is to be reduced by 14 per cent. over the next three years. The White Paper states:
"Our ability to provide overseas aid is constrained in circumstances in which the overriding need is to strengthen our own economy".
We find that expenditure of £794 million in the last financial year is to be reduced to £779 million, but in 1982–83 it will go down to £680 million. Are we in such a bad state that that is what we have to do? I recall the interesting debate—I think I sat through the whole of it—in which a number of your Lordships spoke on the North-South discussion and the Brandt Commission Report. It is not much use listening, it is not much use talking, if the first thing we do is to cut overseas aid. Somebody might ask where are we going to find it? There are two proposals I can make at once, and they have been mentioned already. First of all, the assisted places scheme, and, secondly, doing something with the banks' 55 per cent. profit. We could tackle those two things.
I do not want to comment on the rights or wrongs of defence expenditure, except to say that I find again in the White Paper that there will actually be increased expenditure of £1,000 million—I prefer to say one thousand million, because it is the real figure, rather than saying one billion, which does not sound such a lot—between this year and 1983–4. Surely defence expenditure is public expenditure. How are the Government financing that? I want to come back to the question of public expenditure before I conclude. In fact, the ratio of public expenditure
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to GDP is still below the average for all the nine EEC countries. This point has been made in previous debates, and the noble Lord the Minister when replying answered "Well, of course, Britain is poorer economically". But we are talking about a percentage of GDP, so it does not matter if one is economically poorer or richer. We are talking about percentage expenditure, and we are the lowest. I completely agree with the noble Lord, Lord Byers, who said that one of the criticisms of public expenditure is the blunt instrument the Government are using, and that the £8 billion is not a sacrosanct item.
The thing that worries me most about reading the White Paper and the Financial Statement is that by and large there are no sound plans to deal with economic recession. When we consider that exports were up only 2 per cent. on the previous year, but imports rose 11 1/2 per cent. and manufactured imports rose 15 per cent., then I must say, how long can this situation possibly continue, and are there any firm plans to deal with it? I have always disliked the general question of import controls, but can we possibly continue with a 15 per cent. increase in manufactured imports in view of the very slow and very small increase in our exports?
What are the Government's plans for coping with recession and industrial stagnation? The attitude seems to be that, if we tackle the points in the Budget, regeneration will come by just waiting for it. I would echo what other noble Lords have said; it is no use coping with inflation if in so doing we find we have ruined quite a number of our industries.
Again, I find from the White Paper that output of our manufacturing industry in 1979 was no less than 4 per cent. below that of 1973. These are the words in the White Paper:
"Private investment in manufacturing industry appears to have levelled off during 1979 after two years of relatively rapid growth".
They are the Government's words, not mine. Yet we had a Budget which was to ensure that there was going to be a fair amount of investment coming into manufacturing industries. If the recession increases, as the Government forecast will be the case, surely there is inevitably going to be further loss of revenue, by

1427
reduced taxation because of lower incomes, and increased public expenditure because of the rise in unemployment and increase in unemployment benefit payments. So the recession will be further aggravated. I find from the White Paper that every one hundred thousand unemployed cost £110 million in benefits.
What I am going to say now may be out of date. Even if we are able to increase productivity—I agree with the noble Lord, Lord Walston; it is not so much a question of productivity as of the amount of production—even if we can increase production, surely we have got to pay attention to increase of demand. If I may give an example, we have problems of housing in this country; we have a large number of construction workers out of work. You can see in the White Paper how local authority housing is going to be almost smashed as the next three or four years go by. Suppose £100 million was spent on housing, surely this would increase tax revenue, curtail unemployment benefit, cause the suppliers of materials to employ more men. It may be an out-of-date argument, but to me this still seems to be the sensible way to talk about our economic planning—and I, along with other noble Lords, am not an economist.
May I say this in conclusion—and here I refer again to the speech of the noble Lord, Lord Alport. If we really want to get this country working there has to be a better understanding between the Government and the unions. The trade unions may have faults, individual groups in the trade unions may have faults, but you will not get over this by alienating the trade unions and the trade unionists. I repeat what I have said in a previous debate. This is not just a question of pay; it is a question of the whole attitude to men at work. Unless the Government really understand this they are going to find themselves in very great difficulty.
If we were a dictatorship it would be very easy to plan production and investment—very simple. But we are a democracy. We have consumer choice, which makes things very difficult. I believe it means we have to have some form of incomes policy. But you will not get that unless it is allied to other factors which would take the trade unions along with
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you. I believe the Government have to make a serious U-turn on this matter if they wish to get the co-operation of the people of this country.
7.20 p.m.
Baroness SHARPLES: My Lords, the noble Lord, Lord Byers, has introduced a most excellent debate this afternoon with his customary common sense, and I thank him. This evening I shall confine my remarks to the extremely imaginative and courageous package of proposals which shows the determination of Her Majesty's Government to carry out their pledges to independent businesses. In doing so, I should like to correct what appear to be some misconceptions—and I am sorry that the noble Lord, Lord Walston, is not present—about the size of the independent business sector. It numbers 800,000 and it also employs 51 per cent. of the total number of workers not employed by the Government—in other words, more than all the large public companies put together.
I agree very much with what the noble Lord, Lord Spens, said: the most important proposal is that losses incurred by investing in independent businesses may be charged against income for tax purposes. It goes even further than many of us had dared to hope. It will encourage the flow of equity investment in independent businesses and, as time goes by, will revive the confidence and enthusiasm of this vital independent business sector. As in America, it will attract the savings of those individuals who are understandably nervous of investing in quoted public companies to which they can make no contribution, save their cash. It will now be possible for them to take a close interest and actively help independent businesses in which they choose to invest. I am told that experts are already thinking up ways of using this clause for tax avoidance; but they can be dealt with, and their activities will be far outweighed by the benefits which will result from encouraging this essential part of our economy which can contain unemployment and also generate a much needed upturn in our economy.
Various noble Lords have spoken of the experimental enterprise zones and I do not wish to elaborate any more as regards that matter. I shall only say that these will take time to produce results and also I expect that there will be opposition to them

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from some quarters. I do not believe that we should rest content with all that the Chancellor has done to improve the environment for independent businesses. There will not be swift results, which may disappoint many people. I should, however, very much like to congratulate the right honourable Lady the Prime Minister and the Chancellor for referring to the whole field of independent businesses rather than to those which are simply "small". This package of proposals is the first great step towards the ideal of an "equity owning democracy" at which I am convinced we should aim.
7.23 p.m.
Viscount HANWORTH: My Lords, as has already been said, this Budget is part of an overall Government strategy of curing our ills by a monetary policy and by reducing public expenditure, and it should in my view be seen in that context. The criticism of it made by the Opposition elsewhere follows the usual practice of trying to gain political advantage on matters which are of relatively little importance seen against the broader canvas of the Government's strategy. To be fair, the Opposition ought to acknowledge that in many cases efforts are being made to help the poorer sections of the community; and in the case of higher prescription charges I understand that two-thirds of those people who might be liable to the higher charges are exempted.
The nation's economic performance has been visibly declining for at least 10 years, and without North Sea oil there would have been a disaster. Fundamentally, the reason for this decline is simple: it is because the hardest thing is for a nation or company which has reached the top to remain there. The challenge of reaching the top is no longer there, and the necessity for making changes to meet altered circumstances is overlooked in favour of using tried methods. It can be said that in success are always the seeds of failure—and that trend has been going on for so long that we have now nearly reached the bottom.
When in 1958 I left the Army and joined industry, I remember vividly that, although the management dared not say so, they still thought that Britain made the best engineering goods in the world
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and that it was the customers' misfortune if they did not buy them. Worse still, management could no longer wave a big stick over blue-collared workers and they had not learnt even the first techniques of man management, leadership, or call it what you will—I wonder if they have yet met this challenge.
In that context communication has meant no more than exchanging memos, and consultation has been pushed beyond a point where it has badly affected efficiency. The problem facing any Government in Britain today is that there is not just one thing wrong with our economy, but at least six areas which urgently need improvement. As I said in a recent speech, I consider that bringing the unions round to realising the true facts of life and to reorganising their structure is perhaps the most important, but also the most intractable, problem.
Over the last decade or so Governments have tried all obvious methods to wrestle with our ills, and the last Government had certainly reached the end of the road and would have had to change direction even if they had managed to get some restraint on wage increases. Looked at against that background, with a country which in many respects is ungovernable, the present Government's strategy is probably the only way left of trying to deal with our problems and to bring home to everyone the realities of our economic situation. I wish their policies success.
However, I have some nagging doubts as to whether the probable additional increase in unemployment—and it will increase anyway—and the damage to industry which this policy is likely to produce, is wholly acceptable, or will in fact be accepted. Although I am sure that this nation will accept stern measures to improve the economy on a short-term basis, I wonder whether it will do so over the much longer period which the Government envisage. For that reason some people think that the Budget could usefully have been tougher. Much the same considerations apply to making reforms in trade union law.
Although on balance I accept the Government's present policy as probably the only means of trying to put the country on its feet, I do not believe that a purely capitalist, free enterprise, policy

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is sustainable in the long run. For example, free collective bargaining in the wages area always was the "law of the jungle" and some modified system must be developed. I hope that the Government will, during their term of office, try to lay the foundations for dealing with this and other problems in a way more acceptable to modern socialist trends—and I do not mean by that just to our socialist party. If the Government adhere to the extreme dogmas of their Right wing, I am sure that anything they achieve will be swept away in the not very distant future.
Finally, to pick up one point made by the noble Baroness, Lady Gaitskell, she said that she would never believe that we could benefit economically by increased unemployment. I agree. It is a basic principle that the more people who can work usefully for as long as possible, the richer the nation ought to be. Goodness knows, we cannot afford half the things that we ought to afford! In a recent debate I discussed the reasons why this did not work out in practice, and suggested that further thought should be given to this before automatically applying palliatives to our unemployment situation. I hope that the noble Baroness can take it up from there.
7.30 p.m.
Viscount MASSEREENE and FERRARD: My Lords, first, I should like to offer my apologies to the noble Lord, Lord Byers, who I see is not now in his place. Due to a slight mechanical defect in my car when driving up from the country, I arrived too late to hear his speech. It was a great disappointment to me because I have always reckoned him to be one of the best speakers in this House and to speak an inordinate amount of common sense.
I support the Budget. I have always been a monetarist, but I should like to say something about high interest rates. During the last five or six years in this House I have said that it is my opinion—and I agree that from the point of view of economists my opinion is worthless—that the squeeze by high interest rates is perhaps slightly outdated as regards the control of the money supply. Today public expenditure accounts for between
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60 and 70 per cent. of the GNP. The Government control the Treasury, or perhaps the Treasury sometimes controls Governments—although I am sure not this Government. Of course, the Treasury controls the Big Five through the Bank of England. Nevertheless, if we want to reduce inflation, we must slash Government expenditure. This Government have made a very good start on what is a very difficult task. Over the next few years I should like to see Government expenditure slashed, not by 2 per cent, or 3 per cent. as at present, but possibly by 10 per cent. or 15 per cent., although that may be quite impossible.
As I said, I did not hear the speech of the noble Lord, Lord Byers, but from the speech of the noble Lord, Lord Walston, I understand that Lord Byers said something about applying different rates of interest in banking. I may be quite wrong about that, but from listening to the noble Lord, Lord Walston, that is what I gathered he said. I have always been very keen on this matter. A few years ago I said that we should have a very high MLR for wine, women and song, but that we should have a different rate of bank interest for exporting companies and agriculture. Apart from the dairy farmer, the average farmer only receives his income in the autumn through his harvest or when his lambs are sold. All farmers work on overdrafts; very few do not. They have no money coming in for 10 months of the year. It is very hard for them to have to pay 20 per cent. or 21 per cent. interest rates. There are similar examples in other industries, but the situation in agriculture is unique. Other nations allow people such as farmers and those wishing to start new businesses to pay a different rate of interest. I hope that the Government might consider that in future.
Although I am a monetarist—and I hope a humane one—and I completely agree with the Government in their policy, especially with Sir Keith Joseph, who is a famous monetarist, I must ask the question: Do we have the right conditions in the United Kingdom for monetarism? These huge labour "monopolies"—I suppose that is the right word for it (we can call them cartels, if you like)—have complete control over the employer. As your Lordships know, the unions are above the law and the 1974 Act put them

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further above the law. We then have the Protection of Employment Act and, of course, we have the Welfare State. The employer has no power to control wages, apart from going broke! The unions can demand anything they like. That is why was extremely pleased to see in the Budget—and the P.M. must have had great courage to do this—that the Government propose to deduct £12 from the supplementary benefit and other allowances payable to a striker, on the assumption that the union will make up that £12. Before the war the unions always paid their members if they were on strike.
I should like to give a few figures to show why the unions can well afford to pay £12 to their members who are on strike, and a good deal more. I now quote from the International Currency Reviews Survey. Between 1974 and 1978 the survey shows—and it was taken from 19 unions—that those unions received £439 million from members' subscriptions. Out of that they paid their members only about £62 million. What did they do with the rest? They spent it on administration. great luxurious offices and cars. As an example let me take NALGO. In 1974 NALGO's subscription income was £2,100,000. It paid nothing to its members. In 1979 its subscription income rose to £9,800,000 and it paid £84,000 to its members. What did it do with the rest? It spent £6 million on building sumptuous offices, and I do not know what happened to the remainder. However, I presume that some of it went on nice cars, good salaries and big cigars, but I can only presume because I do not know.
As another example let me take Mr. Clive Jenkins and his union. He proposes to increase his members' subscriptions by £6 in 1980, because he has sent round a circular letter to this effect. That will bring in an extra £3 million. The excuse, I understand, is that they want to purchase extra freeholds. If they cannot afford to pay £12 to their members on strike when they are among the richest organistions in the country, it is deplorable.
Lord WELLS-PESTELL: My Lords, would the noble Viscount give way for one moment? I had better declare that I am a member of ASTMS whom the noble Viscount described as Mr. Clive Jenkins's union. It is not. It is ASTMS. He
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must bear in mind, because I think he is exaggerating the situation, that ASTMS for example maintain a very large and effective college for training personnel and staff and so on. Some of them maintain convalescent homes. It is not all going in the direction the noble Viscount thinks. So far as ASTMS is concerned, I do not like the phrase but it is having an ongoing system of training of people in various sorts of grade.
Viscount MASSEREENE and FERRARD: My Lords, I thank the noble Lord for that information. I did not know that. It is an excellent thing. If unions were weak financially it could be wrong to impose this figure of £12, but I think that financially they are quite able to pay their members at least £12 weekly while on strike.
May I for a few minutes go on to one or two matters in the Budget. I am sorry to see that capital gains tax remains the same. I agree that you do not have to pay unless you have a gain of something over £3,000. But we really ought to alter the date of April 1965. By all means have a capital gains tax if you want it, but when we come to 2000 A.D. to still date back to April 1965 will be quite absurd. As we all know, it is a tax on inflation, and if we are inflating at a rate of nearly 20 per cent. the amount of capital gains tax would be absolutely enormous. I should like to see capital gains tax backdated no further than 10 years.
Regarding bank profits, I quite agree that they appear almost obscene. They are really very high. All the bankers I speak to agree with me. They are rather embarrassed about it. When Governments get money—perhaps not this Government, but other Governments—they are rather inclined to waste it. By all means let the Government tax the profits; but it is a great pity that instead of the Government taxing them some means cannot be devised whereby these excess profits could be paid out to start small business through the merchant bank subsidiaries. If something like that could be worked out it might be better than the Government taking it in tax. Even with the best will in the world, civil servants are inclined to be a bit extravagant with other people's money.
There has been great uproar about the £1 prescription for medicine. All I would

1435
say here is that I think it will improve the health of the country considerably. There will be far fewer coughs and headaches. Many of the people who like going round to see the doctor, perhaps because he has a good manner, will probably go to the chemist's shop instead. I am also a little worried about index-linked pensions for civil servants and some others. While I have great admiration for some civil servants, this year those index-linked pensions of civil servants are going to add £400 million to public expenditure. They have just had a 23 per cent. pay rise—which of course is higher than in private industry and in other nationalised industries. That will add about £640 million to public expenditure.
I was never in the Civil Service, but I thought that it was supposed to be an honour to be in the Civil Service and that you did not expect great remuneration. You got your OBE and then perhaps CBE, and then rose up and got a KCB, but I do not think you can really compare them to those in private industry; so I think that pay rise is excessive. Of course, if I were in the Government I should be only too anxious to keep in with my civil servants; so perhaps there is some object there.
I have spoken long enough. I support the Government—I hope that the noise of thunder is not the IRA—in their Budget. They are on the right course, especially with regard to strike benefit, provided they do not lose their courage but get the union legislation forward quickly. We have tried the softly, softly approach for 30 years, but it has not paid off and I think it must be done by legislation.
Lord MISHCON: My Lords, before the noble Viscount sits down, did he notice that the heavens themselves were rather amazed at his speech and sounded forth their reaction?
7.47 p.m.
Lord BANKS: My Lords, my noble friend Lord Byers has certainly provoked a fascinating debate today, and no part of it was more fascinating than the notable and courageous speech of the noble Lord, Lord Alport. I should like to say something about the basic economic
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strategy of the Government and just a word about its implications for social security. No one can deny that the immediate outlook is grim. The total level of taxation has been increased as a result of the Budget by £235 million; there is to be a cut in public spending at a time of increasing recession of £1,275 million; output is expected this year to be down by 2 per cent; owing to the abolition of the lower 25 per cent. income tax band the increases in the allowances will not take full account of inflation except for those at the very bottom of the scale; unemployment is expected to be up; inflation is expected to remain at its present level, between 16 per cent. and 20 per cent; and there will be a drop in real earnings.
But, say the Government, all will be well. The cure will be harsh, but, if the patient survives the cure, he will make a spectacular recovery and leave hospital loaded with presents in the shape of tax cuts. What is the cure? It has been explained to us this afternoon by the noble Lord, Lord Cockfield. It was explained by the Chancellor of the Exchequer in his Budget speech. it is to reduce the rate of inflation by reducing the money supply. There is a relationship, it is argued—erratic from year to year, but a relationship nevertheless—between money supply and the public sector borrowing requirement. Therefore, we must reduce the public sector borrowing requirement. This, it is said, will also bring down the very high interest rates.
My noble friends Lord Byers and Lord Mackie have drawn attention to the deleterious effects of these, as have other noble Lords who have spoken. The public sector borrowing requirement will be reduced by cutting public expenditure by 4 per cent. between 1979–80 and 1983–84; the gross domestic product is expected to rise by 1 per cent. per annum in that period; there will be, it is estimated, a £5 billion rise in revenue, half of which will come from North Sea oil; and the public sector borrowing requirement will be down from some £81/2 billion to £3 billion, and that will allow, at that time, tax reductions.
That is the happy scenario which has been outlined to us to give us encouragement in these difficult days. But there

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are some questions which must be asked about that strategy, some of which have been asked already this afternoon, and I think these questions would weigh with the noble Lord, Lord Alport, even if they do not weigh with the noble Lord, Lord Cockfield. First, what about the damage caused to the economy by the recession? The noble Lord, Lord Walston, referred to that.
What about the firms which will go out of business, caught between the Government's strategy on the one hand and wage demands on the other? They will not come back. We may be destroying an important part of our productive capacity. What about the levels of unemployment which this strategy will demand and the strains on our society which that can cause? We all in this House admire the ability of the noble Lord, Lord Cockfield, and the cogent and logical way in which he presents his arguments, but if I were asked to say what was missing, I would say it was the human touch, the consideration of how individuals react and are affected by the automatic, mechanical policies which he outlined to us.
What about the run-down of the public services, which is already noticeable? After all, we spent last year only 3 per cent. of our gross domestic product on the public services, whereas the EEC average is 41 per cent. What about the social divisiveness of many of the expenditure cuts? And what happens at the end? Supposing it all works out as we have been told. At the end do we keep this monetary restraint and keep at the level we have then reached for ever, or are we allowed to relax and, if we relax, do we commence the cycle once again? The Government strategy is based on a belief that if the money supply is reduced, inflation will fall; in other words, that inflation follows the money supply and not the contrary. I do not believe that theory—it could be right—has been proved, and therefore a great risk is being taken with the national economy to test a theory. It is also based on the belief that if you cut public expenditure you encourage private expansion, and I do not believe that is necessarily so. I think the effect can be precisely the opposite.
Would it not be more sensible to adopt a much more flexible attitude to the public sector borrowing requirement, and
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certainly not to decrease it in the face of a recession, and to seek agreement of both sides of industry for the operation of an incomes policy of the kind my noble friend Lord Byers outlined? The noble Lord, Lord Cockfield, said that curbs were resented in incomes policy as attempted and that pent-up demand at the end of the incomes policy destroyed the whole thing. We have had the kind of incomes policy which is put on for a year or two and then taken off, but we have not had an attempt yet to establish a long-term permanent incomes policy, and that is what we want. As to restraint being resented, there was a clear opinion poll verdict, when this matter was much before the public, in favour of restraint—in favour of an incomes policy—and there are undoubtedly resentments, too, caused by the operation of a free-for-all. Surely it is better to work incomes policy by co-operation and agreement than to seek to impose it by a combination of monetary policies and market forces: co-operation and negotiation rather than. bankruptcies and unemployment.
Regarding social security, the Chancellor, and indeed the noble Lord, Lord Renton, today, have spoken with alarm about the fact that one-quarter of the total expenditure today is on social security and that it amounts to £20 billion. But we should hear in mind that over one-half of that figure consists of contributory benefits financed from the National Insurance Fund, to which the Revenue pays only 18 per cent. of the cost. About one-half of those National Insurance benefits, or one-quarter of the whole, consist of retirement pensions, and pensions have not been increasing as a percentage of national average earnings. They are recognised to be too low, and the Minister for Social Security, Mr. Prentice, is on record as having said in the other place very recently that pensions are too low and should be a higher percentage of average national income.
In any event, retirement benefits are operated under the 1975 scheme, a scheme to which all parties agreed, and, as I recall, it was only those of us on these Benches who pointed out that the burden was being thrown on future years by the earnings-related pension, but that is scarcely a problem at the moment. So the pension scheme is proceeding very much as was anticipated and, it accounts for one-

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quarter of the whole of social security spending. A tax credit system such as we on these Benches advocate would give the opportunity for a simplification of the social security system, and no doubt that simplification and rationalisation would allow for some cuts in cost while still seeing that the essential benefits were provided. I am quite convinced that nibbling away at the present structure, which the Government are now embarked upon, is not the way to seek reform.
I welcome of course the improvement in family income supplement and in the mobility allowance, for example, announced in the Budget Statement, but I regret, as other noble Lords have done, that child benefit was not raised sufficiently to take account of inflation. We are told that this is too costly—that every extra 10p of child benefit costs £60 million—and that to bring it up to the level of £5.20 which is necessary to offset inflation would cost another £270 million. But we must regard this as equivalent to the cuts—the same sort of thing, in effect—as the increases in personal allowances, and they will cost the present Budget, I understand, £1,200 million. Thus, if £1,200 million could be found for that purpose, why could not £270 million be found for something which is really part of that process?
I regret the decision to break the link between pensions and earnings, but we spoke about that yesterday and I will say no more about it today. I regret the decision to break the link between short-term benefits—to which the noble Lord, Lord Underhill, referred—and prices, the decision that this autumn they will be increased by 5 per cent. less than the increase in the retail price index. These benefits are to be taken into tax. Will they be uprated in future, once that has been done—it will not be this year—annually for prices? Of course, if one increases supplementary benefit in line with the retail price index, as has been done, and if one increases short-term benefits by 5 per cent. less then one will increase the numbers on supplementary benefit, which is the very thing which we are supposed to be trying to get away from at present.
I said yesterday that I regretted the cuts in social security and welfare services, The welfare services make a
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direct demand on resources, but the social security cash payments do not. They transfer income, certainly to those more likely to spend, but the level of private savings is buoyant, and the fact that those people are more likely to spend rather than to save does not seem to me to be an important factor at present. Bigger investments are deterred not by a shortage of funds, but by economic considerations.
In conclusion, and returning briefly from social security to the main strategy, I should like to emphasise that it is not true to say that the Government in this country take a larger share of gross domestic product than do Governments in similar countries. It is lower than in any other EEC country. It is 42 1/2 per cent. in the United Kingdom at the moment, and 46 1/2 per cent. in West Germany, which is held up as the great example in these matters. Furthermore, it is not true to say that the Government's share of gross domestic product has been increasing in recent years. On the contrary, in 1974–75 public expenditure rose to 46 per cent. of gross domestic product, but, as I have said, at present it is 42 1/2 per cent. If one takes Government expenditure on goods and services, cutting out the transfer payments, the social security payments, one finds that the percentage is less than it was in 1973–74.
When we consider the recession which, as David Blake, the economics editor of The Times has pointed out, the Government have now taken on as part of their policy, we must bear in mind the facts that I have just mentioned, and we must make sure that we do not reduce the social security benefits which will help to ameliorate the recession for some of those who will be worst hit by it.
8.2 p.m.
Lord BRUCE of DONINGTON: My Lords, we on this side of the House are most grateful to the noble Lord, Lord Byers, for introducing the debate, and we are more especially grateful to the noble Lord, Lord Banks, who has voiced I believe a number of the sentiments that are shared not only by my own party, but also by that section of the Conservative Party which is called the wet section ". It is amazing what varying

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stages of humidity there are in the Conservative Party at this time.
I listened very carefully to the speech of the noble Lord, Lord Cockfield, which I found markedly similar to two other speeches I have heard from him on the same subject over the past seven or eight months. Therefore, I do not propose to refer in detail to his speech, which produced in substance various items which are incorporated in the Financial Statement and Budget Report 1980–81. I have observed, however, that the noble Lord is not prone to answer questions that are put to him, and is not prepared to examine very closely some of the factors that are laid before him by your Lordships, unless they happen to fit in with the particular theories that he holds. So we can deal with that aspect of the matter quite briefly.
The noble Lord said—and on this I take him up—that the Government's policy essentially was concentrated on monetary, financial and fiscal action. These are the parameters which the noble Lord, Lord Cockfield, set upon Government action itself. I have listened to these debates for many months now, and I think that it becomes clear from them, as well as from utterances in the other place, that the situation has now arrived where determination, resolve, steely resolve to do this, that or the other have become ends in themselves. It is as though determination to pursue a course has become a virtue in its own right, irrespective of where the course is likely to lead one. The noble Lord gives every appearance—which is amplified by his intonation—of following precisely the course that has been laid down for him. I remind the noble Lord that sincerity is not essentially a virtue. A homicidal maniac is perfectly sincere.
We know what the Government's policy is, or what its results will be. They have laid them out quite frankly, and we cannot complain about that. From looking at the Financial Statement we know that the prospect that the Government are offering to the United Kingdom, as a result of the application of their monetary, financial and fiscal action, is higher unemployment, lower manufacturing output, and lower investment. In the case of higher unemployment there was already the hint in news-
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papers supporting the Government that when this occurs it may be accompanied by means-tested benefits.
The first question I have to ask on the presentation of this vista, which the noble Lord, Lord Alport, described—correctly, in my view—as truly horrendous, is what has happened to the result of all these magnificent taxation incentives that were given in the Budget last year? We were told that by shifting the burden of taxation from direct to indirect taxes we were going to galvanise people into extra effort. Well, it is a little peculiar that so far all the Government are able to predict is a decline in output.
It was said that industry was being starved of investment because of public expenditure, which as the noble Lord, Lord Banks, has said, runs at a lower percentage of the gross domestic product than in most other countries of Europe. It was said that industry was being starved. But there is no evidence of starvation. Yet the vista that the Government hold up before us, of greater and greater restrictions on the public borrowing requirement, of greater slashes in Government expenditure, surely, by their own incentives, should be increased investment in the country, because this is the whole purpose, one assumes, for which the policy is being introduced. And what do we find? Investment in the United Kingdom is scheduled, as is shown in the OECD statement that I have here, to decline by between 7 and 10 per cent. during the current year, and the results projected over the four years are not particularly impressive. So all that the Government have to offer us as a result of all this is a decline, with the prospect at the end, in 1984—coinciding, miraculously enough, with a probable general election—of a massive tax bonanza (mainly, I take it, by income tax reliefs) which may or may not ensure their return in the 1984 election.
One other thing is made quite clear in the Financial Statement, and that is that the Government do not anticipate any substantial reduction in the EEC net contribution of £1,000 million during the next year, rising towards the end of the fourth year to something like nearly £1,500 million. Indeed, the question was put by the noble Lord, Lord Monson, as to whether, in the event of our obtaining a substantial relief of our net EEC contri-

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bution, the Government would relent somewhat and see that this sum, whatever reduction of the net contribution is achieved, is diverted without any effect on the public sector borrowing requirement to those sections of the community from whom the Government, in their current Budget, have so wantonly taken some of the benefits to which they are entitled. It will be interesting to find out the Government's reaction to that question.
But more shocking than that is the fact that the noble Lord made no mention in his speech of the possibilities or otherwise of recovering the £1,000 million described by his right honourable friend the Prime Minister as "our money". She has been parading this about for months now. We have had several phases in the action she is going to take. She blows hot one day; she blows cold the next. She is going to get it back; she is going to rap the table; she is going to lecture them; she is going to get the money back. Yet, the next day we have: No, she is not going to take any action except in co-operation with Europe. Is she going to do anything about it or not; and when are the results coming? It is no good the noble Lord replying, as is his custom, "Your Government did not get it back, anyway ". That is no answer at all. I want to know, and the House will want to know, what effective action is going to be taken. I would remind the noble Lord, whose party expressed astonishment at the previous existence of this deficit when they came to office in May, that the whole of the deficits for the five years preceding the election are set out on page 661 of his own party's campaign handbook if he cares to look it up. So their astonishment and their ingenuity in pretending that they did not know of its existence is, of course, a complete nonsense; but they do not anticipate being able to get any of it back.
The other thing that is implicit in the Financial Statement, to which the noble Lord, Lord Alport, referred and which was referred to by my noble friend Lord Walston, is that there is no indication of when the Government expect the inflation rate to come down. There is no indication at all as to what is supposed to happen. I remember that last year, when we were discussing the Budget, some
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astonishment was expressed from the Government Benches when I said (quite truthfully, in the event) that their predicted rate of inflation for the end of the year of 14 1/2 per cent. was more likely to be 20 per cent. So it is—and it is still going up. What relief in respect of inflation have they got to offer?
Nor does the Budget Statement or the speech of the noble Lord's right honourable friend in the other place give us any clue as to when high interest rates are going to come down. It is all very well for the noble Lord to say that these are a kind of penalty on firms which pay their workers above the going rate. That would have a superficial justification if the interest rates were confined to those firms; but I can tell the noble Lord that there are thousands of firms up and down the country—small firms as well—which are suffering very grievously from this high rate of interest, despite the fact that they have not encouraged the employment of labour at extremely high or extortionate rates.
Monetary control, fiscal control, financial control—does the noble Lord really think that anybody believes him when he says that high interest rates are inevitable? Is he saying that the Government, if they wished, could not themselves have the powers to reduce the interest rate, on the same lines as other countries? Is he saying that he is so scared of the Bank of England, which is supposed to be nationalised, so afraid of the Bank of England and the money market, that he is powerless to take any steps at all in reduction of interest rates? Perhaps he is. But if he says he is powerless to do this, then how is he going to ensure the control of M3, the money supply, anyway? That, of course, is central to the whole basis of the Government's policy—the control of M3. How is he going to do it? Or does he even know that he can do it? The noble Lord knows quite well, and I will not insult his intelligence, that there is no causal connection between the public sector borrowing requirement as such and M3. He knows that perfectly well; and, if he denies it, I will produce the computer calculations for him, and a whole lot of other things besides.
The noble Lord says that the control of the public sector borrowing requirement is crucial to his policy, even though it has no connection—no connection at

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all; no correlation; point nought, nought, nought, nought correlation—with M3, the money supply. Let us see. This question was raised in another place by a Conservative who knew perfectly well that by controlling public sector borrowing requirement you did not in fact control M3 at all. The Question was put to his right honourable friend the Prime Minister in another place on 7th February. Mr. Tapsell said:
"Is it not time to bring domestic credit expansion under more effective control by issuing directives to the banks and other main lending institutions to reduce their lending to within the declared Government monetary units?"—[Official Report, Commons, 7/2/80, col. 734.]
That was a perfectly reasonable question.
It was a question which the noble Lord, Lord Alport, almost asked in the course of what I thought was a most constructive speech—one of the most constructive speeches I have listened to for some time. The Prime Minister replied—and these are her own words:
"If that of itself would work, we would be prepared to consider it. But there has been an enormous so-called explosion in financial technology, which means there are various ways of getting around lending by banks. Of course, that means that any such directive to the banks would largely be inoperative, because the lending would be transferred to other financial institutions ".
In other words, the Prime Minister admits that the whole key to the policy put forward by the noble Lord—that of controlling M3—cannot in fact be carried out; or, alternatively, the Prime Minister herself is not prepared to carry it out.
So much for the nonsense about these so-called cosmetic efforts to control M3. They are merely an excuse by virtue of which the noble Lord, by associating the public sector borrowing requirement with public expenditure, seeks to have a mandate in order to carry out the other parts of his policy, a policy, to use their own words, of redressing the balance which has been so rudely disturbed since the end of the war so as to bring it back more and more to what it was before. These are the Government's policies.
The noble Lord says from time to time that there are no alternatives. In fact, when I listened to the right honourable gentleman Sir Keith Joseph when he was broadcasting, at the end of his somewhat lengthy cross-examination by economic commentators he seemed to rub his head wearily and say: "Well, there is no alterna-
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tive; all other plans had failed ". And the noble Lord has echoed it in this place—evidently not being entirely satisfied with the vision at the end of his tunnel, having a sneaking doubt that there ought to be something more; but there is no apparent alternative.
I think that when we come to talk about the re-establishment of British industry, when we come to talk about restoring output and increasing production, when we come to talk about national recovery in the broadest sense of the term, one thing is necessary above all else. One thing becomes the responsibility of Government which extends their vision, or should extend their vision, far beyond the narrow concept of monetary, financial and fiscal action. It should be the aim of Government to give the nation purpose. This is what the whole art of government is about. The noble Lord, Lord Alport, referred in as many words to that aspect of the matter.
We found in our experience in the war that a national purpose was not easy to obtain but was obtained very progressively and strengthened as time went on. That strength of purpose, aside from any other factor, aside from the acknowledged aim of achieving victory—for it was not a negative one of avoiding defeat but one of achieving victory—was sustained, above all, by a sense of justice. People who were in the war (whether in the forces or as civilians in the factories, or wherever they were) were sustained in their endeavours by a feeling that the Government of that day progressively established a greater measure of fairness and a greater measure of justice than people themselves had experienced in the pre-war years. We well know that over vast sections of the population rationing itself meant for millions getting meals adequate enough in one week, perhaps for the first time. So sacrifices were made on the basis of justice. This is where this Budget fails; because, when all the chips are down, we know quite well that the result of the taxation proposals will be to put more money into the pockets of people earning over £15,000 to £20,000 a year and that the social services will bear hardly on the bulk of the population.
The noble Lord has mentioned (and Sir Keith Joseph has mentioned) that there is no alternative. I think that there

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is. One has to establish a sense of purpose. But I think that the one thing that must be asserted—and I believe that many of my noble friends will agree with me—is the supremacy of Parliament over any sectional interest in the community. I use the phrase deliberately to cover trade union organisations as well as the banks, as well as the large companies, the multinational companies and everybody else. Parliament must be seen to be the final body that determines the destiny of the nation itself. It should be the function of Parliament to determine the parameters within which free enterprise can work. It must determine (I hope by consultation with the trade unions and other bodies) the approximate parameters within which free collective bargaining may take place; and at the same time—and I know that many noble Lords opposite would agree—Parliament must make quite sure that no profit interest however powerful, no multinational company however powerful, or group of companies or interests, acts other than within the parameters of the national policy. But, above all, such a policy, if it is to be successful must ensure—I mentioned it once and I repeat it with very deep conviction—that the spring that lies behind the efforts of our people is fundamentally the feeling that they are being dealt with fairly and justly.
Let not the noble Lord think that the British people can be driven or bullied by threats of unemployment, by the ruthless carrying out of their monetary policy which they hope will so sap the power of the unions that thereafter wage rates will be easy to depress. British people cannot be driven; but they can be led. I do not think that they have been well led for a long time. I speak as an individual; but I feel that the last peacetime Government to give really effective leadership to the nation—a leadership to which they responded, and during which period of time we achieved the greatest proportion of investment of the gross domestic product—was that of the Parliament of 1945 to 1950. Since that time, although parties have tried and leaders have tried (and I think everybody has been quite sincere in that) there has been lacking the leadership that we have required.
It may be thought that questions of
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fairness and justice are immaterial matters in the conduct of our affairs in the United Kingdom. I believe that they are central. For me, at any rate, they are. I well recall—and they have been a guiding light for me—the words of Thomas Carlyle of over 100 years ago, when he wrote:
"It is not to die or even to die of hunger that makes a man wretched. Many men die; all men must die. We all end up in a chariot of flame. But it is to be weary we know not why, to be weary yet unrelated, girt up in a cold universal laissez-faire. This is, and for ever remains, intolerable to all men that God hath made ".
8.30 p.m.
Lord COCKFIELD: My Lords, this has been a most interesting debate and it has brought forth a number of penetrating and interesting speeches from both sides of the House. I was, however, astounded that the noble Lord, Lord Bruce of Donington, started by claiming that insincerity was a virtue. I have long since ceased to follow some of his particular intellectual exercises, but that one seemed to be more unusual than usual. He has complained also that he does not always get replies to the questions that he asks. I am going to start therefore, despite the lateness of the hour, by explaining to him simply what is the connection between the money supply, the PSBR and the rates of interest. The rate of interest is the key to the level of the money supply. If the noble Lord, Lord Bruce of Donington, wishes to throw that key away as he has suggested, it is not surprising that he abandons hope of controlling the money supply. If the PSBR goes up, it follows that the Government have to borrow more money. They can only borrow more money at higher rates of interest. This lesson was abundantly demonstrated last November. If rates of interest rise, those rates of interest impose a burden on industry and cut down the demands for credit by industry, to match the increase in the PSBR. Therefore, an increase in the PSBR results not only in higher rates of interest; it results in damage to industry.
The next major point that the noble Lord raised was to suggest that we had abandoned hope of obtaining a satisfactory settlement of our claims in relation to our contribution to the EEC. That statement is completely unfounded. The Government remain firmly committed to securing

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a proper settlement of this problem. It is of course the position, as he has rightly pointed out, that the White Paper on public expenditure does not bring into account the amount of this settlement. That is entirely right because we can account for this settlement only when the amount of it is known, and it is in those circumstances that we shall then decide precisely what should be done. So much for Lord Bruce of Donington.
A large number of points were raised by other noble Lords. Lord Davies of Leek started by complaining that this Budget was the "leak of the century". I am sure then that no pun was intended. My noble friend Lord Thorneycroft replied to him to some degree, but I should like to make a serious comment on this. My own experience has been that over the years the economic commentators have grown much more penetrating in their analysis of the economic situation and it is not surprising in many ways that they come up with answers that are not all that different from those which the Government produce as well. This process is much assisted by the large number of bodies in the economic field that now produce forecasts, so that one can always compare these forecasts and draw a line through them. There is also, if I may be forgiven for saying this, a certain similarity between these forecasts produced by economic commentators and circulars from stockbrokers. They contain so many recommendations and prognostications that after the event it is always possible for them to pick out the one or two bull's eyes they succeeded in scoring.
A number of noble Lords, among them Lord Wells-Pestell and Lord Monson, raised the question of the earnings-related supplement and suggested that the proposal to abolish this supplement was not right in view of the fact that contributions had been made towards it. The position so far as the earnings-related supplement is concerned is in fact quite different from the position in relation to retirement pensions. With retirement pensions one builds up an entitlement over a very long period of years, ultimately of course over the whole of one's lifetime, and therefore the pension that one gets is directly related to the contributions one pays. That has never been the position in the case of the earnings-related supplement, which has always been financed on what is virtually a pay-as-you-go basis and entitlement to
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ERS in any calendar year is based on the contribution record over the last completed tax year before the start of that calendar year. In other words, it is a relationship between benefit and contribution in one year only, and in order to respect that entitlement we do not propose to abolish the benefit until January 1982, because entitlement throughout 1981 depends on contributions being paid in the current financial year.
My noble friend, Lord Renton, raised a point relating to debt interest. He asked why the debt interest payments in the White Paper did not fall more rapidly and how far they reflected payments on past debts. Of course, the bulk of debt interest reflects payments on the accumulated stock of debt and the interest rates at which that debt was issued. It takes time, therefore, to reduce interest payments as old debt is replaced by debt at lower interest rates and as public borrowing is brought firmly under control, and this is linked directly with the question of the level of the public sector borrowing requirement. The Government's policies to reduce the PSBR and interest rates will however reduce the burden of debt interest in time. It is projected already to fall after 1981–82 in real terms.
The noble Lord, Lord Spens, raised a very technical point relating to the proposal to extend tax relief for interest paid on money borrowed for investment in a close company. He suggested that there might be some difference between what the Chancellor of the Exchequer said and what appears in the Budget Red Book. In fact there is no difference, I am glad to assure him. The fact is that the relief at present depends upon two factors; namely, that the individual should have worked for the greater part of his time in the company's business, and, secondly, that he should have a material interest. It was only the first of these conditions that the Chancellor proposed to relax, and therefore it was only the first of them to which he referred in his Budget speech. The other condition, which he did not propose to relax, remains.
The noble Baroness, Lady Gaitskell, in referring to reductions in Government expenditure mentioned in particular spending on social security and on health. The position, I am glad to assure her, is that spending on social security is still

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expected to increase by nearly 4 per cent. between 1979–80 and 1983–84. So far as health is concerned, the commitment in our manifesto was not to reduce the overall spending on health below that planned by our predecessors. That promise has been honoured in the White Paper. My noble friend Lord Renton had already referred to this matter when he said that the Government's plans to reduce public expenditure took due and proper regard of those areas of great difficulty where there were strong arguments in favour of maintaining or even increasing expenditure.
The noble Lord, Lord Walston, claimed that the Government now accepted that tax incentives had proved to be ineffective. This is not the position at all. The position was explained very carefully by my right honourable friend the Chancellor of the Exchequer in his Budget speech. I will read what he said at column 1474 of Hansard of the other place on 26th March:
"The cuts "—
he was referring to the cuts in income tax—
"that I made last year were an important start in reducing the oppressive burden of direct taxation. At every income level, taxpayers now retain a significantly larger share of their incomes, which they are free to spend or save as they choose. I intend to do more in the future, but at a time when output is falling and we are making further heavy cuts in public expenditure I cannot afford to protect income taxpayers fully from the effects of inflation. This, then, must be a year of consolidation ".
There is no question in any way of retreating from the basic principles of our policy so far as income tax is concerned; it is simply that in the current year we have not been able to do as much as we would have liked to do.
The noble Lord also referred to what he claimed to be the problems created for industry by the fact that depreciation allowances for plant and machinery were on an historic cost basis. In fact that has long ceased to be true. As long ago as 1945, Sir John Anderson (Lord Waverley as he subsequently became) introduced the first initial allowances which were intended to be a supplement to depreciation, and to meet the problem caused by rising replacement costs. In the last Conservative Government my noble friend Lord Barber (as he now is)
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introduced the 100 per cent. first year allowances on plant and machinery. These now mean—to take the example given by the noble Lord—that if an industrialist replaces an asset which cost him originally £10,000 by a new one which cost £20,000, then in the year of replacement he gets full tax relief on the £20,000. Therefore, that particular point has long since been met.
The noble Lords, Lord Underhill and Lord Banks, raised the point about the unemployment benefit. There is of course no reduction in unemployment benefit. What has been done is that the uprating falls short by five percentage points below the full amount required to keep pace with the level of price increases. As my right honourable friend the Chancellor of the Exchequer explained at the time, none of these benefits comes within the tax net at present. He said:
"What I am now proposing takes account of the general agreement by successive Governments that they should ".
It needs of course, to be borne in mind, in looking at the whole question of the taxation of unemployment and sickness benefit, that few people receive these benefits throughout the whole of the year. The ultimate objective therefore, as I explained in my opening speech to your Lordships, was to ensure that the person who received an income partly from work and partly from benefit enjoyed no advantage compared with the person who earned the same income throughout the year.
The noble Lord, Lord Underhill, and other noble Lords, raised the question of the level of public expenditure in this country compared with other countries expressed as a percentage of the gross domestic product. It is perfectly true, as the noble Lord said, that the percentage in this country is lower than in many other countries—one would expect it to be. This country is significantly poorer than most of the countries to which he refers. In particular, the GDP per head in Western Germany is about double what it is in this country. If we have double the income, we can afford a higher percentage of expenditure. That, after all, is the whole basis on which progressive taxation, which has been accepted in this country, certainly since the closing years of the 19th century,

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exists. I realise that noble Lords opposite always object to references to the 19th century. But it was Lord Harcourt in 1894 who first introduced the concept of progressive taxation in this country in the original estate duty. There is some reason to suppose that Lord Goschen, with the temporary estate duty, had introduced the germ of progressive taxation before Lord Harcourt. But that is a digression.
The fact of the matter is that for many years now progressive taxation has been accepted as the norm. There is considerable argument as to what the scale of progression should be. The concept of progressive taxation has been accepted as the norm. If one accepts progressive taxation, equally it follows that the richer country has a greater capacity to bear a higher proportionate level of public expenditure.
I am sorry that time prevents me from answering specifically any further points raised by noble Lords. I assure them that I always re-read the debates very carefully and pay very great attention to everything that is said. The fact that I do not refer to them specifically does not mean that I have ignored what they say.
I should like, in conclusion, to say that so far as the country as a whole is concerned the Budget has in fact been well received. Anyone who doubts that needs only to refer to the MORI Poll published in the Sunday Times last Sunday. The Budget has been well received because the measures contained in it are regarded as valuable in themselves and appropriate to the situation that we face. My noble friend Lord Thorneycroft—in a very powerful speech in which he analysed in great depth the philosophy underlying the financial and economic policy of Her Majesty's Government—said that really no alternative policy was available. The noble Lord, Lord Bruce of Donington, quoted my right honourable friend Sir Keith Joseph who had said much the same. This in fact is the simple truth of the matter. This point has been most clearly brought out in the debate in your Lordships' Chamber this evening. We are offered on one side a re-run of policies which have one quality, and one only: namely, that they have all failed. What we are offered is a re-run of those policies which have been tried repeatedly in the
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past by both Conservative Governments and Labour Governments. No income or pay policies have ever succeeded or ever produced the right answer. So far as the Labour Party is concerned we are again offered a re-run, except on this occasion it is a re-run of the disastrous policies which they followed between 1974 and 1979. That anyone could possibly advocate that we should do exactly the same, when one considers the state to which those policies brought this country, is difficult to imagine.
The answer was really given by the noble Lord, Lord Mackie, who said that he wished to dissociate the Liberal Party from the attitude and policies of the Labour Party. We have no alternative policy available: that is why we shall proceed with the policy to which we have set our hand. We are confident that this is the only policy which will enable this country to rebuild its fortunes. If I may use the words which appear in the Motion of the noble Lord, Lord Byers, I commend the Budget to your Lordships as an important step forward in safeguarding
"the social, economic and industrial life of the nation".
8.51 p.m.
Lord BYERS: My Lords, I think it would be your wish that I should resist the temptation to spend the next hour in trying to refute the speech we have just heard. I shall read it with great care and I think I shall be in communication with the noble Lord. But for tonight, and at this hour, I should like simply to thank all those who have spoken in the debate, and particularly the noble Baroness, Lady Sharpies, who made a very good four-minute speech. I hope that will be recorded. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

BRITISH RAILWAYS (CASTLEFIELD) BILL
Brought from the Commons, read 1a, and referred to the Examiners.
CLIFTON SUSPENSION BRIDGE BILL
Brought from the Commoms, read 1a, and referred to the Examiners.
COMPETITION BILL
Returned from the Commons with the amendments agreed to.
  DHSS: POLICY ON PASSPORT PRODUCTION
  DHSS: POLICY ON PASSPORT PRODUCTION
  BADGER GASSING IN SOUTH WEST ENGLAND
  BADGER GASSING IN SOUTH WEST ENGLAND
  BADGERS AND BOVINE TUBERCULOSIS: REVIEW STUDY
  BADGERS AND BOVINE TUBERCULOSIS: REVIEW STUDY
  HANSARD: DELAY IN LONDON DELIVERY
  HANSARD: DELAY IN LONDON DELIVERY
  UK IMPORTS FROM EEC MEMBER STATES
  UK IMPORTS FROM EEC MEMBER STATES