Sitting of 16 April 1980

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

LOCATION OF OFFICES BUREAU
The Vice-Chamberlain of the Household reported Her Majesty's Answer to the Address, as follows:
I have received your Address praying that the Location of Offices Bureau (Revocation) Order 1980 be made in the form of the draft laid before your House.
I will comply with your request.

ORAL ANSWERS TO QUESTIONS
  FOREIGN AND COMMONWEALTH AFFAIRS

    Uganda
    Miss Joan Lestorasked the Lord Privy Seal whether Her Majesty's Government have offered Uganda assistance in the training of her police and armed forces in view of the possibility of withdrawal of Tanzanian troops.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Richard Luce): We attach priority to helping Uganda rebuild her police force, and have been giving assistance in this field for many months. A request for training assistance for the Ugandan armed forces is presently under consideration.
    Miss Lestor: I thank the hon. Gentleman for his reply. Does he agree that Tanzania did a great service to the world in assisting to remove President Amin? Does he further agree that any help that we can give to Uganda to ensure stability in both its armed forces and its police force should in no way be denied? Will
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    he ensure that a decision is reached as soon as possible?
    Mr. Luce: I agree entirely that anything that we can do to help Uganda establish law and order—which is its top priority—is something to which we shall readily respond. That is why I said that we are giving priority to providing assistance and advice with the police and the armed services. There are further requests for advice concerning the armed services, to which we are willing to respond.
    Mr. Cyril D. Townsend: Will my hon. Friend consider either initiating the presence of a Commonwealth peacekeeping force in Uganda or inviting the United Nations to consider establishing a United Nations force in that country, rather than wait on events?
    Mr. Luce: Although there has been a withdrawal of 10,000 Tanzanian troops, there are still at least another 10,000 in Uganda at present, and probably about 1,000 Tanzanian police. It is for the President of Uganda to determine whether he wishes to invite other countries to contribute forces. To date there has been no formal request to the Commonwealth Secretariat for a Commonwealth force. If the President wishes for that, it is for him to make an approach.
    Mr. Rowlands: The Minister referred to a request for assistance in training the armed forces. Will he tell us the nature of that request, when was it made, and how quickly are the Government likely to respond? Is he aware that any other form of civil aid will be futile and worthless unless there is law and order, and chaos is prevented in Uganda?
    Mr. Luce: I agree absolutely with the hon. Gentleman that the first priority—which is the choice of the Government of President Binaisa—must be the preservation and establishment of law and order. That is why I have said that we are giving prority to that area.
    On the question of armed services, there have been discussions between the Deputy Minister of Defence and the Chief of Staff in Uganda, and the Ministry of Defence and the Foreign Office in Britain. They have made various requests, which we are considering urgently, and to which we shall respond shortly.

    Middle East
    Mr. Roy Hughesasked the Lord Privy Seal if he has any plans to visit the Middle East.
    The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): My right hon. Friend hopes to do so before long.
    Mr. Hughes: While the Lord Privy Seal is in that region, will he take the opportunity to raise the question of the human rights of the Palestinians, especially as we hear so much about this subject at the present time? Does the Minister agree that we need action rather than words to ensure that these people are once again able to live in their homeland and govern themselves?
    Mr. Hurd: As we have often said in recent months, we agree that the Palestinians have political rights. In any settlement that has any chance of enduring, those rights have to be accepted and recognised.
    Mr. Temple-Morris: Is my hon. Friend aware that if he were to visit the Middle East today he would find among our friends grave concern that some positive and effective action should emerge from the EEC Foreign Ministers meeting on Monday with regard to the position of Iran? Is he further aware that if that meeting fails, that failure will be trumpeted out, literally in Iran and other countries as being a failure by America to achieve the support of its Allies, which will seriously demean and weaken the Western Alliance as a whole?
    Mr. Hurd: I accept the first part of my hon. Friend's question. There is no special magic about Monday's meeting, except that it provides the first opportunity for the Foreign Ministers of the Nine to meet and, we hope, to reach at least a first step decision along the lines indicated by my hon. Friend.
    Mr. Greville Janner: Does the Minister agree that the brutal and barbaric attack on the kibbutz at Misgav Am last week by a constituent body of the PLO makes it plain that the Foreign Secretary was sadly wrong when he said that that organisation was no longer a terrorist body?
    Mr. Hurd: We condemn absolutely the attack on the Misgav Am kibbutz to
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    which the hon. and learned Gentleman has referred. Ae he knows, we do not recognise the PLO. It is an umbrella organisation which includes different bodies, some of which are still associated with terrorism of that kind and others of which are working through political and diplomatic channels. It is important to encourage the second tendency and to condemn the first.
    Mr. Jessel: Does my hon. Friend accept that until the PLO has totally, clearly and definitely renounced any intention of destroying Israel it will be hopeless to demand, and useless to expect, the Israelis to have any kind of meeting with it?
    Mr. Hurd: In the end, I think that the two things will have to occur more or less at the same time. The Palestinians will have to accept Israel's right to exist within secure and recognised frontiers, and the Israelis will have to accept that the Palestinians have political rights, too.
    Mrs. Dunwoody: Has the Minister noticed today the announcement of the creation of a new Arab force, including the PLO? Does not that indicate to him that there is no change in the PLO's stance towards the integrity of the State of Israel?
    Mr. Hurd: We have noticed the announcement of the force. Let us wait and see what becomes of it in practice.

    Mr. James Moss
    Mr. Stan Thorneasked the Lord Privy Seal what further information he has regarding the trial or release of Mr. James Moss presently held in Mongu jail, Zambia.
    Mr. Luce: I understand that no decision has yet been reached on whether the case against Mr. Moss should proceed to trial. Meanwhile, he is regularly brought before a magistrate, but continues to be remanded in custody, since bail is not granted in Zambia in murder cases.
    Mr. Thorne: As the Minister knows that Mr. Moss has been in confinement since December 1979, does he think that a visit by himself, my hon. Friend the Member for Blackburn (Mr. Straw) and myself might expedite a conclusion on the part of the DPP?
    Mr. Luce: I should have to reflect a little on that question before giving a

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    straight answer. However, a number of hon. Members on both sides of the House, including my hon. Friend the Member for Preston, North (Mr. Atkins), are concerned. Indeed, their constituents who are relations of Mr. Moss have also made representations to me. My judgment is that through our high commission we are keeping in close touch indeed with developments in this case, and we shall keep a very careful watch on the welfare of Mr. Moss.
    Mr. Straw: Does not the Minister think that it is unacceptable for Mr. Moss to languish in gaol for four months without the Zambian Director of Public Prosecutions making a decision on whether to bring the matter to trial? Can he say what further action the Foreign Office will take to press the Zambian authorities to make a quick decision, so that at least that element of doubt is removed from over this man's head?
    Mr. Luce: As the hon. Gentleman knows, a charge of murder has been made against Mr. Moss. It is up to the Zambian Director of Public Prosecutions, when he has considered all the factors, to decide whether Mr. Moss should be taken to trial. We have been in touch with the Zambian Government to ask how far ahead they anticipate that will be. As yet we have had no response, but we hope to receive one very soon.

    South Africa
    Mr. Cyril D. Townsendasked the Lord Privy Seal if he will make a statement on relations between Her Majesty's Government and the Government of South Africa.
    Mr. Winnickasked the Lord Privy Seal when next he expects to meet the South African Ambassador.
    The Lord Privy Seal (Sir Ian Gilmour): Our relations with South Africa are governed by our desire to encourage peaceful change there and to achieve an internationally recognised settlement in Namibia. If there is progress on both these fronts, we can look forward to the steady improvement in our relations which we seek.
    I have no plans to meet the South African Ambassador in the immediate future.
    Mr. Townsend: Bearing in mind the build-up of Soviet maritime forces in the Indian Ocean, most recently described in the defence White Paper, will my right hon. Friend have discussions with the Ministry of Defence about the possibility of sharing maritime intelligence information with the South African Navy, and even the possibility of having joint naval exercises with the South African Navy?
    Sir I. Gilmour: As my hon. Friend will realise, that is primarily a matter for my right hon. Friend the Secretary of State for Defence, but at present we have no plans to act as he has suggested.
    Mr. Winnick: When he meets the ambassador, will the right hon. Gentleman express the deep concern that is felt about the fact that Mr. Nelson Mandela and his associates have been locked away in South African prisons for 16 years, yet their real crime is that they simply want freedom for their own people? Would it not be wise for the Government to give the South African authorities the same sort of advice as Mr. Harold Macmillan gave them in his "wind of change" speech in 1960?
    Sir I. Gilmour: The hon. Gentleman will appreciate that we have no standing in the case of Mr. Mandela, so I do not think that it would be right for us to make formal representations on his behalf.—[HON. MEMBERS: "Oh!".]—However, I am sure that the South African Government recognise very well what an excellent effect on international opinion the release of Mr. Mandela would have, and how widely it would be welcomed in this country as a symbol of the desire for reconciliation in South Africa.
    Mr. Nicholas Winterton: Does my right hon. Friend accept that many Conservative Members welcome the improved relationship between this Government and the Government of the Republic of South Africa? Does he agree that it would be wrong to put undue pressure on South Africa at the present time over the future of South-West Africa? Does not he further agree that South Africa is doing its utmost to ensure that there is gradual progress to a more democratic form of government in South-West Africa, and that the Administrator General, Mr.

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    Viljoen, is seeking to hand over executive powers in many areas to the Parliament which at present exists in South-West Africa, which represents all 11 ethnic groups?
    Sir I. Gilmour: Of course I hope for better relations with South Africa. As my hon. Friend will know, a specific question on Namibia will be answered shortly. It may be worth reminding the House that it would have been impossible to hold the elections in Zimbabwe without the logistic help that we received from South Africa.
    Mr. Maxton: In view of the Government's opposition to the British Lions tour of South Africa, will the right hon. Gentleman make it clear to the House, to the British Lions rugby touring team and to the South African Government that British Embassy facilities in South Africa will not be available to that team?
    Sir I. Gilmour: I do not think that that sort of declaration helps anyone. The House and the Rugby Unions know very well what our attitude is to the Gleneagles agreement, which commits us to taking every practical step to discourage sporting contacts with South Africa.
    Mr. Marlow: Does my right hon. Friend think that it is right and proper that an organisation such as the British Olympic Association, which does not wish to mix politics with sport, should consider sending a team to Moscow, when for political reasons the South Africans are prevented from sending a team?
    Sir I. Gilmour: I do not honestly believe that that issue arises on this question.
    Mr. Rowlands: May I press the right hon. Gentleman further with regard to Mr. Nelson Mandela? Surely there is nothing wrong with the Government pressing very strongly for, and making the strongest representations about, the release of Nelson Mandela and others, who have suffered years of the most cruel form of imprisonment on Robben Island. I believe that the full strength of the voice of the Government, through representations to the South African Ambassador here and to the South African authorities, should be heard with regard to the release of Nelson Mandela and other political prisoners.
    Sir I. Gilmour: The hon. Gentleman will have heard what I have just said. We do not have any formal standing, but I have made clear what good would follow from a decision of the South Africans to release Mr. Mandela.

    Namibia
    Mr. Hooleyasked the Lord Privy Seal how many times in the current year the five Western Powers have held discussions with South Africa concerning the ending of the illegal occupation of Namibia.
    Mr. Luce: The negotiations for Namibian independence to be achieved through the plan for United Nations supervised elections require frequent contact between the five Western Powers, acting either jointly or individually, and South Africa.
    Mr. Hooley: Does not the Minister recognise that there is some urgency in the matter, since South Africa is now regularly using Namibia as a base for repeated assault and aggression not only against Angola but against Zambia? Is there not a contradiction between our efforts to free Namibia and our apparent interest in building up commercial and financial relations with South Africa?
    Mr. Luce: As the hon. Gentleman knows, there have been discussions recently between United Nations officials, on both the military and political sides, and the various countries involved with the Namibian problem. Dr. Waldheim, the United Nations Secretary-General, has just made a report on that mission. It is reasonable that we should strike a balance between the need for some patience, in the light of those developments, and the need to reach an agreement as soon as possible—I hope—on the outstanding problem of the demilitarised zone.
    Mr. John Page: Will my hon. Friend ensure that when the group of Five discuss Namibia full consideration is given to the views of the different parties inside Namibia, and also to the views of the different wings of SWAPO inside and outside Namibia?
    Mr. Luce: Yes, I can assure my hon. Friend of that. The group of Five have kept in touch with the internal parties to ensure that they are aware of their views, and they will continue to do so.
    Mr. Deakins: Is it not in the interest of the West that there should be a free, democratic and independent Namibia as soon as possible?
    Mr. Luce: Indeed. That is why we are committed to working as hard as possible for United Nations' supervised elections.

    Afghanistan
    Mr. Dalyellasked the Lord Privy Seal if he will place in the Library details of his approach to the Russian Government of his proposals as to how the Russian Army should withdraw forces from Afghanistan in order to avoid the possibility of internecine factional bloodshed.
    Mr. Hurd: No, Sir. The exchanges which we have had with the Russians are confidential. Our approach is flexible and other Governments are contributing suggestions on how the concept might be put into effect. It would, therefore, be misleading to publish details at this stage.
    Mr. Dalyell: Do the Government agree with His Eminence the Cardinal Hume, the Archbishop of Westminster, that the Russians should not be regarded as bogeymen? May we be assured that these confidential communications are carried out in a sensible spirit, and not in the spirit of lashing the Russians? Lashing the Russians is not the way to get the Red Army out of Afghanistan.
    Mr. Hurd: The proposals put forward by my right hon. and noble Friend the Secretary of State for Foreign and Commonwealth Affairs, and endorsed by the Foreign Ministers of the Nine, are not designed to lash the Russians. They are designed to give the Russians a way in which they can withdraw their troops from their aggression in Afghanistan, leading to neutral and non-aligned status for that country.
    Mr. Beith: Has the hon. Gentleman considered the doctrine propounded by the hon. Member for West Lothian (Mr. Dalyell) only a fortnight ago, when he seemed to suggest that the Russian invasion of Afghanistan was justified by the fact that atrocities had been committed against Russian advisers within that country? Has he given careful consideration to that extraordinary principle?
    Mr. Hurd: I have indeed. It is true that it is dangerous to be a Russian in Afghanistan at the present time, but the remedy is in their own hands. They could withdraw.
    Sir Paul Bryan: Although after the invasion it was right that Western countries should press the Russians to withdraw, is it not now obvious that they have no intention of doing so? Should not the Government base their diplomacy on that assumption?
    Mr. Hurd: The Russians are now engaged in a savage colonial war in Afghanistan, to which it is difficult to see an outcome. It must be right to work in the direction in which we are working. The war is being conducted by upwards of 80,000 troops who are engaged in fighting the resistance movement. It must be our aim to encourage and to work towards encouraging them to bring that to an end by withdrawing their troops.
    Mr. Whitehead: What evidence do the Government have that some circles—at least in the USSR—now realise that the invasion of Afghanistan was a major blunder in every sense of the word? Which item of British Government policy is designed to encourage those circles and to increase their influence?
    Mr. Hurd: It is the proposal to which the question was addressed. It is a proposal precisely designed to give the Russians a way out of their aggression.
    Mr. Dalyell: On a point of order, Mr. Speaker. In view of the nature of those replies, I shall return to this subject in the Adjournment debate which you have kindly given me for next Monday.

    Middle East
    Mr. Donald Stewartasked the Lord Privy Seal what part his Department is playing in talks on securing peace in the Middle East.
    Mr. Hurd: We have no direct role in the current peace negotiations. We continue to support the autonomy talks as a step towards a comprehensive settlement. We are also discussing with our European Community partners ways in which Europe might be able to contribute to such a settlement.
    Mr. Stewart: Is the Minister aware that, so far as the Government may be involved, the peacemaking process is not helped by the intransigence of Premier Begin in colonising the disputed lands? Does he accept that there can be no lasting peace in the area until the just claims of the Palestinian nation are met?
    Mr. Hurd: Yes, Sir. We believe that the, Israeli policy of increasing settlements on the West Bank is unwise, unjust and a major obstacle to a settlement.
    Mr. Hicks: Can my hon. Friend say what action the Government have taken to support the role of the United Nations peace-keeping force in Southern Lebanon, in view of the adverse events there in recent weeks?
    Mr. Hurd: We take that very seriously. The Secretary-General of the United Nations has been in London today, and he has expressed great alarm which we share. A discussion is taking place in the Security Council of the United Nations at this moment on the matter. We strongly support UNIFIL, the United Nations force in the Lebanon, and we are willing to support any sensible measures to buttress it and increase its effectiveness.
    Mr. Faulds: In view of the fact that the Camp David agreement is defunct and is about to expire on 26 May in any case, what initiatives is the Foreign Secretary trying to mount with his European colleagues to bring forward other proposals which will be more realistic in terms of the need for the restitution of Palestinian rights?
    Mr. Hurd: As I said in my original reply, we are considering what we might do. We do not wish to do anything to cut across the highly important talks that are taking place within the Camp David process.
    Mr. Hugh Fraser: In view of the general confusion in the Middle East and the statement of President Carter that in no circumstances would he recognise the PLO, and in view of what the PLO is now attempting to do in setting up a command in Syria, will the Foreign Secretary, or his deputy, reiterate what was said by the Prime Minister, namely, that there is no question of Britain's recognising the PLO?
    Mr. Hurd: President Carter said that he would not recognise the PLO so long as it did not recognise Israel. That is one of the difficulties that we have constantly pointed out. We do not recognise the PLO, and it will be difficult for us to do so as long as it refuses to accept the right of Israel to exist within secure and recognised frontiers.
    Dr. M. S. Miller: What progress have the Government made towards persuading the PLO to drop the part of the covenant which states that Israel must be destroyed? Most reasonable people, including the majority of people in Israel, feel that if the PLO were to drop that part of the covenant there could be discussions that could lead to a major breakthrough, which would benefit the Palestinian Arabs.
    Mr. Hurd: It is partly a matter of the covenant, as the hon. Gentleman says, but perhaps even more so a question of terrorist attacks. We are doing what we can in that direction. It would be a great help if the Israeli Government would state at the same time that they recognise that the Palestinians have a right to a homeland also.
    Mrs. Dunwoody: I agree with the last remarks of the hon. Gentleman. However, there appears to be a different emphasis on the condemnation of the Israeli moves from that on the action of the PLO. Will the Minister make it clear that he is prepared to demand that the PLO drops this part of the covenant as a price for going ahead with negotiations?
    Mr. Hurd: We should not pay too much attention to the covenant, any more than we should to the founding documents of other political organisations. It is the action that is taken, particularly the renunciation of terrorist activity, that matters.

    Olympic Games
    Mr. Whiteheadasked the Lord Privy Seal how many countries are now in agreement with Her Majesty's Government in their proposals for an Olympic Games boycott.
    Mr. Hurd: The number is increasing all the time. The latest information available suggests that about 30 Governments have publicly announced that they are in

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    favour of a boycott or have expressed serious reservations about their athletes taking part.
    Mr. Whitehead: Is the Minister aware that many of us who were deeply unhappy about the holding of the Moscow Olympics on human rights grounds, long before the invasion of Afghanistan or the American presidential elections, nevertheless feel that the current slogging match between the Government and the British Olympic Association will leave us with the worst of all worlds in this country, exposing deep divisions when there should be unity? Will he discuss with those athletes who have voted to go to Moscow, as is their right if they so wish, some form of unified protest by them in Moscow during the holding of the Games?
    Mr. Hurd: No. That ignores the fact that the Soviet Union controls the television output for the Games. There is no slogging match. We quietly and firmly reiterate our view when we are asked to do so. It must surely be increasingly clear to the hon. Gentleman that, as the tide of boycott begins to flow strongly in many sports, this will be a tawdry event, with second-rate competition.
    Mr. Biggs-Davison: Whatever other countries may do, will not any British athlete who goes to Moscow to compete dishonour himself and his country?
    Mr. Hurd: The competitors find themselves in a difficult personal situation, which has not been helped by the premature decision of the British Olympic Association to accept the Moscow invitation. We shall do what we can to help them in that situation, but we believe that it is strongly against British interests for British athletes to participate.
    Mr. Roy Hughes: Should not the Government give up their attempt to blackmail our sportsmen and sports administrators? Does not the Minister find reprehensible the attempted character assassination of Sir Denis Follows, a man of the highest possible integrity, who has served sport admirably over many years?
    Mr. Hurd: The integrity of Sir Denis Follows is in no way in question. We disagree with his judgment about British interests in this country.
    Mr. Gummer: Does my hon. Friend agree that this ought to be a situation in which Britain was leading the way and not merely counting how many other countries were doing this? Is it not sad that, without impugning Sir Denis Follows' character, he should commit character suicide rather than have his character assassinated because he will not understand that he has a position to uphold as a British person, and not merely as a representative of sportsmen?
    Mr. Hurd: I would rather not be drawn into further comment on Sir Denis Follows. I merely say that we warmly welcome the latest decision by British yachtsmen not to take part.
    Mr. Foulkes: Will the hon. Gentleman say what compensation the Government are prepared to give to those business men who have obtained franchises for the Moscow Olympics, including Mr. McClue of Ayr, and will lose substantial amounts of money? Surely these are the people that the Government should be trying to encourage, but they will lose money as a direct result of the Government's action. What compensation will be given to them by the Government?
    Mr. Hurd: If the hon. Gentleman wants to raise a particular case, he should do so. In principle, the Government are not liable for compensation in this matter.
    Mr. Farr: Will my hon. Friend persuade the Government to take a more resolute attitude towards those British members who still wish to go to Moscow and point out that if they go they could distinguish themselves by being almost the only representatives in Moscow from any free country in the world?
    Mr. Hurd: It is true that the tide towards a boycott is flowing strongly and that the competition, sport by sport, will now be second-rate in many respects. For example, the United States' swimmers won 13 gold medals at the last Olympic Games. A swimming competition without American participation is certainly a second-rate affair.
    Mr. Rowlands: Is the hon. Gentleman aware that, whatever position individual Members have taken in regard to the Olympics, many of us—even those of us who have strong views—find utterly distasteful and disgusting the attempt by

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    members of the Government to brand individual sportsmen in Britain as dishonourable or as if they were disloyal in making their personal decisions? Will he therefore confirm that no impediment or difficulty, administrative or bureaucratic, will be put in the way of individuals making their own choice and going to Moscow if they wish to do so?
    Mr. Hurd: I entirely reject the hon. Gentleman's account of what has been taking place. We have made it clear that it is a matter for choice in a free country whether people go. We have also made it clear, and shall go on making clear, our judgment as the British Government where British interests lie. We hope that as many individuals as posible will follow that advice.

    Afghanistan
    Mr. David Priceasked the Lord Privy Seal what is his latest assessment of the situation in Afghanistan; and if the Russian Government have yet replied to Her Majesty's Government's proposals for the neutralisation of Afghanistan.
    Mr. Hurd: In Afghanistan the Babrak Karmal regime lacks support. There is widespread popular resistance to the Government and the Soviet occupying forces, which could number as many as 100,000.
    Our proposals, endorsed by the European Nine, are for a neutral and nonaligned Afghanistan. This is different from "neutralisation", which implies an imposed solution. We have put our thinking to the Soviet authorities. We are studying their reply and will decide later whether to continue the exchange and, if so, how.
    Mr. Price: Does my hon. Friend agree that there is wide support for the Government's proposals, and will they push ahead with them? Does he also agree that this is about the only hope of getting the Soviet Union and its leadership off the hook on which they put themselves with this colonial aggression?
    Mr. Hurd: This is a serious proposal which has been put to the Soviet Union and to many other Governments in a serious vein.
    Mr. J. Enoch Powell: We know who guaranteed the neutrality of Belgium and
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    how that guarantee was implemented. Which countries would guarantee the neutrality of Afghanistan, and how would they implement it?
    Mr. Hurd: As I said in answer to the hon. Member for West Lothian (Mr. Dalyell), I shall not today go into the details of a plan which is still being discussed and is still evolving. The three parts of it are clear: first, Soviet withdrawal; secondly, a declaration by the Afghans, repeating one that they have often made before, in favour of neutral and non-aligned status; and, thirdly, support for that declaration by their neighbours and other countries.
    Mr. Wilkinson: Is it not true that many countries have retaind their neutral status satisfactorily without external military guarantees? In those circumstances, is it not in the interests of the free world and of peace that neutrality should prevail in Afghanistan, and that this would be in the interests of the Great Power balance?
    Mr. Hurd: Yes. One of the encouraging things about our proposal is the degree of interest and support which has been expressed for it by many countries in the free world, and in particular the Islamic world.
    Mr. Bagier: Does the Minister accept that evidence of that took place in Oslo last week at the parliamentary assembly of the International Parliamentary Union, when an overwhelming majority of nations condemned the incursion into Afghanistan by the USSR and strongly called for its withdrawal? It appeared to be the general hope of the Assembly that the initiative being taken by her Majesty's Government, with a large amount of backing from the Opposition, would be successful?
    Mr. Hurd: I am grateful to the hon. Gentleman for his comments. We certainly intend to proceed in that spirit.

    Falkland islands
    Mr. Blackburnasked the Lord Privy Seal if he will implement the Shackleton proposals for the Falkland Islands.
    The Minister of State, Foreign and Commonwealth Office (Mr. Nicholas Ridley): I have nothing to add to the

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    replies given on 19 December to my hon. Friend the Member for Surbiton (Sir N. Fisher).
    Mr. Blackburn: In view of the reports, confirmed this morning, of a potential fish yield of 1,000 million pounds per annum, plus the potential of offshore oil from these islands, will my hon. Friend confirm that the sovereignty of these islands is not the subject of any agenda item for discussions with any foreign powers?
    Mr. Ridley: I do not know from where my hon. Friend got those reports of the potential. I have not the ability to be anything like so precise. In fact, I am dubious about the potential of fishing and oil. I confirm that the forthcoming talks with the Argentine Government will be purely exploratory. The Argentinians have sought talks with us, and we have responded by saying that we will meet them.
    Mr. James Johnson: In view of the disputes with Iceland over cod, and the fact that now we have limits of 200 miles by international acceptance, why cannot the Government think a bit more about this matter and put 200-mile limits around these islands in the South Atlantic: not merely the Falkland Islands, but St. Helena, Tristan da Cunha, Asuncion Island, South Georgia—the whole lot? Even if we cannot get boats out of Hull to fish there because of the distance, at least we could charge the vessels of Japanese and Communist States for licences and make some money for these people in Port Stanley.
    Mr. Ridley: It would be impossible to police a 200-mile zone fishing limit round the Falkland Islands without the agreement of the Argentine Government, but that is one of the items that can be raised in the forthcoming talks.
    Mr. Maxwell-Hyslop: Before my hon. Friend goes to his meeting, will he refresh his memory about the recommendations by the old Trade and Industry Sub-Committee of the Public Expenditure Committee in the previous Parliament, in so far as they referred to this specific question of the potential for British fishery development in the Falkland Islands?
    Mr. Ridley: I shall certainly refresh my memory of that important document.
    Several Hon. Members rose—
    Mr. Speaker: Order. I shall allow an extra minute at the end of questions on the EEC so that I may now call the Front Bench spokesman on this question.
    Mr. Rowlands: Will the hon. Gentleman confirm that he has invited representatives of the Falkland Islands to attend the new round of talks, as has been the previous practice, and will he say what has been their reaction?
    Mr. Ridley: I confirm that we have invited representatives from the Falklands, and one councillor will attend.

  EUROPEAN COMMUNITY

    Council of Foreign Ministers
    Mr. Aitkenasked the Lord Privy Seal when he expects next to meet his EEC counterparts.
    Mr. Hicksasked the Lord Privy Seal when he expects next to meet his EEC colleagues; and if he will make a statement.
    Mr. John Evansasked the Lord Privy Seal when next he expects to meet his EEC colleagues.
    Sir Ian Gilmour: My right hon. and noble Friend will meet his Community colleagues at the next Foreign Affairs Council on 21 and 22 April. I myself will be paying an official visit to Cyprus on those dates. I expect therefore to meet Community colleagues next at the Council to be held on 5 and 6 May.
    Mr. Aitken: Is my right hon. Friend aware that at these meetings, and at the even more important EEC summit in Luxembourg, the Prime Minister and the Foreign Secretary will carry with them the good wishes of the entire nation when it comes to trying to organise a fair reduction of Britain's contribution? Will the Government be sure not to neglect the more pressing and urgent geo-political priorities at these summits, especially the need for a concerted European approach to the crises in Afghanistan and Iran?
    Sir I. Gilmour: I am grateful for what my hon. Friend has said, I am sure that my right hon. Friend and my right hon.

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    and noble Friend will carry with them the good wishes of the entire country. As regards the second part of his question, that will depend upon what happens between now and the meeting of the European Council, and especially upon what happens next week at the Foreign Affairs Council. However, I strongly take my hon. Friend's point.
    Mr. Hicks: In view of the rapidly deteriorating situation in Southern Lebanon, especially the difficulties facing the Irish troops as a result of the activities of Major Haddad, supported by his Israeli advisers, will my right hon. Friend confirm that top priority will be given by his counterparts and himself at his forthcoming meeting to taking some form of initiative to safeguard the peaceful intentions of everyone living in that area?
    Sir I. Gilmour: As my hon. Friend the Minister of State said earlier, he and I talked with Dr. Waldheim this morning about this matter, which is serious and needs remedying. However, I cannot guarantee that it will be given top priority at the next meeting of the Foreign Affairs Council.
    Mr. Evans: When the Minister next meets his European colleagues, will he make it clear to them when they discuss the imposition of any sanctions against Iran in line with President Carter's request, that any decision that they make, notwithstanding article 131 of the Treaty, will be subject to ratification by the House of Commons, as the Prime Minister promised yesterday?
    Sir I. Gilmour: Of course what the Prime Minister promised yesterday will, needless to say, be carried out.
    Mr. Crouch: Has my right hon. Friend noticed that in some of the questions put to him on this matter there has been reference to "counterparts" and in others a reference to "colleagues"? It will not have gone unnoticed that my right hon. Friend used the word "colleagues", and in these days of questioning about Europe I am grateful to him for that distinction.
    Mr. Dalyell: Can the Lord Privy Seal and his counterparts or colleagues think of any good reason why the Soviet Union should want to colonise Afghanistan?
    Sir I. Gilmour: That question should be addressed to the Soviet Union. All we know is that at least 80,000 troops are present in Afghanistan terrorising the inhabitants and causing large numbers of casualties and that this action has been criticised by almost the entire free world, 104 members of the United Nations, and by the Islamic Council. It appears to be supported only by the hon. Gentleman.
    Mr. Brocklebank-Fowler: When he next meets his EEC colleagues, will my right hon. Friend discover from them whether the Brandt report is to be on the agenda for Venice in June? If so, will he undertake to publish the Government's response to it before that date?
    Sir I. Gilmour: It is too early to say what will be on the agenda in Venice, but I think that I can assure my hon. Friend that the Government's views on the Brandt report will have been published before that date.
    Mr. James Lamond: The Lord Privy Seal is to discuss with his opposite numbers in the EEC the proposal by Lord Carrington for a neutral Afghanistan. Bearing in mind that he has said today that this neutrality would not be imposed but would have to be agreed, presumably by Afghanistan, would it not have been courteous to have indicated to the Afghan Government the nature of the proposals so that they—after all they will be the Government with whom the proposals will have to be agreed—would have known exactly what was proposed?
    Sir I Gilmour: The hon. Gentleman has that wrong. The present Government of Afghanistan would not last a moment if the Soviet troops were not there. His views on this subject are, therefore, not all that relevant.
    Mr. Alan Clark: To return to my right hon. Friend's meeting with his counterparts, may we assume that on the agenda of this meeting will be the text of Sir Roy Denman's report, which asserts that the majority of senior Eurocrats are drunk and incompetent?
    Sir I. Gilmour: I cannot give a definite answer to that, but I think that it is unlikely.
    Mrs. Dunwoody: When the Lord Privy Seal talks to his counterparts about Afghanistan will he make it clear to

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    them that if there is to be a concerted effort to support the American position over the hostages in Iran that is made easier by the fact that the EEC is now less dependent on Iran for its supplies of oil? That therefore makes the problem political, as opposed to directly economical.
    Sir I. Gilmour: I agree that it is largely a political problem. The question is how to achieve the objectives that we all have in mind, which are, first, the maintenance and solidarity of the Western Alliance, and, secondly, the release of the hostages.
    Several hon. Members rose—
    Mr. Speaker: Order. I shall make a statement tomorrow on open questions on foreign affairs, which is something new.

    European Council Meeting
    Mr. Dykesasked the Lord Privy Seal when he expects the new date for the postponed European Council meeting scheduled for 31 March to be announced.
    Sir Ian Gilmour: The European Council is now to be held in Luxembourg on 27 and 28 April.
    Mr. Dykes: I thank my right hon. Friend for that answer. Can he say whether he is now convinced that the worst of the unthinking, narrow-minded, knocking of the Community in this country is over, and that, although the summit was postponed originally for the wrong reasons, the refixing of the new date offers a good opportunity for the Community to reach positive and constructive solutions both on our own budget contribution and on taking the Community forward on a number of important matters?
    Sir I. Gilmour: I cannot tell what will be done by what my hon. Friend called the knockers of the Community. However, I agree with him that there is a great opportunity at the forthcoming Council not only to make considerable progress and to achieve a solution on our budget contribution, but to make progress in other areas.
    Mr. Deakins: Has the delay in holding the summit given the Government any more room for manoeuvre over Britain's budget contributions?
    Sir I. Gilmour: We are not seeking greater room for manoeuvre, as my right hon. Friend the Prime Minister has frequently said. We are seeking a genuine compromise, and we have a limited area in which to manoeuvre. However, the enforced delay has enabled various contacts to take place.
    Mr. Gummer: Does my right hon. Friend agree that we are much more likely to get a sensible answer to the problems of Britain's contributions if at the same time we show our determination to make the European Community a real force for peace in the world?
    Sir I. Gilmour: I entirely agree with my hon. Friend. He will be aware that since the Government came into power, and especially over the past two months since the invasion of Afghanistan, we have shown a distinct wish and inclination to do just that.
    Mrs. Dunwoody: Has the right hon. Gentleman noticed that one other thing has happened in the interim? At the same time as he has been asking for a considerable change in our budget contributions, his right hon. Friend the Minister of Agriculture, Fisheries and Food has managed, by moving to positive MCAs, to increase the contributions. How will he explain that to the Market?
    Sir I. Gilmour: As the hon. Lady will know, or should know, the increase in our contributions as a result of the move to positive MCAs, of which she talks, will be so infinitesimal that I do not think it needs explanation.

    Areas of Disagreement
    Mr. Marlowasked the Lord Privy Seal if he will list the areas of disagreement which are outstanding between the United Kingdom and the other member States of the European Community.
    Sir Ian Gilmour: The United Kingdom's inequitable contribution to the Community budget is the main problem affecting the United Kingdom specifically. The Government are determined to negotiate a fair solution. There are other issues for the Community as a whole to resolve, such as the need to control the costs of agricultural surpluses and to modify the common fisheries policy.
    Mr. Marlow: In view of the fact that there is, although my right hon. Friend

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    did not disclose all of them, a long list of problems, and therefore the possibility, to say the very least, that these problems will not be resolved, I wonder whether my right hon. Friend will be kind enough to confirm, in just one word, that it would be imprudent for Her Majesty's Government not to have a contingency plan based on the possibility that we do not get agreement, and that therefore we might in the last resort have to have some new policy of positive association with the countries in the Community other than the one that we have at the moment?
    Sir I. Gilmour: If I had to answer my hon. Friend in one word, it would be "No". However, I have told him and the House that I do not believe that what he is saying is a serious option. Britain is a member of the EEC and the Government have every intention of ensuring that it continues to be so.
    Mr. McNamara: Will the right hon. Gentleman tell the House, in his helpful spirit of compromise, to what extent we are prepared to compromise on fish, on energy policy and on our relationship with the monetary system?
    Sir I. Gilmour: As the hon. Gentleman knows, we have said that we do not believe in a package deal. We believe that all these issues should be decided on their merits.
    Mr. Budgen: If it proves impossible for the countries of the EEC to adopt a single and effective attitude towards the crises in Afghanistan and Iran, will my right hon. Friend explain to the House where the British people are likely to see the much-vaunted political advantages of remaining in the EEC?
    Sir I. Gilmour: That is a doubly hypothetical question, and therefore one that I cannot answer.
    Mr. Cryer: Will the right hon. Gentleman comment on the fact that we are facing a £1·2 billion deficit in payments and a £2½ billion deficit in trade with the EEC, of which £700 million accounts for textile goods? Has the Foreign and Commonwealth Office any contingency plans to improve the trading position, to seek stern negotiations to improve it or get out, which is the only solution that most sensible people see as the alternative?
    Sir I. Gilmour: I know that that is something that is very much concerning the Labour Party at the moment, but it is not concerning us. The hon. Gentleman is ignoring the fact that our trading performance with the EEC is better than it is with the rest of the world. It is a characteristic of the Labour Party that its Members do not like listening to facts of which they do not approve. The export-import ratio of our trade with the Community increased to 86 per cent., from 83 per cent. in 1978. Since 1973 our exports to the EEC have increased by 350 per cent., and elsewhere by merely 200 per cent.

    President of the Commission
    Mr. Foulkesasked the Lord Privy Seal when next he expects to meet with the President of the European Community.
    Sir Ian Gilmour: I expect to meet the President of the Commission, Mr. Jenkins, when I next attend the Foreign Affairs Council on the 5–6 May, if that is what the hon. Gentleman has in mind in his question.
    Mr. Foulkes: That is what I have in mind. I apologise for the mistake in terminology. When the right hon. Gentleman meets the President of the Commission, will he explain to Mr. Jenkins, and will he explain to us now, why the Government will not accept finance from the European Community if it also involves finance from United Kingdom Government sources? Does he accept that this exacerbates our budget problem?
    Sir I. GilmourNo, I do not. I am not certain on what the hon. Gentleman bases his question. As he knows, there have been Commission proposals to spend EEC money in Britain, which we have welcomed.
    Sir Anthony Meyer: Does my right hon. Friend recall the judgment at the time of our original application to join the EEC, namely, that the cost of membership would be high and easy to quantify, and that the benefits of membership were unquantifiable but certainly very much higher? Does that judgment still not hold good? Does it not account for the ease with which one can set out the disadvantages and the relative difficulty in setting out the advantages?
    Sir I. Gilmour: Of course, my hon. Friend is absolutely right. It will not have escaped his notice that the Labour Party, when unfortunately, it is m government is in favour of the EEC, and that when it is in opposition it always turns against it.
    Mr. Straw: Is the right hon. Gentleman aware that his answer about the balance of trade between the EEC and the United Kingdom is misleading? The figures that he used include the trade in oil. If he considers the trade in manufactured goods, which must be the test of any industrialised nation, he will see that Britain has suffered again and again as a result of its membership of the EEC. Have the positive and substantial benefits of the balance of trade that were promised by the right hon. Member for Sidcup (Mr. Heath) in the 1971 White Paper come about?
    Sir I. Gilmour: That is because our economic performance in general declined sharply under the previous Labour Government. The fact remains that we are doing better with the EEC than we are with the rest of the world.

    Official Documentation (Availability)
    Mr. Spearingasked the Lord Privy Seal is he is satisfied with the form of official documentation used in the EEC Council of Ministers and the arrangements he has made for relevant documents to be made available to public and Parliament.
    Sir Ian Gilmour: Documents are generally made available to Parliament within two working days of receipt in London. There are occasions, unfortunately, when Community documentation is not available as early as we would wish, but we shall on these occasions continue to make every effort to ensure that the House has the documentation as quickly as possible.
    Mr. Spearing: I thank the Lord Privy Seal for that reply. However, will he consider the matter again and make sure that on all occasions proper documents of the EEC Council are available? If he should find that there is no proper documentation that can be placed before the public and Parliament, will he take action to ensure that during the meeting of the Council of Ministers proper documenta-
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    tion is provided to form the basis for scrutiny and debate?
    Sir I. Gilmour: I shall have another look at this. I agree with the drift of the hon. Gentleman's argument. It is desirable that, when possible, documentation should be available. We shall do everything that we can to ensure that it is. I cannot give the hon. Gentleman any guarantee, because these things are not necessarily within the British Government's power.
    Mr. Dykes: When the Council is legislating, would it not be a good idea for it, occasionally at least, to hold some of its sessions in public, with the press present?
    Sir I. Gilmour: That is something that could be considered.
    Mrs. Dunwoody: Does the right hon. Gentleman agree that it is difficult to examine all the directives and regulations that flow from the Council if those documents are not available? Would the right hon. Gentleman like to suggest a new method whereby no directive becomes operative in the United Kingdom until it has been examined by the House of Commons?
    Sir I. Gilmour: I agree that it is difficult to examine a document if we do not have it. I have nothing to add to my original answer.

    Council of Foreign Ministers
    Mr. Knoxasked the Lord Privy Seal when next his noble Friend expects to met his European Economic Community colleagues.
    Sir Ian Gilmour: At the Foreign Affairs Council in Luxembourg on 21 and 22 April.
    Mr. Knox: Does my right hon. Friend agree that the unanimity shown by the Council of Foreign Ministers last week over Iran represents a significant step forward in the development of an EEC foreign policy? Will this process continue at the meeting?
    Sir I. Gilmour: I think that we would all agree that next week's meeting will be very important. As my hon. Friend the Minister of State said, it will not be the be-all and end-all of our policy on Iran.
    Mr. Bowen Wells: When my right hon. Friend next meets his European Economic Community colleagues, will he raise the subject of the operation of the European Investment Bank and of our contribution to it? Does he agree that we have our own Commonwealth Development Corporation, which is more worthy of the contributions that we make from our limited resources? Will he reduce our contribution to the European Investment Bank in favour of the Commonwealth Development Corporation?
    Sir L Gilmour: Both institutions are important. I shall certainly look at the question, but it is unnecessary to denigrate one while praising the other.
    Mr. Dalyell: If the Lord Privy Seal were a stubborn Iranian, would a blockade with the possibility of a military threat make him more, or less, amenable to releasing hostages?
    Sir I. Gilmour: I can safely say that that is a hypothetical question.

POST OFFICE (CHAIRMAN)
The Secretary of State for Industry (Sir Keith Joseph): With permission, Mr. Speaker, I understand that it would meet the wishes of the House if I were to make a statement about impending changes in the senior management of the Post Office.
Sir William Barlow has made excellent progress with the administrative prepartions for the legislation that the Government intend to introduce soon to separate the Post Office into two corporations.
Sir William knew that I hoped that he would become the chairman of British Telecommunications, but to my great regret told me shortly before Easter that he would prefer to resume his career in the private sector. Sir William has my respect and admiration for what he has achieved and sought to achieve in the Post Office during the past two and a half years. His departure later this year will be a loss to the public sector, though I have no doubt that it will be a gain for private industry.
I also announced yesterday that after consideration of a number of possible candidates I would appoint Mr. Ronald Dearing, a deputy secretary in the Department of Industry, to be a deputy chairman of the Post Office and chairman-designate of the postal business.
Mr. John Silkin: Opposition Members regret that Sir William Barlow felt it necessary to offer his resignation on this occasion.
Mr. Arthur Lewis: Speak for yourself.
Mr. Silkin: My hon. Friend the Member for Newham, North-West Mr. Lewis) must take up his fight in his own way. I am speaking for the majority of Opposition Members. The manner in which Sir William Barlow is going, the very soothing words uttered by the Secretary of State, and the chivalrous words of Sir William are reminiscent of the situation when Sir Leslie Murphy and the NEB were sacked.
Will the Secretary of State confirm that there were differences of opinion between the Government and Sir William Barlow, particularly on three issues? First, will he confirm that there were differences of opinion about the investment programme? Is it not a fact that in 1979–80 the Post

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Office was compelled to repay £110 million? Is it not also a fact that this year's cash limit has been rigorously imposed and that Sir William believed that it was necessary to increase the investment programme? All those who are waiting for telephones no doubt share that opinion.
Secondly, is it not true that Sir William believed that the rigid and unimaginative cash limits imposed by the Government made it difficult to hold sensible wage negotiations? We have seen the effect of lunatic wage negotiations in other industries, particularly the steel industry.
Thirdly, is it not a fact that Sir William was utterly opposed to the break-up of the Post Office monopoly, because he saw the danger to the rural letter service? He was equally bitterly opposed to the attempt to destroy the monopoly in telecommunications of the maintenance and installation services.
Finally, the Secretary of State has often said that he believes in a policy of Government non-intervention in management. Can he believe that imposing impossible cash limits on shipbuilding, the steel industry and the Post Office, and the sacking of the NEB and Sir Leslie Murphy along with the forced—that is how we see it—resignation of Sir William Barlow is non-intervention in management? If he believes that, he has a very idiosyncratic view of nonintervention.
Sir K. Joseph: The short answer is "No". There has not been a series of such disagreements between Sir William, myself and the Government. The exact reasons for Sir William's resignation—which I very much regret—are for him to give.
It is true that cash limits—introduced by the previous Labour Government—impose a discipline, particularly on nationalised industries. Chairmen of nationalised industries, particularly of those that are successful, such as the telecommunications part of the Post Office, are irked by restraint on desirable investment. At this stage I draw no implications for British Telecommunications. However, it is all the more sensible, where practical, to introduce private capital in order to lessen borrowing—where necessary—on the public sector borrow-
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ing requirement. There is no truth in the allegation that there was a wide difference of opinion about the Government's decisions on the Post Office monopoly—largely because the Government have not yet made any final decision.
Sir William Barlow would have liked a bigger investment programme. Indeed, we would have liked a bigger one. We are examining ways in which the Post Office can have a larger telecommunications investment programme within cash limits. I do not see the benefit of having cash limits—introduced by the previous Labour Government—if they are slack and imaginative, as opposed to what the right hon. Member for Deptford (Mr. Silkin) would be pleased to call rigid and unimaginative. What is the point of having them if they are slack and flabby?
Mr. Silkin: Will the Secretary of State tell us—as he has not answered my question about non-intervention in management—how it is possible to provide the 222,000 telephones that are now required, without a new investment programme? How can that be achieved within the rigid cash limits?
Sir K. Joseph: There are a number of ways in which the cash flow of nationalised industries can be improved, including higher productivity in particular, and better co-operation between managements and the work forces. But in addition, the investment programme can be increased beyond the retained cash flow of the organisation, to the extent that we can introduce private capital and reduce the claims on the public sector borrowing requirement.
Mr. Cyril Smith: While accepting that Sir William did not disagree with the Minister on the monopoly of postal services since that decision has not yet been made, may I ask whether Sir William expressed a view about what that decision should be, and whether the Minister gave any indication of what the decision might be? In the light of that, did those considerations have any effect on the resignation?
Sir K. Joseph: That question must be for Sir William. As far as I am aware, the answer is "No". Sir William was aware of my thinking about the changes that might be introduced, and I was certainly aware of his reaction to that thinking and have taken it into account.
Sir Paul Bryan: Has Mr. Ronald Dearing been warned of the truly catastrophic situation that he is likely to be asked to take over in 18 months? Is not the Post Office being asked to provide services that are well beyond its depleted powers and beyond those required in most other countries? Should not a new appraisal of the Post Office's future be made before Mr. Dearing is asked to take over?
Sir K. Joseph: I am slightly puzzled about the reference to 18 months ahead. Mr. Dearing has unrivalled knowledge from outside the postal service of the problems, since he has been the deputy secretary in the Department of Industry involved in Post Office policy. I believe that my hon. Friend is concerned about the split when he refers to "18 months". I do not share his view that that split will produce the cataclysmic situation that he fears. Mr. Dearing has had the stalwart character to take a one-way ticket out of the Civil Service into what inevitably will be a demanding and exposed job, and all credit to him.
Mr. Golding: Is the Secretary of State aware that while the Post Office Engineering Union has strongly disagreed with Sir William Barlow over his opposition to industrial democracy and a shorter working week, it believes that he has been right to oppose Government policy on cash limits at their present levels, the proposed creaming off of traffic to private wires, and taking away the rights of exclusive service to install and maintain equipment? Is he aware that the union believes that Sir William has been right on these matters, and it is known that he has done this in order to defend the postal monopoly?
Sir K. Joseph: I am glad that voices other than mine have been raised in tribute to Sir William.
Mr. Cormack: Will my right hon. Friend accept that while we wish Sir William well in his personal future, not everyone on the Government Benches will be devastated by his departure? Will he also accept that the one thing that Sir William has manifestly failed to achieve is a first-class postal service? Will he ask Mr. Dearing to give his early and urgent attention to achieving a first-class postal service or to abolishing the non-
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sensical two-tier system that we have at present?
Sir K. Joseph: I am not sure that my hon. Friend and those who support him fully appreciate the difficulties of managing some of our nationalised industries, particularly where the trade union membership refuses to accept the advice not only of their management but of their trade union leaders in improving services to the public.
Mr. Arthur Lewis: The Secretary of State said that Sir William voluntarily resigned of his own free will and volition, and, of course, Sir William has admitted that. Can we be assured that as he will be getting a fabulous index-linked pension, the taxpayers will not be expected to give him a golden handshake, when everyone knows that the postal services today are worse than they have been at any time in the past 50 years?
Sir K. Joseph: The degree to which the postal services are worse than they have been is not the fault of Sir William, who has striven very hard to secure the co-operation of the postal trade unions in improving the service to the public. I suspect that Sir William will be able to earn substantially more in the private sector than he earns as chairman of the Post Office.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been rising in their places since the statement was made.
Mr. Tapsell: Before my right hon. Friend reiterates too confidently his statement about the success of the telecommunications side of the Post Office, will he bear in mind that those who work in the City of London and earn substantial amounts in foreign exchange for this country now have to operate what is probably the most inefficient telecommunications service in any major financial centre? Is he aware that if these people wish to make a telephone call to many of the other financial centres they have to send a telex message and ask them to make the call?
Sir K. Joseph: I do not criticise what my hon. Friend says. There are many improvements that Sir William and the

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Government would like to achieve in telecommunications. The investment programme is part of the problem, and that is why we seek ways to enable it to grow.
Mr. John Evans: Is the real truth the fact that the chairmen of the nationalised industries are finding it increasingly difficult, if not impossible, to work within the ridiculous framework laid down by the Secretary of State? Is it not also true that in the not-to-distant future there are likely to be further resignations of chairmen of nationalised industries? Would it not be better if the Secretary of State asked Sir William to stay in the Post Office and, for the sake of British industry, resigned himself?
Sir K. Joseph: In that long question the hon. Member did not propose anything to replace cash limits. If he were to suggest denationalisation we might listen to him.
Mr. Jessel: Is there likely to be any improvement in the postal services now?
Sir K. Joseph: I must weigh my words carefully here. Sir William, Mr. Ronald Dearing and I all have the same purpose—to improve the postal service. It is now a question of the extent to which the membership of the relevant trade unions co-operates with management in achieving this.
Mr. Harry Ewing: Why is the Secretary of State trying to cover up this matter? Why will he not admit openly that his own bungling interference has brought about this situation in the Post Office? When the Secretary of State tells the House that the £110 million that the Post Office had to repay to the Treasury was primarily from the profitable part of the organisation, namely, the telecommunications business, does he not understand that £80 million of that £110 million came not from the telecommunciations side but from the postal side of the business? Finally, can he explain why, since he became Secretary of State, he has spent a great deal of time attacking the postal service? How on earth can he expect the people who work in that industry to have confidence in the job that they do? Will he get someone to preside over the industry to give them pride in their jobs?
Sir K. Joseph: I do not habitually blame all problems on the trade unions, but the habit of the Opposition in ignoring the contribution of trade unions to the problems is going too far. The loss of the Post Office was to a large extent caused by the billing dispute, which cost the postal service nearly £100 million in interest on borrowed money. I think that the loss in the postal service would have been much reduced if the trade unions concerned, particularly the postal trade union, had co-operated in achieving higher productivity to offset the sheer increase in costs involved in their wage claim.
Mr. Peter Bottomley: Is my right hon. Friend prepared to comment on the difficulty apparent in the last few years in recruiting and holding successful chairmen of nationalised industries?
Sir K. Joseph: I shall have difficulty in restraining the length of my answer. First, the job is inherently very difficult in managing an industry that is not subject to the disciplines of competition or the threat of bankruptcy. Secondly, it is not always possible to obtain the best person—although I believe that we have done so in the postal service—to head these industries at the level of pay at the present standard. Those are two difficulties, to begin with.
Mr. Cryer: Is it not the case that if Sir William Barlow went to an unfair dismissals tribunal his leaving would be regarded as constructive dismissal? Have the trade unions been consulted on the new appointment? Why was the post not advertised? Why do those who get into these jobs with fantastic salaries—fantastic compared with the pay of an ordinary postman—come from the magic circle in his office?
How does the Secretary of State expect the ordinary postal and telecommunications workers to co-operate when they see a chairman appointed from his little clique to preside over the destruction of the Post Office as we know it?
Sir K. Joseph: I scarcely know where to start on that series of imaginative allegations. First, there is no question of dismissal, constructive or otherwise. I am sad that Sir William Barlow has decided to go, but he prefers the cut and

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thrust of the private sector to the monopoly world of the public sector.
Secondly, surely it is in the interests of the average postman and telephone worker to have good management and to co-operate with good management. That is how so many wage earners abroad have achieved a standard of living very much higher than that of our wage earners.
Mr. Ioan Evans: In view of the uncertainty that the resignation has caused in the Post Office, which is one of the largest employers in the country, when can we expect the legislation that will separate the postal side from the telecommunications side? As the right hon. Gentleman's cash limits have provoked a dispute in the steel industry and are provoking a strike in British Leyland, does he expect them to provoke an industrial dispute in the Post Office?
Sir K. Joseph: Cash limits are bound to create difficulties but they are nevertheless essential if we are to control public borrowing and, through that, inflation. I hope that the legislation will be introduced soon, but that is not a matter for me alone.
Mr. Les Huckfield: Does the Secretary of State not realise that ever since he took office he has not had a good word to say about the Post Office? He even agreed with the stupid and inaccurate remarks of the hon. Member for Horn-castle (Mr. Tapsell). How can the right hon. Gentleman be so complacent about cash limits and the investment programme when the latest figures show that at least 60,000 people have been waiting for telephones for at least six months? How could he have expected Sir William Barlow to continue as chairman when the right hon. Gentleman has continually undermined confidence in the Post Office?
Sir K. Joseph: I have sought to represent the consumer's reaction to the Post Office, and I have had plenty of evidence that the consumer has been dissatisfied with the postal service.

PORT OF LONDON (FINANCIAL ASSISTANCE) BILL
Sir Graham Page: On a point of order, Mr. Speaker. I wish to suggest that the Port of London (Financial Assistance) Bill, which is on today's Order Paper, is not a Public Bill but is either a Hybrid Bill or, possibly, a Private Bill, and ought to be subjected to the appropriate procedure for that sort of Bill.
The long title says that the Bill is to
"provide financial assistance for and in connection with measures taken by the Port of London Authority to restore the profitability of their undertaking by reducing the number of persons employed by them."
Certainly, by that title, the Bill benefits one authority—the Port of London Authority—which is one body within a class or category of bodies, namely, all those that are port authorities. On that basis, the other bodies in that category should have the opportunity to present their cases, by petition, to the House.
I need not remind you, Mr. Speaker, of the ruling of Mr. Speaker Hylton-Foster, but I shall quote it in order to develop my argument. According to "Erskine May", at page 862, Mr. Speaker Hylton-Foster gave the following definition of a Hybrid Bill in 1962:
"I think that a hybrid bill can be defined as a public bill which affects a particular private interest in a manner different from the private interests of other persons or bodies of the same category or class."
I submit that that relates not only to an adverse effect but to a favourable effect.
The Bill deals preferentially and discriminatorily with the interests of the Port of London Authority in a manner different from the private interests of other bodies of the same category or class, namely, other port authorities. Of course, in my constituency I have particularly in mind the Mersey Docks and Harbour Company.
Page 865 of "Erskine May" deals specifically with Bills relating to the Port of London Authority. The paragraph is headed "Port of London" and says:
"The Port of London Bill, 1903, was introduced by the Government and proceeded with as a hybrid bill, but, after being suspended, was withdrawn in the next Session. The Port of London Bill, 1908, a Government bill which constituted the Port of London Authority, was also proceeded with as a hybrid bill, but bills.

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promoted since then by the Authority have regularly been passed as private bills."
That deals specifically with the sort of Bill that is on the Order Paper today.
When I consulted the usual people whom one consults on a subject such as this I was told that the Bill only provides money and does not alter the law, and that therefore it is a Public Bill dealing with public policy. I should have thought that if it is necessary to have statutory authority for the Minister to give away money to one body, that surely alters the law. Even if it is taken that it does not alter the law—and it must alter the law if we need a statute—I can find nothing in "Erskine May" to support that sort of argument.
I submit that the Bill comes clearly within Mr. Speaker Hylton-Foster's definition of Hybrid Bills in 1962 and well within the precedents of the way in which the House has previously dealt with Port of London Authority Bills. I submit that it is either a Hybrid Bill or a purely Private Bill.
Mr. Allan Roberts: Further to that point of order, Mr. Speaker.
Mr. Maxwell-Hyslop: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. I have an advantage over the hon. Members, because I had notice this morning of the point of order that the right hon. Member for Crosby (Sir G. Page) has raised, and I have the further advantage—I hesitate to say it to the hon. Member for Tiverton (Mr. Maxwell-Hyslop)—of having studied "Erskine May", which I know the hon. Gentleman takes to bed with him. I also have the advantage of having looked into the matter in considerable depth during the day.
I am naturally grateful to the right hon. Gentleman for his courtesy in giving me notice this morning, which enabled me to have time to study the matter and to take advice upon the question.
Having listened to the right hon. Gentleman, I must inform him and the House that I am satisfied that the Bill is not, of its nature, hybrid. Its sole effect is to make a grant of public money to the Port of London Authority to help it in its present financial difficulties.
There are a number of instances of Bills giving similar assistance to individual authorities which have been pro-
1216
ceeded with as Public Bills. I mention in particular the Rolls-Royce (Purchase) Act 1971, the British Leyland Act 1975 and the Covent Garden Market (Financial Provisions) Act 1977, in respect of none of which was there, as far as I am aware, a claim that they should be treated as hybrid measures.
In my view there is nothing in the Bill that amounts to direct commercial discrimination against any other authorities. I therefore rule that it does not require to be proceeded with as a Hybrid Bill.
Mr. Maxwell-Hyslop: Further to the point of order, Mr. Speaker. I say with great humility that I share your view, but, purely for the clarity of precedent, I think that it is important to stress that Mr. Speaker Hylton-Foster's ruling, which my right hon. Friend the Member for Crosby (Sir. G. Page) quoted, contains a word to which emphasis was not given. I think that a Hybrid Bill can be defined as a Public Bill that affects a particular private interest—not a particular interest, but a particular private interest. As I understand it, the Port of London Authority is a public body. Therefore, on that very fine point as well, it would not seem to me to fall within Mr. Speaker Hylton-Foster's ruling.
Mr. Speaker: I am deeply grateful to the hon. Gentleman. I shall sleep a lot better tonight.
Sir Graham Page: May I express gratitude to you, Mr. Speaker, rather than to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), for looking so carefully into the matter? I am much obliged.
Mr. Spriggs: We follow your advice with great care, Mr. Speaker, and the House is grateful to you for giving it, but since this morning's post arrived the Mersey Docks and Harbour Company has let hon. Members know that it is now in serious financial difficulties. From what you have said, Mr. Speaker, it would appear that there is a form of discrimination in the Bill. I should like you to have another look at the matter and report your findings to the House.
Mr. Speaker: I looked into the matter earlier today. The hon. Gentleman and his hon. Friends who feel keenly about Liverpool would be well advised to pursue the matter in another way. The Bill is not a hybrid measure.

NORTHERN IRELAND (SECURITY)
Mr. McCusker: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the deteriorating security situation in Northern Ireland, which has resulted during the past week in the deaths of three members of the Royal Ulster Constabulary and £1 million-worth of damage caused yesterday by a Province-wide bomb blitz."
Earlier this week the House was given the details of the deaths and injuries suffered by the police as a result of Provisional IRA activity during the past 10 days. I shall not bore the House by repeating the details of their deaths, but simply remind hon. Members present that another three gallant young men, aged 24, 33 and 43, are dead and an equal number of their colleagues are seriously injured.
Since then the terrorists have again demonstrated their capacity to strike at the community by bomb as well as bullet. Yesterday, in a well co-ordinated Province-wide bomb blitz, in a space of 19 minutes they totally destroyed three hotels, at a cost of at least £1 million, and in the process probably added another 100 people to the dole queue. We must be thankful that no one was killed, although a number of people were injured. In those bombings almost 1000 lb of explosives were used.
In Strabane there was the further sinister element of the Provisional IRA again being able to commandeer a house, hold the family prisoner overnight and use the family's car to carry out its mission. While that was happening the person responsible for security in the Province was in Dublin talking to the Republic's Government. Many people in Northern Ireland, including me, feel
1218
that he could have been better employed elsewhere.
There has been a serious deterioration in security in Northern Ireland during the past week. In my own constituency, four more men have been murdered. I resent the fact that Dublin politicians, some of whom are not without guilt with regard to the situation in Northern Ireland, should ever have the opportunity to discuss these matters, let alone to discuss them before Members of this House, and particularly before Members from Northern Ireland.
Mr. Speaker: The hon. Gentleman gave me notice this morning, before 12 o'clock, that he would seek leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the deteriorating security situation in Northern Ireland, which has resulted during the past week in the deaths of three members of the Royal Ulster Constabulary and £1 million-worth of damage caused yesterday by a Province-wide bomb blitz."
The hon. Gentleman has brought our attention to the continuing grievous position in Northern Ireland. The House has listened with deep concern to what he has said.
The House has advised me that when I give my ruling I should not give the reasons for my decision, but I tell the hon. Gentleman in passing that he is aware, and the House is aware, that I do not decide whether the subject shall be debated. I say that for the benefit of people outside the House as well. I decide merely whether there should be an emergency debate tonight or tomorrow.
After listening to the hon. Gentleman with anxious concern, I have to rule that his submission does not fall within the provisions of the Standing Order, and therefore I cannot submit his application to the House.

HEALTH AND SAFETY AT WORK ETC. (AMENDMENT)
4.6 pm
Mr. Bob Cryer: I beg to move,
That leave be given to bring in a Bill to amend the Health and Safety at Work, etc. Act 1974 so as to control the moving or lifting of heavy weights by employed persons and for connected purposes.
At present the position regarding weight limits is confused. The Agriculture (Lifting of Heavy Weights) Regulations 1959 provide for any workers employed in agriculture to lift.
"any load consisting of a sack or a bag together with its contents lifted or carried unaided a maximum of 180 lb."
Yet the Woollen and Worsted Textiles (Lifting of Heavy Weights) Regulations 1926 put the maximum where the yarn, cloth, tool or appliance is reasonably compact at 150 lb and where it is not a rigid body at 120 lb. There is no reason for supposing that there is any physical difference between textile workers and agricultural workers.
Section 72(1) of the Factories Act 1961 limits the load for any employed person to
"any load so heavy as to be likely to cause injury"
to the person lifting, carrying or moving it. My Bill would retain that general limitation, but, in order to clarify and improve the position, the maximum weight permitted in any circumstances for adult males would be 112 lb.
The Bill would be classed as a "relevant statutory provision" under schedule 1 to the Health and Safety at Work etc. Act, and as such would be subject to the powers of the Minister under section 1 of that Act. That would mean that, should the Minister decide that further improvements were necessary as part of a review of the lifting of heavy weights in industry and agriculture, he would not be hindered by an Act which would not be part of the general legislative pattern. He would thus be able to repeal or alter the provisions of the Act by regulation made under the major statute, provided that any alterations were
"designed to maintain or improve the standards of health, safety and welfare."
However, it seems to me important to take action quickly, because of the num-
1220
ber of back injuries that occur, rather than wait for a review. Indeed, in a written question on 31 March 1976 I asked the then Secretary of State for Employment
"what consultations have been instituted with the Health and Safety Commission to produce legislation further to control the lifting of heavy weights by work people in order to reduce the demands on the Health Service arising from back injuries."
The Minister replied:
"I am advised by the Chairman of the Health and Safety Commission that the Health and Safety Executive has held informal discussions with representatives of a number of organisations having wide experience in the problems of the manual lifting of heavy weights. In addition, it is intended to include the subject in a review of the wider field of ergonomics which is to be undertaken by the Executive."—[Official Report, 31 March 1976; Vol. 908, c. 486.]
I tabled the question on 31 March 1976. At that stage the Health and Safety Commission was about to embark on a review of the lifting of heavy weights, incorporating much detail and expert advice. So far there has been no result. The anomalous position that I outlined in 1976 still pertains. The legislation has not been improved one jot. One is driven to the conclusion that the only weight lifted by many concerned with the issue is a piece of paper. If members of the Health and Safety Commission were to do a stint in a foundry or a mill, lifting bolts of cloth or pieces of machinery, there might be speedier action.
About 50,000 people are involved each year in accidents resulting in strains, sprains and other injuries to the trunk, including slipped discs. I hope that my Bill will help reduce the toll.
Lifting heavy weights also contributes to back pain. On 18 January a Conservative Member pointed out:
"Every day 56,000 people are off work because of back pain. Every year 18 million working days are lost because of it, which is more than the number of days lost because of strikes."—[Official Report, 18 January 1980; Vol. 976, c. 2173.]
On average each year over 15 million working days are lost through industrial injury. In 1976, by comparison, 3½ million days were lost in strike action. In 1977 it was just over 10 million, as opposed to about 15 million days lost in the same year through industrial injury.

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The Government are enacting Draconian legislation against trade unions. It would be preferable if they concentrated on eradicating or at least reducing industrial injury. One way that that can be done is by supporting this modest measure.
My Bill is a small step in the right direction. The TUC wants a lower level, which I believe is right, but by making my Bill a relevant statutory provision, which is a legal definition under the Health and Safety at Work etc. Act, the Minister can improve the position by regulation.
For four years the Health and Safety Executive has been looking at the problem, and it is apparently about to embark on yet another working party, because the commission cannot agree on regulations. We should not wait for a further 200,000 accidents, with millions of pounds worth of National Health Service facilities being utilised. It is time that action was taken.
While it is intended that the general provisions of the Health and Safety at Work etc. Act shall apply to this Bill and that it shall be subject to such means of enforcement as improvment and prohibition notices, it is also intended that section 47 shall be limited in its application, in that my Bill would give rise to civil liability under actions for breach of statutory duty. It is in that field that many workers have found the existing regulations most onerous.
In 1976 I quoted the position of a farm worker who was injured after lifting a load of about 180 lb. The position has not changed. That worker obtained compensation only because the defined weight could not be obtained, and the matter was settled out of court. As long as statutory limits remain high, such accidents will continue.
On 14 April 1976 I quoted from a letter written by a textile worker, who said:
"may I give you another example of unfair situations regarding the Health and Safety at Work Act and the attitude of management. An inspector employed in our cloth inspection department had occasion to lift a roll of cloth off a 'batching unit'. There is no good access to the above machine and the operator/inspector would have to stand sideways and attempt to lift approximately 150 lb. or more by leaning over the machine. Requests were made by the men in the inspector's department
1222
to make the job more accessible or redesign the hatching unit for better access. That was two years ago!"
I added:
"The access was altered only under threat of legal action by the men, and photographic evidence was taken which resulted in action."
Only last year that illustration in 1976 was emphasised by a constituent of mine who found herself in exactly the same position, and subsequently suffered a back injury at work.
"By bringing down the maximum weight to 112 lb., we should save the nation money, prevent many damaging accidents, keep more people at work in a better state of health and release valuable National Health Service facilities for other uses. Any future improvements recommended by the Commission can readily be incorporated in the way I have described. If action can be taken swiftly by approving the Bill, it will clarify a difficult and confused situation, and surely in health and safety at work, that can only be of benefit."—[Official Report, 14 April 1976; Vol. 909, c. 1394–5.]
In 1976 people were reviewing, examining and re-examining the position, yet nothing has been done to legislate on the matter. The Department of Employment, which is responsible for it, has not even bothered to send anyone to keep a watching brief on the proposals. That is a disgrace.
I hope that the House will give its approval for the introduction of the Bill. By this modest measure the House can reduce industrial injury and the resulting pain.
Question put and agreed to.
Bill ordered to be brought in by Mr. Bob Cryer, Mr. Dennis Skinner, Mr. Jim Marshall, Mr. Frank Haynes, Mr. Ted Fletcher, Mr. John Evans, Mr. Norman Atkinson, Mr. Frank Allaun, Mr. Kevin McNamara, Mr. Joan Evans, Mr. Russell Kerr and Dr. M. S. Miller.

HEALTH AND SAFETY AT WORK ETC. (AMENDMENT)
  HEALTH AND SAFETY AT WORK ETC. (AMENDMENT)
  Mr. Bob Cryer accordingly presented a Bill to amend the Health and Safety at Work Etc. Act 1974 so as to control the moving or lifting of heavy weights by employed persons and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 9 May and to be printed. [Bill 192.]

HOUSING BILL (ALLOCATION OF TIME)
4.16 pm
The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move, That the following provisions shall apply to the remaining proceedings on the Bill:
Committee
1.—(1) Subject to sub-paragraph (2) below, the Standing Committee to which the Bill is allocated shall report the Bill to the House on or before 1st May.
(2) Proceedings on the Bill at a sitting of the Standing Committee on 1st May may continue until 11 p.m. whether or not the House is adjourned before that time and if the House is adjourned before the proceedings have been brought to a conclusion the Standing Committee shall report the Bill to the House on 2nd May.
Report and Third Reading
2.—(1) The proceedings on Consideration and Third Reading of the Bill shall be completed in three allotted days and shall be brought to a conclusion at Seven o'clock on the last of those days; and for the purposes of Standing Order No. 43 (Business Committee) this Order shall be taken to allot to the proceedings on Consideration such part of those days as the Resolution of the Business Committee may determine.
(2) The Business Committee shall report to the House their resolutions as to the proceedings on Consideration of the Bill, and as to the allocation of time between those proceedings and proceedings on Third Reading, not later than the fourth day on which the House sits after the day on which the Chairman of the Standing Committee reports the Bill to the House.
(3) The resolutions in any Report made under Standing Order No. 43 may be varied by a further Report so made, whether or not within the time specified in sub-paragraph (2) above, and whether or not the Resolutions have been agreed to by the House.
(4) The resolutions of the Business Committee may include alterations in the order in which proceedings on Consideration of the Bill are taken.
Procedure in Standing Committee
3.—(1) At a sitting of the Standing Committee at which any proceedings on the Bill are to be brought to a conclusion under a Resolution of the Business Sub-Committee the Chairman shall not adjourn the Committee under any Order relating to the sittings of the Committee until the proceedings have been brought to a conclusion.
(2) No Motion shall be moved in the Standing Committee relating to the sitting of the Committee except by a Member of the Government, and the Chairman shall permit a brief explanatory statement from the Member
1224
who moves, and from a Member who opposes, the Motion, and shall then put the Question thereon.
4. No Motion shall be moved to postpone any Clause, Schedule, new Clause or new Schedule but the Resolutions of the Business Sub-Committee may include alterations in the order in which Clauses, Schedules, new Clauses and new Schedules are to be taken in the Standing Committee.
Conclusion of proceedings in Committee
5. On the conclusion of the proceedings in any Committee on the Bill the Chairman shall report the Bill to the House without putting any Question.
Dilatory motions
6. No dilatory Motion with respect to, or in the course of, proceedings on the Bill shall be moved in the Standing Committee or on an allotted day except by a member of the Government, and the Question on any such Motion shall be put forthwith.
Extra time on allotted days
7.—(1) On an allotted day paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on the Bill for two hours after Ten o'clock.
(2) Any period during which proceedings on the Bill may be proceeded with after Ten o'clock under paragraph (7) of Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) shall be in addition to the said period of two hours.
(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, a period of time equal to the duration of the proceedings upon that Motion shall be added to the said period of two hours.
Private Business
8. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
9.—(1) For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order of a Resolution of the Business Committee or the Business Sub-Committee and which have not previously been brought to a conclusion the Chairman or Mr. Speaker shall forthwith put the following Questions (but no others), that is to say—

(a) any Question already proposed from the Chair;

1225

(b) any Question necessary to bring to a decision a Question so proposed (including in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);

(c) the Question on any Amendment or Motion standing on the Order Paper in the name of any Member, if that Amendment or Motion is moved by a member of the Government;

(d) any other Question necessary for the disposal of the business to be concluded; and on a Motion so moved for a new Clause or a new Schedule, the Chairman or Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

(2) Proceedings under sub-paragraph (1) above shall not be interrupted under any Standing Order relating to the sittings of the House.
(3) If an allotted day is one on which a Motion for the adjournment of the House under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) would, apart from this Order, stand over to Seven o'clock—

(a) that Motion shall stand over until the conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion at or before that time;

(b) the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.

(4) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that Motion.
Supplemental orders
10.—(1) The proceedings on any Motion moved in the House by a member of the Government for varying or supplementing the provisions of this Order (including anything which might have been the subject of a report of the Business Committee or Business Sub-Committee) shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(2) If on an allotted day on which any proceedings on the Bill are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion moved at the next sit-
1226
ting by a member of the Government for varying or supplementing the provisions of this Order.
Saving
11. Nothing in this Order or a Resolution of the Business Committee or Business Sub-Committee shall—

(a) prevent any proceedings to which the Order or Resolution applies from being taken or completed earlier than is required by the Order or Resolution, or

(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such proceedings on the Bill as are to be taken on that day.

Re-committal
12.—(1) References in this Order to proceedings on Consideration or proceedings on Third Reading include references to proceedings, at those stages respectively, for, on or in consequence of, re-committal.
(2) On an allotted day no debate shall be permitted on any Motion to re-commit the Bill (whether as a whole or otherwise), and Mr. Speaker shall put forthwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
13. In this Order—
"allotted day" means any day (other than a Friday) on which the Bill is put down as the first Government Order of the Day provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
"the Bill" means the Housing Bill;
"Resolution of the Business Sub-Committee" means a resolution of the Business Sub-Committee as agreed to by the Standing Committee;
"Resolution of the Business Committee" means a Resolution of the Business Committee as agreed to by the House.
When I moved the Second Reading of the Housing Bill on 15 January, I said that it was far more than just another Housing Bill. It is a Bill with profound social implications. It provides an opportunity to transform the personal prospects of millions of our citizens. It will establish the rights of tenants as individuals above the bureaucracies of the State and local authorities.
The Bill flows from the clearest of manifesto commitments upon which this Government were elected. The policies within it were endorsed overwhelmingly by the electorate. They were promised in the Royal Address and were presented to the House in the Housing Bill at the earliest opportunity, which was dictated

1227
by these unique provisions and the time taken to draft and present them to the House.
The policies are ones that the people clearly want and have indicated that they want. It may interest the House to know that there is a continual stream of letters to my Department from people who are eager to buy their homes and are longing to know when the Bill will come into force. We have received about 2,800 letters from members of the public about the right to buy, about 90 per cent. of which support our policies.
Mr. Frank Allaun: Big deal.
Mr. Heseltine: For those concerned it is a big deal, and I am pleased that the hon. Member for Salford, East (Mr. Allaun) realises that.
The majority of these letters are from tenants who are trying to buy their own homes. The largest group are those who are having difficulty in buying because landlords will not sell, or sell at the discounts that it is within their discretion to grant. These people want the Bill enacted as quickly as possible.
Mr. Jack Straw: Since 16 May 1979, most local authorities have been offering discounts of 33 per cent. to 50 per cent., which are the discounts available under the Bill. Notwithstanding that, sales in the past six months have been 2,500 fewer than during the last six months of the Labour Government. Where is the evidence that the measure is desperately needed? How does the Minister explain that decline in sales?
Mr. Heseltine: If the hon. Member looked carefully at the figures he would realise the fallacy behind his question. He is not in a position to refer to current completions or to those awaiting completion. We do not yet have the statistics of completions currently taking place, namely, the completions that will have arisen as a result of the new opportunities that were created following the change in government. The hon. Member will be aware that, as we have made clear to the House, the second half of 1979 saw levels of completion—22,000 for the half year—that are comparable with the highest levels of completion ever achieved in council house sales. The hon. Mem-
1228
ber will be pleased to see that on the evidence that is available the programme is progressing as successfully as I am sure he would want to see.
Mr. David Alton: Has the Secretary of State seen the report in The Guardian today, which quotes his own Department's figures and demonstrates that sales are down by about 22,000 on what was achieved during the period of the last Conservative Government? Estimates by the Department show that 40,000 houses were sold last year. In those circumstances, surely the Secretary of State must be worried at the continuing decline in the number of sales, not only in the council sector but in the private sector, as a result of the very high levels of mortgage rates.
Mr. Heseltine: I am worried by the effect on the programme of the high levels of mortgage rates. I am sure that the hon. Member will support the Government in whatever way is possible to secure reductions in public expenditure, which alone will bring down the interest rates and therefore the mortgage rates, I share his concern and I welcome his support for the policies that we are pursuing in that direction. As for the report to which the hon. Gentleman drew the attention of the House, I refer him to the answer that I gave to the hon. Member for Blackburn (Mr. Straw). I hope that Opposition Members will bear with us until we have the completion figures. Then we shall be able to make judgments about the facts as completions take place consequent upon the change in policy towards the sale of council houses.
There is a very considerable delay between a person applying to buy a council house and the completion of the sale. The House will be very familiar with some of the reasons for this. When the houses were built, it was not anticipated in many cases that they would be sold. The legal documents are not often in existence to enable the legal processes to be completed with dispatch. There is a very considerable time delay, as all local authorities involved in selling council houses have discovered. We are going through that process, and there is bound to be a time delay.
The House will be aware that in the legislation itself there is the assumption that the effective right of ownership becomes relevant from the date on which

1229
the prospective purchaser serves notice on the local authority, so we have done everything in the legislation to anticipate the delay problems and to remove any anxiety which might exist in the minds of prospective purchasers.
It is quite clear that in the minds of many people—not only those who voted for my party at the general election but those who subsequently sought to take advantage of the policies upon which we were elected—there is a desire that the Bill should come into force as quickly as possible. It is, therefore, our clear intention to have the Bill enacted before the House rises for the Summer Recess. I believe that I carry the support of the House in saying that delay beyond that date would be a denial of our promises and of the aspirations of the people who voted for us. It is against that background that the guillotine motion is moved.
I realise at once—Opposition Members have been perfectly frank about it—that parts of the Bill are contentious and complex. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has made the position of his party totally clear. He does not like the main provisions of the right to buy and has made it clear that at any subsequent general election the Labour Party will campaign on a clear commitment to withdraw from millions of council tenants the right to buy. He will want to explain to the electorate at large—as he has explained already, so articulately—the implications of those policies at that time, and I do not doubt that my right hon. and hon. Friends will join in the debate as honestly and frankly as they feel able to do. But that is a matter of policy, and it is against the background of a policy commitment of that sort that it is quite understandable that Opposition Members are content to see the Bill proceeding at what one might describe as other than the fastest possible speed.
We have all been in opposition and know the relative responsibilities of being in opposition. I understand the attitudes of Opposition Members, although I cannot, of course, agree with them. But the Bill is important not only in respect of the right to buy council houses. It is important because it gives new rights to those who remain council tenants. It gives rights that Labour Members said that they believed in when their party was in
1230
office. They talked about them a great deal, although they did not legislate for them. We may assume, therefore, that broadly they are in support of that section of the Housing Bill.
The Bill also contains proposals for reviving the private rented sector. I think that again we carry the support, in principle, of hon. Members on each side of the House in trying to create a climate in which the private rented sector might have an opportunity at least to halt the decline that has continued for so long.
There is a great deal in the Bill that carries support from hon. Members in many parts of the House, albeit that there are parts of the Bill which, although carrying such support, had to wait for this Government to come to power before there was a chance to put them on the statute book.
Mr. Frank Allaun: In addition to the two parts that the right hon. Gentleman has just mentioned, there is another important one—the withdrawal of subsidy on a very big scale. Can the Secretary of State deny that the Estimates provide for a reduction of £2½ billion a year within three years in housing expenditure, that is to say, by 50 per cent., which means virtually the extinction of new council house building? In view of that, can he deny the right of a full discussion of the Bill in Committee, in the usual way?
Mr. Heseltine: That question is not relative to the debate in terms of the figures, because it would be perfectly possible to see changes in the housing programme without there being a piece of housing legislation. The hon. Member will know that such downward changes are possible without the Bill, because he supported the Government who presided over those changes so significantly in recent years when the housing programme fell by hundreds of millions of pounds. It did not need this legislation for that process to continue. The remaining levels of housing support anticipated in the Government's public expenditure White Paper allow for a continuing new construction programme at the discretion of local authorities.
Mr. Allaun: How many?
Mr. Heseltine: It depends on the discretion of local authorities. I appreciate

1231
that it is difficult for Labour Members to get used to the fact that if we give freedom to local authorities, they have to be allowed the discretion to exercise that freedom. It is not possible, therefore, for me to say in advance what local authorities will do with that freedom. They may repair houses, they may give mortgages, they may give improvement grants, or they may build new houses—all within the block allocation over which they have discretion. The House will be able to see what happens when local authorities make their own decisions, as opposed to having decisions imposed on them by a central Government Department.
Mr. Allan Roberts: Is it not the case that the housing investment programme allocations that the Secretary of State has given to local authorities have meant that many local authorities cannot make any decisions about where they spend the money, because they have been allocated only enough to meet existing commitments? There is no discretion; they have been given discretion to spend nothing, because there is nothing left.
Mr. Heseltine: The hon. Gentleman misses the point, because they have already exercised the discretion. What they may have done is to anticipate the allocation of funds which they did not then in fact receive. [Interruption.] They had already received or assumed receipt of funds and therefore used discretion in allocating part of the funds that they knew they would get. This is a very well-established precedent. The point that Labour Members should remember, inconvenient though it is, is that the policies of their party brought about the decline of new council housing on a scale broadly equivalent to the rates that are assumed in the current position.
Mr. Gerald Kaufman: What has the Secretary of State to say about the exercise of freedom by the Greater London Council, which has decided that because of the cuts in housing investment programme allocation it cannot advance any local authority mortgages for the whole of the coming financial year? Mr. George Tremlett, the leader of the housing committee, has said that the Government have allocated the Conservative-controlled council only £156 million of
1232
the £270 million requested, and that £130 million is committed.
Mr. Heseltine: That makes my point exactly. The local authority has discretion over the £156 million. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) would have found it easier to answer the question if he had considered the implications of his Government's policies and their consequences on the national economy. Reductions in public expenditure would have occurred even if the Labour Party had somehow or other secured a return to office. The right hon. Gentleman would have learnt to defend those cuts with the eloquence with which he defended them in the last four or five years. We do not need crocodile tears.
Opposition Members became expert at defending all types of cuts in the most harrowing circumstances. The right hon. Gentleman defended the cuts from the Dispatch Box. He defended housing subsidy cuts as though they were the Ark of the Covenant of Socialist purpose when he was explaining why the cuts were necessary to restore the welfare of the economy. Now he sits in his place as though that had never happened, but it is on record in Hansard.
Mr. Peter Hardy: Does the right hon. Gentleman recognise that my local authority, which has a splendid housing record, has in the past seven years been able to maintain a substantial housing and house improvement programme? Is he aware that its funds are entirely committed to projects that are in hand? The housing improvement and house building programmes will come to a shuddering halt. We did not experience that at any time in the past five or six years. Is the Secretary of State aware that administration, planning and building preparation in local government have been brought to a shuddering halt?
Mr. Heseltine: If that were so the hon. Member would have a passionate case to make to the House. However, he knows that housing has not come to a shuddering halt. He knows that the housing programme continues. In the White Paper we have set out the way in which billions of pounds are to be spent on the housing programme in the coming years. All we are talking about is the level at which the programme will continue.

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It is curious that when I reduce the housing programme by one figure, Opposition Members find that unacceptable, although they reduced the programme by the same figure year after year. We all understand that Opposition Members are grubbing around for an argument with which to rally the troops and they have to present their case in the harrowing language used by the hon. Member for Rother Valley (Mr. Hardy). What he said bears no relation to what is happening in his constituency.
I return to the motion. The Standing Committee on the Bill has been sitting for 10½ weeks. Yesterday evening was the 37th sitting, and the Committee has spent 110 hours considering the Bill. It has reached clause 106. When we tabled the guillotine motion, the Committee had reached clause 96. That focused its mind, and it has moved on. I accept that progress has been made. The progress indicates the reasonableness of the motion. The major parts of the Bill providing for rights to buy, the tenants' charter, private sector tenants, housing subsidies, and repairs, have been dealt with. It should not be too difficult to understand that in order to achieve enactment by the Summer Recess there must be a timetable motion.
Mr. Bruce Douglas-Mann: Does the Secretary of State agree that clause 106 is only half way through the Bill in terms of its pages? Is he aware that the Select Committee on the environment has received a large body of evidence dealing with many aspects of the Bill? Local authorities are almost unanimous, in that they regard the provisions for the sale of flats to be totally unworkable. Is the Secretary of State aware that the schedules require even more detailed consideration than the clauses of the Bill that have been discussed?
Mr. Heseltine: I am aware of the thorough and comprehensive work undertaken by the Select Committee. Virtually all authorities with an interest in housing have been asked to give evidence. I have no doubt that there will be a lengthy and detailed scrutiny, and that an informed judgment will be reached. In every Bill there tends to be a concentration on the early parts, dealing with the more significant provisions.
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The Government's view is that we have made reasonable attempts to reach a voluntary arrangement. But that has not proved possible. If we do not secure enactment of the legislation by the summer it will not come into effect until early 1981. The difference between us is three weeks. We believe that it is necessary to end the Committee stage on 1 May. The Opposition say that 22 May is acceptable. But we do not believe that we can guarantee enactment of the legislation by the Summer Recess if we wait that long. The judgment must be based on the question whether the three weeks in dispute entitle us to risk delaying enactment by three months. The Government's clear view is that we would not be justified in frustrating the requirements, ambitions and entitlements, based on electoral promises, of all the tenants involved for the sake of an additional three weeks.
Mr. Kaufman: It is important that the right hon. Gentleman, who paid only one fleeting visit of about five minutes to the Standing Committee, does not misinform the House. He said that it was natural that a Standing Committee should concentrate on the early clauses. We completed the first 26 clauses dealing with the rights to buy before the end of the 13th sitting. That represented a rate of two clauses persitting. That is the rate at which we have proceeded throughout. We neither slowed down nor speeded up. We went at a steady rate throughout. The Secretary of State should withdraw his untrue statement.
Mr. Heseltine: The right hon. Gentleman will want to raise those matters when he speaks in the debate. I accept that I was able to visit the Standing Committee only once—a privilege that I shared with the right hon. Member for Sparkbrook. We have all heard the speech on housing by the right hon. Member for Ardwick. He has made it on many occasions and I am sorry that I was not able to hear it in Committee. I am sure that he will make his speech with his usual conviction today.
Under the terms of the motion we can ensure that there will be 10 more sittings of the Committee. That should allow sufficient time. I do not like the idea of asking the House to approve a guillotine motion. Such motions always arouse controversy, but all Governments have to

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move them from time to time. I am sure that I shall find such motions unacceptable if I find myself on the Opposition Front Bench.
The motion allots two and a half days for Report and Third Reading. I hope that the House feels that that is a generous allocation. It should provide sufficient opportunity for proper discussion. We propose that the remaining sittings of the Committee should be considered by the Business Sub-Committee in accordance with normal procedure. I do not think that it would be constructive for me to refer in detail, beyond that, to the terms of the motion, which are familiar to all hon. Members.
There is nothing new about the introduction of a guillotine motion. The Bill is of critical importance, and I believe that we are now entitled to ask the House to limit the time taken on it and to ensure that those people who want to benefit from it can plan with certainty that it will be on the statute book, enabling its enactment to take effect some time in the early autumn. With that in mind I commend the motion to the House.
4.42 pm
Mr. Roy Hattersley: Timetable motion debates tend to take on a depressingly ritual character, and I begin by saying how grateful I was that at the end of his speech the Secretary of State dealt with the subject in a subdued, if not altogether rational, way. Of course, at the beginning he could not resist the old florid temptation to talk about electoral promises and all that. He was so carried away with his own eloquence that he referred to the occasions on which I had defended—according to him, so well—the previous Government's policy of reducing housing subsidies. I am sure that I would have done it very well if that had ever occurred. However, I have never made such a speech. I am grateful for the right hon. Gentleman's faith in my abilities which he hypothetically poses.
Mr. Heseltine: The whole basis of my faith in the right hon. Gentleman's eloquence in defending potential reductions in housing subsidies was the eloquence with which he defended reductions in food subsidies.
Mr. Hattersley: The fact that we have a Secretary of State who thinks that the same economic arguments apply to housing subsidies as those that apply to food subsidies demonstrates a good deal of the problems that tenants face today.
I do not propose to deal with this motion in the traditional, rather florid way in which such motions are normally discussed. I do not think that that is the best way for the House to occupy itself for three hours, and therefore I make it absolutely clear at the outset that our complaint this afternoon is not that the Government's behaviour is constitutionally scandalous, but that it is manifestly unreasonable. I shall attempt to demonstrate its unreasonableness according to three criteria.
The first concerns the size and content of the Bill. On Second Reading the Secretary of State said—he quoted himself this afternoon with his usual pleasure—that the Bill amounted to a "profound social revolution." I said to him, I think with absolute justification, that he ought to accept that profound social revolutions had long Committee stages. It is a piece of elementary logic, if the Bill changes the face of public and private tenancy in this country in the fundamental way that the right hon. Gentleman suggests, that 129 clauses and 20 schedules, most of them complex and controversial, will undergo very thorough scrutiny. Indeed, the right hon. Gentleman ought to welcome that thorough scrutiny.
The second criterion by which I wish to judge the unreasonableness of the motion is the behaviour of the Opposition in Committee. The right hon. Gentleman was honest enough to describe the behaviour of my hon. Friends by saying that they had not made totally speedy progress. I think that he phrased it in that subdued way because no one who has attended the Committee—and I have enjoyed that privilege more than once—[HON. MEMBERS: "Twice."] I have attended the Committee more than twice, but then I have the advantage of serving on another Standing Committee next door. Anyone who has read the Official Report of the proceedings of the Committee, as I did at the weekend, would find it impossible to argue that the Labour Members on the Committee had done anything that could remotely

1237
be described as obstructing its procedures or moving towards intentional delay. The only speech of any great length was made by the Minister for Housing and Construction, who addressed the Committee on one occasion for more than 100 minutes. No other speech compares with that in length.
The Minister for Housing and Construction (Mr. John Stanley): I am sure that the right hon. Gentleman would like to place on the record the fact that I took the trouble to explain the shorthold provisions at some length. That was welcomed by the right hon. Member for Manchester, Ardwick (Mr. Kaufman) on that occasion.
Mr. Hattersley: I read the ironic welcome that my right hon. Friend gave and it did not strike me for a moment that the Minister could take my right hon. Friend's words as a compliment, although I sometimes overestimate the Minister's judgments and abilities. I certainly want to deal with what he said on that day about shortholds.
As the Secretary of State said, in 37 sittings the Committee has dealt with 106 clauses, and for a Committee on a Bill of this sort to deal with what amounts to three clauses per sitting is a remarkable, record. There are some who will believe that the Committee was allowed to proceed too quickly.
Mr. Frank Allaun: Does my right hon. Friend agree that what is significant is the dogs that did not bark? There are a number of Government Members who have very strong views about the concept of shorthold and about compelling local authorities to sell houses, but by the helpful work of the Tory Whips they were not selected to sit on the Committee. Therefore, any opposition from the Government side was silenced from the start.
Mr. Hattersley: I am sure that that is true, and I notice that all the hon. Members who were explicitly critical of the shorthold provisions—some of them, with whom I shall deal in a moment, made representations to me about what they believed should be a bipartisan approach—did not serve on the Committee. However, I hope that even in the truncated Report stage, if the motion is passed tonight, the Members who spoke
1238
up about shortholds in the last Parliament and who argued that they were tolerable only if there were adequate safeguards, will speak up again. I of course do not include the Under-Secretary, who reported to the Committee that at about the time he joined the Government he had a great conversion about shortholds and discovered the errors of his opinions in the previous Parliament.
The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): Perhaps the right hon. Gentleman will care to quote me accurately instead of speaking on the basis of his flippant glance at Hansard over the weekend. I said that the facts of life bore in upon one when one became a Minister. As the right hon. Gentleman has clearly shown, the facts of life disappear into irresponsibility in his case when he changes sides.
Mr. Hattersley: I shall accept without qualification the Under-Secretary's explanation of his activities. He said the words that I attributed to him. He reminds me of those non-conformist churches which used to exist in the place where I lived as a boy. The Cabinet and the Government must be the same—one can join only if one announces one's conversion from one's previous errors. I am glad to see that the Under-Secretary has been baptised in a faith which enabled him to join the Government.
The point made by my hon. Friend the Member for Salford, East (Mr. Allaun) brings me naturally to the third reason why we believe that the motion is unreasonable. It concerns the form of the Bill. By that I mean not so much its content, which we debated previously, but its nature; not so much its substance but its style. This Bill, like other Bills presented by the Secretary of State, is full of enabling provisions. Clause after clause amount to giving the Secretary of State the right to do what he likes, how he likes, when he likes. There is a long history, as I propose to demonstrate, of the Secretary of State and his Ministers being deeply reluctant to explain their intentions when they have the power to implement the Bill.
Therefore, the Committee has two tasks. It has to probe the Bill's provisions, but it also has to probe Ministers'

1239
intentions, and that is properly and necessarily a long process. I give an immediate example. Clause 116, which has not yet been reached, seeks to repeal what is commonly called the non-profit rule in housing legislation. That rule prevents housing authorities from carrying surpluses on their housing revenue accounts. In other words, it prevents them from making a profit out of corporation tenants. Councils in future will be allowed to make such a profit. On Second Reading, I and other hon. Members asked the Secretary of State what those profits were to be used for. After all, by any standard, making profits on municipal housing is a controversial proposal. It might have seemed reasonable to anyone who debated that proposal that the Secretary of State should tell him how the profits would be used.
The right hon. Gentleman would not tell me on Second Reading. I returned to the subject during the debate on the rate support grant on 16 January. The Minister for Local Government and Environmental Services gave me an answer, with which he was visibly delighted. He said:
"It is an important and complex issue, and we are considering the alternative possibilities carefully. We shall be making propsals, as promised, shortly."—[Official Report, 16 January 1980; Vol. 976, c. 1776.]
"Shortly" turned out to be 2 April, the day before the House rose for the Easter Recess.
The hon. Member for Huntingdonshire (Mr. Major)—he may well be in the House, but I do not have the privilege of being able to recognise him—[HON. MEMBERS: "He is here."]—I now have the privilege of recognising him—was told in a written answer, which has almost entirely escaped public notice, and as far as I and the Library of the House can ascertain it was not reported in any newspaper, that the profits obtained by increasing the rents of council accommodation could be used to subsidise the general rate fund.
That is scandalous in two respects. First, we are now being told that the Government propose to subsidise owner-occupiers and private tenants out of profits made on council accommodation. Secondly, it is doubly scandalous because that intention was made known only on 2 April when the Bill was in Committee.
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Frankly, I must tell the Secretary of State that I do not believe that he had not made up his mind until April Fool's Day of this year. I believe that he has known it for some time, and that he has withheld that information from the House and from the Committee. I believe that he did that because he regarded it as a deeply damaging proposal to put forward a few weeks before the municipal elections. He hoped that by sneaking it out in that way, and then having a truncated debate when the Committee reassembled, he would avoid some of the pains and penalties associated with the idea of making profits on municipal housing to subsidise other local authority enterprises.
Although the Secretary of State may believe that this sort of motion and this sort of Committee gag will reduce the amount of publicity attracted to such a proposal, I promise that it is our duty and our intention to ensure that the result will be the exact opposite.
That is an example of why discussion of the Bill must take a long time. Decisions affecting its operation are ground out of the Minister and his colleagues with the greatest of difficulty. I have given an example of a piece of information which was ground out of the Minister, although not in Committee. Indeed, it should have been announced in Committee. The statement that was attached to the answer given to the hon. Member for Huntingdonshire announced that the Secretary of State proposed to embody a provision in the Housing Bill to allow for that. The Committee has not been informed of that proposal. That is an example of why the discussion of the Bill must be prolonged. It is because of the Government's behaviour.
I shall give two other examples which relate to the actual performance of the Minister in Committee. One is the area to which the Secretary of State was rash enough to refer, namely, shorthold. That is a new system of lettings which provides only a limited security of tenure for the tenants.
The Minister, when replying on Second Reading, said that he welcomed a bipartisan approach to the matter. On Second Reading the Minister said:
"That is an approach that we wish to follow, because the confidence factor is all-important."

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The Opposition tabled a number of amendments to facilitate that bipartisan approach. I am sorry to intrude once more into ministerial grief. Although some of the amendments were similar in text to certain provisions in a previous Conservative Bill, and would have provided safeguards for shorthold tenants, not one was accepted by the Government. So much for a bipartisan approach.
Matters went from bad to worse. Disregarding, rejecting, brushing aside my concern over the abolition of protection—as I believe shortholds to be—the Minister said on Second Reading
"a fair rent must be registered at the outset of shorthold."—[Official Report, 15 January 1980; Vol. 976, c. 1563–4]
He implied that, because rents must be registered, he could not understand why I was making a fuss. It was not until my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman), who leads for the Opposition in committee, pressed the Minister time and time again that we discovered the meaning of the outset of shortholds.
I shall paraphrase the Minister's description, when he spoke on 13 March, of what might happen on shortholds. He said that the owner of a vacant property was a free agent, who was able to make it available at any time as a shorthold. He said that at the expiry of a shorthold agreement the owner could make a voluntary arrangement with his tenant. That voluntary arrangement could be on a periodic basis—annually, quarterly or monthly. That would be for the tenant and the landlord to decide.
That explanation was prised out of the Minister with the greatest of difficulty, and was virtually denied on Second Reading. It means that within a period of a little more than a year a property can be transferred from a condition which endows its tenant with complete security—so far as it is provided by the Rent Acts—to a security that lasts from month to month, with the rent being adjusted from month to month.
I make this point not because of its flagrant unacceptability to those of us who believe that tenants should be protected against landlords—
Mr. Stanley rose—
Mr. Hattersley: I shall explain my point, and then the Minister is welcome
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to intervene. If the Committee is put to the trouble of prising out that sort of essential information, instead of its being advanced openly and willingly by the Minister, the Minister should not be surprised if the Committee takes some time to press him again and again.
Mr. Stanley: The right hon. Gentleman is aware that it is a complicated area. A certain amount of that confusion has been revealed by his remarks. He should be aware that during the Committee proceedings we tabled an amendment which made it a legal impossibility for somebody who was a protected tenant to be deprived of his security by virtue of his becoming a shorthold tenant.
Mr. Hattersley: Of course, but that is not the point that I was making. The point I was making is clear: once a person has entered into a shorthold tenancy, according to the Minister—I shall read the quotation in extenso if that is what the Minister wishes—at the end of the shorthold tenancy it is for the tenant and the landlord to negotiate the best deal that they can.
Our position is that the relationship between the tenant and the landlord is never an equal one, and the idea that they are negotiating equally is nonsense.
Mr. Heseltine rose—
Mr. Hattersley: The Secretary of State can dig out his hon. Friend if that is what he wishes.
Mr. Heseltine: It is not a question of digging out anyone else. As the House understands, the supply of rented accommodation has been in decline for as long as any of us can remember. We are all trying to find ways of reversing or at any rate halting that position. The dilemma about which the right hon. Gentleman is talking is that, if there is a fully protected position in a shorthold, unless some reasonable position is provided at the end of the shorthold, the landlord will, in his own defence, find it necessary to terminate the arrangement and obtain possession. Unless he does that, he is conferring upon the tenant rights the existence of which will prevent him from letting the property.
It is vital to the House that right hon. and hon. Members should understand that the existence of those rights, unless there is some way round this difficulty, will

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prevent the properties coming on to the market at all. That is the problem with which the right hon. Gentleman is dealing. It must be dealt with extremely carefully, or we shall find that the decline in the private rented sector continues.
Mr. Hattersley: The first part of the right hon. Gentleman's long intervention was the best argument against shortholds that I have heard for a long time. I have two complaints about his remarks. First, we are opposed in principle to that system. That is why we are pledged to repeal it when we return to office. Secondly, why did he not tell us the facts in the first place? Why was it that on Second Reading all our fears about occasional tenancies, periodic tenancies and monthly tenancies, with increases in rent month by month, were dismissed? Why was the matter not made clear there and then?
Mr. Stanley rose—
Mr. Hattersley: A third time? Of course.
Mr. Stanley: I am sorry to intervene again. I am grateful to the right hon. Gentleman for giving way. He is not correct to talk about increases in rent month by month. The shorthold tenant is a protected tenant. The Rent Acts apply in exactly the same way to the shorthold tenant as they do to every other tenant. If a rent has been registered on property, it applies in exactly the same way as any registered fair rent.
Mr. Hattersley: But the Minister will be able to hear all those hon. Members who serve on the Committee saying what appears in his own statement, that the requirement to register can be removed. He must not try to take advantage of the House in that way. Our complaint is two-fold. First, the situation is as the Minister described it to the Committee and, secondly, he should have told the House rather than required the Committee to grind on until that information was wrung out of him.
I take another example from yesterday, when the same Minister revealed, almost absent-mindedly, some of the facts about mortgages about which the Opposition have been pressing the Government for the last year. I have lost count of the number of occasions on which I have asked the Secretary of State what effect he expects the sale of council houses to
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have on the private mortgage sector, the provision of private mortgages and the cost of private mortgages. He has always given me one of two answers. They conflict, but on a couple of occasions he has given both conflicting answers, namely, that he does not know and that it will be market forces which determine the level and the availability.
Yesterday however, the Minister gave the Committee some new and extraordinary information concerning the effect of the sale of council houses, at least on local authority mortgages. His comments are recorded in column 1944 of the Standing Committee Hansard. He said that it would be the Government's intention that in respect of a family buying their own house, if they were to obtain a mortgage for buying that house from the corporation, and if the house they chose to buy was a speculatively-built house—a house already in private occupation—the local authority would look at the mortgage rate in a certain way. It would either be the local avearge rate, which is the equivalent of the pool rate, or the standard national rate, which is probably the equivalent of the building society rate, whichever is the higher.
On the other hand, a tenant buying a council house would be required by the Government to be provided with a mortgage from the local authority at the level of interest prevailing—a lower rate than the mortgage provided for a prospective private house buyer. One of the net results of the sale of council houses is that from local authorities at least there is to be a two-tier interest rate. If a person buys a council house, there will be a low interest rate. If he buys any other sort of house, there will be a high interest rate.
As well as being absolutely opposed to the principle, we are deeply opposed—and so should Concervative Members who respect this place—to such information being withheld until it is prised out during long sittings of the Committee.
Having dealt with that example, I conclude by dealing with what I believe to be the worst example of all of the way in which the Government have wilfully withheld information which, had it been provided, would have made the Committee's deliberations a great deal easier and clearer than has been possible to date.

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The worst example of all relates to part I of the Bill, which deals with the compulsory sale of council houses irrespective of the needs of the area in which they are being sold and irrespective of the judgment of the elected representatives who in law may be required to sell them.
The Secretary of State continues to accuse me of the intention of repealing that part of the Bill. I plead absolutely guilty, and, as he rightly prophesied, I shall continue to explain to the people of this country why the judgment about selling should be made according to the needs of the area rather than according to the ideology of the Conservative Party. However, the overall opposition to compulsory sales is not the point with which I want to deal this afternoon, nor is it one with which it would be appropriate for me to deal.
I want to deal with the more narrow point relating to the conduct of the Bill. The practical effect of selling council houses on the lives of ordinary men and women who want to rent such a house, or to move within the local authority pool from an unsuitable house to a suitable one, depends on two factors. It depends on the number of houses which are being sold in the area, thus reducing the rented sector, and on the number of houses which are being built in the area, thus increasing the rented sector. Therefore, very reasonably, from the day on which that proposal was put before the House, we have asked the Secretary of State to give some information about the prospective levels of new house construction in this country.
He has always refused. At least, he refused until 21 February, when he made a statement of sorts. That statement was described by New Society as "wilful obfuscation". The housing magazine "Roof" described it as "calculated to mislead". Both those conditions have been demonstrated by the Secretary of State today, when he told us that that was a matter of local authority discretion and that, therefore, the number of houses built by local authorities was largely a matter for them and one which was up to them.
That is literally untrue. The number of houses built by local authorities is crucially determined by the overall capital allocation which the Secretary of State
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provides. For very many authorities, the allocation for next year is no larger than that which is needed to fulfil their existing building commitments. No matter what they choose, it will be impossible for many authorities to build even one house next year. In fact, when it was deciphered, the statement of 21 February—I propose to decode parts of it in a moment—meant that new council house building had been brought virtually to an end. For one or two authorities it will literally be brought to an end in 1980–81, and many more will suffer the same fate in 1981–82.
My complaint today is not that the right hon. Gentleman has presided over the ending of council house buliding but that he has not been sufficiently frank with the House in saying that that is what he has done. Let me give him two examples from the statement of 21 February, which was supposed to reveal all those things to us. First, that statement compared actual spending in one year, a Labour year, with authorised spending in another year, a Conservative year. But it is well known that authorised spending is always higher than actual spending. Therefore, the right hon. Gentleman chose to compare two figures which were not only bogus but calculated to give his argument the best possible gloss.
Secondly, and statistically an even more heinous crime, he talked about a capital allocation which he said was £2·2 billion at 1981 survey prices, and then admitted that he was responsible for a cut of £540 million. However, that figure turns out to be at 1979 survey prices. He has fiddled the figures and manipulated them in such a way as to minimise the size of the cuts. He must understand that, as well as that doing nothing for his reputation, it requires my right hon. and hon. Friends, who treat these matters not only with seriousness but with integrity, to pursue those questions at length both in Committee and on Report.
Mr. Heseltine: We shall not be able to resolve this matter today because we are talking about statistics which are relevant to future new building programmes. However, in order to have a means of judging the right hon. Gentleman's assumptions—he said that I had brought new

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council house building to a halt—may I ask whether he meant that in 1982–83 and 1983–84, when my policies will have effect, no new council houses would be built.
Mr. Hattersley: I think that it will be exactly as the right hon. Gentleman said in an unguarded moment. Council house starts in those years will be for the old and for the very special categories—[HON. MEMBERS: "Ah".] With great respect, that is the figure which counts when we are calculating the loss through sales versus the additions through building. In 1981–82 and 1982–83, there will be virtually no building for general need, and in many areas there will literally be no building for general need. Let me explain, by accepting one of his statistically fraudulent assumptions, how is it possible to compare the outturn of one year with the allocation of another.
On the best evidence, it is assumed that the outturn for 1979–80 will be about £3·2 billion. The allocation for 1980–81—which is too large a figure for sensible comparison—is only £2·2 billion. Even according to the phoney criteria of the right hon. Gentleman, that is a net loss of £1 billion. It is no good the right hon. Gentleman asking me whether I am telling him that that means there will be no building in some areas in 1981–82. It means that there will be no new building in some areas this year. I have a long list—although the Secretary of State does not need my evidence, because he has a longer list—of authorities which have already announced that there will be no new housing starts in their areas this year.
Mr. Allan Roberts: In answer to my previous intervention, the Secretary of State said that local authorities had already exercised their options, and had already spent their money on commitments. Will my right hon. Friend tell the Secretary of State that one-year allocations do not allow local authorities to do anything other than that in the face of the allocations that they had been given? He may or may not know that it takes longer than one year to plan to build, and to build a house.
Mr. Hattersley: I had thought of commenting on the answer given by the Sec-
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retary of State about local authorities having exercised their options by spending money which the right hon. Gentleman had not provided last year. However, it seemed such a nonsensical notion that I considered, on reflection, that it would be kinder not to return to that absurd idea. If the Minister of State wishes to explain and justify it during the course of the debate, we await with fascination an explanation of the Secretary of State's statement.
In the meantime, I wish to give three examples of what is happening—thanks to the allocation programme. I take my examples from the West Midlands, an area which I am privileged to represent. The Conservative-controlled council in Birmingham has abandoned all new contracts for building. The Labour council in Coventry has abandoned all new contracts for house building. In Walsall, where there is no overall majority—although there will be in a fortnight's time—the council has also abandoned all new contracts for building. They have done so because the money allocated to them by the Secretary of State allows them to fulfil existing commitments, but does not allow them to do anything more.
Mr. David Winnick rose—
Mr. Hattersley: If my hon. Friend will forgive me, I wish to conclude on this note. I hope that, by my concluding my speech quickly, my hon. Friend will be able to put his views.
The points that I have made are not essentially concerned with the merits of the Bill. They give a clear indication of our views of the merits of the Bill, but they are concerned with the way in which the Bill has been presented and with the Government's continued attempt to keep the facts about the Bill from hon. Members.
Our complaint is not that the guillotine motion is a sign of the Government's wickedness. It is a sign of their weakness. It is a desire not to be inconvenienced or embarrassed further by the truth of their intentions being revealed in Committee. My experience of motions and stratagems of this sort is not that they allow the deception to continue but that they draw attention to the deceptions. We believe that that is how the debate should proceed.
Mr. Deputy Speaker (Mr. Bernard Weatherill): I remind the House that this debate is limited to three hours. Relatively short contributions will enable the Chair to call all hon. Members who wish to speak.
5.12 pm
Mr. John Major: I am grateful for this early opportunity to bring myself to the attention of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). I am sorry that when I have intervened during the Department of Environment Question Time, he has not noticed my interventions. Perhaps that rather faulty memory accounts for some of the matters that he has forgotten during the period of the previous Labour Government. None the less, I shall seek to bring myself to his attention many times during this Parliament.
During the next few moments I propose to adopt the novel concept of speaking to whether there should be a guillotine. There are two specific reasons why I am happy to vote for the Government motion. First, I believe that the Bill needs and deserves to become law at the earliest possible opportunity. Secondly, it is highly desirable that the remaining time available within the Government's programme should be allocated in such a fashion as to ensure that there is reasoned discussion on all the important parts of the Bill that we have not reached. There are many important points to be discussed on leasehold and other matters, and a reasoned and moderate discussion may be achieved, because the timetable motion is likely to concentrate minds wonderfully.
I understand the view presented by the right hon. Member for Sparkbrook, and it will no doubt be echoed by his right hon. Friend for Manchester, Ardwick (Mr. Kaufman). They do not like the Bill. They do not agree with the Bill, and they do not like the concept of the guillotine motion. But we have already debated the Bill for more than 100 hours, and there is more debate to come. It will be subject to scrutiny in the other place, and there is a two and a half day allocation for Report and Third Reading. That seems to be a sufficient allocation, even for a controversial Bill.
The right hon. Member for Sparkbrook blamed the Government for pro-
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foundly unreasonable behaviour in guillotining the Bill. I should like to draw to his attention the remarks of his right hon. Friend the Member for Durham, North-West (Mr. Armstrong) on the occasion of the guillotine of another serious and controversial Bill—the Education Bill in 1976. On that occasion the right hon. Gentleman said:
"To talk about curtailing discussion of a Bill on which we have already spent 100 hours is to stand logic on its head."—[Official Report, 8 November 1976; Vol. 919, c. 53.]
I hope that the right hon. Gentleman will consult his right hon. Friend later this evening to determine whether he accepts that as an accurate statement.
We had a frank discussion in Committee, and in the temporary—I hope—absence of the right hon. Member for Ardwick, I should like to say that the Committee stage was conducted in a reasonable manner most of the time.
I revert to the guillotine for a moment, since this is the subject under discussion. On the occasion of the guillotine in 1976, we had two guillotines for the price of one. On that occasion both measures were guillotined after a discussion lasting for one hour. There was a guillotine on the guillotine.
If the Opposition believe—as they frequently seem to suggest in Committee—that the Bill, and the intention to guillotine it, is a wicked unilateral act of devilment by my right hon. Friend the Secretary of State, I am pleased to take this opportunity to disabuse them. The Bill was a prime election commitment, and my constituents cannot understand why it is not already on the statute book. In my area a fairly enlightened local authority is selling council houses and implementing a series of reasonable policies. That is not universally so. In many areas—almost exclusively controlled by Labour councils—council houses are not sold. However, that is not so in all cases. Some Labour councillors will sell houses, and several Labour councillors will buy council houses.
Mr. Frank Allaun: The hon. Gentleman said that the policy of selling council houses was an election commitment by the Government. However, other electorates have committed their local authorities not to sell council houses. The hon. Gentleman said that for the most part

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Labour-controlled authorities were refusing to sell. He must know that a large number of Conservative-controlled councils informed Shelter that they did not want to be compelled to sell council houses.
Mr. Major: This policy was stated clearly to the electorate, and the Government's prime concern is to honour their election commitment. The circumstances were similar to those surrounding the Education Bill in 1976, when the hon. Member joined his colleagues in overriding the views of many Conservative-controlled education authorities. I suggest that a certain degree of consistency might be merited. During the election campaign we promised beyond a shred of doubt a statutory right to buy without delay, a tenants' charter and shorthold provisions. We have now been in office for one year, and we have delayed long enough. We should now bring those promises to the statute book, and ensure that the rights that we promised people are available.
I know that the Opposition have claimed—and the right hon. Member for Ardwick will no doubt claim this passionately later—that we have made very good progress on the Bill and that we could complete it without a timetable motion. I agree that we have made relatively good progress. But it does not necessarily follow that I agree that we can complete the Bill within reasonable time to ensure that it becomes law before the summer without the timetable motion. Perhaps we can, but it is not certain.
In Committee, from time to time we reached especially contentious points. On such occasions the right hon. Gentleman turned loose his hon. Friends the Members for Bootle (Mr. Roberts) and Lambeth, Central (Mr. Tilley), who have an infinite capacity to speak at moderate length on subjects well within the rules of order. On one occasion the hon. Member for Bootle was on his feet for 28 minutes making one speech—or, to be more precise, making one four-minute speech seven times during a 28-minute intervention. It occurred to me on that occasion—and I recall the thought now—that, as the French General Pierre Bosquet said at the battle of Balaclava:
"It is magnificent, but it is not war."
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Certainly the speech made by the hon. Member for Bootle on that occasion was entertaining, but it was not progress. We need to make progress desperately on the Bill to bring it into law at the earliest possible moment.
If there were to be no guillotine, if we were to accept the good will of the Opposition and to decide that no timetable motion was necessary, we would lay open ourselves to the possibility between now and the conclusion of proceedings on the Bill that at any stage the Opposition might suddenly discover something that they disliked to such an extent that they would seek disproportionate delay. The right hon. Member for Ardwick may shake his head, but that may happen. The right hon. Gentleman said in Committee that he had discovered areas in the Bill which were far worse than he imagined they could be. If that is so again, there may be some form of disproportionate delay which I should not wish to try to explain to my constituents.
The right hon. Member for Sparkbrook claimed that no time had been wasted in Committee and that there were very few indications of exceptionally long, single filibusters. That I accept without question. But time has been wasted in Committee that could have been spent discussing the Bill.
We have spent a substantial time in Committee—many hon. Members serving on the Committee are in the Chamber now and they know it—discussing not the provisions of the Bill, but the delights of Ardwick by day and by night and the horrors of Fort Ardwick. We have discussed the virtues of the Manchester city council at length. I should have thought that the virtues of Manchester city council would have been the subject of a very short debate, but apparently not. We discussed the rather curious habit of the hon. Member for Blackburn (Mr. Straw) of arresting his constituents as they go about their business. We also discussed the fact that the hon. Member for Bootle was unable to get a council house and was forced, poor chap, to go out and become an owner-occupier. [HON. MEMBERS: "Oh!"] We were all very sorry and sad about that. Entertaining it may have been, but it was not germane to discussion of the Bill, and in aggregate it amounted to a considerable degree of wasted time.
Mr. Straw: Does the hon. Gentleman accept that, despite the occasional entertainment that we have provided to Conservative Members, who otherwise have been required to keep their mouths shut and their heads down in deference to the Whips, the Committee has made more progress than any other Committee on any major Bill since the election? Indeed, its progress has been twice the rate of any other Committee on a major Bill.
Mr. Major: That is precisely because we have given Opposition Members so much time to speak, about which the hon. Gentleman was sarcastic. As another example of time-wasting, one had only to mention the word "landlord" in Committee to see a glazed look come over the faces of Opposition Members. Indeed, the hon. Member for Salford, East (Mr. Allaun) is sitting there, looking entranced, again. I have mentioned the buzz word and a look of entraced enlightenment has come over him as he considers the wickedness of landlords. If the hon. Gentleman had been the commander of the walls of Jericho when they fell down, he would have blamed the landlord for poor maintenance, not himself. No doubt, as his right hon. Friend the Member for Ardwick would say, had they been under the care of Manchester city council, that could not possibly have occurred.
Mr. Frank Allaun: Better than Ronan Point.
Mr. Major: It may be better than Ronan Point. It may even be better than a number of other things as well. However, even the hon. Gentleman was somewhat puzzled when it occurred to him that a tenant might sublet. A tenant is, of course, very worthy, but if he sublets he becomes a landlord and not at all worthy. It was most painful to see Opposition Members struggling with their psyche during the period when they uncovered this.
Presiding over these delaying tactics with a benign and delightful expression on his face has been the right hon. Member for Ardwick. As a newcomer to the House, it has been a delight for me to observe the tactical manoeuvrings of the right hon. Gentleman. He has the most effective air of injured innocence that I have ever seen. He is perfectly able to crank himself into a position where he
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can be as thoroughly unhelpful as possible while stating that he is seeking to give every ounce of co-operation to the Committee. That has occurred throughout what I concede has been a most enjoyable Committee stage, but one, none the less, that I hope we shall see concluded by 1 May.
We have a clear mandate, a clear commitment, for the Bill. We have had long—perhaps already over-long—discussion on the Bill. There has been some time-wasting, albeit spread widely and not significant and locked together in a single block. I believe that there is considerable justification for this reasonable timetable motion to ensure that there is reasoned and balanced discussion within fixed time limits of the clauses that remain. I believe that the time has come when we can proceed on what will come to be looked at as one of the most remarkable social Bills that we have had for many years, and that it will give many people a freedom of opportunity that has not existed in the past. I trust that the timetable motion will be passed.
5.26 pm
Mr. John Tilley: I think that we are now hearing some of the qualities of knockabout humour that Conservative Members were not allowed to indulge in in Committee.
Mr. Major: I promise to indulge in them after the timetable motion has been passed.
Mr. Tilley: We are grateful for the fact that we are only now having to endure them. I view with trepidation the promise that we shall endure them even more up to 1 May.
Like the hon. Member for Huntingdonshire (Mr. Major), I should like specifically to talk about the guillotine. I do not suggest that all guillotines are evil or that Governments should not at certain times have ultimate control over their legislative timetables. However, we have to examine the reason why the Government have brought in this guillotine motion on this Bill.
One possibility is that they expected to get further with the Bill than they have done and therefore they feel that they must now have a guillotine. I do not think that is a reasonable explanation because, as hon. Members on both sides of the

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House have admitted, considerable progress has been made on the Bill. Indeed, all the indications were that the Government, in their guessing about what would happen, thought that they might get bogged down on the right to buy or on the tenants' charter. That did not happen.
Having got through 100 clauses, it is a peculiar action for the Government now to introduce a guillotine, unless they had already decided, when they put the Bill before the House three months ago, to guillotine it. If so, that would be reprehensible behaviour, because the Government would be abusing the procedures of the House by trying to get what are three or four major Bills through under the guise of one Bill.
Election promises are, of course, pressing on a new Government, but those promises could have been put into operation in a much shorter Bill which could have gone through much quicker. There is more in the Bill than the three election promises mentioned by Conservative Members. That explanation is not acceptable because it does not make sense.
The only other explanation for the guillotine being brought in at this time—I believe it is the genuine explanation—is that the Government wish to stifle debate on what the Bill is all about. The public are becoming aware of what the Bill will do for them, be they intending owner-occupiers, council tenants or private tenants. Though a certain number of council tenants will benefit from what is effectively a major handout of public money if they exercise their right to buy, the majority of council tenants will experience nothing more than rents at a level higher than ever before envisaged because the subsidy proposals will enable the Government to blackmail councils which do not want to increase rents to increase them to the level required by the Government.
It is possible not only for the council to make a profit on council housing and put that profit into the general rate pool but for the Government to insist that councils do that. That is the prospect that faces the majority of council tenants as a result of the Bill. In addition, because of the subsidy proposals, fewer repairs will be done and fewer transfers will be available.
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As for the tenants' charter, we spent a long time trying to get the Government to admit the principle of consultation with tenants' associations. Anyone who has any knowledge of council tenants knows that the only way in which they can make their collective voice heard is through the local tenants' associations. The Government would not have those words in the Bill in any circumstances. That has been brought out in Committtee and that is why the Government want to stifle and end the debate.
What I have just said is nothing compared with what we proved will happen to the 3 million private tenants who are desparately affected by the rent implications hidden in the Bill. The Government's simple proposal—as was brought out in Committee—is that the only way to revive the private sector is to allow profits to increase, rents to rise steeply and to reduce security of tenure so that landlords can rid themselves of tenants more easily and establish a free market in rents.
In Committee, we heard—indeed, we have heard more about it from the Secretary of State today—evidence about what shorthold means. It means that any family that has to take a shorthold tenancy will find that at the end of the period—which will almost certainly be 12 months—it will have virtually no hold on the property. Perhaps we should have put forward an amendment, as my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) suggested, to the effect that for "shorthold" we should read "stranglehold", because that will be the position of the majority of private tenants. Private tenants are becoming aware of this and a campaign about their rights is building up. They are putting pressure on Conservative Members who represent areas of inner cities, such as inner London, where many of the private tenants who voted for the Conservatives will be affected severely by the measures contained in the Bill. I suggest that that is why the Government want to impose a guillotine.
In Committee, we have shown that underneath the various layers of provisions on mortgages and subsidies lies the hidden fact that first-time buyers in inner cities have also had it. In my area of the London borough of Lambeth, the Conservative-controlled GLC has said

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that it cannot provide any more mortgages. In the same week, the Labour-controlled Lambeth council was driven to the same conclusion because of the parsimonious allocations of money for the housing investment programme.
We went into this debate feeling that any attempt to boost private landlordism in the way suggested by the Government was morally wrong; we also thought that it would not work. We must ask the Government, ourselves and society as a whole—how many times we have to go through the horrors and scandals of Rachmanism under which tenants in inner city areas suffer before we find a public alternative to private sector landlordism. That was an issue that we brought to the attention of the Government in Committee, and they had no answer.
Though the guillotine will curb the debate, what it will also do—which is the real intention of the Secretary of State—is implement the proposals contained in the Bill sooner. The Bill will begin to bite, and as it does the private tenants' campaign and the campaign by council tenants against it will grow steadily as the misery, insecurity and high cost imposed by it bear down on the population.
The Government are not doing themselves a favour by imposing a guillotine. Once the Bill is enacted they will have sown the seeds of their own destruction at the next general election when the 9 million tenants—3 million private tenants and 6 million council tenants—vote on the basis of what the Bill has done to them.
5.36 pm
Mr. Graham Bright: A little less than a year ago the people of Britain chose a new Government who were committed to a decisive change in the way that we ran our affairs. Nowhere was that commitment clearer than on housing. The Conservative Party promised to widen the opportunities for home ownership, to give council house tenants the right to buy their own homes and, if they wished, to enjoy security of tenure under a new charter that would be provided. We also said that we would revise the private rented sector. We put our policies clearly and openly to the electorate and won its approval. We have
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kept our word to the electorate in the Housing Bill because it embodies those promises.
The Bill has been discussed extensively in Committee, as Opposition Members know. I am sure that all hon. Members regret the necessity for the introduction of a guillotine motion, but there comes a time when not only the needs of the House in regard to time have to be met but the expectations of the country have to be realised. That time has now come, and it would be wrong for this vital Bill to be further delayed.
I appreciate that Opposition Members are opposed to many of the proposals contained in the Bill. Every legitimate means of opposition to the Bill has been heard in Committee. We have listened to objections in principle and in practice and to amendments in general and in detail at each of our Committee meetings—and we have had 37 sittings. I make no complaint about that, but Opposition Members cannot legitimately complain because we are doing what we said we would do.
There is overwhelming evidence that the people of Britain expect to have the opportunity to buy their own homes. Why this opportunity should be denied to the millions of people who live in council houses is something that Opposition Members have yet to explain clearly. This is a right that I and my right hon. and hon. Friends believe must exist in practice.
Mr. Winnick: As the hon. Member is so anxious to give council tenants the right to buy, which is the subject of continual debate, what about the rights of private tenants? Should he not be equally enthusiastic about their right to buy the properties in which they live?
Mr. Bright: I am anxious to see everyone have the opportunity and the right to buy his own home, and I know that my right hon. and hon. Friends will continue to work towards that end. The Housing Bill, which is now in Committee, will ensure that tenants gain the right to purchase. We must end the situation in which one-third of the homes in Britain are held by district councils in a form of permanent feudal overlordship. The wider home ownership is spread, the better it will be for the people of Britain. It is tragic that the private rented sector has

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been hit so severely by short-sighted legislation in the past few years. Rent controls and security of tenure provisions introduced by Labour Governments since 1974 have driven more than 400,000 dwellings off the market. For newly married couples, workers whose jobs involve a high degree of mobility—
Mr. Straw rose—
Mr. Bright: No. I wish to keep going. I know that the hon. Gentleman wants the opportunity to participate in the debate.
The shortage to which I was referring has been a severe handicap for newly married couples, workers whose jobs involve a high degree of mobility, and students seeking lodgings. That has been brought home to me in my constituency.
The need to expand the number of privately rented dwellings from the present 13 per cent. of the total is important. I am convinced that the introduction of shorthold tenure in the private sector for a fixed term and a fair rent will be the key to reviving the entire sector. Tenants will have the security of tenure that they need, and landlords will have the assurance that they will be able to regain possession on a specific date if they wish.
I remind the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) that the anachronism in 1980 is not the private landlord but his medieval fantasy about benevolent municipal landlords and controlled rents. As a nation our priority in housing should be to sweep away the distinction between the rights enjoyed by owner-occupiers and those enjoyed by council tenants. That is why the tenants' charter enshrined in the Bill is so important.
We recognise the importance of security of tenure and the right of succession. I am sure that that is recognised by Labour Members. The difference between us is that we have acted to ensure it. We have gone further in sweeping away petty regulations on lodgers and subletting which have restricted the freedom of local authority tenants for so long. As a member of a Labour-controlled district council for 14 years, I could never understand why council tenants were so confined by rules and regulations over improvements and redecorations.
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The Bill will establish reasonable arrangements in that area. At long last tenants will have full information on the procedures employed for allocating, transferring and exchanging accommodation. They will have to be consulted when matters affecting their tenancies arise. The balance has shifted in their favour, and I fail to see why they should have to wait any longer for the Bill to become law.
The Bill deals with complex matters. Its operation will have to be carefully monitored. I have said that in Committee. The measures that it contains will promote wider home ownership and a fairer balance between landlords and their tenants. There will be the opportunity to use resources released by the sale of council houses to improve existing properties and to expand our future programme. It is not satisfactory for council house rents to cover only 43p of every £1 spent on municipal housing. Experience in Leeds and Nottingham shows how sales can provide resources for local housing programmes. I have heard nothing from the right hon. Member for Manchester, Ardwick (Mr. Kaufman) on the Floor of the House or in Committee to demonstrate that there will be any loss to the taxpayer or ratepayer arising from sales. Indeed, sales are the key to finding new resources. We are taking action to make provision for improvement grants more flexible.
The Bill is the most important housing measure to come before the House for many years. An immense amount of time has been devoted to it in Committee. We have sought and won the approval of the people of Britain for such measures. We have sought and won the approval of the House. Labour Members have had every opportunity to state their case. Our duty is to ensure that the British people have the chance to take advantage of the opportunity presented to them in the Bill. That is why the House should support the motion.
5.44 pm
Mr. Jack Straw: I congratulate the hon. Member for Luton, East (Mr. Bright) on his speech. I was delighted to hear from him. Throughout the 37 sittings of the Committee we have heard from him only once. I regret to say that I was not present on that occasion.
Mr. Bright: I have spoken on three occasions in Committee.
Mr. Straw: I think that the hon. Gentleman spoke for longer in aggregate today than throughout the 37 sittings in Committee.
Every Government have the right to get their legislation through the House. Therefore, I do not protest at the principle of the guillotine. It is an inevitable fact of modern parliamentary life. However, during the two previous guillotine debates in this Session, on the Social Security Bill and the Education (No. 2) Bill, the Ministers concerned made it clear, in the words of the Leader of the House on 29 January, that:
"no Government should resort to a guillotine lightly."
The right hon. Gentleman added:
"That is so. It is certainly true, too, that the case for its employment should be clearly proved". [Official Report, 29 January 1980; Vol. 977, c. 1268.]
I noted this afternoon that those words were not quoted by the Secretary of State for the Environment. The Leader of the House was in and out of the Chamber for a short while before leaving altogether. It may be that he left the debate because he, too, was discomforted by the Government's decision to press ahead with the guillotine motion.
No guillotine motion has been less justified in recent parliamentary history than this one. First, it is impossible for the Government to complain about the lack of progress in Committee. The Secretary of State accepts that there has been progress—those were his exact words—in Committee. As I said to the hon. Member for Huntingdonshire (Mr. Major), consideration of the Bill in Committee has proceeded at a far faster rate than that of any other major Bill this Session. We have proceeded at the rate of almost three clauses per sitting compared with an average of one clause per sitting for four other major Bills that have been through Committee recently.
Secondly, there has been no time-wasting or serious filibustering. There have been moments when we have had to introduce a certain amount of humour. Despite that, we have proceeded seriously to debate the issues. We have agreed to uncontentious clauses with the barest of explanation or discussion.
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Thirdly—this is the most serious charge, and one to which there is no answer—it is impossible for the Government to claim that the Bill would not have emerged from Committee in time for it to go to another place, return to this place and be enacted properly before the summer, and certainly before the end of the Session in the autumn. The Secretary of State admitted that all that was between the Opposition and the Govern-was a matter of three weeks—namely, whether the Bill emerged from Committee on 1 May or 26 May. I was surprised to hear that there is anxiety about whether the Bill will receive Royal Assent before July if it emerges from Committee on 26 May. I was astonished to hear that. It can only mean that the Government are anticipating major opposition to the denial of democratic rights to local authorities when the Bill goes to another place, as there was over the Education (No. 2) Bill and as there will be over the Local Government, Planning and Land (No. 2) Bill.
It is interesting to try to work out why the Government are so concerned about getting the Bill enacted before July. One can understand why they want it to become law. The only reason that I can think of is that the Secretary of State and the Prime Minister wish to have at least one good thing that they can claim to their credit among the record of disasters at the Conservative Party conference in October. That must be the prime reason for enacting the Bill before July.
We have been told by the hon. Member for Huntingdonshire that he has had many letters from his constituents in which they claim that they want to buy their council houses. Unless the revolution has already occurred and I have not noticed, Huntingdonshire is a Conservative area. Since 16 May 1979 local authorities have been able to offer exactly the same discounts as those that appear in the Bill. Despite the large discounts and the fact that no local authority has changed hands since last year, the number of tenants coming forward to buy their council houses, as the institute of Housing indicated yesterday and as was published in The Guardian today, has decreased compared with the number who came forward during the previous Labour Administration. I hope that we shall hear no more from Conservative Members that there is a desperate

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clamour for the right to buy throughout the country.
Mr. Ronald W. Brown: The byproduct of the Government's policy is that those who live in inner London areas and who want to move out have not been allowed to do so. Sales may have decreased, but there have been no transfers from Hackney to outer areas.
Mr. Straw: I accept my hon. Friend's point. As the Government have already granted general consent to local authorities to sell council houses at discounts of up to 50 per cent., there is no urgent need for the Bill to be enacted, Those Tory councils that wish to exercise this policy, have the power to do so now.
Apart from the political necessity of enacting the Bill in time for the Conservative Party conference, why are the Government so anxious to stifle discussion in such an undemocratic way? The truth is that this Bill is not only about the sale of council houses. That is the tinsel on the poisoned cake. This Bill is about the destruction of a housing policy that has been pursued on a broadly bipartisan basis since the war. It concerns the demolition of the public housing effort, the dramatic raising of council rents and, worst of all, the ending of security of tenure for all private tenants.
In Committee, we are unable to change any of the clauses because the Government have a majority. However, we have turned a spotlight on the intentions and effect of the Government's proposals. The Government have been continually discomfited and embarrassed by that exposure. As a result, they now wish to turn off the spotlight. Let us look at the effect of that exposure in respect of tenants in the private sector. The shorthold provisions were presented in an innocuous and anodyne way by the Secretary of State. On Second Reading, he said that these shorthold provisions were designed to improve the amount of rented accommodation. He said that changes in the rights of those tenants with resident landlords—an important sector—would merely simplify the present procedures. However, as a result
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of our probing in Committee, it has emerged that the Government's intentions are very different.
When the Conservative Party was in Opposition, the hon. Member for Kensington (Sir B. Rhys Williams) proposed shorthold tenancies with the active support of Conservative Members who—as my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said—are now on the Front Bench. He proposed shorthold provisions that contained major safeguards to ensure that they did not undermine the existing system of regulated and protected tenancies. Those safeguards ensured that shortholds could be created only for vacant and self-contained properties, and those with high physical standards. It was proposed that rents would be fixed in advance and, above all, that a shorthold tenant would have the right of first refusal when his tenancy came to an end, should the landlord wish to continue letting the property. Even the shorthold tenant would have been given some security of tenure.
The Government have abandoned every one of those safeguards. To their embarrassment and discomfiture, they have turned down all our amendments, which had been designed to introduce the same safeguards that were in the Bill proposed by the Hon. Member for Kensington and supported by the hon. Member for Hampstead (Mr. Finsberg). At the end of the year a tenant may find himself out on his ear at three months' notice. The Minister cannot suggest that that tenant could have his rent registered and regulated. If a tenant went to the rent officer, he would pay the penalty of eviction. The Bill contains no protection against that.
The Bill destroys the security of tenure of tenants with resident landlords. Since 1977 they have had little security. Under clause 64 they will get none. My hon. Friend the Member for Lambeth, Central (Mr. Tilley) rightly described the Bill as a "rent Bill." It will destroy the security of tenure of all new tenants. The Law Society is no revolutionary body, yet it said that regulated and protected tenancies under the Rent Act 1977 would become obsolete. This is a rent Bill, and it is as vicious, vindictive, and destructive of security of tenure as the 1957 Bill. No one should have any doubt about that.

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The Secretary of State said that we had almost come to the end of the Bill. He knows that we have got only halfway through it. There are masses of provisions packed away in the schedules, and they require detailed discussion. They need far more discussion than would be possible in the next five days. The guillotine motion is wholly unjustified. The case for it has not been proved.
However, it is entirely in character that the Secretary of State has attempted to push it through. He does not care a jot about democratic rights, or the rights of minorities to scrutinise his proposals. I am sure that that has been made clear not only by the comments of Opposition Members but by those of leading Conservatives both in the House and outside. Other proposals of the Secretary of State have been described as "undemocratic and unworkable" by none other than the Conservative leader of the GLC, Sir Horace Cutler. The right hon. and learned Member for Hexham (Mr. Rippon), a former Conservative Secretary of State and no revolutionary, described yet another of the Secretary of State's proposals as being symptomatic of an elective dictatorship.
Perhaps the most pertinent and astonishing remark that I have heard during the 11 months that I have been in the House came from the hon. Member for Buckingham (Mr. Benyon). He called upon the imagery of Nazi Germany when describing the Secretary of State's "right to buy" proposals. As a result of the way in which the Secretary of State had put forward those proposals, the hon. Gentleman described him as the "gauleiter of housing". He was right to describe him as such. A gauleiter of housing is what he is. By jack-booting his way through the House with a guillotine motion and by denying its democratic rights, he is jack-booting his way through the security and peace of mind of 3 million private tenants, and he is destroying the housing hopes of hundreds of thousands of those who are in genuine housing need.
5.56 pm
Mr. John Heddle: The hon. Member for Lambeth, Central (Mr. Tilley) referred to private landlordism and the shorthold provisions as "morally wrong". He said that they
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would not work. That reminds me of the splendid Guinness advertisement
"I don't like it because I've never tried it."
It is that negative and sterile attitude that should be brought to an end by the guillotine.
Like my hon. Friend the Member for Huntingdonshire (Mr. Major), in many ways I regret the Committee's departure. I shall miss the wit, repartee, and the cross-party banter. I shall miss the Latin puns, the Greek quotations, the step-by-step tour of every hon. Member's constituency, and the handkerchief-full of crocodile tears that have been shed about derelict properties and poor, exploited tenants. Never once did we hear that for every year during the period of the previous Labour Administration 125,000 units of accommodation—houses, flats or bungalows—came off the private rented market because of the stranglehold of rent control.
Mr. Straw rose—
Mr. Heddle: I shall not give way, because the hon. Member for Blackburn (Mr. Straw), for whom I have the highest regard and greatest respect, occupied our attention for 10 minutes or more.
My right hon. Friend the Secretary of State said that his Department received letters by the sackful from the electorate, asking when they would be able to exercise the right to buy. Every hon. Member receives letters every day from his constituents, asking when the Government will fulfil their election promise to give council tenants the right to buy and to give others, particularly young married couples, students, and those who move round the country or change their jobs, the right to rent. Is it any wonder that for many years in Labour-controlled local authorities the public have been saying, with monotonous regularity, that politicians are all the same? Is it any wonder thtat they say "Ah, typical politicians—they promise you the earth at election time, but once in power they forget about you."
This Government are not in the promise-breaking business. They have no intention of reneging on this commitment or on any other commitment in their manifesto. We promised to extend home ownership; we promised to introduce a tenants' charter; we promised to

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introduce a law to increase the supply of private rented accommodation. We must and we will fulfil those promises, and do it at an early stage.
The Opposition should drop their mongrel dogmatic attitude and face the simple fact that, whether they like it or not, the majority of council tenants actually want to own their own homes. Also, people who want to rent houses, bungalows, or flats, and they do not mind whether they are privately owned or council owned as long as they can, at a stroke of a pen or at the fall of a guillotine, be taken off the depressing and deplorably long council house waiting queues.
Mr. Selwyn Gummer: Will my hon. Friend confirm that particularly in rural areas there is no hope for people to rent homes unless already empty houses come on to the housing market? That will not happen as long as farmers, in particular, are afraid that they cannot reclaim those homes for their own farming purposes. Will he not agree that shorthold is essential for rural constituencies if the people are to be housed? It is the tenants who need this help.
Mr. Heddle: I am grateful for that intervention from my hon. Friend I shall touch briefly on the Rent (Agriculture) Act 1976 in a moment—I am sure that he will have greater knowledge of that than I do.
Now is the hour for us to act. Our constituents care very little for parliamentary procedure. The public cannot comprehend why a Bill that was given such a convincing and overwhelming majority on Second Reading on 15 January must still be the cause of many gallons of parliamentary midnight oil-burning all over again, while we hassle and argue about the dots and commas of the right to buy and the right to rent. Not without reason, the public cannot understand why it has taken not only 37 sittings and 110 hours—many of which would be called unsocial—to perform the simple act of delivering the key of a council house or a shorthold tenancy agreement.
Prior to the Second Reading the Government, to their credit, embarked on a considerable policy of consultation. They produced four or five consultation docu-
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ments, over a period of four or five months. They consulted the local authorities, local authority associations, housing action groups and professional bodies. All these submissions were taken into account when the Bill was drafted. It was open democracy. Hundreds of thousands of electors who voted for the right to buy their own council houses on 3 May last year will remember the delaying tactics of the Opposition tonight when they record their votes in the local government elections on 1 May.
It is not only Conservative-controlled local authorities and Conservative-controlled constituencies that concern us here. We should be looking after the interests of the silent majority who live in rented council accommodation in Labour controlled boroughs and who wanted the right to buy as far back as 1974. This election commitment was embodied in our manifesto of October 1974. The community simply will not tolerate any longer the attitude of Labour-controlled councils which, for narrow partisan reasons, stand in the way of their tenants becoming home owners. The people ask, with good reason, why a manifesto commitment has already taken 12 months to come to pass.
Electors at large probably will not remember 20 July 1976. Because of the mistaken benevolence of the electors of Bolton, East at the time, I have no firsthand memory of that night, but on that date, at a very late hour, the Government of the day guillotined not one, not two, but five Bills, one of which was a major housing Bill. That was the Bill to which I referred earlier, which is now the Rent (Agriculture) Act. Where was the right hon. Member for Birmingham, Spark-brook (Mr. Hattersley) that night? Where was the right hon. Member for Manchester, Ardwick (Mr. Kaufman)? They were both in the "Aye" Lobby—and that is where they should be tonight on behalf of their electors and constituents.
Now is the day, and now is the hour, The time has come for the Opposition to show that they really believe in home ownership and that they want council tenants to have the right to own their own homes. Now is the time for the Opposition to show that they believe that shorthold tenancies could be given a chance to succeed. Now is the

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time for them to show that they really want homelessness reduced and housing waiting lists cut.
I have no doubt that all hon. Members receive letters from their constituents on this matter. I received one dated 14 June last year from my constituents, Mr. and Mrs. J. Lodge, of 14 Forge Lane, Little Aston, who wrote:
"Dear Mr. Heddle, we never voted Conservative before, but we did this time because we want to buy our bungalow. We have been tenants of the Lichfield District Council all our married lives, so please can you help us by explaining the procedure, because although we are now in our late 50s, we do not want to go on paying rent for the rest of our lives, with nothing to show for it in the end".
There are thousands upon thousands like Mr. and Mrs. Lodge.
There are many landlords—private landlords, charities and trusts, all respectable bodies—waiting to provide short-term rented accommodation for those wishing to have the right to rent. I believe that it is up to us to provide them with that opportunity. It is up to the Opposition, too, to stand by the words embodied in their Green Paper of June 1977, when they said of private rented accommodation:
"If the decline continued unabated and no action were taken to compensate for the loss of accommodation from the sector, many people—particularly new or mobile households—might not be able to find the housing they need…this is already beginning to happen in a number of areas. To guard against this, we need to consider what action can be taken to stimulate the supply of lettings within the private sector, and what can be done to provide accommodation in the public sector".
The answer lies in the Division Lobbies tonight. By providing shortholds in the private sector and by allowing sales of council houses in the public sector to release cash for homes for those genuinely in need of accommodation in the public sector, that goal can be achieved. If there is a will, there is a way, and I suggest that the way must be to impose the guillotine in order to put the will and ambitions of the people on their doorsteps tonight.
6.8 pm
Mr. David Alton: I begin this evening by registering the strongest possible protest that the Liberal Party was excluded from the Committee dealing with this Bill. Inevitably, that has meant that the opinions
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of 4 million people who voted for my party at the last general election were not heard in Committee. Therefore, I am even more concerned about the move to guillotine the Bill than many other Opposition Members.
Mr. Allan Roberts: Is the hon. Member aware that liberal opinion on the Conservative Beck Benches was also excluded from the Committee?
Mr. Alton: I am well aware of that point and I shall come to it later. I began by making that protest, but I continue by sharing the protest already made by Members of the Labour Opposition about the way in which the Government are attempting to guillotine the Bill at this stage.
There are far more important issues in the Bill than the sale of council properties, and many of these are being camouflaged and hidden from the public in an attempt to pass, by sleight of hand a Bill that will have profound implications for the way in which our housing services are administered throughout the country. There is the whole question of local autonomy, which is particularly significant in this Bill. The rights of tenants are also very important. The Bill ignores and camouflages many of these areas.
For instance, figures issued by the Department of the Environment last month indicated that the number of new council houses started in January was probably lower than at any time since the Second World War, yet there are still more than 1 million people living in houses without inside sanitation, and there are still thousands on council waiting lists. The Government talk as though the sale of council houses will solve all those problems or make them go away overnight.
Many important issues remain undebated. The Government will introduce a stream of amendments which will be read out and put to the vote without discussion. The only amendments by Labour or Liberal Members, or by the few enlightened Conservative Members who may protest at some of the actions that the Government are taking, which will put to the vote are those that will have been fortunate enough to be the subject of a limited debate. That is surely a negation of democracy.

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The Secretary of State talked about his manifesto commitments as though they were his exclusive right. At the general election his party polled 33 per cent. of the vote. That was slightly better than the 29 per cent. polled by the previous Government, but it is representative of only one-third of the British people and it is arrogant to assume that the Government's mandate represents a vast number of electors.
Every local councillor elected to every council taking decisions on the sale of council houses also has a mandate, has been elected, and has the right to say whether council houses should be sold. The Secretary of State is riding roughshod over elementary democracy in denying those locally elected representatives the opportunity to put their point of view and to take decisions about areas that they know a great deal more about than does the Secretary of State.
Housing is essentially a local service, and one man's meat can be another man's poison. What is right for some inner cities may be wrong for others; what is right for some rural areas may be wrong for others; what is right in some urban areas is often wrong in rural areas. There has been a deliberate attempt by those debating the Bill to try to ignore the differences between areas.
The Secretary of State said that the Bill would revive the private rented sector. I believe that it ensures that the safeguards that have been built up for many private tenants over the years will be removed and there will again be unfettered Rachmanism in our towns and cities. I am sure that many people, having had their security removed, will be worried about what is to happen to them, their families and their homes.
The Government are adopting double standards. Why does the Secretary of State not give those in the private sector the same rights that he is giving public sector tenants? Local authorities should be able, dependent on local circumstances, to decide whether private tenants should also have a right to buy.
I can think of many examples in my own city of Liverpool where there are thousands of people living in squalid conditions. Many live in the private sector. Indeed, 30 per cent. of tenanted properties in Liverpool are in the private
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sector, compared with the national figure of 13 per cent.
Many private landlords have refused to provide even basic amenities such as an inside toilet and bathroom. How dearly many of those private tenants would like the chance to buy their homes, to get improvement grants and to exercise some home help. But the Secretary of State's double standards do not give those in the private sector the opportunity to get what he says those in the public sector should have. It is all very well to talk about housing need, but the money supply for housing is being cut back savagely, and by ignoring that the Secretary of State is covering up and camouflaging the basic problem confronting local authorities.
The Labour-controlled local authority in Liverpool decided two weeks ago to end improvement grants for those in the private sector and not to provide any more mortgages. The council took that decision because it believed that there should be no redundancies in its works department. My Liberal colleagues on the council said that that was a doctrinaire and wrong decision. We believe that some compromise should have been arrived at, but because the money supply to local authorities has been reduced they are being left with that sort of unpalatable choice.
The Liverpool authority had to decide whether to put more people on the dole, in a city where there is already 12 per cent. unemployment, or to end improvement grants in the private sector—which will also have implications for employment in the construction industry.
The Secretary of State said that if he were in opposition he would be opposing the guillotine motion. That sums up his cynicism and disregard for the fundamental issues involved. The Secretary of State seems to have an obsession with home ownership. I believe in the extension of home ownership and I should like to see more people having the chance to own their own homes, but with mortgage rates at 15 per cent. and the Government continuing to allow the MLR to stand at 17 per cent., what chance have many people got of becoming home owners?
I see many "For Sale" notices on our homes-for-sale developments in Liverpool. I have people telling me that

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they can no longer afford their mortgage repayments and asking whether I can get them into council properties Liverpool already has a vast number of people on its council house waiting list. The Government's crude obsession with the money supply does not take into account its effect on the housing market and so on.
More than 50 per cent. of British homes are already owner-occupied. That is a higher proportion than in West Germany, France, Holland or Denmark. By 1977, houses made up nearly 35 per cent. of personal wealth, compared with 19 per cent. in 1960. Massive funds have been diverted from what one might call productive investment.
In 1978, the then Government spent or remitted £.5½ billion of taxpayers' money—one-third of the yield of income tax—to distort the housing market. Yet that massive injection of funds has produced little result. The public house building programme, which is just emerging from the tower block lunacies of the 1960s, is being crippled by interest charges and the Government's cash limits. We see £1 billion being given away in mortgage relief on the top slice of personal income, so that the richest house buyers have borrowed and spent as much as they can—bidding up house prices in the process, and making it increasingly difficult for first-time house buyers.
Council house waiting lists are lengthening, estates are being increasingly vandalised and private housing is deteriorating as spiralling mortgage rates swallow up more and more of home owners' money. What does the Secretary of State do? He says that we should sell council homes—as though that will solve all those basic problems. I sometimes think that if the right hon. Gentleman had been on board the "Titanic" when it started to sink, he would have been busily rearranging the deck chairs.
Against the background of the crisis in housing, the Bill is largely irrelevant. It ignores the crazy system of housing finance. When will the Government at last announce that mortgage relief will be paid only at standard rates of tax? What hope will they give to the 1½ million still living in homes without inside sanitation?
The hon. Member for Leeds, West (Mr. Dean) tried to introduce a Bill to improve
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conditions in hostels for the homeless. The needs of those people were ignored by the Government and 13 people had to die in a fire in London to force the Government to respond. But for that, they would have done nothing for those who fester in squalid lodging houses and hostels. When the Bill was first introduced, it did nothing to help. Council houses are compulsorily up for grabs, but the same rights of home ownership have not been given to the 13·9 per cent. of the population who are tenants in private property.
Of course we support the extension of home ownership and believe that more people should have the chance of owning their own homes. I believe that that is a good way of ensuring liberty and equality. But the Government's policies of compulsion are hopelessly misguided. They seem to forget that where the gauleiter leads—here I use the words of the hon. Member for Buckingham (Mr. Benyon) in the debate on Second Reading—the commissar may well follow. Council house sales may well be suitable for some authorities, but in other areas it may be the worst thing that could happen to them.
In rural areas where numbers are such that small shifts in the balance between public and private housing stock can fundamentally affect the future of a community it is crass nonsense—quite absurd—to go on with the sale of council houses.
Mr. Peter Bottomley: In what proportion of local authority areas does the hon. Gentleman think council houses should be sold?
Mr. Alton: It should be a matter for local authorities to decide in their own areas. They know better than anyone else what the needs are. In the city of Liverpool there are 4,000 council properties standing empty. Some of them have been empty since 1964. I am in favour of giving away some of these properties and giving people a chance to become home owners.
When I was chairman of the housing committee in Liverpool, we pushed forward with a policy to sell council dwellings. We also did something else, to which I shall return in a few moments. But what is right in Liverpool is not right in a seaside town, for example.

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There, houses may well be sold to people who become simply holiday home owners. We can see the results of people buying up second, holiday homes in the rural areas of Wales. What will happen if council houses are sold in the rural parts of Wales? What will happen if people can become home owners there while those living in parts of Wales do not have the chance to go on to the council house waiting list and obtain council properties.
It would have been far better if the Government had done more to pioneer homes-for-sale developments, giving people the chance to buy houses built on sites in partnership with private enterprise. In the city of Liverpool we pioneered such a scheme, and about 3,000 houses have now been built and sold or are in the pipeline. People have been given incentives, such as the meeting of solicitors' and removal fees, and have thus been given a chance to obtain a stake in the community through home ownership.
First priority has been given to existing council tenants. Every time a council tenant moves out of a council dwelling into a house built for sale on a low-cost site in the inner city, not only is a socially desirable objective achieved, in providing more home ownership in the inner city, but council accommodation is freed for people in need.
It is nonsense for the Government to assume that everybody can afford to buy his own home. The unemployed cannot afford to do so, and people living in miserable conditions cannot always afford it. Despite the Conservative mentality that everyone should have to buy his own home, some people do not want to, and they should not he forced to.
The Bill does not go anything like far enough on tenants' control. People should be given genuine control. It is financially absurd that, for instance, the unit cost of fitting a washer on a tap has now reached the extortionate amount of £7 or £8 every time a man from a corporation works department does the job. It happens because people have been encouraged to do too little for themselves. That is why the Bill should have included a statutory requirement for local authorities to allow tenants to establish housing co-operatives if they wish.
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People who have day-to-day control over their estates are far more likely to keep them in good order, and it is far less expensive for the taxpayer. People should be given incentives. If necessary, they should be given rent reductions to set up their own tenants' co-operatives.
Finally, for private tenants, the Government propose nothing but increased insecurity. I introduced, simultaneously with the Government's Bill, my own Rights of Private Tenants Bill to ensure proper standards of sanitation in the private sector and to give tenants the right, where landlords refused to do basic improvement work, to buy their homes.
I have always believed in home ownership. The Government instead propose benefits that will benefit only the few, with possibly increased distortion of housing finance. Waiting lists will not be cut, nor will bad housing go away. For most people there will be no improvement at all, but rather less hope of decent housing in a climate of public spending cuts and decay.
6.24 pm
Mr. W. Benyon: I rise with some diffidence after being described by the hon. Member for Blackburn (Mr. Straw) as a leading Conservative. If that is not the kiss of death, I do not know what is.
This debate is a charade. Once again we face a timetable motion on a major Bill. Any computer that was reasonably programmed could have produced this debate quite happily. One would have only to press the buttons marked "Guillotine" and "Hattersley" to get exactly the same speech out of the machine. I suppose that the same applies to my right hon. Friend the Secretary of State for the Environment.
I find myself in a curious position. I have always taken the view that all major Bills should be timetabled after the Second Reading, on a motion from a Select Committee of the House. I still hold strongly to that view, but, conversely, I do not wish to see this Bill on the statute book. Therefore, I shall not support the Government in the Lobby tonight.
I opposed the Bill on Second Reading principally because it took away an effective and democratic power from

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local authorities and put it in the hands of the Secretary of State. I regard that as a dangerous and retrograde step for the Conservative Party to take. I still hold firmly to that view, but since Second Reading other factors have entered into the calculation. In particular, the Government spending plans with regard to housing have now become much clearer.
I fully support the economic policy being carried out by the Government. I have no quarrel whatever with the action that has been taken and is being taken to curtail and control Government expenditure. But I should like to examine what will happen in housing over the next two or three years.
First, it is true that local authority building for rent will be substantially curtailed, if not stopped altogether. Likewise—and this is the part that I find most worrying—the purchase and rehabilitation by local authorities of sub-standard housing for renovation and reletting will practically come to an end.
In the private sector, housing for rent will show no increase. In fact, it is more likely to show a decrease because of the Labour Party's opposition to my right hon. Friend's shorthold proposals. I have always said that the Shadow Minister is the only person who could provide another 1 million units of accommodation overnight. Until that happens there is no joy to be found in the form of extra accommodation for rent in the private sector.
Housing for sale is governed principally by the level of salaries. My estimate, in which I am supported by the building societies, is that the best that we can hope for is a continuation of the present situation or a modest rise in numbers of new mortgagees. In those circumstances, pressure on the local authority sector is bound to intensify.
On top of this, the rate of household formation will show a considerable increase over the next few years. The demographic bulge is leaving the schools and going into work. Therefore, there will be far more people looking for houses in the next few years than there were previously. In addition, there are a number of other social matters the implications of which are not generally realised, except by those who really
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study them. One is divorce. There are more than 140,000 divorces every year. If only 50 per cent. of those who are divorced find other partners, over a year another 70,000 applicants are added to the housing lists.
All this will exacerbate the problem over the next two or three years. If a totally unbiased expert with no preconceived political views—a sort of housing archangel—were asked to examine the problem, he would surely say that he must concentrate on the voids in the local authority estates above everything else. First, he would say that he must concentrate what building was available on housing for the elderly, whose numbers will rise continually over the next decade or so. Secondly, he would surely encourage those in council houses who could afford to do so to seek accommodation in the private sector. Unpalatable though it may be to my hon. Friends, it is exactly those people who will be encouraged to purchase their local authority houses and not move to owner-occupied accommodation elsewhere.
The mantle of Cassandra does not rest happily on my shoulders, but I see widespread distress and difficulty ahead, and certainly in my constituency, which is one of the better housed in the country. Over the past five or 10 years we have built more houses than any other area in the country, but even in my area the position is changing rapidly for the worse.
I have two questions for my right hon. and hon. Friends. First, has that aspect been properly considered?
Mr. Deputy Speaker (Mr. Richard Crawshaw): I remind the hon. Gentleman that this is a debate on the timetable motion and not the Bill in general.
Mr. Benyon: I take the point, Mr. Deputy Speaker. However, the debate has ranged widely.
I hope that my question can be dealt with before the Bill comes to its conclusion as a result of this motion.
During the remaining stages of the Bill it should be possible. while passing it as an enabling Bill, to delay its introduction until this period of extreme but necessary financial stringency has passed.
6.31 pm
Mr. Allan Roberts: I oppose the guillotine motion. Many issues remain to be dealt with.
I thought that at any minute the hon. Member for Lichfield and Tamworth (Mr. Heddle) would be fighting us on the beaches. I tell him that the privately rented sector declined in the four years following the passage of the 1957 Act at twice the rate that it declined after the passage of the 1954 Act. When security of tenure and rent control restrictions were lifted, the privately rented sector declined more quickly than when controls existed. That will happen again with the short-hold provisions.
If the guillotine motion is accepted, we shall not debate the right to buy for tenants in old persons' bungalows. It was the worst example for the hon. Member for Tamworth and Lichfield to mention. The Bill will give the right to three of the tenants' relatives to join with the tenant to get a mortgage and to buy the property. I do not suggest that many old people will want to buy their bungalows, but three relatives may wish to get together with an elderly tenant to do so. When he dies, that bungalow will therefore not be available for other old people to transfer from under-occupied three-bedroomed accommodation.
The Conservative local authority in Wirral has already announced that it will not be able to build the elderly people's bungalows proposed because of Government cuts in the housing investment programme. Under this Bill, that authority will be forced, against its will, to sell the old people's bungalows that it already has. Elderly people will remain imprisoned in 12-storey flats or will under-occupy three-bedroomed council houses. They will not have the opportunity to transfer to the bungalows of which they have long dreamt.
Another issue yet to be resolved is short-life accommodation and licences. The Bill will give Security of tenure to tenants of all public housing. Organisations such as the Peabody Trust have begun to evict tenants who are on licence. They fear that granting security to short-life tenants will mean that those on licence will not vacate properties when they are needed for planned modernisation programmes.
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I agree with the Minister for Housing and Construction that the Peabody Trust is behaving like a villain in a Victorian melodrama in dealing with its tenants, and that perhaps it should reconsider its action. The Minister has tabled an amendment to try to alleviate the problem for future short-life housing schemes. However, the amendment does not go far enough, and we shall not have the opportunity to debate the issue if the guillotine motion is passed. Thousands of houses with short but useful lives will remain empty.
I have tabled two new clauses. The first would place on local authorities the duty to consider short-life housing schemes to bring into use empty houses in the public sector. The second would prevent local authorities pre-empting public inquiries. It would outlaw prior demolition of properties that were the subject of a public inquiry. These are important issues, which will help to get houses into use and prevent waste of publicly owned property. I urge the Government to allow time to debate these important matters.
The Secretary of State tells us that he has a mandate for the legislation and that is therefore right to guillotine it. He does not have a mandate for the clause to increase local authority mortgage lending rates. He did not tell the electorate that the Government would make local authorities charge higher mortgage rates.
In the consultative documents issued by the Department of the Environment, the right hon. Gentleman indicated that he was prepared to legislate on distraint. He probably had a mandate to alter distraint procedures so that, without recourse to the courts, local authorities could not use them against people owing rent. However, that proposal has been dropped from the legislation. That should be dealt with in debate.
Conservative Members claim that they believe in mobility and that that is a reason to force councils to sell council houses. However, they have dropped our proposals to lift residential restrictions for those on council house waiting lists. The legislation on the tenants' charter included in the Scottish Housing Bill, lifting residential qualifications and allowing single people access by right to

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council house waiting lists, is not included.
Why should applicants on local authority waiting lists have access to their files when tenants do not? Why are the Government reluctant to allow tenants that access? The whole issue of freedom of information will not be debated adequately if this motion goes through.
A new subsidy system is being introduced for council houses. Because of the Government's insistence, that matter was debated at 3.30 or 4 am. My right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman), on the Feast of the Passover, was forced to eat bacon sandwiches. It was not a serious debate, because of the lateness of the hour. That is intolerable. We need a proper debate. The subsidy system will rob local authorities of money that they need to maintain a house building programme and keep down rents. The system will be based on the discretion of the Secretary of State about what rent levels should be.
The right hon. Gentleman described the legislation as a social revolution. The Under-Secretary of State, in opposing amendments moved by Labour Members, said:
"it is no part of the philosophy of this Bill to take a lead on an issue of social policy. We are dealing with housing policy."—[Official Report, Standing Committee F; 28 February 1980, c. 681.]
There is a conflict there between the Secretary of State and his Under-Secretary. That needs debating, and it will not be debated if the guillotine motion is agreed to.
I appeal to the dry hearts on the Government Benches to vote with us to stop what is a social revolution, a revolution that for the first time in history is switching provision of housing from State provision to dependence upon private landlords—and private Rachmanism at that.
6.40 pm
Mr. Gerald Kaufman: This has not been just another guillotine debate—a debate in which the Government move the motion with ritual complaints about Opposition obstruction and the Opposition respond with ritual complaints against the Government for stifling freedom of debate.
From the outset, the Opposition have recognised and accepted the right of
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the Government to secure this legislation—and not only the Government's right but the Government's power, through their large majority, to enforce that right. We deplore many parts of the Bill and have contested those clauses vigorously. We shall continue to do so. But we accept that the Government have not only a majority but a mandate for some parts of the Bill.
The Government's right to achieve the passage of the Bill, and their power to secure its passage have never been at issue. What we as an Opposition have sought is that this legislation shall be debated properly—not exhaustively, not protractedly, but with a care appropriate to the content of the measure.
As several of my hon. Friends have pointed out, this is a multiple measure. It begins with chapter 1, the compulsory sale of council houses. That alone is 26 clauses—longer by itself than many complete Bills that have been before the House this Session. It continues with what is claimed to be a tenants' charter—a diluted version of the charter in the Labour Government's Bill that fell with the general election last year, but welcome as far as it goes. That is another 23 clauses.
After this come the clauses on shorthold—gravely damaging, in our view, to the rights of private tenants. There are further clauses on private tenancies, on repairs and improvements, on housing subsidies—a major and controversial recasting of the subsidy system—on housing associations, on service charges and on leasehold. In all, there are 129 clauses and 20 huge schedules—a total of 142 pages. If the Government want Bills to get through by a certain date it is their duty to put before the House Bills of dimensions that can properly be got through by a certain date.
That was only how the Bill began its life; along the way it has swollen into a monstrous growth, like some legislative creature from the black lagoon. The Government, understandably dissatisfied with their original handiwork, have been rewriting the Bill as it goes along. So far in Committee the Government have tabled 137 amendments, together with six new clauses and one new schedule.
Faced with this almost unmanageable measure, the Opposition decided that we

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would contest it vigorously by debate and vote but would not seek to obstruct its passage. Up to the time of the tabling of the guillotine motion we had tabled an average of only two amendments per clause or Schedule.
We neither debated nor opposed the original sittings motion. When, after only two weeks, the Government decided to move to afternoon sittings, we again neither debated the sittings motion nor voted against it, and the Bill made steady progress. Indeed, our very sense of responsibility was used against us. Along the Committee Corridor a parallel though much shorter Scottish housing Bill was being discussed in Committee. The Minister in charge, the Under-Secretary of State for Scotland, moved a sittings motion to extend that Committee's sittings. He said:
"it might be of interest to the Committee to know that Mille we in this Committee are still at the very beginning of clause 1 after six sittings, the Standing Committee considering the Housing Bill, a very similar measure, is at present on clause 16. It may also be of interest to Opposition Members to know that when a sittings motion in identical terms to the one that I am presently moving, was considered in that Committee, the hon. Gentleman who speaks for the Opposition on that Committee stated: "The Opposition will not appose this motion and we shall take a few minutes only to discuss it because we want to get on with the Bill'."
The Under Secretary of State for Scotland added:
"I hope that the Opposition representative on this Committee will take a similar very constructive attitude".—[Official Report, First Scottish Standing Committee, 19 February 1980; c. 342.]
I am not concerned with that hon. Gentleman's immature attempt to make mischief between my right hon. and hon. Friends on the Committee dealing with the Tenants' Rights, Etc. (Scotland) Bill and my colleagues on the Committee considering the Housing Bill. Ignominious failure can be the only outcome of any attempt to create disharmony between members of the Parliamentary Labour Party. On each side of the border we stand shoulder to shoulder. What is significant is that a junior Minister was able to feel justified in drawing attention to the rapid progress that we were making, and to what he rightly called our "very constructive attitude".
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If the Minister thought that reaching clause 16 after eight sittings was speedy, he had not seen anything yet. Before long we began to notch up an average of one clause every hour. At the time when the guillotine motion was announced, we had reached clause 93—not bad progress in 34 sittings. After 37 sittings, we are now considering clause 106. This is no thanks to the Government.
At an early stage in Committee we asked the Minister to give us some idea of the timetable that he planned for his Bill. He was unable to do so. So, in the absence of any Government timetable, the Opposition set themselves a timetable. We informed the Government of it regularly and we kept to it meticulously. Our only stipulation was that the Committee should sit at civilised hours so that proper consideration could be given to the Bill's important and complicated provisions, which affect perhaps 20 million people.
All this was brought to a halt by the Government a week before the Easter Recess. On Tuesday 25 March, the Minister, with his hon. and learned Friend the Member for Clitheroe (Mr. Waddington), met my right hon. Friend the Member for Rhondda (Mr. Jones), my hon. Friend the Member for Leeds, West (Mr. Dean) and me, and told us that the Government wanted the Bill out of Committee by Thursday 24 April.
At that point we had reached clause 75. The Government wanted us to complete 54 further clauses and 20 schedules—93 pages—not to mention all the additional Government amendments and new clauses and schedules, in 15 sittings. We told them that the offer was an insult, and we rejected it. That was the only formal discussion on the subject that the Government ever had with us.
There was further brief informal contact between the Opposition Whip and my hon. Friend the Member for Leeds, West followed by a brief conversation in a corridor between the Minister and me, in which he laid down unilaterally a time limit, saying that the Bill must be finished at the latest by 1 May. We had offered alternative dates later in May but the Government refused even to discuss them. We were given the choice of finishing voluntarily on 1 May or being guillotined on 1 May. That, no doubt, is what

1285
Professor Milton Friedman means by being free to choose.
That was what the Leader of the House described as negotiations between the usual channels. It was a dishonest claim. There were no negotiations. There was an offensive ultimatum, which we rejected. Yet it would have been perfectly possible to work out a timetable that gave the Government their Bill while at the same time providing satisfactory time for proper debate.
Why was this not achieved? First, it was because of the attitude of the Minister. The Minister is an amiable man, and I am perfectly certain that he is kind to animals and small children, that he helps old ladies to cross the road, whether they want across or not, and that he rarely, if ever, beats his wife. He also has a considerable knowledge of the Bill. Indeed, it can be said confidently that between them the Minister for Housing and the Secretary of State for the Environment share a thorough understanding of the measure.
The Minister understands about 120 of the clauses and the Secretary of State, with suitable guidance, can find his way through the remaining nine. However, the Minister has shown none of the flexibility that can help even the most controversial Bill through Committee. He never began to negotiate at a time when negotiation could have made the guillotine motion unnecessary, even by the Government's criteria. Even when we asked for such a simple thing as notes to help us through the technical clauses, he refused.
Why have the Government decided to guillotine a Bill the Committee on which had reached clause 93 by the time that it was announced? First, they have guillotined the Bill because the Leader of the House is of unprecedented incompetence. He has so botched his legislative programme as to produce an unparalleled snarl-up of Bills, even though the Session is six months longer than normal. The second reason for the guillotine is that each year the Secretary of State needs a new stimulus to goad the ladies of the Tory Party conference to their Bacchic frenzy—a frenzy that generates the adrenalin needed to get him through another humdrum year of parliamentary drudgery—not that he bothers with much of that.
1286
This year we can anticipate the feast of oratory that the right hon. Member is preparing for the Heseltine groupies at Brighton. The Secretary of State will raise aloft his brand new Housing Act and declaim "My housing policy is in ruins. Private and council rents are soaring to astronomic levels. Mortgages are dearer than ever. Building societies are suffering from an unprecedented famine of funds. Even the lickspittle Greater London Council is having to stop its mortgage scheme and cut its homesteading project. Fewer new houses will be built next year than for a generation. I shall be the first Housing Minister this century to preside over an actual reduction in the number of houses to rent. But never mind all that. I have bludgeoned through Parliament this squalid and damaging Housing Act and you now have my permission to cheer."
There will follow the regulation scenes of abandon, with younger women having to be treated for hysteria, older ladies being trampled underfoot and the Prime Minister, as usual, demonstrating her cold disdain for the whole performance. That is one reason for the guillotine. The Bill must be rushed through in time for the biennial Brighton rock.
There is another reason for the guillotine. Those of us who serve on the Standing Committee found that the more the Housing Bill was debated and the more we forced the Government to disclose about it, the more damaging and dangerous it was revealed to be. The guillotine is designed to muffle the debate and hush up the damage. I have no doubt that the Government expected the Opposition to obstruct the Bill on the early clauses on council house sales so that they could introduce a guillotine much earlier than they have. But we wanted to debate as much of the Bill as possible. As a result, we have disposed completely of the Tory myth that compulsory council house sales will bring financial gain to public funds. That absurdity was touted a great deal, but now it is not mentioned.
We have brought into the open the powers that the Government are taking to force up council rents—powers that make the Housing Finance Act 1972 look like a tenants' charter. Let it be clearly understood that, from now on, all council rent increases will be the responsibility

1287
not of the local authorities but of the Bill and this Government.
We have forced into the open the way in which the Bill wildly tilts the powers of the courts to evict against the tenant and in favour of the landlord. We have forced into the open the way in which the Bill is designed to bring about more and more frequent and higher and higher rent increases for private landlords while at the same time removing any incentive to carry out repairs and improvements.
Only yesterday we forced from the Minister the admission that the Government were deliberately rigging the interest rates of local authority mortgages in order to deter people on low incomes living in the most difficult localities from achieving home ownership. Above all, we have forced out the truth about shorthold tenancies. In the debate on Second Reading we deliberately made no commitment for the repeal of the shorthold tenancy provisions in the Bill. Instead, we decided to table amendments to secure safeguards for shorthold tenants. Many of the amendments were based word for word on the safeguards contained in the shorthold Bills introduced by the hon. Member for Kensington (Sir B. Rhys Williams). The sponsors of those Bills included the present Minister for Housing and Construction and an Under-Secretary of State. The Government voted down each of those safeguard amendments. It is easy to see why.
During the Committee debates Ministers chortled with glee when I said that we would rather see properties empty than subject to the proposed form of shorthold tenancy, yet Ministers gave the game away when they voted against our amendment to confine shorthold tenancies to currently empty properties. They did that for two reasons. The first was that they know that hardly any shorthold tenancies come from empty properties. That is the considered view of the Small Landlords Association and even of the Prime Minister's Centre for Policy Studies, which kindly sent us its view. The centre says:
"It is extremely unlikely that many lettings will result from these provisions."
It describes shorthold tenancies as "naive in the extreme."
The second reason is more menacing. The Government's real objective is not
1288
to provide new properties for letting but to end security of tenure and rent control on all lettings by private landlords. Short-hold tenancies are the device to bring that about. There is to be power for the Secretary of State, without reference to Parliament, to end the requirement to register rents, scope for landlords to winkle genuinely protected tenants into adjacent, inadequately protected short-hold tenancies, and power for landlords, after only a year, to convert shorthold tenancies to unprotected lettings of as little as one month. The measures are the beginning of the end of security for the tenants of private landlords.
That is the legislative framework for the rebirth of Rachmanism under official Government sponsorship. It is the most retrograde step in rent legislation for 60 years. That is why the Opposition have announced their intention to repeal short-hold tenancies and to confer proper security on all tenants of private landlords. That is why the Government do not want the Bill to be debated adequately. In Committee, as we turned over the stones we found very nasty things lurking underneath. The Government know that there might be more revelations to come, so they have moved this grubby guillotine motion.
The Government may be able to stifle parliamentary debate, but they will not stifle the truth about this menacing measure. We shall tell the people the truth about the Bill, which the Government are so anxious to conceal. We shall win our own mandate to reverse the measure, which the Government are rushing through the House in such an unseemly way.
6.59 pm
The Minister for Housing and Construction (Mr. John Stanley): When the right hon. Member for Manchester, Ardwick (Mr. Kaufman) was introducing one of his various timetable motions in the last Parliament, he prefaced his remarks by saying:
"I hope that the House will be spared from the Tory Opposition even the most mechanical, ritualistic noises about the motion."
He did not do much to spare the House from a certain amount of mechanical and and ritualistic noises today. The contributions by my hon. Friends the Members for Huntingdonshire (Mr. Major),

1289
for Luton, East (Mr. Bright) and for Lichfield and Tamworth (Mr. Heddle), who are members of the Committee, were much closer to the realities of the Housing Bill than anything that we heard from the right hon. Member for Ardwick.
During the debate on the same guillotine motion, the right hon. Gentleman spoke with some enthusiasm on timetable motions. He said:
"We are gradually learning from the Tories how to conduct Government business in an orderly fashion."—[Official Report, 22 October 1975; Vol. 898, c. 487.]
We certainly share his enthusiasm for the orderly conduct of business, and I remind the right hon. Members for Birmingham, Sparkbrook (Mr. Hattersley) and for Ardwick that they gave us plenty to learn about guillotine motions during the last Parliament. Their Government guillotined three major measures in one day. They guillotined two constitutional measures before their Committee stages had even started. We did not hear much from the right hon. Member for Sparkbrook about that when he was discussing the scrutiny of this Bill.
The timetable motion for this Bill has arisen for only one reason. It was not that put forward by the right hon. Member for Sparkbrook or that advanced by the right hon. Member for Ardwick. It has arisen because of our inability to agree with the Opposition an end date for the Committee stage. The date we offered, which the Opposition did not wish to discuss, was 1 May. Let me explain why that date is both eminently reasonable and absolutely necessary. I can assure the hon. Member for Blackburn (Mr. Straw) that there is no question of our having resorted lightly to this timetable motion. There is only one way of judging whether the end date of 1 May is reasonable, and that is against the rate of progress that the Opposition have made with the Bill so far. That rate of progress has been made solely of the Opposition's own volition.
The right hon. Member for Ardwick said in Committee yesterday that he would be paying me a mixture of compliments and insults today, and he has been as good as his word. In return, I register my gratitude and appreciation to him for the assistance which he has given me in getting through this vital piece of Tory legislation. I go so far as
1290
to say that I do not believe that any Minister piloting through a controversial Bill could have been faced by an Opposition spokesman more helpful, more responsive and more energetic in securing it than the right hon. Member for Ardwick.
Of course the right hon. Gentleman has passionately denounced virtually every clause, but his passion for denouncing each clause has been exceeded by his enthusiasm to get on to the next one. That is why, on the basis of the rate of progress we have made, we believe that the date of 1 May is entirely reasonable. We have now completed the consideration of no fewer than 105 clauses. The most controversial parts have already been dealt with. The pace has been chosen by the Opposition. Let me remind the House of the extent of progress so far. We have completed the provisions on the right to buy, the tenants' charter, shortholds, assured tenancies, controlled tenancies, resident landlords, improvement and repairs, housing subsidies, local authority mortgages and rent rebates and allowances.
Against that background, given the progress made so far, it is ludicrous for the Opposition to maintain, as they have tried to do, that the Bill should remain in Committee until Whitsun. The right hon. Member for Ardwick has shown that, unlike other Opposition Front Bench Members, he can make great progress with a Bill. We have spent a total of 110 hours on this Bill. All the clauses of substance have been dealt with. That provides perfect scope for the Bill to be completed by 1 May, which will allow for no fewer than a further 40 hours of debate. I do not think that a more reasonable proposition could be advanced. We are simply asking the Opposition to continue with the sort of progress achieved so far. Given that progress, it should be possible to finish by the date that we have proposed.
The Opposition proposal is that the Bill should stay in Committee effectively until the Whitsun Recess, and that would allow for a further 70 to 80 hours of debate. However, we have already taken 110 hours to complete 106 of a total of 129 clauses plus the new clauses and the schedules. Against the ground covered so far by the Opposition, there is no case for suggesting that the

1291
Bill must remain in Committee until Whitsun. Not merely is our proposal of 1 May entirely reasonable; it is so necessary, and that is the essence of the case for the motion. Three weeks longer in Committee now certainly does not mean that there will be only three weeks' delay in the Bill receiving Royal Assent. If the Bill remains in Committee until Whitsun, it will almost certainly not receive Royal Assent by the Summer Recess. So far as we can see, it certainly will not receive Royal Assent until the spill-over part of the session in the autumn. The significance of this debate is that three weeks longer in Committee now will mean a delay of at least three months before the Bill can be enacted. The Bill is so important that we cannot contemplate such a delay.
Mr. Tristan Garel-Jones: Does my hon. Friend feel that the Opposition appreciate sufficiently the sort of pressure that is being exerted upon those Conservative Members who have the misfortune to represent boroughs where the Socialists are in local control by constituents who simply do not understand why the Bill is not already on the statute book?
Mr. Stanley: That is the essence of the case, and I shall come to it in a moment.
Delay means that, quite apart from the effect upon those who wish to buy their homes, other important provisions will be deferred. There will be delay in bringing in the much needed provisions on improvement and repair. There will certainly be delay in making available to local authorities and housing associations the Exchequer contribution that we announced yesterday for improvement for sale schemes. There will be delay in extending repair grants which will be patricularly valuable to the less well off. There will be delay in making improvement grants available for public and private sector tenants; delay in giving local authorities and the Housing Corporation the ability to help first-time buyers by guaranteeing mortgages; and delay in removing the legal impediments to shared ownership schemes, again to help first-time buyers. There will be delay in giving effect to the tenants' charter which the Opposition have
1292
claimed they so badly want introduced. There will be delay in the provision making it easier for owner-occupiers to make more accommodation available by sub-letting. It will certainly also mean delay in introducing a shorthold scheme, no doubt a delay which the Opposition will welcome, given what they have said about it.
Of all the irresponsible undertakings that have been given by the Labour Party, there can be few more irresponsible than that given in respect of shortholds. As my hon. Friend the Member for Buckingham (Mr. Benyon) rightly said, this is one of the few areas where the Shadow spokesman on housing can make a difference to the amount of available rented accommodation. It is irresponsible fo the Labour Party to take up a position on shortholds before the Bill has even completed its Committee and Report stages, let alone been passed on to the statute book. Its policy has been solely to try to show before the Bill becomes law that shortholds do not work.
Mr. Straw: The Minister knows that if he had included the safeguards contained in the Bill promoted by the hon. Member for Kensington (Sir B. RhysWilliams), the position would be different. That was exactly why my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said that we would keep an open mind until the Bill went through Committee. Why have not the Government included those safeguards, when the Minister was one of the signatories to them?
Mr. Stanley: The hon. Member for Blackburn (Mr. Straw) is familiar with the Committee proceedings, but one of the points ignored by him and by his Front Bench colleagues is that we gave extremely detailed reasons and explanations why we felt that the shorthold could work in the way that we proposed. There are important structural differences between the conception of shorthold devised by my hon. Friend the Member for Kensington (Sir B. Rhys-Williams) and the proposals that we have brought forward. In addition, no account has been taken of the fact that we said that we were considering certain aspects of the amendments which were proposed. The attitude of the Labour Party in taking up a position on shortholds before it has

1293
had the opportunity to see the final shape of the legislation is reprehensible.
I turn to the other aspects of the Bill. The most important and crucial of these—my hon. Friend the Member for Watford (Mr. Garel-Jones) and others referred to it—is the position of those who want to buy their own homes, but who are being denied the right to do so, and who will not have that right until the Bill becomes law.
Those tenants have been waiting with increasing frustration and impatience for the Bill to be enacted so that they can buy their homes. One of the few moments of reality came from my hon. Friend the Member for Lichfield and Tamworth, when he read out a letter from some constituents who had written to him on the matter. It is a real, live situation, where people are waiting for the Bill to be enacted so that they can have the opportunity to buy their homes.
The frustration of those who wish to buy but who have been prevented from doing so has been added to by the sight of many other tenants—usually in areas under Conservative councils—buying their homes.
I wish to put some perspective on the comments about sales of council houses since we took office. I shall give the House two pieces of information. First, there is no doubt that in the new towns our right to buy policy is making a material contribution to extending home ownership, and not only in the Home Counties. On the number of firm negotiations and sales, in Skelmersdale the figure has reached 450, in Northampton it is 500, in Peterborough it is 600, in Washington it is more than 200, and in Basildon it is a massive 2,250. Inquiries are still coming in. There were more than 600 inquiries last month.
The position is the same where the local authorities are selling. More than 250 authorities now doing so. In our first nine months in office, some 30,000 council tenants were able to buy their homes. They are the fortunate ones. The unfortunates are those in the predominantly Labour-controlled areas where the councils are still refusing to sell, despite the fact that the House has given the Bill a Second Reading and that the Opposition themselves have said on more than one occasion that it is
1294
only a matter of time before the Bill becomes law.
There are nearly 2 million tenants in the areas where councils are refusing to sell. It is principally for those 2 million tenants that this motion is so necessary, but not merely for them, because there are others, such as the tenants of housing associations, and the 40,000 co-owners, who will have the opportunity to buy. As the right hon. Member for Ardwick is a co-owner, no doubt he will see fit to exercise his opportunity as a result of this important piece of legislation.
The main issue is that of the 2 million council tenants. They have seen the prices of their houses and flats rising month by month. By not selling under the discounts that we introduced last May. Labour councils have already cost each of their tenants who want to buy hundreds, if not thousands, of pounds. The right hon. Member for Sparkbrook, by telling Labour councils not to sell council houses before the Bill is enacted, has gone out of his way to ensure that tenants will pay even more for their homes.
Labour councils have already cost these tenants far too much. Now the Opposition are proposing to add to the delay still further by seeking to ensure that the Bill is not enacted until well after the Summer Recess. The Opposition's proposal was that the Bill should remain in Committee until 22 May. The significance of that is that the Bill would not have received Royal Assent until early November. As a result of the necessary eight-week delay between enactment and commencement, that means that the right to buy would not commence until January 1981. We are not prepared to wait until January 1981, and neither are hundreds and thousands of tenants prepared to wait until that time.
We do not believe that this is the time for delay. It is time to press on. We have put a reasonable proposition to the Opposition. I hope that the House will agree to the motion.
Mr. John Sever: On a point of order, Mr. Deputy Speaker. I believe that I am in order in speaking at this time. I wish to refer to several of the comments made by the Minister. Will he explain to me why he thinks that we should proceed with the

1295
timetable motion this evening on the basis of his arguments? To say the least, his arguments were threadbare. There are still a large number of schedules, 20 or more, with new schedules being proposed almost daily by Conservative Members and others. There are still some 20 new clauses to be discussed.
If the amendments that have not yet seen the light of day, the clauses that have not yet been discussed, and the stones to which my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) referred earlier have not yet been turned over, how is it that the Minister believes that the Government can come forward legitimately and reasonably with a proposition that the

Division No. 255]

AYES

[7.16 pm

Adley, Robert

Cope, John

Hawkins, Paul

Aitken, Jonathan

Cormack, Patrick

Hawksley, Warren

Alexander, Richard

Corrie, John

Hayhoe, Barney

Alison, Michael

Costain, A. P.

Heddle, John

Ancram, Michael

Cranborne, Viscount

Henderson, Barry

Arnold, Tom

Critchley, Julian

Heseltine, Rt Hon Michael

Aspinwall, Jack

Crouch, David

Hicks, Robert

Atkins, Rt Hon H. (Spelthorne)

Dickens, Geoffrey

Higgins, Rt Hon Terence L.

Atkins, Robert (Preston North)

Dorrell, Stephen

Hill, James

Atkinson, David (B'mouth, East)

Douglas-Hamilton, Lord James

Holland, Philip (Carlton)

Baker, Kenneth (St. Marylebone)

Dover, Denshore

Hooson, Tom

Baker, Nicholas (North Dorset)

du Cann, Rt Hon Edward

Hordern, Peter

Banks, Robert

Dunn, Robert (Dartford)

Howe, Rt Hon Sir Geoffrey

Beaumont-Dark, Anthony

Durant, Tony

Howell, Rt Hon David (Guildford)

Bell, Sir Ronald

Dykes, Hugh

Howell, Ralph (North Norfolk)

Bendall, Vivian

Eden, Rt Hon Sir John

Hunt, David (Wirral)

Benyon, Thomas (Abingdon)

Edwards, Rt Hon N. (Pembroke)

Hunt, John (Ravensbourne)

Best, Keith

Eggar, Timothy

Hurd, Hon Douglas

Bevan, David Gilroy

Emery, Peter

Irving, Charles (Cheltenham)

Biffen, Rt Hon John

Fairbairn, Nicholas

Jenkin, Rt Hon Patrick

Biggs-Davison, John

Fairgrieve, Russell

Jesse, Toby

Blackburn, John

Faith, Mrs Sheila

Johnson Smith, Geoffrey

Blaker, Peter

Farr, John

Jopling, Rt Hon Michael

Bonsor, Sir Nicholas

Fell, Anthony

Joseph, Rt Hon Sir Keith

Boscawen, Hon Robert

Fenner, Mrs Peggy

Kaberry, Sir Donald

Bottomley, Peter (Woolwich West)

Finsberg, Geoffrey

Kellett-Bowman, Mrs Elaine

Bowden, Andrew

Fisher, Sir Nigel

Kershaw, Anthony

Boyson, Dr Rhodes

Fletcher, Alexander (Edinburgh N)

Kimball, Marcus

Bright, Graham

Fletcher-Cooke, Charles

King, Rt Hon Tom

Brinton, Tim

Fookes, Miss Janet

Kitson, Sir Timothy

Brittan, Leon

Fowler, Rt Hon Norman

Knight, Mrs Jill

Brocklebank-Fowler, Christopher

Fox, Marcus

Knox, David

Brooke, Hon Peter

Fraser, Rt Hon H. (Stafford & St)

Lamont, Norman

Brotherton, Michael

Fraser, Peter (South Angus)

Lang, Ian

Brown, Michael (Brigg & Sc'thorpe)

Fry, Peter

Langford-Holt, Sir John

Browne, John (Winchester)

Gardiner, George (Reigate)

Latham, Michael

Bruce-Gardyne, John

Gardner, Edward (South Fylde)

Lawrence, Ivan

Bryan, Sir Paul

Garel-Jones, Tristan

Lawson, Nigel

Buchanan-Smith, Hon Alick

Glyn, Dr Alan

Lee, John

Buck, Antony

Goodhew, Victor

Lennox-Boyd, Hon Mark

Budgen, Nick

Gorst, John

Lester, Jim (Beeston)

Bulmer, Esmond

Gow, Ian

Lloyd, Ian (Havant & Waterloo)

Burden, F. A.

Gower, Sir Raymond

Lloyd, Peter (Fareham)

Butcher, John

Grant, Anthony (Harrow C)

Loveridge, John

Butler, Hon Adam

Gray, Hamish

Luce, Richard

Cadbury, Jocelyn

Greenway, Harry

Lyell, Nicholas

Carlisle, John (Luton West)

Grieve, Percy

McCrindle, Robert

Carlisle, Kenneth (Lincoln)

Griffiths, Eldon (Bury St Edmunds)

Macfarlane, Neil

Carlisle, Rt Hon Mark (Runcorn)

Griffiths, Peter (Portsmouth N)

MacKay, John (Argyll)

Chalker, Mrs Lynda

Grist, Ian

Macmillan, Rt Hon M. (Farnham)

Channon, Paul

Grylls, Michael

McNair-Wilson, Michael (Newbury)

Chapman, Sydney

Gummer, John Selwyn

McNair-Wilson, Patrick (New Forest)

Churchill, W. S.

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

McQuarrie, Albert

Clark, Hon Alan (Plymouth, Sutton)

Hamilton, Michael (Salisbury)

Madel, David

Clarke, Kenneth (Rushcliffe)

Hampson, Dr Keith

Major, John

Clegg, Sir Walter

Hannam, John

Marland, Paul

Cockeram, Eric

Haselhurst, Alan

Marlow, Tony

Colvin, Michael

Havers, Rt Hon Sir Michael

Marshall, Michael (Arundel)

Committee stage should be concluded?
It appears to me that the Committee could justifiably argue, and has tried to argue through the personage of my right hon. Friend the Member for Ardwick, that far more time should be devoted not only to those clauses, schedules, new clauses and amendments that are outstanding, but also to all the clauses that have hitherto been discussed. For example—
It being three hours after the commencement of proceedings on the motion, Mr. Deputy Speaker put the Question necessary to dispose of them, pursuant to Standing Order No. 44 (Allocation of time to Bills).
The House divided: Ayes 296, Noes 238.

Marten, Neil (Banbury)

Prentice, Rt Hon Reg

Stewart, John (East Renfrewshire)

Mather, Carol

Price, David (Eastleigh)

Stokes, John

Maude, Rt Hon Angus

Prior, Rt Hon James

Stradling Thomas, J.

Mawby, Ray

Proctor, K. Harvey

Tapsell, Peter

Mawhinney, Dr Brian

Pym, Rt Hon Francis

Taylor, Robert (Croydon NW)

Maxwell-Hyslop, Robin

Raison, Timothy

Taylor, Teddy (Southend East)

Mayhew, Patrick

Rathbone, Tim

Tebblt, Norman

Mellor, David

Rees, Peter (Dover and Deal)

Temple-Morris, Peter

Meyer, Sir Anthony

Rees-Davies, W. R.

Thatcher, Rt Hon Mrs Margaret

Miller, Hal (Bromsgrove & Redditch)

Rhys Williams, Sir Brandon

Thomas, Rt Hon Peter (Hendon S)

Mills, lain (Meriden)

Ridley, Hon Nicholas

Thompson, Donald

Mills, Peter (West Devon)

Rifkind, Malcolm

Thorne, Neil (Ilford South)

Miscampbell, Norman

Rippon, Rt Hon Geoffrey

Thornton, Malcolm

Mitchell, David (Basingstoke)

Roberts, Michael (Cardiff NW)

Townend, John (Bridlington)

Moate, Roger

Roberts, Wyn (Conway)

Townsend, Cyril D. (Bexleyheath)

Monro, Hector

Rossi, Hugh

Trippier, David

Montgomery, Fergus

Rost, Peter

Trotter, Neville

Moore, John

Royle, Sir Anthony

van Straubenzee, W. R.

Morris, Michael (Northampton, Sth)

Sainsbury, Hon Timothy

Vaughan, Dr Gerard

Mudd, David

St. John-Stevas, Rt Hon Norman

Waddington, David

Murphy, Christopher

Scott, Nicholas

Wakeham, John

Myles, David

Shaw, Michael (Scarborough)

Waldegrave, Hon William

Neale, Gerrard

Shelton, William (Streatham)

Walker, Bill (Perth & E Perthshire)

Needham, Richard

Shepherd, Colin (Hereford)

Walker-Smith, Rt Hon Sir Derek

Nelson, Anthony

Shepherd, Richard (Aldridge-Br-hills)

Waller, Gary

Walters Dennis

Neubert, Michael

Shersby, Michael

Ward, John

Nott, Rt Hon John

Silvester, Fred

Warren Kenneth

Onslow, Cranley

Sims, Roger

Watson, John

Oppenheim, Rt Hon Mrs Sally

Skeet, T. H. H.

Page John(Harrow West)

Smith, Dudley (War. and Leam'ton)

Wells, John (Maidstone)

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

Page, Rt Hon Sir R. Graham

Speed, Keith

Wheeler, John

Page, Richard (SW Hertfordshire)

Speller, Tony

Whitney, Raymond

Parris, Matthew

Spicer, Jim (West Dorset)

Wickenden, Keith

Patten, Christopher (Bath)

Spicer, Michael (S Worcestershire)

Wiggin, Jerry

Patten, John (Oxford)

Sproat, Iain

Wilkinson, John

Pattie, Geoffrey

Squire, Robin

Winterton, Nicholas

Pawsey, James

Stainton, Keith

Wolfson, Mark

Percival, Sir Ian

Stanbrook, Ivor

Young, Sir George (Acton)

Peyton, Rt Hon John

Stanley, John

Pink, R. Bonner

Steen, Anthony

TELLERS FOR THE AYES:

Pollock, Alexander

Stevens, Martin

Mr. Spencer Le Marchant and

Porter, George

Stewart, Ian (Hitchin)

Mr. Anthony Berry.

NOES

Abse, Leo

Craigen, J. M. (Glasgow, Maryhill)

Foster, Derek

Adams, Allen

Crowther, J. S.

Foulkes, George

Allaun, Frank

Cryer, Bob

Fraser, John (Lambeth, Norwood)

Alton, David

Cunliffe, Lawrence

Garrett, John (Norwich S)

Archer, Rt Hon Peter

Cunningham, George (Islington S)

Garrett, W. E. (Wallsend)

Armstrong, Rt Hon Ernest

Cunningham, Dr John (Whitehaven)

George, Bruce

Ashley, Rt Hon Jack

Dalyell, Tam

Gilbert, Rt Hon Dr John

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

Davidson, Arthur

Ginsburg, David

Bagier. Gordon A. T.

Davies, Rt Hon Denzil (Llanelli)

Golding, John

Barnett, Rt Hon Joel (Heywood)

Davies, Ifor (Gower)

Gourlay, Harry

Berth, A. J.

Davis, Clinton (Hackney Central)

Graham, Ted

Benn, Rt Hon Anthony Wedgwood

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

Grant, George (Morpeth)

Bennett, Andrew (Stockport N)

Deakins, Eric

Grant, John (Islington C)

Bidwell, Sydney

Dean, Joseph (Leeds West)

Grimond, Rt Hon J.

Booth, Rt Hon Albert

Dempsey, James

Hamilton, James (Bothwell)

Bottomley, Rt Hon Arthur (M'brough)

Dewar, Donald

Hamilton, W. W. (Central Fife)

Bradford, Rev R.

Dixon, Donald

Hardy, Peter

Bradley, Tom

Dobson, Frank

Harrison, Rt Hon Walter

Bray, Dr Jeremy

Dormand, Jack

Hart, Rt Hon Dame Judith

Brown, Hugh D. (Provan)

Douglas, Dick

Hattersley, Rt Hon Roy

Brown, Robert C. (Newcastle W)

Douglas-Mann, Bruce

Haynes, Frank

Brown, Ronald W. (Hackney S)

Dunn, James A. (Liverpool, Kirkdale)

Healey, Rt Hon Denis

Brown, Ron(Edinburgh, Leith)

Dunnett, Jack

Heffer, Eric S.

Buchan, Norman

Dunwoody, Mrs Gwyneth

Hogg, Norman (E Dunbartonshire)

Callaghan, Rt Hon J. (Cardiff SE)

Eastham, Ken

Holland, Stuart (L'beth, Vauxhall)

Callaghan, Jim (Mlddleton & P)

Edwards, Robert (Wolv SE)

Home Robertson, John

Campbell, Ian

Ellis, Raymond (NE Derbyshire)

Homewood, William

Campbell-Savours, Dale

Ellis, Tom (Wrexham)

Hooley, Frank

Cant, R. B.

English, Michael

Horam, John

Carmichael, Neil

Ennals, Rt Hon David

Huckfield, Les

Carter-Jones, Lewis

Evans, loan (Aberdare)

Hudson Davies, Gwilym Ednyfed

Cartwright, John

Ewing, Harry

Hughes, Roy (Newport)

Clark, Dr David (South Shields)

Faulds, Andrew

Janner, Hon Greville

Cocks, Rt Hon Michael (Bristol S)

Field, Frank

Jay, Rt Hon Douglas

Cohen, Stanley

Fitt, Gerard

John, Brynmor

Coleman, Donald

Flannery, Martin

Johnson, James (Hull West)

Concannon, Rt Hon J. D.

Fletcher, L. R. (Ilkeston)

Jones, Rt Hon Alec (Rhondda)

Conlan, Bernard

Fletcher, Ted (Darlington)

Jones, Barry (East Flint)

Cook, Robin F.

Foot, Rt Hon Michael

Jones, Dan (Burnley)

Cowans, Harry

Ford, Ben

Kaufman, Rt Hon Gerald

Cox, Tom (Wandsworth, Tooting)

Forrester, John

Kerr, Russell

Kilfedder, James A.

Morris, Rt Hon John (Aberavon)

Spearing, Nigel

Kilroy-Silk, Robert

Moyle, Rt Hon Roland

Spriggs, Leslie

Kinnock, Neil

Newens, Stanley

Stallard, A. W.

Lamborn, Harry

Oakes, Rt Hon Gordon

Stewart Rt Hon Donald (W Isles)

Lamond, James

Ogden, Eric

Stoddart, David

Leadbitter, Ted

O'Halloran, Michael

Strang, Gavin

Leighton, Ronald

O'Neill, Martin

Straw, Jack

Lestor, Miss Joan (Eton & Slough)

Orme, Rt Hon Stanley

Summerskill, Hon Dr Shirley

Lewis, Arthur (Newham North West)

Palmer, Arthur

Taylor, Mrs Ann (Bolton West)

Lewis, Ron (Carlisle)

Parker, John

Thomas, Dafydd (Merioneth)

Litherland, Robert

Parry, Robert

Thomas, Jeffrey (Abertillery)

Lofthouse, Geoffrey

Powell, Rt Hon J. Enoch (S Down)

Thomas, Dr Roger (Carmarthen)

Lyons, Edward (Bradford West)

Powell, Raymond (Ogmore)

Thorne, Stan (Preston South)

McCartney, Hugh

Prescott, John

Tilley, John

McCusker, H.

Race, Reg

Tinn, James

McDonald, Dr Oonagh

Radice, Giles

Urwin, Rt Hon Tom

McElhone, Frank

Rees, Rt Hon Merlyn (Leeds South)

Varley, Rt Hon Eric G.

McGuire, Michael (Ince)

Roberts, Allan (Bootle)

Wainwright, Edwin (Dearne Valley)

McKay, Allen (Penistone)

Roberts, Ernest (Hackney North)

Walker, Rt Hon Harold (Doncaster)

McKelvey, William

Roberts, Gwilym (Cannock)

Watkins, David

MacKenzie, Rt Hon Gregor

Robertson, George

Wellbeloved, James

McMillan, Tom (Glasgow, Central)

Robinson, Peter (Belfast East)

Welsh, Michael

McNally, Thomas

Rodgers, Rt Hon William

White, Frank R. (Bury & Radcliffe)

McNamara, Kevin

Rooker, J. W.

White, James (Glasgow, Pollok)

McQuade, John

Roper, John

Whitehead, Phillip

Magee, Bryan

Ross, Ernest (Dundee West)

Whitlock, William

Marks, Kenneth

Ross, Stephen (Isle of Wight)

Williams, Rt Hon Alan (Swansea W)

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

Ross, Wm. (Londonderry)

Williams, Sir Thomas (Warrington)

Marshall, Dr Edmund (Goole)

Rowlands, Ted

Wilson, Rt Hon Sir Harold (Huyton)

Marshall, Jim (Leicester South)

Ryman, John

Wilson, William (Coventry SE)

Maxton, John

Sandelson, Neville

Winnick, David

Meacher, Michael

Sever, John

Woodall, Alec

Mellish, Rt Hon Robert

Sheerman, Barry

Woolmer, Kenneth

Mikardo, Ian

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

Wrigglesworth, Ian

Millan, Rt Hon Bruce

Short, Mrs Renée

Wright, Sheila

Miller, Dr M. S. (East Kilbride)

Silkin, Rt Hon S.C. (Dulwich)

Mitchell, Austin (Grimsby)

Silverman, Julius

TELLERS FOR THE NOES:

Mitchell, R. C. (Soton, Itchen)

Smith, Cyril (Rochdale)

Mr. George Morton and

Molyneaux, James

Smith, Rt Hon J. (North Lanarkshire)

Mr. John Evans.

Morris, Rt Hon Charles (Openshaw)

Soley, Clive

Question accordingly agreed to.
Resolved,
That the following provisions shall apply to the remaining proceedings on the Bill:
Committee
1.—(1) Subject to sub-paragraph (2) below, the Standing Committee to which the Bill is allocated shall report the Bill to the House on or before 1 May.
(2) Proceedings on the Bill at a sitting of the Standing Committee on 1 May may continue until 11 pm whether or not the House is adjourned before that time and if the House is adjourned before those proceedings have been brought to a conclusion the Standing Committee shall report the Bill to the House on 2 May.
Report and Third Reading
2.—(1) The proceedings on Consideration and Third Reading of the Bill shall be completed in three allotted days and shall be brought to a conclusion at Seven o'clock on the last of those days; and for the purposes of Standing Order No. 43 (Business Committee) this Order shall he taken to allot to the proceedings on Consideration such part of those days as the Resolution of the Business Committee may determine.
(2) The Business Committtee shall report to the House their resolutions as to the proceedings on Consideration of the Bill, and as to the allocation of time between those proceedings rind proceedings on Third Reading, not later than the fourth day on which the House sits after the day on which the Chairman of the
Standing Committee reports the Bill to the House.
(3) The resolutions in any Report made under Standing Order No. 43 may be varied by a further Report so made, whether or not within the time specified in sub-paragraph (2) above, and whether or not the Resolutions have been agreed by the House.
(4) The resolutions of the Business Committee may include alterations in the order in which proceedings on Consideration of the Bill are taken.
Procedure in Standing Committee
3.—(1) At a sitting of the Standing Committee at which any proceedings on the Bill are to be brought to a conclusion under a Resolution of the Business Sub-Committee the Chairman shall not adjourn the Committee under any Order relating to the sittings of the Committee until the proceedings have been brought to a conclusion.
(2) No Motion shall be moved in the Standing Committee relating to the sitting of the Committee except by a member of the Government, and the Chairman shall permit a brief explanatory statement from the Member who moves, and from a Member who opposes, the Motion, and shall then put the Question thereon.
4. No Motion shall be moved to postpone any Clause, Schedule, new Clause or new Schedule but the Resolutions of the Business Sub-Committtee may include alterations in the order in which Clauses, Schedules, new Clauses and new Schedules are to be taken in the Standing Committee.
Conclusion of proceedings in Committee
5. On the conclusion of the proceedings in any Committee on the Bill the Chairman shall report the Bill to the House without putting any Question.
Dilatory motions
6. No dilatory Motion with respect to, or in the course of, proceedings on the Bill shall be moved in the Standing Committee or on an allotted day except by a member of the Government, and the Question on any such Motion shall be put forthwith.
Extra time on allotted days
7.—(1) On an allotted day paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings on the Bill for two hours after Ten o'clock.
(2) Any period during which proceedings on the Bill may be proceeded with after Ten o'clock under paragraph (7) of Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) shall be in addition to the said period of two hours.
(3) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, a period of time equal to the duration of the proceedings upon that Motion shall be added to the said period of two hours.
Private Business
8. Any private business which has been set down for consideration at Seven o'clock on an allotted day shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill on that day, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before Ten o'clock, for a period equal to the time elapsing between Seven o'clock and the conclusion of those proceedings.
Conclusion of proceedings
9.—(1) For the purpose of bringing to a conclusion any proceedings which are to be brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee or the Business Sub-Committee and which have not previously been brought to a conclusion the Chairman or Mr. Speaker shall forthwith put the following Questions (but no others), that is to say—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed (including in the case of a new Clause or new Schedule which has been read a second time, the Question that the Clause or Schedule be added to the Bill);

(c) the Question on any Amendment or Motion standing on the Order Paper in
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the name of any Member, if that Amendment or Motion is moved by a member of the Government;

(d) any other Question necessary for the disposal of the business to be concluded;

and on a Motion so moved for a new Clause or a new Schedule, the Chairman or Mr. Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(2) Proceedings under sub-paragraph (1) above shall not be interrupted under any Standing Order relating to the sittings of the House.
(3) If an allotted day is one on which a Motion for the adjournment of the House under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) would, apart from this Order, stand over to Seven o'clock—

(a) that Motion shall stand over until the conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion at or before that time;

(b) the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion after that time shall be postponed for a period equal to the duration of the proceedings on that Motion.

(4) If an allotted day is one to which a Motion for the adjournment of the House under Standing Order No. 9 stands over from an earlier day, the bringing to a conclusion of any proceedings on the Bill which, under this Order or a Resolution of the Business Committee, are to be brought to a conclusion on that day shall be postponed for a period equal to the duration of the proceedings on that Motion.
Supplemental orders
10.—(1) The proceedings on any Motion moved in the House by a member of the Government for varying or supplementing the provisions of this Order (including anything which might have been the subject of a report of the Business Committee or Business Sub-Committee) shall, if not previously concluded, be brought to a conclusion one hour after they have been commenced, and paragraph (1) of Standing Order No. 3 (Exempted business) shall apply to the proceedings.
(2) If on an allotted day on which any proceedings on the Bill are to he brought to a conclusion at a time appointed by this Order or a Resolution of the Business Committee the House is adjourned, or the sitting is suspended, before that time no notice shall be required of a Motion moved at the next sitting by a member of the Government for varying or supplementing the provisions of this Order.
Saving
11. Nothing in this Order or a Resolution of the Business Committee or Business Sub-Committee shall—

(a) prevent any proceedings to which the Order or Resolution applies from being

1303
taken or completed earlier than is required by the Order or Resolution, or

(b) prevent any business (whether on the Bill or not) from being proceeded with on any day after the completion of all such proceedings on the Bill as are to be taken on that day.

Re-committal
12.—(1) References in this Order to proceedings on Consideration or proceedings on Third Reading include references to proceedings, at those stages respectively, for, on or in consequence of, re-committal.
(2) On an allotted day no debate shall be permitted on any Motion to re-commit the Bill (whether as a whole or otherwise), and Mr. Speaker shall put forthwith any Question necessary to dispose of the Motion, including the Question on any amendment moved to the Question.
Interpretation
13. In this Order—
"allotted day" means any day (other than a Friday) on which the Bill is put down as the first Government Order of the Day provided that a Motion for allotting time to the proceedings on the Bill to be taken on that day either has been agreed on a previous day, or is set down for consideration on that day;
"the Bill" means the Housing Bill;
"Resolution of the Business Sub-Committee" means a resolution of the Business Sub-Committee as agreed to by the Standing Committee;
"Resolution of the Business Committee" means a Resolution of the Business Committee as agreed to by the House.

PORT OF LONDON (FINANCIAL ASSISTANCE) BILL
Order for Second Reading read.
7.30 p.m.
The Minister of Transport (Mr. Norman Fowler): I beg to move, That the Bill be now read a Second time.
This is a short Bill, which essentially follows the assurances given to the Port of London Authority by the previous Government. We recognise the obligation that that has imposed upon this Government. Specific help has been promised—and some of that help has been paid over. There were then both legal and moral obligations. In other words, this was an inherited obligation and not a new path of policy.
Equally, I made clear in my statement of 7 December—and I make clear again tonight—that we are talking about a financial limit. The Bill gives effect to the strict financial limit that I have already set. At the same time, we clearly hope that it will help the PLA to continue the excellent start that it has made to restoring profitability.
Before turning to the detail, I hope the House will permit me to paint in some of the background. As the House knows, the nature of the ports industry has changed dramatically over the last 10–15 years. This is mainly due to freight-handling technology, which has meant changes from traditional labour-intensive methods to cargo handling—in other words, the container revolution.
Consequently, there has been a dramatic reduction in demand for labour in the ports. In London, for example, the number of registered dock workers has declined by over 70 per cent. since 1966—a fall from 25,000 to 6,500 in that period. I acknowledge the social and human impact that such a reduction involves, and I pay tribute, to the cooperation that was necessary to secure it. But further reductions in manpower are still needed. There has also been a movement towards bigger ships and a consequent need to move nearer to the sea.
The Port of London has been particularly affected by this change. Traffic has
1306
moved out of the upper dock into the facilities down river at Tilbury, or to specialised river wharves, and in some cases it has left London altogether and gone to other ports. There has also been a reduction in London's share of Britain's port traffic, particularly in general cargo, which represents the major part of traffic in the upper docks. The amount of general cargo has fallen from 6 million tonnes in 1970 to about 1 million tonnes in 1979. The dramatic decline in manpower requirements of the port have made it necessary for the PLA to reduce the size of its own work force, both registered dock workers and staff.
The authority's problems have been increased by the need in some cases for it to take on surplus registered dock workers from other employers who have gone out of business. Since 1973 the PLA has had to take over almost 5.000 registered dock workers from other employers, so there is no question whatever that the cost of surplus manpower is the overriding problem facing the authority. However, it is fair and important to say that there has, in general, been excellent cooperation by the trade unions in the manpower rundown But the fact is that payroll costs account for over 70 per cent. of the authority's operating costs, and its problems have not been made any easier by the continuation of some restrictive working practices, which are inappropriate to the efficient working of a modern port.
Since 1975 the authority's financial position has deteriorated rapidly, mainly be cause of the slump in world trade and the changes in traffic which I have already mentioned. In 1976 the previous Government appointed Price Waterhouse and Company to provide an independent report on the authority's financial position and prospects, and in June 1977 they agreed to stand behind medium-term loan facilities of £15 million made available by Lazard Brothers as agent for a consortium of banks. This loan was intended to help the PLA to pay for the severance of surplus staff and to refinance certain short-term borrowings.
The PLA's financial position continued to deteriorate, however, and in July 1978 the then Secretary of State for Transport—the right hon. Member for Stockton (Mr. Rodgers)—announced further assistance in the form of £35 million in grants

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towards severance costs, and backing for a further £10 million of commercial borrowings. He also insisted that, contrary to the PLA's proposals, the Royal group of docks should be kept open. But the grant towards severance costs was made conditional on agreement with the trade unions of specific targets for manpower reductions. In October 1978 the PLA and the trade unions submitted a jointly agreed short-term trade and manpower plan covering the period May 1978 to June 1979, which provided for manpower reductions of nearly 1,500, divided about equally between registered dock workers and staff. In the event, about 1,100 severances were achieved. Under a second short-term plan submitted in June 1979, a further 1,000 severances have been achieved to date, and more are in the pipeline.
Last June, the PLA submitted to me its strategic plan for the five years from 1979 to 1983, together with a second short-term plan. The strategic plan presented two options. One was the concentration option, which would have involved concentrating the PLA's operations in reduced facilities at both the India/Millwall and Royal docks. The other was the transfer option, which would have meant transferring the operations from the Royal docks to the India/Millwall docks and Tilbury. The PLA preferred the concentration option but Price Waterhouse, which I asked to review this plan, advised that it did not appear to chart a course to viability. I thought it right to publish that report, and there are copies of it in the Library.
In reviewing policy in the light of that report it was important to take one initial decision, namely, the extent to which the Government should be involved in the management of the PLA. I came to the conclusion that we should not be involved in those management decisions. The PLA would be subject to a strict financial limit. The decisions on the options on the retention or closure of docks are and continue to be a matter essentially for the PLA board.
So the Government have agreed only to maintain the minimum level of financial assistance that is needed to continue with the most rapid possible rundown of manpower and to plan for the quickest possible return to viability at least cost to
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the taxpayer. Subject to adjustments to cope with inflation and the latest forecasts, I have, therefore, set the limit of financial assistance at the level promised by the previous Government in July 1978.
I have also told the PLA that it must follow policies that will enable it to recover profitability within that limit. My belief is that problems such as those facing the PLA can become permanent if the limit of Government help is not clearly spelt out. That is why the Bill sets a strict limit on Government help.
I have every confidence that the authority is determined to achieve viability. As the House knows, it announced on 3 March that PLA general cargo handling in the India and Millwall docks would have to cease because it had concluded that it was no longer possible to pursue the concentration option. In making that decision, the main factors that the board gave were losses amounting to £4 million in the first two months of this year, including about £2 million arising from the two-week strike over pay, and the insufficient movement towards implementing the changes in working practices which have been identified as being essential to the improvement of the PLA's competitive position. The authority therefore concluded that it could not continue to operate both of the upper river dock systems and at the same time stand any chance of staying within its financial limit.
Clearly, this was a difficult decision. Nevertheless, I am convinced that the approach that I have mapped out is the correct one and that it is now imperative that the PLA and the unions continue to work together to achieve an efficient, modern and profitable port, which will play an important part in the prosperity of London and of the British ports industry.
The decision of a well-attended mass meeting in the upper docks last Wednesday to lift the blacking of vessels and cargo transferred from the India and Millwall docks should, I believe, be welcomed by the House, as it provides encouraging evidence that registered dock workers and staff in London want to make a success of this port. The authority and its customers also want to make the remaining PLA docks at Tilbury and the Royals succeed. I am sure that with

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the good will of the work force these docks can be competitive.
Turning to the specific provisions of the Bill, the House will see that it provides for financial assistance for measures to restore the authority's profitability through a reduction in the number of its employees and assistance for the carrying on of the undertaking while these measures are being taken.
I should perhaps say that although the broad order of the figures that I am about to give is consistent with those in the Price Waterhouse report, there are some small differences of detail.
The first form of assistance consists of grants for severance payments, and these fall into two categories. First, clause 1(1)(a) encompasses grants paid by my Department to the PLA for severance of surplus staff. Secondly, clause 1(3) encompasses grants paid by the Department of Employment to the National Dock Labour Board in respect of registered dock workers who take voluntary severance. Payments of severance grants were made in the financial years 1978–79 and 1979–80 on the authority of the Estimates and the confirming Appropriation Acts pending this legislation. The total grant to be provided under the Bill amounts to the £35 million promised by the previous Labour Government plus an allowance of up to £5 million to take account of inflation. So far, grant of £19 million towards the cost of severance has been paid, made up of £11·4 million for registered dock workers and £7·6 million for staff.
Under clause 1(1)(b), the second form of assistance is for the carrying on of the undertaking while the measures to reduce manpower are being taken. This is provided by the two commercial loans, totalling £25 million, which again the previous Government agreed to stand behind. At present, the Government's liability under this head amounts to £23 million.
I should add that I also agreed, last year, to stand behind the PLA in negotiating the postponement of a £3 million loan repayment due in 1980 and a similar repayment due in 1981, but, as this does not increase the Government's liability, it does not count against the financial limit in the Bill. Finally, as I indicated in my statement last December, I have agreed, if necessary, to stand be-
1310
hind the PLA's existing overdraft facility up to a total of £5 million.
Clause 1(4) provides that the aggregate of assistance given, whether in the form of grants, loans or guarantees, may not exceed £70 million, and that assistance that has already been given will count against this limit. The total assistance that I have outlined, including that already given, conies to £65 million plus an allowance of up to £5 million for inflation. Therefore, the Bill exactly provides for the financial limit that I have set and does not allow for any further increase. As I have already indicated, the £70 million limit in the Bill does not represent new money, since much of the financial help has already been given to the PLA.
Perhaps before I finish I should say a word or two about why we have not felt able, in present circumstances, to accept the proposal in the PLA's strategic plan for a capital reconstruction involving a substantial write-down of the authority's outstanding debt to the Government.
My first point is the one that I made basically in my statement last December: that the Government can see no justification for such a write-down, since it would conflict with our aim of keeping assistance from public funds to the minimum.
Secondly, as Price Waterhouse has pointed out, the case for a capital reconstruction has not yet been demonstrated. We believe that the first task is for the PLA to restructure its business so as to achieve a profitable port operation, in particular through the elimination of uneconomic working practices and surplus manpower. It has to be remembered that we are already providing substantial sums in grants to assist in this very process.
Mr. Nigel Spearing: I am grateful to the Minister for giving way at this stage, but it may save time later. I understand why Price Waterhouse made that judgment. However, is the right hon. Gentleman satisfied that Price Waterhouse was sufficiently aware that the Port of London Authority was not the port in London and that that, in competition with some of its tenants, as I shall point out, placed it in a very different position in respect of capital repayments than if it had the monopoly in ports handling and cargo work throughout the Thames estuary?
Mr. Fowler: I do not think that there is any question but that Price Waterhouse is as informed about the position in the Port of London as any outside body can be. The survey and report that it did for me was only one of three which have been done. I give the hon. Gentleman the assurance that Price Waterhouse is certainly aware of that point. However, it is a point that he will no doubt wish to develop in his own speech.
Also, on the question of capital reconstruction, I do not think that it would be right to relieve the PLA of the obligation to repay or service a large amount of its existing debt, because it would remove the incentive to continue with the remedial action already so effectively under way.
There will undoubtedly be some who will argue that it is wrong for a major port of London's importance to have to meet tests of commercial viability, on the ground that we should try at all costs to avoid any further dock closures, even though the upper docks have been losing at the rate of about £7 million a year on operating account. But, if we take an opposite view, the argument surely is that it will mean supporting the Port of London at the expense of other ports, which have to operate profitably in a competitive environment. The Government believe that the ports of this country should operate in full competition, one with another, meeting the normal tests of commercial viability of being able to cover operating costs and service capital and without making any call on public funds.
Sir Graham Page: My right hon. Friend says that the ports should act in competition with one another, and the whole gist of his speech seems to be to recognise that the Government take responsibility for redundancy payments of dock workers. Does he recognise that responsibility with regard to other ports, such as Merseyside? Once the Port of London is so subsidised, the Mersey Docks and Harbour Company is left to pay for redundancies out of its commercial profits.
Mr. Fowler: My right hon. Friend raises an important point. There are two answers to what he said. First—and this is the basis of my speech—what we are doing in the Bill is to recognise an obligation inherited from the previous
1312
Government. I think that Opposition Members would agree that it does not chart a new path of policy but simply recognises an obligation laid down by the previous Government. That is why I have been specific about the cash limit.
The second point, which I will develop for a moment, refers to the position of the Mersey Docks and Harbour Company. That company approached me last year asking for financial assistance on the same lines as the aid being given to the PLA. I told the company then that I was not prepared to make amounts available towards its severance costs but that I would continue and, indeed, increase the normal assistance by way of loans under the Harbours Act 1964 towards its capital development. This was on the understanding that the company would take remedial action to reduce costs and increase revenues.
Towards the end of last year, the company approached me again saying that it expected a trading loss in 1979 of about £2 million and was concerned about the position in 1980. So I invited the National Ports Council to carry out a rapid study of the company's forecast. This showed that there were a number of ways in which the company could improve its financial position, primarily by a faster rate of manpower rundown and some increases in traffic. The company has accepted that these improvements are feasible and has undertaken to put them into effect. It has also agreed to carry out a more far-reaching study of its business in all its aspects, with a view to drawing up a new profitability plan, again with the aid of the NPC. The results of this study should be available in the summer.
I am sure that my right hon. Friend will wish to develop his arguments during the course of the debate, and clearly my hon. Friend the Parliamentary Secretary will wish to respond to them. What I am clear about is that it would not be right for any message or suggestion to go forward from the House that in any way talks the Mersey Docks and Harbour Company into a crisis.
Mr. Eric Ogden: The only message that I want to deliver to the Minister—it is coming from all hon. Members—is that the Bill has wide implications not only for Merseyside but for the Manchester Ship

1313
Canal Company and every other port. The Minister has made it clear that he is aware of the implications of the Bill, which is the only point I want to put forward.
Mr. Fowler: I am aware of the implications of the Bill, but it would be wrong for me to give the hon. Member for Liverpool, West Derby (Mr. Ogden) the impression that what we are doing in dealing with an inherited obligation is to create a precedent for dealing similarly with other ports. That is a point that I have made clear in the discussions that I have had.
Mr. Anthony Steen: My right hon. Friend has said that he is concerned about meeting inherited obligations, but is he aware that there are considerable obligations under the regional aid programmes which have been cut? A further point he should be aware of is that the special development area status which has attracted a grant of 22 per cent. to Merseyside is not available to the docks which are treated as a service industry. Therefore, the docks are discriminated against from all sides and the Bill will discriminate against them even more.
Mr. Fowler: My hon. Friend the Member for Liverpool Wavertree (Mr. Steen) is being neither fair nor accurate when talking about discrimination. Nor do I think that it is reasonable for him to press such comments at a time when the Mersey Docks and Harbour Company and the NPC are considering the whole position of that company. I believe that I have made my general position and the position of the Government clear on this matter, in that we are dealing with an inherited obligation. It should not be seen as a precedent. But I say to my hon. Friend sincerely that I hope that in the speech he will doubtless make he will not seek to give the impression, which I believe would be wrong, of a crisis or talk the Mersey Docks and Harbour Company into a crisis.
The Government basically believe that the ports of this country should operate in full competition with one another and meet the normal tests of commercial viability. I do not agree with suggestions that it is wrong for London and other ports to seek to operate port facilities profitably. Indeed, I put the converse
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suggestion, which is that it would be unfair to other ports and British industry generally if I were to pursue any other policy. Nor am I persuaded by talk about the subsidies that are provided to certain Continental ports because they apply only to a limited range of charges and dues and not to the costs of cargo handling, which represent the major cost facing port users. I do not believe that Continental ports can be compared with ports in this country, and there is no evidence that what they do has a significant effect on the traffic handled by British ports. Those who argue for continuing subsidy for uneconomic operations perhaps have little confidence or faith in the ability of the PLA management and its work force.
The Port of London can once again return to profitable operation given the vigorous action that the PLA chairman, Victor Page, and the management have shown their intention of taking, and also given the co-operation that the work force has recently demonstrated so convincingly. At Tilbury I believe that we have one of the finest modern container ports in this country, if not in Europe. The Port of London plays an important role in the economy of this country, and it must continue to do so.
I hope that the House will give the Bill a Second Reading.
7.59 pm
Mr. Albert Booth: In proposing the Bill, the Minister is asking the House to endorse a financial undertaking given by his predecessor—my right hon. Friend the Member for Stockton (Mr. Rodgers)—to the Port of London Authority. For that reason, it would be most improper for me to oppose the Bill. I cannot, therefore, recommend any hon. Member to vote against it. Having said that, the brief moment of consensus comes to an end.
One can see set out in the long title of the Bill a proposition which is completely untenable and shows how unrealistic the Minister's approach is to the problem of the PLA. The long title says that the Bill will provide financial assistance to the PLA to enable it to restore the profitability of its operation by reducing its labour force, and that is all. I believe that that is totally unrealistic; it carries with it the assumption that the only cause of the unprofitable

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operation of the PLA is the fact that it is overmanned.
That is a gross simplification. It is unrealistic and it does not take into account a series of important factors that have led to the difficulty that is now facing the Port of London Authority. For example, it ignores the technological development that has taken place in cargo handling. That has had an immense impact on the Port of London as a major general cargo-handling port. It ignores completely the degree to which specialist cargo-handling has hit the Port of London. It ignores—the right hon. Gentleman has made this crystal clear—the competition policy which exists between ports in Britain and between United Kingdom ports and other EEC ports.
If the Minister seriously believes that the ports of other countries determine their charges on a basis that does not take into consideration how many long-term deep-sea cargoes they get compared with British cargo ports, he is flying in the face of the experience not only of those who operate the ports but of those who have made a detailed study of the issue over the past 10 years.
The Minister seems to ignore work practice, which has a great bearing on profitability. Some might say—I might join them—that the way in which the port has been managed over recent years has had a great bearing on its present difficulties. I go along with one factor that the Minister mentioned, although he appears not to want to take it fully into account—namely, the special problems which face the Port of London because of the National Dock Labour Board scheme, with the PLA being the employer of last resort. That has been a special problem for London. Also ignored is the fact that there is a world slump. All these factors must be put together to form a complex relationship which I do not claim fully to understand. However, I can assert even from my knowledge of the Port of London that all the factors that I have mentioned have a considerable bearing on the problem.
It is an utterly prejudiced and, therefore, unrealistic view to say that it is only the number employed in the Port of London that needs to be tackled and that only in that area is it proper for
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the Government to step in with financial assistance. The Minister says that all that it is proper for the Government to do is to set a strict financial limit. Incidentally, it is a limit determined by his predecessor for an entirely different purpose. To say to the Port of London "That is all that you need me to do and you can now go ahead and sort out the problem in terms of profitability" is to ignore a number of important factors and some responsibilities of the House and the Government.
I shall deal first with the issue in the terms in which the Minister has posed it before I turn to what I consider to be a more realistic appraisal. I question how far the £70 million will achieve the narrow objectives which the Minister sets for the Bill. I take it from what he has said that £35 million of the £70 million was agreed in July 1978 as being available for severance as from that date. It has already been in use for almost two years. I think that the Minister said that £19 million of it had already been used. I understand that it has been used in part to support the National Dock Labour Board's registered dock workers' severance scheme. It was used in that way until February 1980, when, as a result of a special levy of about 8 per cent. on employers, the Port of London element of the scheme came into surplus. The Minister has not indicated whether he expects that any more of it will be needed in that regard—that is, whether he thinks that the levy that the employers now pay to the scheme will finance any further redundancies of registered dock workers or whether more will be required for that part of the scheme.
There are severance schemes in existence within the province of the Port of London Authority that are even more expensive to the employer than the registered dock workers' scheme. These schemes will have to be financed. For example, the NALGO-negotiated scheme produces rather better severance terms than the registered dock workers' scheme. If the sum provided in the Bill is to deal only with further severances that arise from the Port of London Authority having decided on the transfer option—namely, taking work out of the India and Millwall docks to place it in the Royal docks, and some of it at Tilbury—is it seen as being sufficient to finance all the

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severance that the Minister considers necessary to enable the PLA to operate profitably again?
I understand that £25 million of the £70 million is to cover loans taken from Lazard Brothers to stand guarantee and that £n is to allow for inflation since the figures were first set. Presumably £ will be the working capital, or the extent to which the Port of London can operate an overdraft to carry on through the period in which it must operate if it is to return to viability.
Bearing in mind the losses being sustained on Port of London cargo-handling operations, I question whether the financing that I have described is realistic. In 1978 the losses were about £12 million I understand that the current losses on the two upper docks are about £9 million. Against that horrendous financial background, it is not by any means clear how the Minister contends that they are set on the road to viability.
One of the difficulties that faces us in trying to debate the issue sensibly is the way in which relevant information has been withheld from the House. The Minister received the Price Waterhouse report containing the five-year strategic plan of the Port of London Authority in September 1979. By December he had the summary, which he chose to make available to us yesterday afternoon. The right hon. Gentleman must appreciate that there is considerable difficulty in preparing properly for debates on this issue.
Mr. Fowler: The right hon. Gentleman is talking utter rubbish. The Price Waterhouse report was not made available only yesterday. It was published in the press last week. If the right hon. Gentleman consults the press, he will find it there. At the same time, it was placed in the Library. As a courtesy, I had my office telephone his office to ensure that he had noticed its appearance. He is on a doubly dud point. There have been three Price Waterhouse reports. The only one to be published is the one that I commissioned. The two commissioned by the previous Labour Government were not published.
Mr. Booth: I apologise to the Minister and to the House for referring to yesterday when I should have referred to the report being available in the
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Library last week. However, my argument is not dud. It is totally relevant. The decision of my right hon. Friend the Member for Stockton to guarantee money being available to the PLA, which led to the Minister bringing the Bill before the House, required the PLA, as a condition of receipt of the money, to accept certain options—namely, to maintain the upper docks in operation while an examination was carried out to ascertain whether it was feasible to restore their viability. The Minister has taken a different view from that of the chairman of the board, who wanted to close the docks.
The Price Waterhouse report is relevant because it gives the first indication of how far an independent accounting examination bears out the decision made by my right hon. Friend the Member for Stockton. He decided that it was right to require the Port of London Authority to continue working the upper docks. The report provides a basis on which to judge the relevance of the Bill.
I accept that the report has been available in the Library since last week. However, we have been given precious little time to make a serious examination of the issue. If the Minister had been more forthcoming, he might have obtained a greater degree of understanding. This subject is fraught with suspicion and uncertainty. It is impossible to discuss it with those who are deeply concerned and affected by it without realising that for a number of years they have felt that either the Government or the management should give some clear indication that a massive rundown of labour would ultimately lead to a viable operation. The decision affected not only the management and unions but local authorities and everybody whose livelihood was dependent on docklands remaining viable.
Mr. Roger Moate: Is the right hon. Gentleman condemning the right hon. Member for Stockton (Mr. Rodgers) for failing to publish the previous Price Waterhouse reports?
Mr. Booth: I am not condemning or approving the non-publication of the previous reports. I would welcome more information. However, this report has a special significance that did not attach to the previous reports. A Labour Minister of Transport decided, against

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the advice of the chairman of the Port of London Authority, to require—as a condition of providing the money—that the Royal docks, West India dock and Millwall dock should be maintained. The report makes a judgment on that issue that is favourable to his decision. It says that it was right to examine further whether there was a sound basis upon which to keep the docks running.
The massive rundown of labour has had an enormous impact on the thinking of those affected by the development of the Port of London Authority. I would take a longer time scale than the Minister. I do not disagree with his figures. They are relevant. However, in 1961 29,000 people were working in the docks. That figure has decreased to about 8,000. That represents a tremendous drop. Such a reduction cannot take place without major industrial disturbance. The Bill is related to a proposal that will run down the labour force still further. A severance of a further 500 is required in the transfer of work from the West India and Millwall docks to the Royals and to Tilbury. Of those, more non-registered workers will be transferred. Such a rundown within that time scale was achieved at an enormous social cost to the upper docklands area. A thriving, bustling, and vital community has become an urban desert.
I was slightly encouraged when I went there the other day and saw some signs of a return of industrial activity. However, one could not help but be terribly depressed by seeing that such a great area had had the life knocked out of it. I realise that the impact of events has gone well beyond the livelihoods of those who used to work in the docks. It has affected a great many other people in the community.
Mr. Ronald W. Brown: Perhaps my right hon. Friend will bear in mind that I and many of my hon. Friends who represent London constituencies have been trying to draw the attention of successive Governments to that very point. All Governments have refused to recognise it.
Mr. Booth: I fully accept that my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) and several other hon. Members who represent
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London constituencies have drawn that point to the attention of previous Ministers. A distinction can be made between the previous Minister and the present one. The previous Minister said that a condition of providing any money was that an operation should be maintained. However, the Minister today has said nothing like that. He has said that the money is available on the sole condition that the labour force is run down. He has not sought any assurance that there will be any restructuring or co-operation between the Government, the Port of London Authority and local authorities in the area to ensure a viable operation.
It is cloud-cuckoo-land nonsense to say that the Port of London Authority is well on the way to achieving viability or profitability. I do not know how that is defined by accountants. However, in its five-year strategy the Port of London Authority defined "viability" in clear and straightforward terms. I would have thought that those terms would have been acceptable to the Minister. The Port of London Authority has said that the correct financial objective is to reach a point at which it can earn enough on its working assets to pay the interest charges and debts that it has to meet and to service its working capital. It is not within a mile of obtaining that objective. Nor is it likely to come within a mile if it is limited to this type of operation.
Mr. Ted Leadbitter: Does not my right hon. Friend find it difficult to understand the Government's posture? The Minister said—and his hon. Friends have also said from time to time—that the Government will not intervene. They assume that that has some sort of political virtue. The Minister said that we should not be involved in management decisions. However, the Government naively and glibly tried to persuade the House that they are not involved in any decisions, while providing millions of pounds to sustain management decisions. They will not provide money elsewhere on more important things. Is not that a rather odd posture?
Mr. Booth: My hon. Friend the Member for Hartlepool (Mr. Leadbitter) has me at a loss. I can see the incongruity of the Minister's position and, at the same time, a certain strange consistency in his remarks. Together with some of his

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Cabinet colleagues, the Minister has said on other issues that it is not the role of the Government to become involved in management decisions. To that extent he is consistent. However, how one can square that with bringing forward a Bill that provides £70 million for the special case of the Port of London while refusing to give money to other cases and how they can say that they are not involved in management decisions evades me. I cannot explain that away.
Closure of the docks—the Royals or the upper docks—would be a social crime in all the circumstances as we now know them. If a sensible basis for maintaining them can be properly established, because of their effect on the area in which they operate, it must be examined very carefully. The Price Waterhouse report says that it is too early to determine whether there is a totally viable basis on which the docks could operate. In fact, to that extent the report disagrees with the judgment of the previous chairman of the PLA.
I believe that the PLA has a major job to do in its co-operation with the local authorities of dockland in the redevelopment of that area. As more and more of the PLA's land becomes available because it is no longer required for dock usage, the PLA should be under an obligation to see that that land is released to other usage in a way that will ensure alternative employment and revitalisation of the dockland area.
In the five-year strategic plan of the PLA, it is made abundantly clear that there is no realistic prospect of achieving the minimum cash flow objective that I have just outlined by 1983 without some form of capital reconstruction. The Minister has not said whether he disagrees with that. He has tended to imply—quite unrealistically, in my opinion—that somehow there can be a return to a viable operation without any sort of capital reconstruction. The Minister must face the fact that there is no way that he has outlined in which the PLA could generate sufficient cash flow to pay its interest charges and meet its capital debts while maintaining the assets which it requires. This applies to the PLA's existing working assets, not to the introduction of more modern cargo-handling facilities.
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The reason for this is simple. The PLA has a capital and physical structure which is far more appropriate to the Port of London at a time when London was the heart of a trading empire than it is to the Port of London as it exists today, with its different trading relationships with other ports in the United Kingdom and those in Europe. It will be necessary for the Port of London to develop much better marketing techniques and to modernise some of its cargo-handling facilities so that it can operate viably. Undoubtedly, it must achieve better working practices in certain areas of its operation before it can achieve the financial target that we have been discussing.
While the future of the docks remains in doubt and while a question mark hangs over the Royals, it will be very difficult for the PLA to build the sort of customer relationship that it must have. It must be much more difficult to persuade a shipping line to start to use the Royals if there is no evidence that there is a convincing plan ahead to return those docks to viability. Of equal, if not greater, importance is the fact that the PLA cannot reach sensible agreements with its unions on the introduction of more modern equipment unless those unions have some confidence that they are working towards a future for which there is a sound framework. They need a target that makes sense. To tell them to reach viability with no more than the provisions of the Bill is not a sensible framework on which to work.
I believe that the greatest defect in the Bill is that it fails to grasp the central issue of the problem of the London docks. It fails to provide any convincing basis for the future of the upper docks. It concentrates, as its long title makes crystal clear, on the reduction required in the labour force. It ignores all those other factors which must be tackled simultaneously with labour reduction in order to put the Port of London upper docks on a sound basis.
Therefore, I urge that during the course of our debates on the Bill we must press for further reconsideration by the Government and the Minister and for a wider and more realistic approach. They must make clear to the PLA, its employees and its customers the options that are open to them which will give to unions and management within the PLA,

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and to dockland authorities, a framework on which to build a future for London dockland.
8.26 pm.
Sir Graham Page: The right hon. Member for Barrow-in-Furness (Mr. Booth) has complained that the purpose of the Bill is to provide financial assistance if, and only if, redundancy payments are to be made. In other words, it is compensation, as it were, for thinning out the manpower in the Port of London. That is perfectly well explained in the first sentence of the explanatory and financial memorandum, which says:
"financial assistance for measures to reduce the manpower of the Port of London Authority".
It was also well explained in the Minister's speech. I believe that that is perfectly right. The Bill should be restricted to that kind of assistance rather than try to cover the whole management and future of the PLA.
Mr. Ogden: Will the right hon. Gentleman be arguing the case for the ports on Merseyside?
Sir G. Page: If the hon. Member would wait for me to make my speech, he might find that I shall steal all his thunder in supporting the case for the Mersey docks.
Having recognised that this is the only purpose of the Bill, we must recognise that the Government have accepted a responsibility to compensate ports for the redundancy payments which they must make in order to ensure that those ports are viable—not necessarily for all redundancy payments in every industry, but certainly in this case the payments to that special kind of worker, the registered dock worker.
The Bill is very careful and deliberate in limiting the financial assistance to that subject—the reimbursement of redundancy payments. In almost every line of the Bill one reads that if there is no redundancy there is no financial assistance. Of course, it is said that this is all with a view to making a port viable. It is true also that the Minister is standing by previous loans and guarantees, but redundancy is the condition precedent to the present grant and the Bill recognises the Government's responsibility when redundancy of this sort occurs. My right
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hon. Friend the Minister said in December:
"The Government can only agree to maintain the minimum level of financial assistance to the authority that it will need to continue with the most rapid possible run-down of manpower".—[Official Report, 7 December 1979; Vol. 975, c. 385.]
That is the purpose of the Bill, but the other arrangements relating to the PLA will stand. It will still be substantially subsidised in other ways, for example, by the refund of £35 million redundancy payments made before the end of February and by the £15 million loan in 1977–78 and another commercial loan of £10 million.
I think that my right hon. Friend the Minister referred to two loans of £25 million.
Mr. Fowler: No—two loans totalling £25 million.
Sir G. Page: That is, then, a further £25 million subsidy to the PLA, together with two £3 million loans and a £5 million overdraft, all backed by the Government.
The PLA may say that it is in competition with the State-owned and subsidised ports, such as Hull and Southampton, which have a Government loan of about £57 million at the preferential rate of interest of 3·6 per cent.
The Mersey docks are not State-owned and they do not get that sort of subsidy. When they borrow money from the Government, they have to pay interest not at 3·6 per cent. but at the Treasury rate of 15 per cent.
Mr. John Prescott: Is the right hon. Gentleman aware that that is exactly the same policy as applies to the British Transport Docks Board if it borrows from the public sector?
Sir G. Page: Yes, but those docks already have capital to play with from the Government in that £57 million loan.
There is an injustice in the Bill. The Mersey Docks and Harbour Company has to compete against State-owned and subsidised ports and it will now have to compete against the heavily subsidised PLA.
Liverpool is the second largest port in the land. We rely on it for a considerable amount of international trade. The company employs 6,600 workers, and there

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are about 10,000 employees in all in the port. In addition, the jobs of many workers on Merseyside rely on port activities.
In 1979, the company set aside £5½ million to cover the cost of redundancies and in 1978 it set aside £3 million. In those two years it had to find £8½ million, without subsidy from the Government, for redundancies.
Mr. Steen: Does my right hon. Friend agree that it is nonsense to discriminate against the Mersey Docks and Harbour Company by giving extra money to London while, on the other hand, establishing enterprise zones and urban development corporations to compensate for the injustice?
Sir G. Page: I do not want to complain about the zones and corporations coming to Merseyside. I hope that they will compensate, to some extent, for the unjust way in which the Mersey docks are being treated by the increase in competition against them caused by the subsidy provided for in the Bill.
The Mersey docks have carried out their duty to the economy, as the Government see that duty, in reducing the number of employees and making the docks as viable as possible. Compared with the Port of London, the Mersey docks have been a success—if we cut out the £8½ million that they have had to find for redundancy.
In fair competition, the Mersey docks can be successful and profitable. If they have unfair competition from subsidised State-owned and State-subsidised docks, and from the subsidised Port of London Authority, they may well suffer. If one compares the Mersey docks figures with those for the Port of London Authority, one sees that the Bill is investing in the Thames failure. I ask the Government to invest in the Merseyside success.
8.35 pm
Mr. Nigel Spearing: The right hon. Member for Crosby (Sir G. Page) has the right to comment on what he believes to be the effect of the Bill on his constituency. I do not deny that he may have a small part of a case, but I commend to him two points. First, the Port of London Authority is not the Port of London. I shall have a good deal more to say about that. Secondly,
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competition among British ports is to some extent regionalised. I shall not say that there is not a degree of competition between the two ports for the Midlands traffic, but there is also competition in relation to the trade facilities and the regular shipping services that each provides The competition may be much less than the right hon. Gentleman hinted.
The first thanks of every hon. Member who wishes to take part in the debate must go to the Leader of the House for putting down a protecting motion, which allows us to have a four-hour debate if we wish. That is a graceful gesture, which gives the House a reasonable amount of time to deal with a complex matter. I intend to take perhaps an undue part of that time, because my constituency contains the whole of the Royal docks, and my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) is today in Zimbabwe, for obvious reasons, and I am sure that he would have wished to contribute from the Back Benches, because he represents the whole of the area in which the West India docks are situated. We have been round the closure course a number of times.
I want to be as bipartisan as I can be tonight, because the origins of the Bill were with the previous Government and my right hon. Friend the Member for Stockton (Mr. Rodgers). I do not want my hon. Friends to think that I am necessarily in favour of the Government's way of going about things. I am not. I hope to show that even if I accepted their criteria I do not believe that the Bill would achieve what they want to do.
The Bill explains itself in the long title:
"To provide financial assistance for and in connection with measures taken by the Port of London Authority to restore the profitability of their undertaking by reducing the number of persons employed by them."
I believe that that is dangerously simplistic. I do not think that it is right for us to pass the Bill, which we must pass tonight, without some heavy qualifications. That is my first qualification.
I commend the courtesy of, and the apparently reasonable introduction by, the Minister of Transport. But the mere fact that he has permitted a Bill with a long title of that kind shows that, although he has learnt a great deal in the

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past few months—all Governments, including my own, have learnt a great deal about the Port of London authority—he has not learnt enough. If I am slightly tedious, but not repetitious, tonight, it is because I want to put on record certain factors that have been ignored by Governments of all persuasions. Governments will ignore them in future at their peril. I make no apology for the length of my contribution, because the people of East London know that what happens in respect of the Bill may determine the whole future of the Port of London. The Bill may not be as good as and may be far more dangerous than the Government realise.
My second qualification is that clause 1(2) of the Bill says that, in giving assistance, the Minister may require
"a grant to be repaid in specified circumstances and conditions as to the future management of the Authority's undertaking and the services and facilities to be provided by the Authority."
I cannot reconcile that with the Minister's statement that he will be taking no power to intervene in the operation of the port authority. We should examine that in Committee.
My third qualification is that the Minister believes that any port in the United Kingdom, be it Liverpool, Whitstable or Felixstowe, can operate entirely on a commercial basis, bearing in mind the effect that it has on other United Kingdom ports. If the Minister wants ports in the United Kingdom, and particularly London, to compete, they may compete themselves into oblivion with ports of the near Continent.
For those reasons, while we do not oppose the Bill, my hon. Friends and I have grave apprehensions about its effect. We fear that it will be a slipway to further reduction in the Port of London Authority's activities and consequently the activities of the Port of London, which is not the same thing. That is why we have given notice of a motion, which may not in the end be put, that the Bill be committed to a Select Committee of the House.
By voting money, we shall be approving a policy. The two cannot be separated. That is the classic position in which the elected representatives of the people must challenge the Executive. The assumptions on which the Bill is
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based can be properly examined only by a Select Committee.
When a Private Bill comes to the House, the long title has to be proved. I do not believe that this long title can stand up, and a Select Committee should decide that.
I shall divide the remainder of my speech into two parts. First, certain aspects of the port should be placed on record—its physical nature and importance, port organisation in London and human dimensions. I then wish to deal with administrative, management and financial factors and international competition. Those are the six parts of the main burden of my remarks.
Other than those who live and work in the area, people consistently confuse the Port of London authority and the Port of London. It is easy to do. People talk of the docks as if the docks equal the port, which is not correct.
The Port of London was there for centuries before the Port of London Authority was created by this House. The operations of the Port of London are more concerned with—and always have been—with the river than the docks. Technical and shipping trends in the past few years have intensified the superiority of the river over the docks, which were started over 180 years ago, as a result of the then monopoly of the West Indian merchants and others, as a secure and safe haven for sailing ships and to maintain easy cargo handling.
It has gone on from there. Indeed, as I have said, everyone constantly confuses the two. In terms of those for whom I am speaking, the East London community, I am not concerned, frankly, with either management or with unions within the Port of London Authority legal network. I am concerned, but not concerned tonight. My concern is with the efficiency and the health of the Port of London writ large and its effect upon East London in particular.
Mr. Moate: I am only seeking information, although I might add that the hon. Gentleman seems to be getting dangerously close to making a case for the closure of the enclosed docks. Can the hon. Gentleman inform the House what proportion of the traffic is taken through

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the upper docks and how much is handled in the river as a whole?
Mr. Spearing: I could quote the figures from a recent PLA report. I shall try to find them as soon as I can. But if I were to find them they would be dangerously misleading, because traffic in the river includes oil, and it is necessary to do quite a lot of calculation.
When the hon. Gentleman intervened, I was about to mention the GLC port, which is the upper port—the area which is popularly supposed to be at a disadvantage. About 12 million tonnes of cargo go up and down the river upstream of the GLC boundary at Crayfordness, of which about 1 million to 1½ million tonnes goes into the docks. I do not think that that necessarily represents the ratio for the whole of the port. I shall try later on to let the hon. Gentleman know the answer privately.
The point is that the upper docks could fulfil a different function from those for which they were built. The hon. Gentleman suggested that I have been coming close to making a case for their closure, but that is not so. I am saying that their capital cost, and the fact that they are there, can mean that they can be used for new functions and to under-gird what everyone wants to see—the sustenance of East London, and urban reconstruction. My doubt is whether the PLA has been sufficiently enterprising in that direction.
I should like to mention some of the physical characteristics of what are generally regarded as the upper docks, and which are said to be so small and out of date. There are no fewer than 16 miles of deep water quay in the West India and Royal docks. The entrance lock of the Royal docks is very large. The channel up to the Royal docks entrance is 47 ft. deep at high water by 600 ft. wide. It is twice as wide as the Panama Canal and much deeper. This is the case right up into Greater London. Indeed, at Tower Bridge there is a 34 ft. channel, 300 ft. wide. The idea that it is out of date, or that this great natural waterway, a great highway for London, has had it, is just not true. Many ships—not as many as we would like—are still in the river. But, of course, there has been a considerable rundown.
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In the Royal docks, there is a dry dock which is no less than 750 ft. long. Unfortunately, it cannot be used. It is impossible now to get any size of ship in a dry dock repaired in London, because the economics and the labour relations of ship repair in London have had a tragic history, which I shall not repeat to the House. It was mentioned by me in some detail in the Adjournment debate on 21 December.
There is virtually no ship repair of any size at all in London, Britain's premier port. When the Thames water authority wished to get some of its sludge vessels repaired, it considered sending them to Falmouth, and may yet do so. That is the position in the United Kingdom, a maritime Power. That is the position in London, Britain's premier port.
The sort of Greek tragedy, almost, which in miniature was found inside River Thames Ship Repairers could, without too much stretch of the imagination, be found also within the Port of London. That is why I believe the debate to be so important.
I turn now from physical and background factors to the organisation of the port. I have drawn the distinction between port and river. Let us have a look at the Port of London Authority. The Port of London Authority was flung together by the House after one or perhaps two abortive Bills resulting from a Royal Commission at the turn of the century. In its wisdom, the House put together a wide-ranging organisation with a number of disparate and, to some extent, conflicting functions. It invested in the authority powers of conservation and navigation and those of a harbour authority. The basic operation would continue whether or not there were docks.
The House vested in the authority the functions of a dock company. It amalgamated all the competing dock companies which competed themselves into oblivion. It put them together in a monopoly but did not include river warehousing. The authority also had a function for cargo handling, storage and, now, groupage, which is not the same. One can own a dock but not necessarily handle a tug. The PLA is involved in cargo handling. For that, it must employ dock labour. In the Royal docks the PLA did not employ labour until recently. The work was done by labour contractors.

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When hon. Members talk about dockers, they must remember that the function of the PLA as an employer of registered dock labour is of relatively recent significance. In the West India dock the PLA has handled cargo since the days of the West India Company.
In addition to those functions, the House vested in the PLA the responsibilities of a landowner. I shall not describe them as responsibilities of a land speculator, but the PLA has dealt in land in recent years. The Community Land Act was of significance. I have no doubt that the repeal of that Act will also be significant to the balance sheet and finances.
It would be feasible in abstract terms for the PLA to operate with a commercial return without operating a dock at all or, indeed, without employing registered dockers. That is because the accounts are consolidated. If the Government's criteria involve commercial viability and return on capital or cash flow and if they leave the PLA to juggle as it thinks fit—or as it must as a result of Government restraint—the capital and cash considerations might force it to take actions which it might not wish to take and which are not in the best interests of the Port of London, the United Kingdom or, indeed, British shipping. That must be borne in mind.
The capital structure for the functions that I have outlined is not suited to the present conditions. It has been said that London was well organised in 1908 when it was empired. That is correct. The Port of London's motto is "Floreat Imperii Portus"—let the imperial port flourish. If the empire goes, what happens to the port? That is almost the history of the port. It is not as simple as that, but there is much truth in it. We face a large problem. It is much bigger than the Government realise.
I turn to the human dimensions, which are considerable. There has been a great improvement in communications, understanding and dialogue in the Port of London in the last two or three years. Before the PLA went broke, it acted like the Kremlin. It was an imperial power. One can forgive it because it was vested in the dock companies, one of which went back to the East India Company. Some people say that the PLA acted in the
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same way as that company, but things have changed.
I pay tribute to Sir John Cuckney, who gave out a lot of information and did his best to change things, but it is very difficult to make changes after 200 or 300 years of tradition, particularly with a middle management that has been used to an entirely different style of operation. Nevertheless, information and knowledge are very important, and while the responsible people in management and the unions may understand that things have to change, it takes a long time for that realisation to filter down the line. I am not convinced that we have allowed enough time for that to happen.
There is now a different basis for registered dock labour. At one time ships' crews handled the cargo. Then a shipping contractor came on the scene and provided auxiliary labour to take over the work of the crew. The dock company handled the work on the quay, in the sheds and through delivery to rail transport. Some of the practices built up at that time may not now be relevant, but they are regarded as bargaining counters and are guarded jealously. The PLA and the Government must take that into account.
The Minister was generous and right in his tribute to the work of the unions and their leaders. The process has been extremely complex and we must remember that registered and unregistered dock labourers are all members of unions and are organised as between the riverside and the dockside. The Minister must not forget that in many ways the PLA is providing services for its competitors. A ship goes into a dock and enjoys the convenience of security, a constant level of water and warehousing, yet an operator is providing a floating jetty or quay which can be run much more cheaply. The PLA has a difficult job in providing services for its competitors.
That brings me to the dilemma of management. I have paid tribute to what the PLA has done in terms of information and the way in which the present management is devoting all the time and effort it can to solving the problems that exist. But it would be wrong not to mention that that management never had and still does not have the confidence of many people who work in the docks and of East London's municipal leaders. One chap said to me "They are a nice lot of young

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men—solicitors and accountants—but there is not a dock operator among the senior management." That may not be true, but that view is held by many people.
Confidence and good communications lie at the root of success for the Minister's plan. It is said in East London that the PLA has always wanted to close the upper docks. Some of our people say that it is suffering from the disease of Maplinitis. In order to make the port profitable they will close everything down, run the concern as a land company, and say that if it had been allowed to build at Maplin it would have been even more profitable.
There is always a degree of mistrust. The London borough councils have had to face four different plans for closure. Only recently has the port begun to be marketed as a total port. The Port Trade Development Committee was set up in 1976 under Frank Cousins, and it made a number of recommendations, some of which were followed up rather slowly. One of them, and this is a moral tale, was that inside the West India docks there should be a crane to deal with containers. It is called the Nellen container crane. I shall not deal with the problems, but the crane has been there for several months. A loan was granted by the harbour board. I believe that the crane cost more than £1 million. It has not been used.
One side blames the other, and I shall not take sides on that issue. The fact is that the West India docks, which are favoured by many of the shippers, could have been operating in a different way had that matter been smoothed out. I do not know who is to blame. It may be that no one is to blame. It may be that these communications should be considered very carefully. Certainly, management cops the blame from the community even if, after investigation, it turns out that this example of apparent deadlock cannot be faulted on either side.
Without a Select Committee, or without some investigation into the port, these problems will continue. That is why many people in East London have called for some sort of investigation into the PLA and, by that token, those who work for it—one cannot be investigated without the other—to see what can be done. In the end, it will be the community who will lose.
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People may receive redundancy pay or top-hat pensions under the provisions in this Bill, but if the matter goes wrong it is the community which will have to carry the can. The community is asking for more details and an investigation.
Mr. Robert C. Brown: Does my hon. Friend know that it is not known whether the crane to which he referred—which has never been used and is not likely to be used—can be moved to any other part of the docks so that it could be used?
Mr. Spearing: I am grateful to my hon. Friend. He brings me to my next point, namely, the way in which the present proposals for transfer have been handled. Apparently the reason for transfer is to save the overhead cost of some 500 persons, many of whom are not registered port workers, so as to come within the Government cash limits. We understand that the Government wish to impose cash limits. I do not want to drag in any contentious material. However, that appears to be the reason for this change and why it has been expedited.
The management said to the unions "The ships will go to the Royals"—where there is a different working practice—"like it or lump it." I think that the reason for the meeting to which the Minister referred was that the unions felt that if they went along the road that the management have been pressing—in the sense of imposing what they regard as an unreasonable condition which leads to blacking—they would lose the lot. However, I do not know whether that is correct, as I do not speak for the unions. But, in risking that—a risk which has been partly lifted—the management were playing Russian roulette with the trade of the port.
There is nothing easier than to take a ship away from a port and not send it there again. There will be many ports around the coast that would gladly take the West India trade. Shippers like to use the West India docks because the working practices are historically superior—or so it is thought by the users—to those at the Royals. That gives rise to a certain amount of distrust.
There is another matter of distrust. People in East London say "Ah, well, they will sell it to the urban development corporation. It will be nice land

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for an enterprise zone. That is what is motivating the PLA." I am not saying that that is so. All that I am saying is that that is a natural and understandable reaction. People in East London know what is happening.
I do not intend to deal with the urban development corporation or enterprise zones. In this speech, I shall assume that they are good things for East London. However, if they are good for East London—and the Minister and the Government think that they will be—would it not be a good idea to keep open the West India docks so that they can be fed by water, and the enterprises which the Government hope that the UDC and other projects may bring could be part of a port?
People in East London say "What will happen to the West India installations? What will happen to the very good Olsen terminal? What will happen to the facilities there? Will it be let to tenants?" Why not? Why cannot the West India docks be used in a constructive and positive way, not necessarily operated by the PLA but perhaps by other persons who could use it for the benefit of the port as a whole? There is the dilemma for the PLA. If it did that, it would say "Ah, well, if we do that we shall undermine the viability of Tilbury." The PLA would, therefore, have to take a very difficult decision.
I should like to put to the Government two other factors which I think will impede the success of their plan. Let us assume that all problems of confidence, management, unions and the relationships between them are solved. Let us assume that there are none of the difficulties which I have just outlined. I still do not think that the Bill will achieve its purpose, because there are the lead weights of the interest. The Minister said that the Price Waterhouse report justifies the continued trust port status. But how can he justify interest of £8 million or £9 million a year, which has to be paid whether or not the enterprise is profitable? All the other wharves on the river are operating at a surplus. But if they make a loss they do not have to pay their shareholders, whereas by statute the PLA does, because the 1908 conditions, whereby a monopoly was exchanged for an obligation to pay interest on capital, no longer exist.
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The 1908 monopoly which London had by virtue of its physical building, which to some extent is now outdated, has disappeared. Therefore, can one apply the same financial principle? I suggest that one cannot. Even if one gets rid of that, one is left with the final factor about which I believe there will be considerable problems. That relates to competition, and not just with other ports which can act as ferry terminals. Techniques have changed, and, because of dredging, lighting and tugs, London is at a physical disadvantage.
However, the major point relates to what is known in the trade as the Touche Ross report, which was published by the National Ports Council some years ago. It showed that Continental ports, by virtue of their municipal or national management, grew up in a quite different tradition from the Port of London. Indeed, they were created and sustained by the nations and towns of which they were part in order to compete with London. Many of the developments at Dunkirk, Antwerp and Rotterdam were pursued by the municipalities in order to compete with London. They have a quite different financial structure.
I shall not go into the details, but the Minister will know that the Touche Ross report calculated that port dues in London could be dramatically reduced if London was funded on the same basis as the Continental ports. I do not think that those facts can be denied. However, the difference is in the effect which that has on the trade of London. That is where I have disagreed with my hon. Friends and the previous Government, just as I now disagree with the present Government.
Here I must thank the Minister for his courtesy in replying to a letter which I sent him last week—I shall be sending another next week—part of which I should like to read. In reply to my point about trans-ship trade and the Continental ports taking trade from London by roll-on/roll-off or short-sea traders, the Parliamentary Secretary says:
"Although there is some trans-shipment of goods from the continent to the United Kingdom it represents only a small proportion of port business; it takes place not so much because continental port charges are lower, but because shipping costs benefit from the economies of scale of the employment of large bulk carriers, extensive port facilities and storage accommodation."

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I would have thought that we have plenty of that in London. He added:
"In any case, since Britain is an island, transshipped goods must still enter the country through a port."
That is fine. That sentence in itself reveals a great deal. The letter continued:
"This means that there is no real competition between United Kingdom and continental ports; London's real rivals are other United Kingdom ports. We believe that ports should compete freely with each other on the basis of price and service without Government subsidy."
I shall not pursue that very much further, but I believe that the matter must be thoroughly examined.
I do not believe that what has been said is correct. Even if labour relations and management were right, and even if the PLA obtained its capital reconstruction, it would still have to compete against trans-shipment trade from the Continent, the roll-on/roll-off trade, the Channel tunnel, and possibly Whitstable, which also takes trade from Rotterdam. Therefore, in passing the Bill tonight, and by providing money for redundancy in a search for viability, we may end up with less than we had, and maybe even less than that.
As I demonstrated, it would be possible for the PLA, as an organisation, to be profitable and viable without dealing with ships, and acting only on land and on its other assets. That danger must be examined. It could be examined by a Select Committee. I hope that the Minister who replies to the debate will be able to tell the House that these matters will be examined. Perhaps the Select Committee procedure would be too lengthy for the purposes that the Minister has in mind. But we need a measure that will induce confidence in order to ensure efficiency. Something must be done in order to clear the air. If it is not done by the House, it should be done by another body and the matter should be settled.
At the turn of the century, a Royal Commission was set up. We need a similar body now. Unless such a body is set up, the purpose of retaining the Port of London in its entirety, let alone the successful operation of a smaller PLA, will not be achieved.
9.12 pm
Mr. Anthony Steen: The hon. Member for Newham,
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South (Mr. Spearing) has given an intriguing social and historical tour of the Port of London. I am sure that the House is indebted to him for that, and we shall be interested to read a report of his remarks tomorrow to find out what he is advocating in relation to the Bill. I assure the House that I shall not embark Linen a similar social and historical tour of the Merseyside area, because I am sure that it would take even longer, and I hope to confine my remarks to a more specific response to the Bill and to the Minister's opening speech.
First, I shall explain why a Member from Liverpool wishes to address the House on a Bill which appears to deal exclusively with the Port of London. Perhaps I can do no better than explain that this morning I received—I suspect that all Liverpool, and possibly all Merseyside, Members received it—a communication from the chief executive in Liverpool in which he informed us that the city council had passed a resolution relating to the financial position facing the port of Liverpool. I think that I have an obligation to read it to the House. The resolution states:
"The city council urges Her Majesty's Government to take immediate steps in the interest of the economy of the city and Merseyside to grant a subsidy to the Port of Liverpool, proportionate to that recently given to the Port of London, so that the port charges in Liverpool should not be rendered so high as to be uncompetitive due to Government discrimination in favour of another port at a time of soaring unemployment in Liverpool."
That resolution and approach of the Liverpool city council will explain at the outset why I believe that, as a Liverpool Member, I have a particular interest in speaking about the Bill and the effect that it will have on Merseyside.
With the chief executive's letter was an ample and interesting report produced by the Mersey Docks and Harbour Board. It may be worth reading to the House the final paragraph of that report. In effect, the board is saying that the Government should apply the same principles to Liverpool as they have to London. Expenditure on manpower accounts for about 80 per cent. of the Mersey docks running costs, and the company accepts the need to continue to reduce its labour force in line with rapid changes in trade patterns and new methods of transport. It is obvious that

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if Liverpool is to continue to bear voluntary severance costs, which are now accepted as a national charge in London, the competitive position of Liverpool will be weakened. Even if Liverpool were not a special development area, this would be manifestly unfair. If one takes into account the considerations of regional policy, it makes no economic sense whatsoever.
The Bill seeks to intervene by making funds available to help the London docks. Yet the Government have been dedicated to fight against public intervention. They have repeatedly stated that public funds should not be used to support ailing industry or to prop up projects which are unable to support themselves. In line with that policy, the Government have rightly reduced regional aid and, under the Local Government, Planning and Land (No. 2) Bill, are seeking to do away with a number of bureaucratic obstacles to allow free market forces to operate. Yet, by intervening in this way, they are distorting the very opportunities that they seek to give to the private sector to operate without public intervention and control.
Regional aid distorted the economic situation by encouraging companies to go from one area of the country to another for no particular reason other than that the Government were giving substantial aid and it was so attractive that companies felt they had to go to areas with special development area status. The funds were so attractive that companies felt that they could go to those areas and, if the economic situation turned rough, they could get out without losing too much.
Regional status on Merseyside has meant that many major companies have in the last two decades gone to the area and created a great deal of employment. But as soon as there has been a downturn in the economy those companies have packed their bags and gone out equally quickly, creating massive unemployment and throwing away a great amount of Government aid which had been provided over a long period. That was the justification for not continuing with a regional aid programme to the extent and at the level which has been created up till now.
Mr. Ronald W. Brown: Will the hon. Gentleman also note that the destruction of London was the result of that policy? Industry left London and went to places such as Merseyside because it was encouraged to do so.
Mr. Steen: I am grateful to the hon. Gentleman for that comment. It merely strengthens the case that I am about to unfold and to which I hope the Government will listen with great care.
The intervention was not confined to industrial dislocation. It went further. The compulsory purchase orders used by city councils destroyed much of the older housing in the inner areas around the docks, both in London and in Liverpool, and transferred the people to the vast council estates on the edges of and often outside the city boundaries. That dislocated the neighbourhoods and communities and reduced the rate income which the local authority would have enjoyed had the people still been living in the inner city area. The decanting of the population from the inner to the outer areas resulted in the loss not only of homes but of population and rate income. It is not surprising that one-fifth of the population of Liverpool has been decanted to the outer areas over the past two decades.
What one is arguing about is massive central Government or local government intervention which has been damaging to the local economy and often to the national economy. Far more than achieving an improvement, it has made matters worse. When the Government decided to relocate workers on Merseyside to the outer city areas, it cost the taxpayer £14,000 for each job that was relocated, destroyed many green field sites on the edges of the city which were good agricultural land and drove farmers further out into the waste lands and the rural fringes beyond. So the experience of public intervention has not been an unmitigated success.
Therefore, the policy of the Government to reduce the amount of public intervention both locally and nationally and to allow free market forces to operate unhindered was something which Conservative Members welcomed. However, it seems that the proposal in the Bill is to discriminate in favour of the London area, propping up the docks there, which

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in turn will distort and discriminate against the docks on Merseyside.
If the Government intend to intervene, they may take the view that the London docks are a special case. That is always an attractive way for a Government to proceed. They may say that the docks should be treated as part of the infrastructure like the roads, electricity services or putting derelict waste land to good use—in other words, that the docks are a special case and should be treated as part of the infrastructure. The Government may say that they distinguish between the docks and the manufacturing and service industries on the basis that one produces goods which should not be interfered with and the other is part of the Government's infrastructure programme. If that is the argument that the Government are putting forward, surely they must deal with it as part of the national strategy. The docks cannot be part of the infrastructure if at the same time the Government say that they will treat them as such in only one area. If it is a national strategy, it must apply to all areas.
On Merseyside we have suffered from a great deal of unco-ordinated Government action. For example, we have a Minister with responsibility for small firms, yet only last month small firms in my constituency were being pulled down to make way for more public housing, with the result that jobs were lost and £100,000 worth of export trade was lost. We cannot have a Minister responsible for one aspect of Government policy when the local authority is doing something else.
The airport on Merseyside has doubled its throughput in the past year and now has more cargo than Stansted, yet the Government discriminate in favour of Manchester airport. It may well be that the argument is that there is a national airports policy and the Government have taken a decision to support Manchester airport to the detriment of Liverpool airport. But as regards the docks the Government cannot say on the one hand that they will discriminate in favour of London and on the other hand that they will not have a national ports policy.
We need a clear indication from the Government of the basis for continued intervention, albeit following the previous Government's policy. Is it that
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it is part of an infrastructure programme? If so, let it be applied to Merseyside. Or is it a one off and the start of a process of the Government intervening and putting public funds into the docks because of the difficulties there?
One of the problems that the docks have on the West Coast of Britain is that they face the wrong way. They face out to the United States, whereas the docks on the East Coast have the advantage of Europe. Merseyside needs special help to counteract the problems that it faces in persuading others to come to the North-West. Therefore, to give favour to London without giving favour to Merseyside is an added insult. Further problems will be created. As I said in my intervention in the speech of my right hon. Friend the Minister of Transport, we cannot get regional aid for the docks because they are considered to be part of a service industry. Regional aid does not go as far as providing money for service industries.
I am asking the Minister to realise that by the Bill he is indicating that he is involved in a programme of discrimination against Merseyside. He is also indicating that he is subsidising a port in the East in favour of a port in the West. By enacting a Bill of this magnitude, he will ensure that Merseyside is less competitive.
What is the point of enacting a Bill that will make Merseyside less competitive when only last month it was announced in the Budget that enterprise zones would be introduced, which we shall probably have on Merseyside? It does not make sense for one Ministry to say "We shall help Merseyside" and for another Ministry to enact Bills that will do a disservice to Merseyside. I ask my right hon. Friend the Minister to say that he will extend the support that he is offering London to the Merseyside docks, which are in a virtually identical phase in their history.
9.27 pm
Dr. Oonagh McDonald: At times I found it difficult to relate the remarks of the hon. Member for Liverpool, Wavertree (Mr. Steen) to the long title, which reads:
"to give financial assistance for measures to reduce the manpower of the Port of London Authority with a view to restoring the profitability of their undertaking".
I shall confine my remarks to that title and question the underlying assumption.

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In common with my right hon. and hon. Friends, I do not wish to oppose the Bill. I, too, want the money to be made available to assist with the redundancies that unfortunately will still be necessary. The long title seems to imply that the profitability of the PLA can be restored merely by reducing the number of persons employed by it. It ignores two aspects of the PLA's problem. First, it ignores the special features of the port. Secondly, it ignores the competition that Britain's largest and principal port faces from other European ports. It has to compete with them on an unfair basis.
Reference has already been made to the Touche Ross report. I shall refer to it in rather more detail. It is interesting to note that the report came to the conclusion that if the port of Hamburg prepared conventional accounts it would be shown to make a large operating deficit. The analysis shows it to operate at a loss even before account is taken of depreciation and interest on capital. In other words, the port of Hamburg in West Germany—a country that is the great idol of the Conservative Party—continues to operate with a large deficit.
There are reasons of a historical nature that underlie the way in which the Port of London has grown up and developed. However, there are other reasons, and important reasons. It is recognised that the existence of a thriving port serves as a catalyst. It produces other jobs in surrounding firms.
Conversely, as the activities of the Port of London decline, the number of jobs in the inner London area, and even in my constituency of Thurrock, decline. Many jobs depend and exist solely as a result of the existence of the Port of London. Others recognise that fact and are prepared to put in subsidies at the appropriate point rather than introduce the notion of a free enterprise zone. They are prepared to provide the necessary subsidies and to let them produce other jobs.
Let us look in detail at the estimates given in the report. Let us use its method of comparison and take not only Hamburg but the other three ports that are analysed. If the Rotterdam conditions applied to London, the percentage change in port charges would be 14 per
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cent. If the Hamburg conditions applied, the percentage change in charges would be 84 per cent. If the Dunkirk conditions applied, the percentage change would be 30 per cent. and for Antwerp, 34 per cent.
The Port of London Authority is operating in the face of competition from ports that arc subsidised in a variety of ways. In addition, it has to take on more extensive responsibilities than some of them. Those responsibilities may not represent large elements in the financial accountability of the Port of London Authority, but they play their part. For example, the Port of London is responsible for maintaining and dredging the river as far as Teddington. It is not a great burden, but it is an additional one. Its main competitors do not have to bear that burden. The Bill should take that into consideration.
The Minister's underlying philosophy implies that one needs simply to reduce the number of those employed by the Port of London Authority to make it viable. That ignores those other features.
The money is designed to cover severance payments. It seeks to reduce the number of registered dockers on the A and B lists. However, no provision has been made for the problems that will arise as a result of reducing the work force. Some of those problems will be matters of union negotiation, and understandably they may be a cause of union resistance. For example, men on the category B list cannot be particularly encouraged to leave before men on the category A list. I do not quarrel with that, because those on the category B list will usually be those who have sustained injuries in the course of their work. Many of them will be elderly. They therefore worked there before decasualisation and they suffered all the iniquities of that system.
I am not criticising the fact that severance payments cannot be used to encourage category B men to leave before category A men. However, reducing the number of those employed by the Port of London Authority will not solve the problem. A further factor has been ignored, namely, the age of those employed. The age profile of dockers in the Port of London Authority shows a peak in the 50–55 age range. In fact, 72 per cent. of the registered men are over 40. The PLA has

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not been taking on younger men for a number of years now. That means that the authority is put in a rather difficult position—it has an ageing work force with very little input of newer, younger men. One cannot ignore the special employment difficulties, because they contribute to the viability or otherwise of the Port of London.
In addition, there is another issue to which the Price Waterhouse report refers rather delicately on page 7. It does not go into any detail but it says:
"Severances of non-registered men have been delayed because of difficulties and delays in negotiations, though we understand that staff severance terms are sufficiently generous to attract an adequate number of applications."
The version of the Price Waterhouse report that has been made available to us—an expurgated version, which leaves out certain features that the PLA would regard as commercially confidential—does not give any information to back up that point.
Many dockers, through their unions, have complained that the administrative side of the PLA is top-heavy. They also complain about the lack of experience, skill and imagination of those employed on the administrative side. They suggest that delays in getting ships in and out of the port are due not to the unwillingness of the dockers to carry out the job well and efficiently but to deficiencies on the administrative side. Whether or not these allegations are true, it is difficult to judge, but surely these are matters that require investigation. Simply to produce a Bill that seeks the reduction of the work force is not enough.
When one reads any speech made by a member of the Government, or any press comment, or when one looks at the Price Waterhouse report, one sees that the reduction in the work force means a reduction in the number of dockers. The staff side is rarely discussed in detail and is not discussed in the report. That is an aspect that should be thoroughly examined if the Minister intends to exercise his powers under clause 1(2), which says:
"the Minister may impose such conditions as he thinks fit".
Does that mean that the Minister will investigate these problems? Will he carry out a thorough investigation to show the numbers employed on the staff side, what their work involves, how quickly
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the necessary reductions in manpower are made there and the terms offered? Will he do anything about these aspects in his efforts to make the Port of London viable, or will he simply ignore such problems? These problems are the sort that sour industrial relations in the PLA.
There is resentment among dockers over the fact that there are too many chiefs and not enough Indians, as they put it. There is resentment about the delays caused, as they see it, by inadequate and inefficient clerical operations. These are matters that should be thoroughly investigated by the Minister. They are matters in which the unions representing the staff side should be involved as well. However, none of this is referred to in the Price Waterhouse report, which skated over the matter in the sentence or two that I quoted earlier.
There are other pressures within the PLA that I want to examine in detail. The authority claims that its financial position has been made much worse by the loss of shipping lines to competitors. It appears that three lines have transferred operations from the PLA dock—APCL, EMEC and CAROL. The loss of trade involved is 40,000 containers, and the handling charges are £70 per container. Those containers left the multi-user berth of the northern depot of the PLA on about 15 March.
The PLA claims that there was a loss to competitors. In fact, it was a loss to a special sort of competitor—a private employer within the port; and that creates special tensions and difficulties for the PLA and creates part of its financial problems. What are the implications of such a loss for the PLA? It was not a case of the customers being lost to another British port or to a Continental port; it was a loss within the port.
The special problems are ignored by the Price Waterhouse report. They create special financial burdens for the PLA, which not only faces a strange sort of internal competition but has to pick up redundancies created by private employers in the docks. The PLA is seeking to reduce its work force, but that force can increase, because the PLA takes up dockers who have been made redundant by private employers.
The Minister said nothing about the special problems. He proposes, in the long title of the Bill, a simple solution.
Mr. Moate: When were the contracts lost? The Price Waterhouse report took account of events only up to the middle of last year. Is the hon. Lady saying that the total loss of revenue to the upper docks from those jobs is about £3 million a year?
Dr. McDonald: I was merely quoting that case as an example of the sort of problem faced by the PLA. It appears that the losses occurred in March this year. They are not covered by the Price Waterhouse report; they are merely an example of the sort of difficulties faced by the PLA that are not adequately covered by the Price Waterhouse report or by the Bill, which seems to suggest that viability can be restored merely by reducing the number of employees in the docks.
The Price Waterhouse conclusion is:
"We do not believe that a case for a capital reconstruction has yet been demonstrated, largely because it is not possible to determine the proper relationship between the PLA's liabilities and assets until more progress has been made in restructuring the PLA's business so as to achieve a profitable port operation, in particular through the elimination of uneconomic working practices and the severance of surplus manpower."
That begs the whole question. These other features of the authority's operations must be taken into account.
Mr. Spearing: My hon. Friend is on a very important point. Can she confirm something that I believe to be true? She said that the contracts were lost by the PLA, I believe at Tilbury, as an employer of labour and as a handler of cargo, but am I right in thinking that whilst it may have lost that cash flow and that revenue it retained the revenue of harbour dues, and that if the berth to which my hon. Friend referred was inside Tilbury dock it retained the tonnage dues on the ship, and possibly cargo tonnage dues as dues to the dock company, in which capacity it was also involved?
Dr. McDonald: I thank my hon. Friend for that intervention. He is right. There are two kinds of losses—the loss to the authority as an employer and the loss of the handling charges. But there are other revenues that the authority derives. Therefore, to say that it has lost three customers over recent months and that
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that is an additional cause of all its problems, and to suggest that that could well be because of the lack of progress towards improvement in working practices, as the authority often does, is to give an inadequate reason.
In fact, it appears that the real reason for the loss of the customer was that the mechanical equipment was not available. At times there is only one straddler carrier available, and sometimes there are two. In other words, the loss was caused by lack of investment and lack of maintenance of the mechanical equipment necessary for carrying out the work. That is different from a need for improvement in working practices as a reason for loss of customers.
Those are the kinds of complex issues that make the Price Waterhouse report's conclusion superficial. It does not look at other reasons for lack of viability, such as the lack of adequate mechanical equipment and lack of investment. It does not look at the peculiar problems created by the fact that the authority competes as an employer with private employers within the port. Therefore, the Price Waterhouse conclusion is inadequate and superficial. If the Minister is to intervene, as clause 1 gives him the power to do, he should do so only after a thorough investigation of the authority's special difficulties.
Mr. Ronald W. Brown: I should like to emphasise my hon. Friend's point. The reason why the Price Waterhouse report was published on this occasion, as distinct from the previous occasions, was that it contained nothing of value. Previous reports were not published, because of the confidentiality of their contents. Therefore, the present report is clearly inadequate for its purpose.
Dr. McDonald: I thank my hon. Friend for supporting what I have said.
The authority faces another special problem. I do not think that it is one for which it can be entirely excused. Reference is made to Tilbury as a container port. One of the most important sections of that port is the Northfleet-Hope container terminal, which was purpose-built, being designed mainly for Australian and New Zealand trade. Australia continues to import many British goods, which can leave the country through Tilbury. In 1978, Australia

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imported £856 million-worth of United Kingdom goods.
However, a special problem will have to be faced by Tilbury with regard to EEC restrictions on the import of dairy products and sheepmeat from New Zealand, which will gravely affect trade. The Government could perhaps look to the EEC for reimbursement, since it is Community decisions that will affect trade in Tilbury in the very near future if severe restrictions are imposed.
The Bill, although welcome and necessary, is in every way inadequate. Its underlying philosophy is misconceived. It is not sufficient to believe that by the continuing reduction of the work force the problems of the Port of London Authority will be solved. The Bill does not deal with the fact that the port faces subsidised competition from other countries, which is right because of the additional employment created in surrounding areas.
In Committee we shall be pressing the Minister for essential information about the operation of the Port of London Authority. We shall seek to improve the Bill and ask the Minister to provide further help for the Port of London Authority to give it the opportunity to become viable in the future.
9.51 pm
Mr. Roger Moate: I apologise for missing the first part of the speech of the hon. Member for Thurrock (Dr. McDonald), especially as in the second part there were points with which I readily express agreement. I am glad that the hon. Lady took the opportunity to emphasise that the damage inflicted on our trade by membership of the EEC has significant consequences for our ports. I hope that her fears are groundless and that the Government will stand up strongly for the interests of our traditional suppliers in Australia and New Zealand and that their trade will continue to come into all British ports.
I also agreed with the hon. Lady's general scepticism about the probable success of the strategy that the Bill is designed to support. I do not disagree with the need for the Bill or wish to see the strategy fail. However, I doubt whether the unions, management or customers involved in port reorganisation can see the immediate future as anything but a period of great trial and tribulation.
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It is a difficult operation, and success is by no means guaranteed. I am sceptical about the chances of maintaining the commercial viability of the upper docks. However, it is a period of experiment, and I hope that the message will not go out from this House, as every speech so far appears to have indicated, that the experiment is doomed to failure. That would be disheartening for everyone involved.
I enjoyed the speech of the hon. Member for Newham, South (Mr. Spearing), which was helpful and constructive. Hon. Members representing dockland areas must be under tremendous strain. The hon. Gentleman and his colleagues representing neighbouring constituencies must feel at times that they bear the burden of the collapse of empire on their shoulders. I do not accept the hon. Gentleman's analysis on why trade has left not necessarily the London river but the upper docks. It is not the collapse of empire or the changing pattern of world trade. Much of that trade has moved to other United Kingdom ports such as Tilbury, Medway or Southampton.
The hon. Gentleman and the hon. Member for Thurrock did the House a service in emphasising that the Port of London is not just the upper docks. They emphasised the vast tonnage which exists within the river itself. Even if both upper docks were to be closed—and that is not the proposition before the House—the total tonnage handled on the riverside wharves and at Tilbury would still leave the London river and the Port of London Authority as probably the largest port in the United Kingdom, leaving aside oil tonnage. It is a very considerable port indeed.
Mr. Spearing: I am grateful to the hon. Gentleman for his remarks. We were not trying to be pessimistic but trying to say that, although the Government's intention may have been correct, we do not think that the remedy is yet adequate.
I have been able to ascertain the answer to the question put to me earlier by the hon. Gentleman about tonnage. The 1978 annual report of the PLA shows that 43·7 million tonnes was handled in the river—that includes the PLA grain terminal, which is in the river—and 5·8 million tonnes in PLA dock premises inside the impounded docks.
Mr. Moate: I am grateful to the hon. Gentleman for that information. He further empasises the point that I was just making and that he also made in his speech.
There is a future for the Port of London, but clearly it is undergoing a period of great and very painful change. I understood the hon. Gentleman's point that he felt that the Bill would not support the changes necessary to secure profitability and would not help to secure viability. I put it to the hon. Gentleman that there is no action that this Government or any Government could take, or could have taken, that would achieve that purpose, because the reasons for the decline of the upper docks are much more fundamental than anything that subsidies could correct. They are geographical; they are social.
I do not believe that the upper docks can have a long-term future of this kind. I cannot see that the enclosed docks have a long-term future. I cannot see how the upper docks, with the long journey up river, can compete with the new and highly specialised facilities and the natural deep-water facilities that exist at so many other docks. I cannot believe that in a situation in which the customer is free to choose where to go, ships will come up river indefinitely.
We are involved in competition, and my right hon. Friend the Minister made a point which is fundamental to the whole Bill and the whole debate—that ports must pass the test of competitiveness and commercial viability. It is not a matter of free enterprise versus State control, because the Port of London is competing against nationalised docks. It is competing against publicly owned docks of one form or another, just as it is competing against privately owned docks and against other British dock workers.
In the last two decades, there has been the most remarkable revolution in shipping. The most fantastic changes have taken place with the container revolution. Literally billions of pounds have been invested in new ships and new handling techniques. It has happened on a scale that is almost comparable with the sort of investment that has gone into the exploration of the North Sea. This has involved such fundamental changes in a very short space of time that I can-
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not believe that docks such as the Royal or the India or Millwall could have kept pace with them.
One can see these changes at Southampton, at Tilbury and in the Medway Port Authority in my constituency. There have been some problems now and then, but basically the changes have been achieved with the co-operation of the dock labour force in this country. It is not that somehow we are trying to force the pace of change upon unwilling people. It has been an industrial revolution, and I cannot believe that one can isolate London from all this, which was what the hon. Member for Newham, South was talking of doing. I do not wish to disparage the efforts to reduce the dock labour force in London. It has happened on a remarkable scale. Basically, the trends are too powerful to pretend that we can sustain the docks ad infinitum. If we do that, perhaps we shall damage certain areas and make it harder for them to adjust in the long term. I do not see that as an argument of despair.
It being Ten o'clock, the debate stood adjourned.
Ordered,
That, at this day's sitting, the Port of London (Finance Assistance) Bill may be proceeded with, though opposed, until Eleven o'clock or for four hours after it has been entered upon, whichever is the later.—[Mr. Le Marchant.]
Question again proposed, That the Bill be now read a Second time.
Mr. Moate: This is not the time to go into the arguments about urban development or enterprise zones. In the long term—and much pain can be suffered in the long term—there are immense opportunities for capital, new jobs, new construction and opportunities. We may do a disservice in the long term if we try to sterilise the opportunities.
Mr. Spearing: I do not disagree with much of what the hon. Gentleman has said, but does he agree that the fact that a ship of 44 ft. draught could enter an enterprise zone in the middle of the Isle of Dogs would help?
Mr. Moate: I would rather leave the urban development corporation to decide that. It is not impossible. If it is decided to secure new berthing facilities for the benefit of existing and new users, so be it. However, I believe that that is a marginal question in relation to

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the whole strategy. I sympathise with the case made by the hon. Member for Newham, South. Nobody misunderstands the situation. Visiting dockland is like visiting a ghost city in the middle of an economic and social desert. The situation is tragic, and I pay tribute to the hon. Gentleman for his constructive approach to the problem.
The right hon. Member for Barrow-in-Furness (Mr. Booth) criticised the Bill. He said that it had a limited purpose and was restricted to running down manpower. To be fair, he should have quoted the Price Waterhouse report, which stated:
"The nub of the PLA's present financial problem is a combination of the uneconomic use of manpower and its inability to divest itself of manpower which is already, surplus … The PLA will not return to viability until it has improved its working practices and shed its surplus manpower."
The right hon. Gentleman might disagree with that, but the report was commissioned by the Labour Government.
The Bill provides the means to change manning levels. It provides the main weapon through which the PLA can return to viability. That is not the Government's assessment; it is the PLA management's assessment of the strategy. On that basis, the Government introduce the legislation.
The right hon. Member for Barrow-in-Furness also criticised the Government for changing their strategy. He said that the previous Government maintained the concentration option that involved the two docks. The Government have not changed the strategy; the Port of London Authority has changed it. It has concluded that it is no longer possible to retain both the upper docks. The authority listed the reasons for that and we understand them. It mentioned the deterioration of financial circumstances since it accepted the concentration option. The Government are backing the judgment of the PLA management.
Mr. Booth: If the hon. Gentleman reads the five-year strategic plan of the PLA, he will see stated at least three times that it is the authority's view that there cannot be commercial viability as I and the authority define it without capital restructuring. Therefore, one cannot contend, as the hon. Gentleman
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does, that the PLA believes that the limited scope of the Bill is sufficient to restore the authority to viability.
Mr. Moate: I shall come to capital reconstruction in a moment. I am quoting from the PLA statement dated 3 March 1980. It is fair enough to take the PLA's statement as a basis for its views on the position.
The reason for the further deterioration, which is why the PLA has abandoned the concentration options—it is clearly stated here—concerns the two weeks' strike over pay, which cost the PLA about £2 million. In addition, the authority has lost about £4 million so far this year. In spite of progress on manpower reductions, there has been insufficient movement towards implementing the changes in working practices identified as being essential to the improvement of the PLA's competitive position.
I do not suppose that anyone enjoys having to make a major change of strategy like that. If, however, there has been this substantial deterioration in the financial position, one sympathises with the decision of the PLA to close one of the upper docks. The Government are backing the PLA management. That is their stated intention, and the Bill quite rightly embodies that approach.
Capital reconstruction is directly linked to this whole case. The Government are absolutely right at this stage not to embark upon such a reconstruction. I say that even though I have frequently urged that public authorities and nationalised industries should not be asked indefinitely to carry unreasonable interest charges. That argument does not apply in this case, because I am not sure that we are placing the PLA on the sort of footing that will lead to viability. I expressed my sceptisism about the chances of success for this strategy, and it would be premature for a major financial reconstruction to be undertaken at this stage.
If a major breakthrough was achieved and it was clear that there was a long-term commercially viable basis for the operation, there would be a case for looking at this situation, as with other industries. However, the PLA is not like other nationalised industries, It is in direct competition with other ports, and if the PLA is relieved of the obligation

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to service its capital the same must be done for Liverpool and all the other ports with which the PLA competes directly. That could not be done for one port without its being done for all the others. Therefore, the Government are right not to proceed to a capital reconstruction.
This argument leads me to the question whether the PLA is a special case. I say that it should not be in terms of capital reconstruction, but there is justification for making it a special case in respect of other subsidies. My hon. Friends representing Merseyside constituencies have been saying that if this approach is good enough for London, it is good enough for their area and extra help should be given to other ports. However, this is a special case only because it involves an obligation inherited from the previous Government. We are honouring a commitment that was made. There is no case for extending subsidies to every other port simply because of the special circumstances of London and the sheer scale of change that has taken place there. It would be neither right nor sensible to spend taxpayers' money liberally throughout the other ports. That would make a bad situation worse. It is hard to concede one special case and then refuse others, but that is what has happened here.
My hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) argued that his area should get special grants on a regional basis because, as a service industry, port operations on Merseyside are excluded from the present facilities. I have a port in my constituency, and my immediate reaction is to ask why Merseyside should be a special case and receive a subsidy and why we in the South-East should not get the same when we are in direct competition with other ports. The answer is that we do not want to make any special cases but that if we have made one special case—and with a port subsidy of £70 million it is a very expensive special case, which the taxpayer has to bear—let us have no more.
I turn now to what will be seen as a parochial point, although it is more than that. Part of the Medway Port Authority is located in my constituency, in the form of the port of Sheerness, which has been very successful. It is profitable. It has superb industrial relations. Its success has
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been achieved through good management, good industrial relations and a determined effort to go out and win business. It has succeeded.
On a number of occasions the Port of London Authority has expressed a desire to have what it calls an estuarial authority—in other words, to take in the area of the Medway Port Authority and embody it in the general PLA operation. The hon. Member for Newham, South referred to Maplinitis. It is part of the same disease. The PLA must concentrate on sorting out its existing commercial activities and not seek ways out by expanding its empire. That is what it has been trying to do by talking about Maplin and Medway.
We are in a period where small is beautiful. The smaller the management unit, the better. Therefore, the better it will be for ports if, for example, Tilbury and the Medway are seen by the PLA almost as self-contained units and we do not seek to have bigger authorities taking over more and more ports simply because of a superficial geographical argument about estuarial authorities.
I repeat my doubts on the question whether the Bill, with the injection of money, will succeed. I do not believe that the Government have any choice in the matter. There is an absolute commitment to go ahead on this basis. I hope that there will be more success than that which I expect. We must resist any further subsidies going to any other ports. In the interests of the dock workers and the country as a whole, we must have a port industry that stands up to the test of competitiveness and commercial viability.
10.12 pm
Mr. Eric Ogden: The hon. Member for Faversham (Mr. Moate) steered a slightly erratic course before he arrived at his destination. He asked a number of practical questions, quite rightly, and he raised a number of rhetorical questions, also quite rightly. He sorted out his differences with my hon. Friend the Member for Newham, South (Mr. Spearing) about the impression that the House is giving on the question whether the experiment is doomed to failure, as my hon. Friend the Member for Newham, South fears, or is an opportunity that deserves more support than the Government are

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able to offer at this time, which is the view of many hon. Members on both sides of the House.
The basic question that the hon. Gentleman was asking was whether we are deciding that in the London area—whether it be the ports of London or the Port of London Authority—we are to provide a port dependent upon the amount of money that is available or whether we decide the sort of port facilities that should be available and then make the money available. Which is our priority? What can we do in London? Do we provide the money, or decide that there is only so much money available and that those responsible for the port should do the best that they can? That is the question that will have to be discussed in Committee, although I am not volunteering to take part in any Committee proceedings.
I confess—and this is meant to be praise for those who have spoken before me, some eloquently, and some eloquently but almost endlessly, but that is another story—that this evening has been one of the few occasions when I have learnt something from listening to all the speeches on Second Reading. Too often, I have been tempted to say that we should have a vote at the beginning of a debate and then have the debate, followed by a second vote to see whether the debate has changed anybody's mind. Tonight I have learnt much. First, I have learnt from my hon. Friend the Member for Hackney, South and Shore-ditch (Mr. Brown), who has briefed me consistently for 15 years on all matters concerning London. We happen to share an office here, and that is part of the rent that I have to pay to him. I have learnt also from my hon. Friends the Members for Newham, South and for Thurrock (Dr. McDonald). They told me more about the Port of London Authority and the port of London than I had known before.
I listened carefully to my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), who is a ports Member. In the North-West we think that Barrow is mainly a shipbuilding area rather than a ports area, but he is a ports Member. Equally, I learnt much from the Minister. I hope that I learn as much from the Parliamentary Secretary. When the Minister had finished
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speaking I knew more about the Bill, although I was less enamoured of it. The phrase "The £70 million for the port" sounds marvellous. Yet the Minister is in trouble because most of it has been pre-empted and already spent. However, I learnt much from him.
We are agreed that the money is to be available to the PLA and to those who are employed by that authority. At times tonight it must have been galling for Members from the London area to hear the debate almost become one about the ports of the Mersey. It must have been galling for them to listen to Second Reading speeches galore on something which was almost entirely out of order. However, I shall not go on about that in view of the present occupant of the Chair. He has been generous tonight. He knew exactly what was happening.
The Bill has implications for every other port. Therefore, I make no apology, as has no other hon. Member, for intervening. I admit to the right hon. Member for Crosby (Sir. G. Page) that I was literally sea green with envy at the way in which he connived to make his speech on the Bill, I trust that I do not embarrass him by saying that we are not exactly allies on this, but at least we are working in parallel. That should be of some consolation.
The Minister recognised that a Bill with this purpose was being prepared by the previous Labour Government and that such a Bill was one of the casualties of the general election. The Minister used the intriguing phrase that he was merely honouring inherited obligations. My local authority would say that this Government have inherited obligations on housing, not least on the sale of council housing, where apparently sales of council houses under the Labour Government were a great deal more than under the Conservative Government. They would say that the Government had inherited obligations about education. Teachers will come pouring into this place to tell the Government about the obligations which they inherited from the Labour Government. Social services workers and pensioners will do likewise.
I do not complain that the Minister has accepted this limited obligation, but I find it strange that he has done it in this way. In any case, there are significant differences between the Bill as proposed

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by the Labour Government and this Bill. This is a residual Bill. It is only part of what my right hon. Friends and their colleagues were intending.
According to clause 1(1),
"The Minister of Transport may, with the consent of the Treasury, give financial assistance to the Port of London Authority."
Clause 1(3) states:
"The Secretary of State"—
I presume that that is the Secretary of State for Industry—
"may with the consent of the Treasury reimburse the National Dock Labour Board".
The truest title for the Bill should not be Port of London (Financial Assistance) Bill but, rather, "The Treasury Veto on the Port of London (Financial Assistance) Bill". We know that no Minister, unless he is a particularly strong one—even stronger than the present Minister of Transport—can act virtually independently of Treasury advice, pressures and persuasion. But I can remember few Bills in which it is written that the Minister or the Secretary of State cannot act within their terms without the specific consent of the Treasury, especially as the Minister has now explained that at least 95 per cent. of the money has been pre-empted anyway. When we go into Committee, I think that that clause could reasonably be taken out without loss of face to the Treasury or to anyone else. It seems an unnecessary use of words.
There are some questions that I should like to put to the Parliamentary Secretary. Within the terms of the long title, I would argue that the way in which the money can be spent is tightly drawn. If there is any hope of the money being spent in any other way, in order to reduce the need for redundancies, I hope that the Minister can cheer me up a little. But at the moment, under the terms of the Long Title, the only way in which the money can be spent is on redundancy payments of one kind or another. That is my interpretation, and I hope that I am wrong.
If the money is to be spent on redundancy payments, severance payments or early retirement, what proportion of the money will the Department of Employment vote in order to carry on straightforward redundancy payments under national social services and social security legislation, thus leaving the severance and
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retirement payments to be carried by the Port of London Authority and the National Dock Labour Board? There are differences between redundancy payments, severance payments and early retirement payments. Will all those payments be included under the terms of the Bill, or will the redundancy payments be carried by the Department of Employment Vote? Now, at the risk of offending some good friends, in both the London and the Liverpool docks, the Bill will inevitably raise questions from those who are not employed in the docks industry about the differences in redundancy payments, severance payments and job loss payments within some sections of the public and private sectors.
A worker employed by the Liverpool local authority who becomes redundant receives straightforward national redundancy payments. A person employed by Meccano who becomes redundant receives straightforward redundancy payments. A person employed by the General Electric Company or by British Rail would receive straightforward redundancy payments if he became redundant. Some private companies provide a little more. In the public sector, people who become redundant because of Government controls and restrictions on local authority expenditure receive straightforward redundancy payments. Why should their taxes and allowances go to help people in the broad docks industry, and perhaps in British Steel?
People who are earning less than those employed in the docks or in the steel industry will be asking questions. Some people will say "Good luck to them". But for every person who wishes them good luck there will be 10 who complain that they could not receive such payments. This is a difficult question, but it is time that both the unions and the TUC examined the matter again, because the Bill will inevitably raise that sort of question. We need to find a more equitable way of dealing with the matter.
Clause 1(1)(b) provides for financial assistance
"for the carrying on of their undertaking while such measures are being taken."
That is very broad. In one way it could be interpreted—I hope that the Minister will say that it will be so interpreted—as support for measures that will reduce the need for further redundancies. If this

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can be done in that way, I would support it. But this is a broad brush. The Minister gave some information, but we need to know more.
We have been given some information about clause 1(5), dealing with
"Any grant, loan, guarantee or payment made … before the passing of this Act."
Even the right hon. Member for Crosby was confused on the question whether there are one or two loans for £25 million. Perhaps by means of a written answer or statement we could calculate how much of the £70 million has already been pre-empted, in what way, how far back the calculations went and what amount is left. What sums of money are we disposing of under the Bill that have not already been promised?
The Bill has serious implications for the Mersey Docks and Harbour Company and its employees, for all those who use the ports of the Mersey, for all district and city councils in that area, and even for the not yet created urban development corporation. I do not wish to be parochial, so let me refer to the Manchester Ship Canal Company. I am not causing any waves or panic. Merseyside Members of Parliament are asked by the Mersey Docks and Harbour Company not to oppose the Bill, not to cause the Minister any difficulties, and not to cause any waves. We do not wish to cause any difficulties, but we wish to point out that what is done in London inevitably affects every other part of the country. I do not ask for a national plan for ports—I am suspicious about strategic plans or national plans—but investment of this sort is extremely expensive. We seem to be acting in an imprecise, inefficient and impractical way. We have a competition in deciding what the customer may or may not want and then we have a whole trail of redundancies and waste of capital.
The main difficulty of the Mersey Docks and Harbour Board—as it was—for too many early years was that the managers were mainly committed to the shippers. The board and the docks were run for the shippers, not for the port and investment in the long term.
We are concerned and interested and want to support the Bill, but we shall be asking for more aid for the Port of London Authority, so that the area may have
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the kind of port that it deserves, and we will be asking for equal relative aid and support for the Mersey Docks and Harbour Company.
10.25 pm
Mr. John Prescott: A number of hon. Members have said that the debate has been interesting and valuable. I agree, and I do not use those words lightly. Hon. Members have contributed to a debate. They have reflected their experience over the years in their own constituencies. My experience as a seaman for 10 years and having worked as a docker for a short time means that I have a particular interest in the industry. Indeed, my maiden speech in 1970 was about the docks industry. To that extent, I have a close personal interest in the development of docks policy.
The Minister made it clear that he was wedded to a belief in competition. That is not unique for him. He has expressed that view in other pieces of legislation that we have debated relating to transport. Even though his belief appears to be flying in the faces of a number of operators, he is wedded to that belief in competition. That is clearly an ideological belief. I do not criticise anyone for having such a commitment. Mine is the opposite. It reflects my Socialist way of looking at these problems, and particularly how I develop my own solutions to them.
The Labour Party clearly reflects the interventionist view. This is a matter of record. Looking at the development of ports policy in the last two decades, we see a clear and distinct difference between the two major parties.
The Minister is going much further with his policy than previous Conservative Governments have gone, particularly in regard to the abolition of the National Ports Council, which was a Conservative-created creature in the days when quangos were not condemned as such and were readily created by Governments of either major party.
The Minister has shown that he understands some of the problems of decline. He mentioned traffic. I shall not refer again to the problems. It is clear that there has been a considerable decline in traffic not only for the Port of London Authority but for a number of established port authorities. I think that there is a

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connection between the established port authorities and the advantage of small being beautiful, as the hon. Member for Faversham (Mr. Moate) described it. There is an important lesson in that for port development which I want to draw out in my contribution.
The Minister indicated that the main problem was a decline in traffic. He referred to technological changes, as did other hon. Members—the great bulk ships for grain, raw materials, oil and petrol and the change to containerisation. All these matters have had a considerable effect on port development and investment. At the same time, they have wreaked considerable havoc in the loss of jobs.
I was glad that the Minister referred to the price that has been paid by labour due to the decline in traffic. Thousands of people have lost their jobs due to these changes. To that extent, a considerable price has been paid by those who work in this industry, particularly in the major ports. However, the Minister's conclusion seemed to be that there should be greater misery for the PLA because of his belief that as labour accounted for 70 per cent. of the operating costs of the port it was the major area for cost reduction.
I am not arguing that there is not a case for a reduction in manpower. A number of authorities have said that this must take place. Indeed, it is inevitable when one considers how the collapse of private employers in this industry has led to the need for the remaining employers, through the dock labour schemes, to take on the surplus labour. That has created problems. Therefore, even if one were not reducing the traditional labour force of the PLA, one would still be left with the problem of having to carry a surplus labour force with declining traffic, and that has created real problems for the PLA.
When referring to the Bill I found a little confusion. It seemed that on one occasion the Minister was saying that he felt that the way forward was to give this kind of finance to the PLA and to tell it that the Government would give it money at this stage, in the hope that the PLA would implement the manpower policy that the Government believe is essential to achieve viability.
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The Minister was attacked by his hon. Friend the Member for Liverpool, Waver-tree (Mr. Steen), who said "If the Government are giving this kind of money to London, why are they not giving it to Liverpool, which also has difficulty with labour costs?" Indeed, if one reads the statements of the Mersey Docks and Harbour Company over the past few weeks one finds that it is clear that the Liverpool docks have lost £7 million, £5 million of which is directly attributable to labour costs. To that extent, Liverpool has a case for asking for Government help.
The Minister relied on his argument that the present Government inherited the Bill from the previous Administration. He said "It really is not our Bill." I was not sure whether the Minister was actually endorsing the fact that the PLA merited financial help because if it was not helped it would go bankrupt. That is the reality of the present state of the PLA; it would be bankrupt without the proposed loans. That was the reality in 1978 when the Labour Government said that they were prepared to make such loans available to the PLA.
If the Minister inherited that commitment from the Labour Administration, he has not been prepared to inherit another commitment made by the Labour Government at that time, against the advice of the PLA. The chairman of the PLA at that time said that it was essential that the upper docks should be closed. My right hon. Friend the Member for Stockton (Mr. Rodgers) made clear that that was a price that he was not prepared to impose, because of the consequences that it would have for the community. He therefore made it a condition that this money should be given but that the upper docks should be retained as part of the plan. Hence the reason for the concentration strategy that is in the five-year plan of the PLA. The concentration strategy meant that the two upper docks, Millwall and India, would be retained as a service.
It is clear that the PLA, with a new chairman and in new circumstances, feels that the dispute and other factors, such as continuing losses, have no longer left it the option to retain those two docks. My point is that it is not simply a matter of inheriting the financial guarantees given by the previous Administration, because the present Government have not given

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the same guarantees in terms of the effects on the community.
The Government, and especially the Minister, are wedded to the philosophy of competition. That is the wont of this Government; it is evident from public statements made by the Minister. I have a copy of The Port for Wednesday 2 April, and the headline is "Fowler's message—Do it Yourself." He is reported as having said, at the annual luncheon of the National Port Employers Association,
"What the Government does not want to do is interfere in the way you are running your businesses."
The article continues:
"The previous decade had been marked by Government intervention in the industry. But the present Government intended to make the 1980s the decade in which 'this tide of intervention' receded."
That is a clear and unequivocal statement against intervention in any form. It is interesting and raises the question of Liverpool. Nevertheless, it indicates that the Minister clearly felt that intervention was something in which he was not going to be involved. Tonight, however, he informed the House that he was using the NPC to look at the claim of Liverpool about its financial difficulties.
The National Ports Council was originally designed to be a tool of Government intervention by an earlier Tory Government, who believed in a form of intervention. It stemmed from an Act of Parliament that was a direct response to the Rochdale report, which recommended a national ports authority. At that time the Conservative Government could not bring themselves to establish authorities; they much preferred the advisory role of the National Ports Council.
It is clear that there is a distinct difference between the two sides of the House on intervention. Previous Conservative Governments did not go so far as the present one appear to go. They saw a certain role for Government intervention. In many instances intervention has ensued from reports commissioned by Tory Governments.
A major inquiry into the ports was led by Lord Rochdale in 1961. That inquiry was established by a Tory Government, who were concerned about the obvious obsolescence and surplus capacity. I think that it will be generally agreed that the Rochdale report was one
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of the best reports on the ports. It recommended a national ports authority, reorganisation, a national plan for the development of the ports, and the end of the deplorable nineteenth century casual labour practices. The Tory Government's response was to establish the National Ports Council.
The council does not have a great deal of teeth, but I regret that it is leaving the scene. What is to replace it, if anything? The Government say that they do not intend to intervene. However, the council has an appeals function. Only a week ago I brought to the Minister's attention the fact that the council had that function. It was intended to deal with monopoly powers. For example, Sir Humphrey Browne, of the British Transport Docks Board, rules more by his head than his heart.
Mr. Fowler: A nationalised organisation.
Mr. Prescott: Indeed. It has the greatest return of all the port authorities. I know why that is so. There are many who are redundant in the area that I represent, and those redundancies indicate clearly why Sir Humphrey's policies are so successful.
When shippers want to appeal against the charges that may be imposed upon them by the ports, they appeal to the National Ports Council. What does the Minister propose to replace that appeal function? I read in one report that he was considering transferring the role to the British Ports Association. Surely that body cannot have an independent function. When the Parliamentary Secretary replies, he may indicate the Government's thinking on the appeal function. It seems that the Government will be identified as intervening in a form of price procedure.
Labour's policy is evident in intervention. That is very much what the Rochdale report recommended. From 1964 to 1970, the then Labour Government embarked upon a massive investment programme. That is relevant to the programme of capital debt charges and the reconstruction of capital, the latter going very much to the heart of the PLA. The Rochdale report called for a massive investment programme, and that was implemented by the previous Labour Government, especially in the London

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area. There was massive development in the Tilbury area in containers. There was the programme of decasualisation. Unfortunately, the Labour Government were thrown out of office before they could enact the Bill that was designed to reorganise the industry.
It was also a traumatic period for the port authority. It provides one of the first examples of a Government embarking upon competition yet failing to help when the Mersey Docks and Harbour Board collapsed. One of the first debates that I heard on docks policy shocked some Conservative Members. They argued that widows who had invested in the Mersey Docks and Harbour Board would have to pay the price of policies pursued by the various users of that port. Those users exploited the Mersey Docks and Harbour Board and refused to allow it to charge the proper amount for using its facilities.
At the same time, a White Paper was published embodying the policy that there should be a great financial commitment and that there should be a commercial policy. Indeed, it was envisaged that there should be a 13 per cent. return on capital. Once again, the financial obligations on the port authority were wedded to competition. What happened? In the 1970s there was, as the Minister said, a decline in trade. There were great technological changes and container and bulk vessels provided the major form of traffic. When spelling out those developments, the Minister failed to understand the full consequences and effect on our British ports policy. Those developments did not affect all ports equally. Ports were affected in different ways.
London and Humberside were affected by the developments in bulk grain. Huge ships were concentrated in Europe and grain began to be transhipped from Rotterdam, Antwerp, and so on, to our ports, thus creating a major problem in our port development. Why did they choose Europe? Touche Ross showed that costs in European ports were considerably lower than here. We force our ports to carry charges that are greater than those carried by our Continental competitors, such as Rotterdam and Antwerp. Other hon. Members have detailed the low interest rates, and so on.
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I have spent most of today in Dover, looking at the port and the problems of road construction. I spoke to the port authority and discovered that £6 million of its new £20 million investment will be spent on providing customs facilities. Those facilities are not paid in Europe. Port authorities in Europe raise their capital via the rents and leases of their users. High interest rates will have to be paid by the Dover authority. Touche Ross reported in 1972, and I have given the current example of Dover. We penalise our ports. As a result, our ports are disadvantaged.
When looking through my files, I found a speech made by John Lunch, managing director of the Port of London Authority, in 1974. He warned then that
"It is well known that Continental ports have many of their costs borne by local or central government and provide special inducements to industry in the form of cheap land, low interest rates etc., since the main objective is to attract basic industry to seed economic growth. In contrast the financial policies for Britain's ports are probably at the extreme of world practice. We require our ports to bear all the costs and to charge the customer accordingly. Hence British ports always appear to the user to be much more expensive than Continental ports."
That is the subsidy argument. He continued to discuss British ports and said that if we allowed that practice to continue, transhipping would make Britain a feeder port rather than a major port. That is exactly what happened.
It is interesting that Mr. Lunch made a point that I would also make about nationalised industries. He said that if we looked at our ports we would see that it was not the type of port that determined whether it was a successful example. Some nationalised ports made a profit. Some local authorities make a loss, some trust boards make a profit and some make a loss. The type of ownership does not determine that. Mr. Lunch said:
"All the ports I have described"—
Antwerp, Rotterdam and Dunkirk—
"are of course in national or municipal ownership. I mention this to avoid any political distraction in this paper. It is organisation of ports that matters—irrespective of ownership."
I add that it is not only ownership but the geographical situation that affects the development of a port. Trade has changed in a major way.

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Transhipment of trade had a major effect on our ports, because it meant that smaller ships were carrying cargoes to this country. Of course, they could be dealt with by smaller ports. We started to see the diversion of traffic.
The ship owner has a mobile asset. We found that when London was blackmailed on the question whether meat boats should go to Southampton. All the port authorities vied with each other for the traffic. That was one of the grave problems in our port development. Competition has been a major factor.
The Minister's mistake is to assume that all ports can compete equally. It is just not true, and it flies in the face of the evidence in all the reports that we have received since the Rochdale inquiry. The Minister does not have to take my word for it. Any port operator will confirm it.
There has been a decline in traffic, but some ports benefited while others faced a major decline, for a number of reasons. In Humberside we lost 1 million tons of traffic in grain and timber, and so on, which bypassed Hull and went to the small wharves. The reason was that the price was considerably cheaper. Once again, the House does not have to take my word. The National Ports Council, under Lord Aldington, whom the Tory Government appointed, analysed the facts in 1972 and found that the major expansion was in the small scheme ports, the traffic in which expanded by about 80 per cent. between 1966 and 1971, compared with an expansion of only 23 per cent. in the large scheme ports.
What happened in Hull was repeated in the Port of London. Traffic went to the small wharves, where we had the problem of registered, as against non-registered, labour. We can see how traffic diverted to the Medway and other parts of the South-East. There are cost difficulties for a port at that end of an estuary.
The point is that the community spent millions of pounds to provide container cranes and big conventional ships. The traffic that was diverted represented much of the bread-and-butter earnings of the ports.
The National Ports Council report in 1972 made clear why it was cheaper to go to the smaller ports—wages were considerably lower and benefits and holidays were considerably less. However, that was
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not the major factor. The main factor was the high capital charges that major ports had developed in the decade after Rochdale, when they were encouraged to make massive investments.
The NPC report said that the proportion of debt to capital employed in the larger ports was 75 per cent. In the smaller scheme ports with which comparisons were made it was as low as 26 per cent. That made a big difference in getting the money back in charges at the dock. The major ports were at a great disadvantage. Apart from the trade and technological developments being against them, the capital debt structure that we had imposed on the port authorities was also of considerable consequence.
This is exactly the argument of the Port of London Authority. All these problems came home with a vengeance to the port of London, which was at the end of an estuary. There are all the costs of estuarial development. The port may have had them as costs or it may have made a profit, but the reality is that the ship owner had to pay to come up the estuary before he went into the dock. Therefore, the port could not compete with Medway, Felixstowe and the others that have a cost advantage and can then ask for investment to be sanctioned by the National Ports Council and secure an agreement with overseas traders to come to their ports.
What happens to the ports in which the community has invested hundreds if not thousands of millions of pounds of public money? Whatever the answer, the authority is left with a debt that is not totally of its making. In some cases it comes about because of circumstances outside its control. Sometimes there is an argument about labour practices, but it is not the sole problem. That is one of the grave weaknesses of the analysis that we have received tonight in connection with the Bill.
The authority has lived with crisis for a decade. It has lived on its reserves of £53 million since 1953. As we found in 1978, it is in crisis, the crisis now being bankruptcy. Without that money, it would have been insolvent. That was the only reason for any Government intervention. Was the authority to be allowed to be insolvent because of the commercial market—the dictates of competition?

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That was the issue that the Labour Government faced, and they said that they would provide the money. The present Government also faced that issue, whether or not they inherited it. They could have backed away from it if they had wished.
I accept that it was not an easy decision, but the Government inherited the responsibility to bring the Bill before the House. The crisis is considerable. It will not go away. We shall live with it for many years, as the five-year strategy report clearly shows. The previous Government made clear, despite the fact that the authority wanted to close the upper docks, that a condition of giving the money was that they must be retained. So it is not exactly the same kind of inherited commitment.
The Minister indicated that, as we on the Opposition Benches believe and I think the authority believes, there must be a financial reconstruction for the authority. There is no argument about that if it is to return to viability. The Minister prayed in aid the Price Waterhouse report. Unfortunately, having been in Dover today I was not able to read all of it, but I have read parts. I was referred to the section on capital reconstruction. The Minister rightly pointed out that perhaps one should wait to determine the labour practices before any consideration of financial reconstruction. But implicit in that remark is the recognition that, to quote from the report,
"In due course, there may be a case for a limited reconstruction based partly on bringing liabilities and assets into balance and by reference to profitability and cash flow objectives."
Price Waterhouse recognised that there would have to be a financial reconstruction. Does the Minister accept that possibility in principle? I hope that the Parliamentary Secretary will answer. If the Minister accepts that that is a possibility, given satisfaction on all the labour practices, which is what he said he wanted to achieve, he accepts that he will intervene in a financial reconstruction. It cannot be achieved without Government agreement and a Bill. In those circumstances, it will be another intervention on behalf of the authority.
The Minister will have to decide whether that is to be a matter of policy or simply an intervention. The hon.
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Member for Wavertree and other hon. Members from Merseyside will again be asking what the difference is between the two ports.
We say that the policy for all ports should be consistent. Ports policy should not be determined by intervention when an individual port goes bankrupt.
It is crazy to believe in competition and non-intervention as a policy. It becomes increasingly evident from Government statements that that is their only policy. Doubtless the Parliamentary Secretary will reiterate that.
Our major concern is that the Minister believes that the emphasis should be on further manpower reductions to solve the problem. If the closure of the upper docks is to be justified by manpower considerations, the same must apply to the Royal docks.
On 8 May 1978, the right hon. Gentleman asked the then Secretary of State:
"Do the Government accept the view of the chairman of the PLA that over the coming months the Port of London will have to be slimmed down substantially, but that if that is done there is no reason why the port, based on Tilbury, should not prosper?"— [Official Report, 8 May 1978; Vol. 949, c. 772.]
Is that the right hon. Gentleman's view now? Does he believe that the Royal docks have to close and that the Port of London Authority should concentrate on Tilbury? I hope that the Parliamentary Secretary will make that clear.
If the dockers are co-operating with the Government, it is in the belief that the Royal docks will be maintained. Does the right hon. Gentleman still believe, as he and Sir John Cuckney believed in May 1978, that the Royal docks have to close in order for the PLA to be viable? I do not believe that he will get co-operation from the industry for such a proposal, which will have a major effect on London development.
We support the Bill but deplore the fact that there is no condition as we laid down regarding the upper docks. We warn the Government that it is a mistake to believe that more redundancies will achieve viability, which appears to be their policy. The five-year report and Price Waterhouse demonstrate that that is not so. Ideological belief in competition also will not solve the problems. The Government are in danger of returning to the bitter dock wars of the 1970s, which

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damaged all and did little for port development.
10.57 pm
The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): I agree with the hon. Member for Kingston upon Hull, East (Mr. Prescott) and other hon. Members that it has been an extremely informative debate, which covered a wide area. Practically every hon. Member who has spoken has promised—I almost said threatened—to pursue his detailed points further in Committee.
Sir Graham Page: I trust that we shall not have a replay, such as Arsenal and Liverpool will have to have after tonight.
Mr. Clarke: It is appropriate that the Liverpool v. London conflict should take place on the football field tonight. There have been times when a Liverpool v. Arsenal match has practically been played on the Floor of this House. I am not sure whether the Government are referee or victim. I trust that we shall not replay this debate for too long.
I shall have to reserve some matters for Committee, not least because I have less time now than several hon. Members took in the debate. The debate ranged widely. We covered the history of ports policy and the whole basis of regional policy in the North-West, and my hon. Friend the Member for Liverpool, Waver-tree (Mr. Steen) went on to deal with discrimination against Liverpool's ports, as he saw it. I shall confine myself to answering specific points about the Port of London Authority and explaining the basis of the Government's policy in the Bill towards that port. I shall also try to deal with the points made by hon. Members from the North-West about how the Government reconcile that policy with their treatment of Merseyside and other ports in the country.
The fundamental purpose of the Bill is to seek to enable the Port of London Authority to continue to deal with the dramatic change that has been taking place in the ports industry in this country.
My hon. Friend the Member for Faversham (Mr. Moate) was quite right and was not exaggerating in any way the extent of the change that has taken place in cargo handling generally throughout
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the docks industry in this country. The so-called container revolution has had a dramatic effect on dock practices, particularly in some of the larger traditional ports. London, as the largest of our traditional ports, has had to accept change on a massive scale. No one throughout the debate—including my right hon. Friend and myself—has underestimated the impact of these changes in cargo handling on the docks industry, and the consequent effects on employment for the communities themselves.
We pay tribute to what has been achieved in both London and Liverpool by way of dramatic reductions in the total labour force which were inevitable in the face of technological change. A considerable degree of co-operation and resourcefulness has been shown in accommodating the change. Unfortunately, as we see from the difficulties which these ports and some others still face, we still have to accommodate change if we are to deal with these problems successfully.
I was asked what aim was being set by the Government for the PLA and those involved with it, as indicated by the contents of the Bill. The aim set for the PLA is to cope with its major problems and to return to profitability by 1983. That is the target set for itself by the PLA in its strategic plan. It is the Government's opinion—I understand that it is also the authority's opinion—that that is a realistic target, although no one denies that it will be a very difficult target to achieve. But it is one that the management and work force of the PLA have to face, because that is the financial climate within which they have to operate and that is the target that they have to set themselves if they are to give long-term security to the port by putting it back on to a competitive and financially sound footing.
The Bill sets out the tight financial limits within which the authority will operate and it offers assistance in reaching those limits in one specific area only —that is, in helping with the considerable costs of reductions in manpower that will be involved in getting to that target and in assisting the port to trade during the period that has to go by before it can get its manpower down to the necessary level.
There has been a great deal of comment about the fact that the Bill is

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narrowly confined to the reductions in manpower and the severance costs. No one is pretending that that is the only problem facing the Port of London. There are other problems involved, not least its geographical situation, the closed docks in particular being a considerable way up the estuary. But there is a world decline in shipping trade, and several other problems have been touched on in the debate. Nevertheless, there is no getting away from the fact—even when we touch on the other factors—that the nub of the problem in the Port of London is that it continues to have excess capacity for any trade that it is likely to attract, and that in particular it has excess manpower and working practices which weaken its competitive position.
There is no way in which we can avoid the fact that the nub of the issue is the continuing need for severance of manpower in order to get down to a labour force which is able to be gainfully and efficiently employed on the trade that will come into the port and to those parts of the port that can trade successfully. That factor is the one identified by this Government and by the previous Government as the one where the Port of London Authority needed financial assistance.
Labour Members have tried, for understandable reasons—I can appreciate them, because most of them represent Port of London Authority areas or dock areas—to distinguish between our aims in the Bill, with the concentration on severance costs, and the aims of the previous Government. They have tried to claim that the inherited obligation, as my right hon. Friend described it, has been changed by this Government and that we have introduced as a new element the concentration on severance costs.
I remind the House of the statement of the Secretary of State for Transport in the previous Labour Government, when he began this policy. In reply to a question by the then hon. Member for Hornchurch—Mr. Williams—he informed the House, as he had already informed the Port of London Authority, that the Government were
"prepared to provide financial assistance towards severance costs for registered dock workers and stair, on condition that the Authority sets in hand urgent measures, in cooperation with its trade unions, to secure the
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most rapid possible rundown of surplus manpower".
That was the basis of the financial assistance.
The Secretary of State said:
"Up to £35 million in grants will be made available towards severance costs as they arise, together with any necessary backing for further borrowing for the financing of the undertaking while manpower reductions are being achieved, up to £10 million. I have requested the Port of London Authority to produce a detailed costed plan as the basis for Government financial assistance, after further discussion with the trade unions, designed to establish the specific targets of manpower reductions. No grant assistance will be provided until this plan has been submitted."
The underlying theme of the financial commitment by the previous Secretary of State was that he accepted that he had to intervene to achieve manpower reductions. He also mentioned the closure of the Royal docks on the understanding—not a condition—that no steps were taken towards their closure. That was not a permanent guarantee. Active measures were being proposed by the PLA to close the Royals.
The then Secretary of State said:
"Both the Authority and the unions are being told that I will review the position at intervals and monitor improvements in performance to ensure that progress justifies continuing in this way. The provision of grant assistance will be contingent upon results."—[Official Report, 31 July 1978; Vol. 955, c. 169–70.]
Mr. Prescott: I have no doubt that that grant was for manpower reductions. Whether the Royals should close was not an issue. Mr. Cuckney made clear that his strategy was that the Royals should close. Mr. Cuckney even considered resignation. He had to maintain the continued operation of the Royals. I thought that that was common knowledge.
Mr. Clarke: That was not the underlying basis of the financial commitment, nor was there any guarantee. It was clearly said that although the proposed closure of the Royals was postponed, the matter would have to be reviewed according to progress. That happened just before an election. Since then the Royals have not closed. No one insists that they should. The present management has closed the India and Millwall docks because of unsatisfactory performance and because of the costs of a strike. The Royals remain open, but their future is tied up with the future of the PLA. It

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depends upon the performance of management and workers. We are dealing with financial provision for severance.
The hon. Member for Liverpool, West Derby (Mr. Ogden) asked me to make clear to what extent we are continuing a previous commitment and how much of the previous Secretary of State's money had already gone. That was also mentioned by my right hon. Friend the Member for Crosby (Sir G. Page). The previous Government spent most of the money. They did so on the Estimates and on the authority of the Appropriation Act, having undertaken to Parliament, in a footnote that few noticed, that they would legislate in due course to give themselves full authority to spend money that they had already spent. That is a proper procedure, but much of the money has already been spent.
I have been asked how much is committed. The right hon. Member for Barrow-in-Furness (Mr. Booth) asked how far the commitment to make grants for severance extended. He asked whether it was proposed to limit the commitment to the severance that would arise from the closure of West India and Millwall docks. It is not. The commitment in the Bill covers the whole period of reduction in labour force that is necessary to achieve the target of financial soundness by 1983.
The total amount of money for reverence payments remains at £35 million, as envisaged by the previous Secretary of State, divided between severance payments for staff and repayments to the dock labour board for payments under the dock labour scheme. We have increased that sum by £5 million to allow for inflation. Of that £40 million total, £19 million has been paid—£11·4 million to registered dock workers and £7·6 million to staff.
The Bill gives backing to two separate commercial loans, totalling £25 million, of which £23 million has been taken up by the PLA. The Government have offered backing for an overdraft facility, should the PLA require it, of £5 million. That has not yet been taken up. Therefore, £47 million of the £70 million has already been committed. It is a commitment that we have inherited. We envisage that the remainder, within the £70 million limit, should enable the
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management and the men of the PLA, as long as they successfully tackle the task that faces them, to return to profitability by 1983.
The Bill commits the Government to a figure that, in our opinion—supported by the Price Waterhouse report and the other information before the House—is the minimum required by the PLA to tackle its problems and move towards profitability.
Mr. Spearing: Does the Minister agree that the point that has been made from the Back Benches is that, irrespective of any difference between the Front Benches, money itself is not enough? The money will help and may be fundamental. That is what the Government can give. However, does not the hon. Gentleman accept that those of us from the area believe that there must be some further inquiry and consideration of the practices of both labour and management so that that money will be effective? That is the burden of at least some of our speeches. Will he say whether he agrees with that and what he will do to further that aim?
Mr. Clarke: I shall deal with the Select Committee point in due course. I agree that money alone will not be enough. What is required is decisions by the management and the work force of the PLA to reorganise the business of the port to achieve financial viability. That involves decisions on the sort of traffic that it will attract, how to attract it, manning levels, working practices and the other problems that the PLA has to tackle. All that the Government are setting out are the financial climate within which it will have to operate and the Government's commitment to the cost of the severance payments, which we inherited as an obligation from our predecessors and which the PLA cannot finance out of its own resources.
We are committed to severance costs only. I shall return later to the points raised by my hon. Friends from Merseyside. The Government are anxious to make it clear that we are concerned only with the cost of severance payments plus the necessary loans to keep the PLA trading during the period in which it must reduce its labour force. There can be no question of turning that commitment into a general operating subsidy for this port, or for any other, for the perfectly

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natural reason that as soon as one admits the policy of operating subsidies to a certain port there is no reason why competing ports should not come along and say "We have a case for an operating subsidy that is every bit as good as that of London."
I wish to deal with the claim made by the PLA-based Members that it would be right to extend that commitment to what I would describe as a more general operating subsidy. They claimed that the PLA was entitled to a capital reconstruction. I refer hon. Members to what my right hon. Friend the Minister said when he opened the debate, to illustrate that the Government and Price Waterhouse have reached the conclusion that the case for capital reconstruction is not valid.
When I talk of a port returning to profitability and a sound financial basis, I include in that the need for it to service its capital debt, just as any other business does. To move to a general proposition whereby one claims that when a business is in serious difficulties it is entitled to write off its accumulated capital debt by a so-called capital reconstruction is very near to saying that there is a case for a continuing subsidy for that port vis-a-vis its competitors, most of whom will not be relieved of the obligation to service their capital and will continue to carry their capital debt.
I have been asked to deal with the question of the general subsidy that it is said is enjoyed by foreign ports, particularly those in Western Europe. That claim is then used to justify saying that there should be a continuing subsidy to London and, presumably, to other ports because, it is said, that is the Continental practice and our ports cannot compete with them.
The Touche Ross report has been referred to a number of times as the basis for this argument. It was published in 1974 and compared four subsidised Continental ports with three unsubsidised United Kingdom ports. It certainly concluded then that the subsidy enabled the Continental ports to set their dues considerably below the levels that would prevail if they operated on a commercial basis.
However, although Continental ports compete with each other, there is no real competition between them and United
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Kingdom ports. Hon. Members, particularly from the Labour side, have talked about the transhipment trade and have said that that is where the competition arises. However, a recent National Ports Council survey showed that transshipment amounted to only 7 per cent. of United Kingdom deep-sea imports in 1978 and about 5 per cent. of deep-sea exports. In any case, transhipped goods still have to enter or leave the United Kingdom through a port. That was the point that I tried to make in my letter to the hon. Member for Newham, South (Mr. Spearing). It sounds a trite remark to make, but it is significant.
The basis upon which the Continental European ports are competing with each other is that they are trying to attract trade into Continental Europe through their respective countries. If by some form of subsidy one can get traffic to go in through, for example, Hamburg, one stops it going in through a Dutch port such as Rotterdam. French, German and Dutch ports seem to have a habit of trying to attract traffic by way of subsidy, leading to international competition of what I would regard as a fairly undesirable kind.
However, all goods come into Britain by way of some port, for the elementary reason that we are an island. Competition in subsidy in this country will therefore be only between different British ports and will affect only the way in which the goods come in and the ports through which they enter. There is no basis for our going into some system whereby we encourage our ports to attract traffic to each other on the basis of subsidies that they can win from Government. The competition faced by the Port of London Authority comes from other United Kingdom ports, such as Felixstowe and the Medway ports, and it is Government policy that ports in this country should compete freely with each other on the basis of price and service without Government subsidy.
The Touche Ross report was concerned with port dues and not with cargo handling charges, which are a much more significant part of port costs, so the kind of comparisons made by the hon. Member for Thurrock (Dr. McDonald) are a great simplification of the position. It is in cargo handling costs, on which there is no evidence that the Continental ports go

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in for any degree of subsidy, that the biggest differences arise between London and many of its competitors. It is in overmanning and working practices that London could do most to improve its competitive position vis-a-vis other ports with which it is undoubtedly in contention at the moment.
That takes me on to the question how we relate this to the practice towards other ports. Merseyside has been concentrated on because it is the other large traditional port that has problems involving the seeking of manpower reductions, although its problems are not on the same scale as the problems of the PLA. I have already sought to emphasise that the assistance to the PLA is for a period to 1983. It is related only to the substantial problems of manpower severance that it faces. That commitment was inherited by us from the previous Labour Government, and most of the money involved had already been committed by them before today.
We shall not seek a generalised subsidy for other ports, as my right hon. Friend made clear when he had to make the difficult decision about the port of Preston. We received an application for a further grant, but the point had to be made that we could not justify further grants to it.
We have made clear that in the Government's opinion there is no case for a grant to the Mersey Docks and Harbour Company because, I am glad to say, we feel that that company is in a position in which it does not and should not need such a grant. By taking the necessary steps it can put its house in order, and it can put itself in a position in which it can finance the necessary severance costs from its revenue.
I understand why my right hon. and hon. Friends feel strongly that Mersey is in some way being discriminated against. I have heard it said before that Merseyside is somehow being singled out for unfavourable treatment, but, with respect, I do not believe that my right right hon. and hon. Friends are able to support that contention. I know how strongly it is felt by some of their constituents.
My right hon. Friend the Member for Crosby referred to competition with State-subsidised ports, and, among others, he cited Southampton. With great
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respect, the British Transport Docks Board is not subsidised in that way. It pays a fully commercial rate on its loans. It is in fact repaying debt early from revenue, because of the way in which it is managing its business. In any event, although it is at present a successful State-owned organisation, we are proposing to bring forward proposals that will introduce a substantial amount of private capital into that board. On all counts, there is no quesion of a State-subsidised competitor.
There has been no general practice on Merseyside of the Government accepting a duty to compensate authorities for any sort of labour severance, although there have been occasions when, as a national measure, grants have been made to the National Dock Labour Board to support the severance of registered dock labourers.
In 1972, £30·5 million was devoted for that purpose to a national severance scheme in which Mersey was a participant and from which it was a beneficiary. But Mersey, because of its particular unfortunate history, has also had other assistance. Following its bankruptcy in 1970, Mersey's capital debt was written down in 1972 by 60 per cent. We are in the perverse situation where Mersey has had capital reconstruction but is not being helped with severance, and where London has not obtained capital reconstruction but is being helped with severance. I am in no way critical of Members from Merseyside who ask for money for severance or of Members from London who ask for capital reconstruction. Many other ports in Britain actually pay the cost of their severance out of their earnings from revenue.
We believe that the interest of the user is best served by an arrangement whereby the docks compete with each other by way of service and efficiency to get the traffic that they need in order to support themselves from their own revenues.
Mr. David Alton: Nearly an hour ago, the point was made that the basic problem of Merseyside is that the Mersey Docks and Harbour Company is making a major trading loss and that £5 million of that loss is accounted for by severance pay over the last year. About 500 people in the dock have become unemployed in the first three months of this year. It seems to me

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and to other Merseyside Members that unless some assistance is given in an area where the unemployment is twice the national average, more dock workers will become unemployed. We cannot walk away from that. I understand from what the Minister said earlier that he might be prepared to consider an application from the Mersey Docks and Harbour Company if it asked for assistance, and yet he has just said that he is not prepared to do so.
Mr. Clarke: With great respect, the hon. Gentleman was not here when my right hon. Friend opened the debate. My right hon. Friend dealt with the present position on Mersey, including the history of relationships between the Mersey Docks and Harbour Company and the Department of Transport over the last few months. I am glad to say that at the present time, with the assistance of the National Ports Council, the Mersey Docks and Harbour Company is reviewing its position and is searching for ways, which we believe can be found, of getting that port back to profitability and a financially more secure position. There is no basis, as has at present been established to us, for a grant for severance or for any other purpose.
As someone said earlier, there is no reason for a background of complete defeatism and gloom about either of these ports. Indeed, it is necessary for us to guard against the constant temptation to find excuses for the present difficulties of these ports and to run away from the main problems, which are unfortunate but necessary, arising out of technological change, which has given rise to overmanning and excess capacity.
It is also no use pretending that somehow these ports cannot be brought back to profitability and a sounder financial basis. There is every reason to believe that both can.
Mr. Ogden rose—
Mr. Clarke: We are running out of time, and I have given way at least eight or nine times. I shall take up further points in Committee, but I suggest that it would not be right to have a Select Committee or any further inqury of the kind sought by the hon. Members for New-ham, South and for Thurrock.
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I do not think that the Port of London Authority needs many more inquiries and studies. It has had three Price Waterhouse reports. I do not think that at this stage it would help for an inquiry to take place which would seek deeply to involve this House or anyone else in management decisions, which must be taken by the responsible management of the PLA, or even to involve us in decisions which must be taken as a result of negotiations between the management and the trade unions with regard to manning levels, working practices and so on.
In the end, it is the responsibility of those in the port to respond to the challenges which face them in order to get the port back to profitability by 1983. The kind of decisions which have recently been taken by the management, in the case of the West India and Millwall docks closure, and the response of the labour force to that, as evidenced by the encouraging decision of the labour force last week, shows that they are capable of responding to what is needed. As a result of the help given by the Bill, I believe that they could return to profitability. That is the target that the PLA must set itself.
During the debate hon. Members asked what would happen if the Bill proved inadequate, if the financial limit was not enough or if the PLA failed to achieve its target. Let there be no doubt. The Government expect the management and everyone concerned with the PLA to take the necessary steps to keep within these financial limits. In our opinion, there is no good reason why they cannot do so, and the decisive steps that they have already taken are a good indication that they are capable of doing so.
With regard to the docks industry as a whole, we shall not slip into a position of general subsidy for that industry or of preferential treatment of one port against another. That is the background of policy, and the Bill contains the financial limits within which the PLA must work. I am sure that it can be successful. I am sure that everyone hopes that it will be successful in its declared aim of winning a secure future for Tilbury, the two remaining upper docks and for those who work in the PLA, to the great benefit of the community in docklands. The Bill is an essential step in helping it towards that aim, and I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Newton.]
Committee tomorrow.

PORT OF LONDON (FINANCIAL ASSISTANCE) [MONEY]
Queen's Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to provide financial assistance for and in connection with measures taken by the Port of London Authority to restore the profitability of their undertaking by reducing the number of persons employed by them, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament of any sums required by any Minister—

(i) for giving financial assistance to the Authority for such measures and for the carrying on of their undertaking while such measures are being taken, and

(ii) for reimbursing the National Dock Labour Board for any payments made by them to dock workers who become entitled to compensation from the Board in consequence of measures for which financial assistance is provided under that Act and

(b) the payment of any sums into the Consolidated Fund.—[Mr. Newton.]

11.30 pm
Mr. Eric Ogden: There is one point about which I should like to ask the Minister, who was not able to give way for obvious and understandable reasons during his remarks. The hon. Gentleman and the Government are falling into possibly the worst of all situations. When there was a National Ports Council and money could be provided for severance for reductions in this narrow area to which the Bill is applied fairly across the country, at least there was a fair system nationally. No one complained that by subsidising severance in one area we were discriminating against another. By choosing the Port of London, which is in need, other areas are automatically disadvantaged. Perhaps the hon. Gentleman will look at this matter between now and Committee.
It is no use arguing the second point made by the Minister—that the previous Labour Government's Bill was aimed exclusively at redundancies or severances.
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That was one of the principal purposes of the Labour Government's Bill, but there were many other purposes for which the Bill was proposed to reduce the need for redundancies.
I ask the Minister to look at those two points and in Committee to try to give some clear explanation of the difference between redundancy payments, on the one hand, and severance and early retirement payments, on the other. They are vital to the progress of the Bill.
11.32 pm
The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): On that point, which is relevant to the money resolution, I have to make it clear that there has not been any national system whereby all severance payments were paid across the board nationally. The National Ports Council still exists and has not been involved in the administration of the dock labour scheme. The National Dock Labour Board administers the dock labour scheme. My right hon. Friend the Secretary of State for Employment has some responsibility for that scheme. It is for that reason that he is cited in the Bill. Normally, the dock labour scheme works on the basis that the payments to registered dock workers are paid and financed out of levies imposed on the ports.
There came a stage in March 1978 when the Port of London Authority was incurring liabilities to registered dock workers which exceeded its capacity to finance out of its own levy. It was on that basis that the sum to which I referred—£11½ million—was paid by the Government as a grant to the National Dock Labour Board to reimburse it for the costs of paying to London sums not covered by levy from London.
The position now is that the NDLB expects that the rate of severance of registered dock workers—it has to be voluntary severance—will not exceed the capacity of London to finance out of levy. Therefore, the money that is not taken up now is likely to be used by the Port of London Authority for severance payments towards the other staff—the non-registered dock workers.
We can go into that point in Committee, but that is the background to it. However, it supports what I said

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before. There is no precedent for a generalised continuing system of subsidy towards all redundancy payments in the docks industry. Certainly, for the reasons that I gave, the Government have no intention of slipping into such an obligation towards all docks. We believe that they are all capable of organising their business so that they can cover these costs out of revenue that they earn.
Mr. Anthony Steen: Is my hon. Friend saying that the intervention in London is solely because of the likelihood of bankruptcy if there were no Government intervention? If so, if the Mersey Docks and Harbour Company were to go into bankruptcy, would he intervene on that basis?
Mr. Clarke: If I may treat that as an intervention, I am definitely not saying that. In our opinion, there is no reason why the Mersey Docks and Harbour Company should contemplate bankruptcy. We hope and expect that, as a result of the work going on by that company and the National Ports
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Council, it will be able to produce a plan which will get it back to a sound financial footing in the very near future.
The basis for assistance to London is on quite different grounds. It is not bailing it out from bankruptcy. It is taking over what is left of this commitment to deal with the short-term problem of severance payments.
With respect, it is most unfortunate when hon. Members from London and Liverpool—I do not say this too critically —keep reverting to the possibility of what happens if their port goes bankrupt. I hope that they do not allow that approach to life to affect the thinking of too many of their constituents who are concerned with the docks. Other ports do not go bankrupt and there is no reason why London or Liverpool should go bankrupt. They face difficult and dramatic changes to which they must adjust. The Government expect them to adjust to these changes and have every confidence that both ports are quite capable of returning to profitability.
Question put and agreed to.

SHIPBUILDING INDUSTRY REDUNDANCY PAYMENTS (NORTHERN IRELAND)
Mr. Deputy Speaker (Mr. Bernard Weatherill): We move now to the two orders on aircraft and shipbuilding. I understand that it would be more to the convenience of the House if they were taken separately.
11.35 pm
The Minister of State, Northern Ireland Office (Mr. Hugh Rossi): I beg to move,
That the draft Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) (Amendment) Order 1980, which was laid before this House on 12th March, be approved.
The redundancy payments scheme for shipbuilding workers to which this order relates derives its authority from the Shipbuilding (Redundancy Payments) Act 1978. One of the provisions of that Act was to place an upper limit of £100 on the previous earnings to be taken into account when calculating the redundancy payments to be made. The effect of the upper limit is that those who earned less than the limit have their benefits calculated on the basis of their actual earnings but those who earned more than the upper limit have their benefits based upon that limit.
In July last, the Government introduced an amending order extending the life of the scheme for two years, to the end of July 1981, and at the same time increased the upper limit to £110. The draft order increases the upper limit still further, to the sum of £120, effective as from 1 February last. This is, therefore, a minor but useful improvement in the existing scheme, bringing it into line with an increase in the upper limit recently made to the general redundancy scheme under the Employment Protection (Consolidation) Act 1978 and has already received approval in another place.
I trust, therefore, that the House will regard the draft order as being uncontroversial and allow the improvement to be made. However, as the order relates solely to Harland and Wolff, perhaps it might be appropriate for me to make a comment on the situation there. This shipyard currently has a work force of 7,100. To date approximately 1,440 Harland and Wolff workers have benefited from the redundancy payments scheme.
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The total cost has been approximately £3·5 million, the average lump sum payment being about £1,505, which is similar to that for the workers of British Shipbuilders.
Although 470 more workers have been declared redundant, to take effect in April-May, it is not possible to forecast the future effects of the scheme because everything depends upon the future orders that the shipyard is able to obtain. However, I can advise the House that the cost of the changes proposed in the order will be minimal, since few employees in Harland and Wolff have earnings approaching the upper limit.
There are at present six ships in the yard, one of which is to be handed over this week. The last of the remaining five is due for completion by late 1981. Thus, serious shortages of work for steel workers are bound to develop before very long if no new order is speedily obtained. The tragedy is that, despite large capital investment by the Government following a modernisation scheme initiated in 1973, which has made Harland and Wolff one of the most modern and capital-intensive yards in Europe, no new orders have been won by the yard since July 1979.
Part of the problem is that there has been little demand in the world for large ships for the repetitive production of which Harland and Wolff facilities were designed. Also, the capacity to build these large ships cheaply in other parts of the world has increased. Another and most significant contributory factor in Harland and Wolff's current problems is the missing of production targets. In consequence, losses in 1978 were £25·5 million, and the Government committed a further funding of £22 million for 1979–80.
That could not be allowed to drift on indefinitely, so, on 23 July last, my hon. Friend the Under-Secretary of State with responsibility for Harland and Wolff announced that he was undertaking a fundamental review of the current position and prospects of the company, and that is continuing. Meanwhile, the Government have made it clear that funds will be provided to enable the company to pursue its operations until decisions are taken in the light of this review.
The painful truth is that unless Harland and Wolff can satisfy potential customers that it can deliver goods when

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the customers want them, it will not have any customers. Customers will simply take their money elsewhere. This is a matter entirely for management and workers to resolve for themselves. No amount of Government funding will do it for them. Essentially, Harland and Wolff stands or falls on its own merits in a highly competitive world.
Having said that, the company is actively seeking orders wherever they can be found and the Government are doing everything within their competence to assist. One obvious way is the placing of orders for naval vessels. My hon. Friend the Under-Secretary of State has discussed this with the Minister of State, Ministry of Defence and I can confirm that Harland and Wolff is on the tender list for Royal Fleet auxiliaries and similar vessels. The position now is that Harland and Wolff is on an equal footing with the rest of the British shipbuilding industry for orders for these vessels. The Ministry of Defence has been made fully aware of the facilities available at Harland and Wolff.
The Government, as announced last November, have obtained EEC approval for a fund of up to£25 million for subsidies on new orders over a two-year period from July 1979. The conditions applying to the use of this fund will be the same as those for the intervention fund for Great Britain. Hence, once again this Government assistance is wholly dependent upon Harland and Wolff securing new orders which will attract these subsidies.
My hon. Friend the Minister of State, Department of Industry will, when introducing the next order, speak of the general world prospects and the demand for new ships. I shall, therefore, leave that broader aspect to him. However, whatever he says will be relevant to the position of Harland and Wolff in seeking to secure for itself part of that demand. Within that context, the future of Harland and Wolff will depend upon the review to which I have already referred, and that, in turn, will depend upon the confidence that the company can instil in potential customers.
Naturally, when the review is concluded the House will be given an opportunity to discuss its findings fully. Meanwhile, adequate provision has to be made for
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those who may, during the present period of difficulty, find themselves redundant. I therefore trust that the House will agree to implement the modest improvement proposed in the redundancy payment scheme, and I accordingly commend the order to the House.
11.44 pm
Mr. Brynmor John: There are two distinct features in the Minister's remarks. The first is the future of Harland and Wolff. That depends generally upon shipbuilding prospects in the United Kingdom. The second is the detail of the scheme.
It is no exaggeration to say that we are debating Harland and Wolff's future and continued existence. When the issue was introduced in another place, a rather more optimistic view was taken of world shipping. The general consensus of a BBC broadcast that I heard this week was that there is an increase in world shipping orders. However, that is the world position. Unless it works its way into the United Kingdom shipbuilding industry generally, and especially into the Northern Ireland sector, any upturn in the market may come far too late to save the yard, because the work force will be dispersed. The Government have recognised that once a work force has been dispersed it is not so easily brought together again.
The Minister referred to the review that was taking place. I remind the hon. Gentleman that when we debated the appropriations for Northern Ireland on 13 March 1980 the Under-Secretary of State for Northern Ireland parried many questions with the information that the Government
"are still in the course of preparing the thorough review that we undertook to complete by the end of the month."—[Official Report, 13 March 1980; Vol. 980, col. 1717.]
It is now 16 April and there is no sign of the report. When we are talking of missed production targets, that criticism can be levelled as much at the Government as at the Harland and Wolff work force. I know that the Under-Secretary of State referred to the illness of an official, but that is not a sufficient excuse. I am not making merely an academic point. A number of decisions depend on the completion of the thorough review. One of the decisions is the future funding of the yard. The management cannot possibly make sen-

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sible decisions until it knows what view the Government take about the yard's long-term future. That is something that we need to know as quickly as possible. We also need to know when the review will be published. When may we now expect it? It has been so long delayed. Will it be published before the end of the month, before the end of the summer, or when?
With the passage of time, emloyment prospects are bleaker. The further redundancy of which the Minister spoke is but the first schedule for the year. I remind the hon. Gentleman that I said during the course of the Northern Ireland (Appropriation) debate that in week 38, in September, all steel work in the yard will have been exhausted. I asked the Government on that occasion, a month ago, for permission for the Harland and Wolff management to go ahead with the ordering of the steel so that if orders were obtained there would be no hiatus between the running out of the previous steel work and the commencement of new work. No answer was forthcoming on that occasion, and inevitably there will be further redundancy in September unless the Government make a decision pretty quickly.
The second way in which the position has changed since we debated it a month ago is that the Government have already announced a further cut of £62 million in public expenditure in their industrial support. They say that £40 million of that is for subsidised electricity for industrial use. However, the £22 million is not so easily explicable. Where will that cut fall? Is it to mean that the Government are to be less able and less willing to support Harland and Wolff in future than in the past? We need more specific answers than were given a month ago.
I, too, have had a reply from the Ministry of Defence about the Royal Fleet auxiliaries. If we assume that Harland and Wolff is on the tendering list, how many auxiliaries will be built or serviced for the Royal Navy during the coming year? When may Harland and Wolff expect a decision on whether it has a share of that? That is crucial. It is comforting to know that it is being given an opportunity to tender, but if it does not know whether it has won that tender the opportunity will be of little consolation to the management.
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The Minister placed great stress on the ability of Harland and Wolff's management to obtain orders. I understand that an order for a bulk carrier was being discussed with the British Steel Corporation. There was a question of bridging the finance between the amount that the BSC was prepared to pay and the production costs of Harland and Wolff. A month ago I asked whether the Government were prepared to contemplate bridging that gap. I received no reply. The fall-back position was that a thorough review was in progress. Have the Government reached a decision, or will that order disappear for want of one?
Can the go-ahead now be given for ordering the steel, so that steel workers will not have to be dispersed when unemployment hits them in week 38? The Minister will acknowledge that once a highly trained work force had been dispersed it was not easy to get them together again and to resume production. May we have the go-ahead or some indication that Harland and Wolff will be allowed to order the necessary steel?
The electrical department is highly skilled and essential to the functioning of the yard. A number of small contracts are needed if that department is to be kept together. Are the Government able to announce that contracts are being placed with the yard? I wish to ask some specific questions and I hope that I shall receive specific answers and not bland generalities. The noble Lord in another place was unwarrantably complacent about the prospects and basis for the order. The Minister spoke about the improvement as if it were a concession to the work force. If a man earns more than £120 a week, his redundancy payment will be calculated not on his earnings but on the maximum of £120 a week. The man who earns that sum will find no improvement.
The noble Lord's justification was based on two grounds. The first is that few people in the yard would be affected. The Minister reiterated that point. How many people will be affected? Secondly, however few are affected, an injustice will remain unless the sums are updated to compensate for inflation, or the general movement in wages. In two years, from 1978, the sum has been increased from £100 to £120. That does not compensate for the average rise in wages. Surely, those who used to be outside the scheme

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will come into the scheme, because their wages have increased at a greater rate.
I am not prepared to say that the scheme should be opposed. However, the Minister should not pretend that it represents a great concession to the work-people. However it is dressed up, it limits the ability of the higher earnings group to receive proper compensation for redundancy. We want to know whether the Minister is determined to minimise the redundancies that we all fear are coming.
11.55 pm
Mr. Peter Robinson: Like many other Northern Ireland Members, I look forward to the day when business such as this can be transacted in a Northern Ireland Parliament, perhaps at an earlier hour or in the afternoon.
The opportunity to speak about redundancies in the shipbuilding industry must be grasped, but we seem to be treading the same ground time and again. Until we receive the report of the review that the Minister referred to, we cannot have as worthwhile a debate as would otherwise be possible.
We should concentrate on the prospect of more redundancies. The Minister will know of the merchants of gloom in Northern Ireland, some of whom predict the closure of the Harland and Wolff yard, and those who are more optimistic but who still talk about another 1,200 redundancies in the near future. Can the Minister give us any indication of the likely number of redundancies in the coming months?
The hon. Member for Pontypridd (Mr. John) referred to the steel work. That is a matter of great concern to shipyard workers and, no doubt, the shipyard management. I reiterate what the hon. Gentleman said and I urge the Minister to give us an answer. We have raised the matter before and we are still waiting for an answer.
Many of us welcome the recent orders for the engine works in Harland and Wolff, but we know that they are only providing a breathing space for that section. The foundry is in the most delicate position. Can the Minister assure us that neither he nor the management at Harland and Wolff envisage the yard without a foundry?
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I return to the subject of naval work, which has almost become a hobby-horse of mine. Like the hon. Member for Pontypridd, I have received correspondence from the Under-Secretary assuring me, as if it were some great achievement, that Harland and Wolff was being permitted to tender for supply ships and similar work. What has the Northern Ireland Office achieved in terms of orders for naval contracts? Can the Minister give us an optimistic outlook for the prospects for naval work for Harland and Wolff?
I am particularly interested in the prospects for work on warships. The Secretary of State for Defence said, in a written answer, that Harland and Wolff was not suited for such work, but that is contrary to the messages that I have received from men and management at Harland and Wolff who believe that the yard could easily be made suitable for that work if we had the continuity of work that we hope we could expect. Is the Minister prepared to consider that aspect? He obviously views with concern the future of Harland and Wolff.
We thought that the review would have been completed by now. Perhaps an opportunity could be given, in the Northern Ireland Committee or some other suitable place, for Northern Ireland Members to discuss the review as soon as possible. Many of us, particularly myself, representing the constituency, view with great concern the economic effect on the whole of Northern Ireland. Harland and Wolff represents probably the most important industry in Northern Ireland. I trust that the Government will reflect that importance when they make known the details of the review and that we shall all have an opportunity to discuss them in detail.
12 midnight
Mr. Harold McCusker: Hon. Members from Northern Ireland must welcome and support the order, but they cannot do it with any great enthusiasm or joy, because implicit in what we are doing is the fact that there will be substantially fewer jobs in the Northern Ireland shipbuilding industry next year than there are now.
After what the Minister told us tonight, the prophets of doom in Northern Ireland are more likely to be correct than any

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of the optimists. During the past year 1,400 jobs have been lost in the industry, and to judge from what we have been told the immediate prospects are bleak.
How much of that job loss was due to European Economic Community policy? A little over a year ago the Minister's predecessor fought very hard against the dictates of Brussels to avoid reducing the work force on condition that an order was given to the yard. There may well be good reasons why work forces should occasionally be reduced, but I do not believe that one of them should be the insistence of the EEC.
The Minister said that other subsidies might well be available to the yard. Will they be conditional on further reductions? Will those subsidies simply be sops to enable us, over a slightly longer term, to run the yard to oblivion? I hope that the Minister will tell us the implications of that aid.
I can understand why the hon. Member for Belfast, East (Mr. Robinson) believes it, but it is no longer true that Harland and Wolff is one of the major industries in Northern Ireland—not of the nature that he described.
Mr. Peter Robinson: I said that it was probably the most important.
Mr. McCusker: I doubt whether it is the most important. There are the textile industry, agriculture and many more industries. I should say that at present the aircraft industry was more important than Harland and Wolff.
When one looks at the nature of Harland and Wolff, one must ask "When does it become non-viable?" It certainly is not viable when it has only a few hundred people working there. Is it almost non-viable now? Can it be said that it can support the design staff and the technical services staff required to keep it in existence and to enable it truly to compete for further orders?
The political, social and industrial implications for Northern Ireland of closure are not what they were 20, 10 or five years ago. If Harland and Wolff closed down tomorrow and put 7,000 people in the dole queue, it would be a disaster for the Province, but it would not be earthshaking to the extent that it would have been only a few years ago.
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On the basis of what the Minister said, I think that there is a cold wind blowing through the gantries tonight. If steel work is ended by the thirty-eighth week of this year, and there is nothing to bridge the gap, we must be witnessing the final rundown of the yard. We should be foolish to allow the work force or anyone else in Northern Ireland to think differently. There is no way in which one can see past that unless there is bridging work available. We wonder when the stage of non-viability will be reached.
Of course, as the Minister said, the yard cannot be kept in existence without orders. Those orders must be completed within the terms of the contracts. We must all admit that it is highly regrettable that Harland and Wolff has not been able to meet delivery dates on its present orders. I did not miss the point in what that senior executive of British Rail told the firm a few weeks ago when he was at a launching ceremony for one of his vessels.
There is no point in being proud of the quality of ships that we build in Belfast if we deliver them six, nine or 12 months late. Shipbuilders who drive Japanese cars, perhaps for the best of reasons, cannot complain if ship owners in the remainder of Great Britain buy Japanese ships, possibly for the same reasons.
I pay tribute to the Secretary of State and the Minister responsible for Harland and Wolff in the previous Government. They made an effort to get work and money for the yard. They did everything that they could to keep it in existence. What has the present Secretary of State done, and what do his colleagues see as their role? Do they believe that they have no role to play in merchant shipping?
Orders from the Royal Navy could be forthcoming. I am told that three warships are due for replacement. Is it too much to ask that one of those orders should go to Belfast? We hear that perhaps there is not the capacity in other yards in Great Britain to handle those orders as speedily as required.
If we are moving towards a crisis in a matter of months, it is important for the Government to adopt the attitude of the previous Government. We may

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merely be once again holding out the begging bowl, but the Government should accept their responsibility if it is possible to bridge the gap until Harland and Wolff is perhaps able to benefit from an improvement in the world market. I hope that the Secretary of State will fight tooth and nail to get us our share of any available orders from the Royal Navy.
12.6 am
Mr. Robert J. Bradford: I should like to follow two points that have been made. The hon. Member for Belfast, East (Mr. Robinson) stated that it was not a great deal of comfort to him to hear that Harland and Wolff was being considered for a Ministry of Defence contract, and I share his lack of elation. He may be a little more comforted to know that between 1971 and 1977 14 Ministry of Defence contracts were placed, and Harland and Wolff was not even invited to tender. At least, the yard is now being asked to involve itself. However, I accept the hon. Gentleman's point. We should be thinking not merely in terms of including Harland and Wolff but virtually of guaranteeing a contract, as my hon. Friend the Member for Armagh (Mr. McCusker) inferred.
If the situation is as bad as outlined by the official Opposition spokesman, clearly it is incumbent on the Government to pull out every stop to safeguard as many jobs as possible in the short term. We do not ask for copper-bottomed guarantees for ever and a day.
In the Statutory Instruments Committee that dealt with the redundancy order in 1978, and of which I was a member, I tried to make the point that the work force at Harland and Wolff had to play its part. A degree of realism was necessary. A glimmer of realism appeared to be developing among the work force in that and the following year, but I confess that I agree with my hon. Friend that that realism has not been sustained in the way that many of us hoped. The work force has to accept, as we have to accept, that there are consequences if the work rate is not sustained. So we would have to accept that the redundancy order is very necessary, unfortunate as it is.
There is not much point tonight in rehearsing the reasons for the decline in the productivity rate. It is an unfortunate
1400
reality, but there it is. I should like to offer one observation. It has been made again and again in this House when we have debated Northern Ireland shipbuilding. I refer to the fact that middle management was not pruned early enough. Even as late as six months ago, some of the workers at Harland and Wolff told me that some effort must be made to prune the middle management. But no effort was made, and that is possibly a very real contributory factor to the unfortunate position in which we find ourselves this evening.
The main point of the order is to ensure that the redundancy payments somehow keep pace with inflation. That is, of course, a very important consideration. Whether they keep pace with inflation is open to argument. I accept the point made by the spokesman for the official Opposition that it is well nigh impossible to get the younger men back into the industry. Obviously, they will not want to run the risk of being employed in an industry the future of which is not at all certain, but unless we try to keep some of the younger men in the industry there will be no future at all, even should there be a recovery in the shipbuilding industry in Northern Ireland and, indeed, in Great Britain.
For that reason I should like to know what kind of numbers of younger emloyees are being made redundant. The scheme is obviously very complicated. That was made clear in Committee by the Minister who introduced the scheme in 1978 and by the then Opposition spokesman. There is no doubt that if a very large number of older workers are made redundant the amount of money paid will be so large that there must, at the other end of the scale, be a very large number of younger workers made redundant in order to balance the total amount of money available for the order.
If at Harland and Wolff a very large number of older men are made redundant and in order to balance the books, as it were, a very large number of younger employees are made redundant, it will be very unfortunate. Has the Minister any ideas how we can keep some of the younger but nevertheless highly trained men in the industry, should there be a rejuvenation of the shipbuilding industry in the Province?

1401
I associate myself with the comments made by my hon. Friend the Member for Armagh, when he paid tribute to the sterling work of the right hon. Member for Mansfield (Mr. Concannon)—a man who, during his time in office, attended assiduously to his duties and tried to keep the yard on the map as far as was humanly possible.
12.15 am
Mr. Gerard Fitt: Northern Ireland representatives will not be satisfied with the atmosphere in which the debate is taking place. In the absence of the review body's findings, the debate is taking place in a vacuum. We are not aware of the Government's attitude. I am not happy about the comments made from the Dispatch Box by a succession of Tory Ministers. That is the general feeling among those employed in the Belfast shipyard.
I add my voice to the comments made by other Northern Ireland Members. I wish to ask the Minister some pointed questions. We have heard that Harland and Wolff has been afforded the facility, by great condescension, to tender for Ministry of Defence work. That is not enough. Has the Secretary of State for Northern Ireland argued in the Cabinet that some of the defence work should be given to Northern Ireland? Has he pleaded with the Secretary of State for Defence that some of the defence contracts should go to Northern Ireland because of the shipyard's financial position and because of the disastrous effect on Belfast if the shipyard closed?
Is the Secretary of State satisfied with the discussions that he has had with the trade unions and management at Harland and Wolff about production dates? Is he satisfied that some improvement has taken place? Have any undertakings been given that if defence contracts are gained the work force will do everything possible to co-operate with management to ensure that production targets are met?
It is not good enough to say that Harland and Wolff has been allowed to tender for defence contracts. Has the Secretary of State for Northern Ireland impressed upon his Cabinet colleagues the necessity of directing work to the shipyard in Belfast?
12.18 am
Mr. Rossi: With the leave of the House, I shall try to answer some of the
1402
varied and detailed points. I hope that right hon. and hon. Members will forgive me if I do not answer them all, because until a short time ago I was not aware that I was to speak in the debate. I thought that the two orders would be taken together. The issues that are not dealt with now will be the subject of correspondence.
A number of hon. Members said that £120 was not sufficient to meet the rate of inflation. The hon. Member for Pontypridd (Mr. John) said that we should relate the £120 to the top earnings in the shipyard so as not to disadvantage people. The average earnings at Harland and Wolff are estimated to be between £80 and £90 a week—well short of £120.
The Department of Manpower Services estimates that of the 1,440 former Harland and Wolff workers who have been declared redundant, and who have received redundancy payments, fewer than one dozen were on the upper limit. We are talking of a minute position in terms of the upper limit. The reason for the upper limit is not so much because of the level of average wages at Harland and Wolff but because it follows automatically the general redundancy scheme applicable to the United Kingdom as a whole, which posited £120 as the upper limit. It was felt only right that Northern Ireland should be dealt with on a parity basis. That is why £120 applies to Harland and Wolff, although strictly on the average earnings it is not relevant. I hope that that answers the questions and the misgivings of some hon Members.
Another question raised by a number of hon. Members concerned the review. It is regretted that the Government are not yet in a position to come to the House with a decision on its outcome. As the hon. Member for Pontypridd said —and he is well informed on these matters—a key official in the Department of Commerce has been ill for some time, and the review was very much dependent upon his work. It is for that reason that we have not been in a position to come forward with the outcome of the review at as early a date as we would have wished. It is a matter of such serious consequence that I hope right hon. and hon. Members will not expect us to rush our conclusions.
Reference was made to publishing the report. I do not think that that will be

1403
possible. After all, a review of this sort will contain a great deal of information that is commercially confidential. It would be inappropriate to make that information public. Certainly, any decisions that will be taken on the review and the report to Ministers will be brought to the House for debate. I hope that hon. Members will be content to leave the matter there.
Mr. John: The Minister's remarks do not answer my question when we may expect the review to be completed. We can hardly be called impatient if, after eight months of waiting for the review, we ask when it is likely to be available to the Government and when they will announce their conclusions.
Mr. Rossi: I would like to give the hon. Gentleman a date, and I have an expectation. However, all that I feel I can say from the Dispatch Box at this moment, because of the vicissitudes of life, is that it will be as soon as possible. I say that in good faith, and I ask the hon Member to accept that. No doubt when speaking from the Dispatch Box in the past he has been in a similar position and realised the problems that arise.
Mr. Peter Robinson: The Minister's answer of "as soon as possible" is, I appreciate, as much as he can tell us now, but I wonder whether he will at least inform the House about the health of this key official. Has he returned to work and started where he left off? Can the Minister tell us whether someone else has taken over the work? Will he at least give us an idea whether any progress is being made?
The Government are intending not to publish the review but only to tell us of decisions taken on it. It is not possible for them to do a little more than that? Surely there will be some conclusions that will not endanger the secrets of Harland and Wolff or any other industry. I hope that the Minister will give us more facts than merely the bald decisions.
Mr. Rossi: We shall, of course, seek to be as helpful to the House as we possibly can, given the restraint that must be upon us in matters of commercial confidentiality. The key official will, I understand, be absent for a little while longer.
1404
I can tell the House that "as soon as possible" means "soon."
Mr. John: The Minister should perhaps have quit while he was ahead. We were more reassured by "as soon as possible" than we are by his clarification of what that means. His is a Department of State, and it is not good enough that the illness of one civil servant, however eminent or experienced, should hold up indefinitely a report that bears on the livelihoods of 5,000 men, thus making the situation more worrying for them and making the viability of Harland and Wolff weaker with the passage of time. Unless quick decisions are made, however sincere the Government may be in their desire to help Harland and Wolff, they will be less able to do so because the commercial position will have deteriorated.
Mr. Rossi: We must maintain a sense of proportion about this. In this review we are considering the future of Harland and Wolff. That is not a matter that can in any sense be dealt with lightly. It must be dealt with carefully and seriously, and if time is required to reach a proper decision time must be given.
The assurance that the House and the work force at Harland and Wolff have is that the Government are fully committed to keeping the company funded fully so that it can stay in operation until decisions under the review have been made. Therefore, the time lag does not adversely prejudice anyone because the financing is being maintained. Although the hon. Member for Pontypridd has had his fun over the problems that arise for the Government and the Department in carrying out searching inquiries of this kind, we are dealing with the matter seriously and properly. In due course—and that "due course" will be soon, very soon, I believe—the House will have the opportunity of dealing with the whole matter.
I was asked about the position on warships. That is quite a different matter from the question of the auxilliary vessels, to which I was referring. There are problems here. Harland and Wolff has not built a warship since 1969. An entirely new generation of warship has come along. It is believed by the Ministry of Defence that the specialised knowledge for building this new kind

1405
of warship does not exist in Harland and Wolff. Therefore, orders for warships as such cannot be expected to be given to Harland and Wolff.
The hon. Member for Belfast, West (Mr. Fitt) asked two specific questions about other naval vessels. He asked whether my right hon. Friend the Secretary of State had raised the matter with his colleagues in the Cabinet and with what result. I must tell him frankly that I do not know. I am not privy to what takes place in the Cabinet. I know that the matter is one of great concern to my right hon. Friend, and he is most anxious that naval orders should be obtained for Harland and Wolff. I know that he has charged my hon. Friend the Under-Secretary to deal with the Ministry of Defence on this matter. In my opening speech I indicated that my noble Friend had seen Lord Strathcona, Minister of State, Ministry of Defence, and had made clear the facilities that were available at Harland and Wolff and had made sure that Harland and Wolff would be in the running. I cannot give a copper-bottomed guarantee on a matter of that sort, but it is being pursued vigorously.
Mr. McCusker: I raised the matter of warships. Whilst I accept that technological advance in these matters must accelerate over a 10-year period, I find it difficult to believe that a shipyard with the history, skill and tradition of Harland and Wolff—which has frequently been in the vanguard of technological innovation—is incapable of building a warship. I know that the Minister cannot go into detail tonight, but is there any way in which he can convince me and the work force in Harland and Wolff that what he is saying is correct?
Mr. Rossi: I cannot enter into a technical discussion on matters of this sort. However, I can indicate that with regard to this technology Harland and Wolff is 11 years out of date, and 11 years are centuries in terms of the development of highly sophisticated weapons of war—as are modern warships. I recommend that the hon. Gentleman pursues his inquiries elsewhere. He will find that there is a great deal of force in my point.
I was asked about production dates in Harland and Wolff whether it is possible
1406
for them to be improved and whether I have had discussions with the trade unionists and the management there. Again, that is not a matter for my Department or a matter for which I have responsibility, but I have had casual meetings with management and trade unionists and I have told them a story. I should like to repeat that story.
Within my constituency there is a gentleman who is a member of a Greek shipping firm. A month or two ago he told me that he was having ships built in Japan, that he was having trouble over quality control, and that he was having to send people to Japan to ensure that the ships were properly built. I asked him what was wrong with Harland and Wolff. I suggested that he should come to Northern Ireland, where he would get a good ship built. I asked him why he did not place his order there. He said that he knew all about Harland and Wolff and that the ships that it produced were virtually the best in the world but that his problem was that Harland and Wolff did not deliver on time. He said that if he ordered a ship he would be investing millions of pounds in that ship and that that money had to start working immediately. He said that if he asked for a ship to be completed on a certain date it would be because he had contracted the space on that ship under a series of contracts and that if he missed the starting date he stood to lose a great deal of money. He said that he could not take that risk and that he could not give his business to a shipyard that might put him in that position.
I have told trade unionists that story, and they say that it is the fault of the management which does not organise the work load properly. I have talked to the management, who say that if there were not so many restrictive practices the matter could be sorted out. It is for management, unions and the work force to sort out the matter so that they satisfy their customers, and so that the customers are willing to place orders.
It is like going into a restaurant. Does one go to the restaurant where the waiter immediately takes the order, ensures that there is no long wait between courses, ensures that the plates are hot and that the food is warm, and where one is seen out with a smile—or does one go to the restaurant where one is kept waiting for

1407
hours, where no one cares a damn whether one is there and where there is a long wait between courses? Which restaurant would one dine at again? Shipbuilding is not very different. It is not for me to tell Harland and Wolff how to run its business, but the customers are telling it how to run its business, and that is the beginning and the end of the matter.
As I have said, the Government are giving financial support. We gave certain financial support last year and some the year before. The modernisation programme, which has virtually made Harland and Wolff the best shipyard in Europe, was started in 1973, and, although hon. Members are inclined to criticise Tory Ministers about their attitude towards the shipyard, I should remind them that 1973 was the year of a Tory Administration which started that work in Harland and Wolff. Millions of pounds have been invested in making that a good, modern, capital-intensive shipyard. The opportunities should be seized by those working there to show the world that they can build ships and deliver them on time.
Mr. James Molyneaux: We on the Official Unionist Bench will assist the hon. Gentleman in trying to persuade Harland and Wolff to display a little more streamlining and cohesion. Perhaps I can illustrate the problem by saying that before Easter, with the knowledge that this debate was to take place this evening, we made determined efforts to meet the representatives of the unions involved. For some unknown reason, at any rate to us, they insisted that we meet next Friday, two days after this debate's delivery date.
Mr. Rossi: All of us must try to persuade both management and the work force that their future depends upon their efforts. It is essentially that, and no more than that.
I do not know how I stand for time and whether there is an opportunity to deal with the remaining questions—[Interruption.] I did not hear that.
Mr. Fitt: I think that hon. Members said that the hon. Gentleman would be getting time if he kept on speaking.
Mr. Rossi: The hon. Member for Pontypridd asked about the British Steel
1408
bulk carrier. I am advised that no decision has yet been made about that. Discussions are still taking place involving Harland and Wolff, the British Steel Corporation and the Government about the financing arrangements.
As to the ordering of a speculative ship, my hon. Friend the Under-Secretary has already considered that question and has come to the view that the Government would prefer the company to build for a particular customer. The speculative building of a ship would be a heavy drain on public expenditure because of the total cost of materials, wages and overheads, which would have to be borne by the company, without any assurance that there would be a market for the ship which it built.
The hon. Member for Armagh (Mr. McCusker) asked about the EEC. I am not aware that any EEC decisions have resulted in the present problems of Harland and Wolff. There are EEC regulations concerning subsidies and credit for shipyards in order to ensure that the shipyards throughout Europe are kept in a relatively competitive position, one against the other, and to ensure that there is no unfairness through over-subsidy by one Government as against another. To that extent, the £25 million intervention fund that I mentioned is subject to EEC regulations. That is money that will be paid to shipbuilders on orders secured by them to make up the difference in price. If they find that they cannot sell as cheaply as they would like, the subsidy becomes available for the purpose of bringing down the price to that which the customer is prepared to pay. That is an alternative to the soft credit arrangements that some other EEC countries are at present operating. All in all, our arrangements are as good as those that exist anywhere in the Community.
I believe that discussions are taking place within the Community concerning the whole problem of the European shipbuilding industry. We must wait to see what further aid is likely to come from that direction. No details have yet been given.
I think that I have covered the questions of which I have made a note. Many are not directly related to the increase from the £110 upper limit to £120. Notwithstanding that some of my replies may

1409
be regarded as not wholly satisfactory, I hope that hon. Members will not allow that to stand in the way of giving the order their approval.
Question put and agreed to.
Resolved,
That the draft Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) (Amendment) Order 1980, which was laid before this House on 12 March, be approved.

SHIPBUILDING INDUSTRY (REDUNDANCY PAYMENTS)
12.41 am
The Minister of State, Department of Industry (Mr. Adam Butler): I beg to Move,
That the draft Shipbuilding (Redundancy Payments Scheme) (Great Britain) (Amendment) Order 1980, which was laid before this House on 12 March, be approved.
The House knows that the amendment embodied in the draft order is the same as in the Northern Ireland order that the House has just debated. It is both minor and uncontroversial and it received approval in another place on 1 April. I hope that we need not take too much time to consider the details of the order, and I shall be brief in introducing it.
In line with the general redundancy payments scheme, the order raises the so-called previous earnings limit, against which payments under the scheme are calculated, for those whose eligible earnings are at or above that limit.
I think that the House may like me to say something about the present shipbuilding scene as we see it and how it has developed since the last debate that we had on this subject. Those of us who sit up at this time of night are aware of the problems which affect the shipbuilding industry worldwide. I think that for the details of the position as British Shipbuilders and as the Department of Industry see it hon. Members can do no better than look at the evidence submitted to the Select Committee on industry and trade on 27 February this year.
In the middle of last year, when the Government announced their policy for supporting the shipbuilding industry, new orders were at extremely low levels and there were few grounds for optimism. There has since been some improvement in ordering levels. Taking 1979 against 1978, world orders were doubled, but 1978 was the lowest year for new orders since the slump in shipbuilding began. Even the improved levels of orders are well below those needed to sustain total available capacity worldwide.
Clearly, British Shipbuilders must take advantage of the improvement in ordering levels. Other countries are just as anxious for new orders as we are, and

1411
competition is and will continue to be fierce. Despite the doubling that I have detailed worldwide, British Shipbuilders' orders for 1979 were only about the same as for 1978. In contrast, Japanese new orders increased by over 50 per cent. and those for the rest of the EEC—excluding the United Kingdom—increased by over 70 per cent. There are some special reasons for that, but those contrasting figures do not present a particularly happy picture for us. Added to that, developing countries are also winning an increasing share of the market.
However, in 1980 British Shipbuilders has won more orders and, as a rough measure of where it stands against its target, it has acheved, or is confident of achieving, about 31 ships out of its 45 ships target. That improvement is to be welcomed, but the market is still very difficult and uncertain. Predictions for ordering levels for the rest of 1980 are not at all easy.
In the tanker market the uncertainties about future oil production and consumption, the current surplus fleet and the relative youth of the fleet will continue to depress new building. Tanker rates have already declined substantially since the end of 1979. On the other hand, freight rates in the non-tanker market have remained fairly steady since the middle of last year. Nevertheless, given the sort of growth rates that we expect for world seaborne trade in the coming years, it is unlikely that 1980 will see any great improvement in demand in this sector, either. Overall, we judge that it will be some time before we see substantial and enduring improvements.
Capacity and demand in the market are still very much out of balance. In British Shipbuilders we see the problems facing all of British industry in consequence of the high level of the petro-pound. For British Shipbuilders there is, additionally, the relationship of the pound to the yen, which has see-sawed strongly to British Shipbuilders' disadvantage over the last year or so. The prices British Shipbuilders can obtain still fall far below costs. It is, therefore, having to rely to a substantial degree upon Government assistance to obtain orders. Frequently this comes to the maximum of the intervention fund aid available. However, the
1412
world price level is not the only determining factor. The level of costs is also important and some of the control over that, at least, is in British Shipbuilders' hands.
I stated clearly last July, and have said many times since, that the Government wish to see a viable and flourishing merchant shipbuilding industry. This can be achieved only if the industry obtains greatly improved levels of efficiency and productivity. I have no doubt that management and unions and all those who work in British Shipbuilders are persuaded of the need for this. Progress has been made, but much still needs to be done. That would be difficult enough at any time, but is more so now, when order books are not full. It is vital that progress should be made if the industry is to survive without the continuing blood drip of subsidy. British Shipbuilders deserves the full support and encouragement of the House.
British Shipbuilders' strategy, reached —as the House knows—after full consultations with the unions, is to reduce the size of our merchant shipbuilding activities to a capacity of a little over 400,000 compensated gross registered tonnes, with employment of between 18,000 and 19,000. British Shipbuilders hopes to be able to reach those targets by mid-1980 through a combination of transfers, wastage and voluntary redundancy.
It is with regard to redundancies that this order is immediately relevant. The facts are that since mid-1979 there have been over 3,500 redundancies within merchant shipbuilding and, as part of the recent broadly self-financing wage settlement, a further 3,000 voluntary redundancies are being sought from BS as a whole. Some of these have already arisen in the merchant shipbuilding sector. The inevitable contraction in the industry is well under way, but it has not vet been completed. Thanks to the good sense and understanding of the unions and the way in which they have genuinely co-operated with management in this painful but necessary process, that contraction is proceeding satisfactorily.
Mr. Michael McNair-Wilson: Can my hon. Friend tell us whether the 3,000 redundancies to which he has referred came from any particular area of the country or whether they were spread throughout British shipyards?
Mr. Butler: They have been spread widely over all the yards in British Shipbuilders over the period of contraction of the industry. There have certainly been redundancies on Merseyside, Tyneside, Wearside and in Scotland. I can provide my hon. Friend with the details if he so wishes, but he will find that the spread is general and includes the closing of some yards in addition to the slimming down of others.
Mr. Frank Field: Will the Minister confirm what he has already confirmed in correspondence to me, which is that the redundancies have affected Cammell Laird more heavily than other shipyards?
Mr. Butler: The hon. Member for Birkenhead (Mr. Field) will find that that is so. But on analysis one has to consider the whole period of the contraction of the industry over the past two or three years. The hon. Gentleman may well find that recently Scottish yards have been more severely affected. However, I recognise that Cammell Laird has experienced a considerable rundown in the number of workers, with obvious consequences for his constituency.
I conclude by giving the total number of people who have benefited under the shipbuilding payment schemes since their inception. My hon. Friend gave a figure for Northern Ireland and I shall include his figure in the total, which to date is 11,500. Further, more redundancies can be expected as part of the restructuring plan that British Shipbuilders determined last summer, and as part of the agreements in the present wage round. That is one reason why we believe that it is right to increase the previous earnings limit in the way that the order proposes, and I am sure that the House will wish to support it.
12.52 am
Dr. John Cunningham: We welcome the improvement in the provisions for redundancy payments, in so far as it is right to give a welcome to any provisions for redundancy, and we shall not oppose the order. However, I should like the Minister to comment on the question that was raised by one of my hon. Friends during the course of the discussion on Northern Ireland, namely, what is the likely impact of this upper limit in terms of the earnings levels in
1414
the yards in England, Scotland and Wales? It may well be that earnings levels are significantly higher in those yards than they are in Harland and Wolff. Perhaps the Minister will comment on that when he winds up.
Despite being debated at a late hour, the order gives us an opportunity to discuss the present and future prospects of the industry. I was interested to hear the Minister say that British Shipbuilders deserves the full support of the House. We certainly accord British Shipbuilders our wholehearted support. However, I am not sure that the Minister does. Within the past 24 hours he has said that reasonably soon the Government hope to make changes in the organisation of British Shipbuilders by some form of privatisation. It is well known that unions and management are opposed to this change.
The Minister is asking us to give the industry our full support. He can hardly say that that is reflected in his own position. It would seem that quite the reverse is reflected. He seems to have grounds for wanting to make what we would regard, and what most others outside the House would regard, as unnecessary and precipitate change.
The facts seem to bear out the argument that British Shipbuilders has, in difficult circumstances, made a good and rather effective beginning. The Minister has said that it has reached about two-thirds of its orders target. It has made wide-ranging progress in a number of major areas and with a number of the major problems that faced it from vesting day. Large problems remain, but any balanced judgment would be that it has made a good and effective start.
It owes little thanks to the present Administration. We have not seen much by way of public sector orders since the Government took office. In one classic example, a public sector order went to a foreign yard—namely, the National Environmental Research Council vessel. it was a small order, but of the sort that Hall Russell and Company Limited would have welcomed. We have been given no adequate explanation of why that happened. The same yard has had disappointed over the placing of contracts for offshore patrol vessels for the Royal Navy. It has some orders for those

1415
vessels, but not as many as it was led to believe were possible or as many as we believe would have been possible. That has been rather disappointing.
We have seen no progress within the EEC towards a scrap and build policy. Governments have said a great deal in favour of scrap and build but have produced no results. We have witnessed a steel strike which has had a significant impact upon British Shipbuilders. It has reduced perhaps the best merchant shipbuilding yard—Austin & Pickersgill Limited—on the Wear to a three-day week. Major responsibility, if not sole responsibility, for that dispute rests with the present Administration.
On the Minister's own admission we have a sterling rate—again, this is part of Government policy—which is significantly disadvantageous to British Shipbuilders in terms of achieving overseas orders. The Minister is reported in the press today as having said last evening that he wants to make changes. Attitudes in the Government seem not to be based on any consideration of what British Shipbuilders has achieved to date. These matters were discussed only recently in a letter in the same newspaper, the Financial Times, which can hardly be said to be the voice of raving Left-wing Socialism.
The Under-Secretary of State for Industry (Mr. Michael Marshall): What is it?
Dr. Cunningham: I should say that it is the equivalent of the "village voice" of the City of London. That is what the Financial Times seems to be. Many things were said about Government policy in a widely read and commented upon leader. It stated that it could discern no arguments for making changes in British Shipbuilders other than those based on dogma or on manifesto commitments being given overriding importance for no reason other than that they appeared in the party manifesto.
We appreciate that the Minister of State has worked hard and has visited shipyards and met trade unionists. That is appreciated by the unions especially. They have expressed their gratitude. However, he must have a major responsibility. He must know the feeling in the yards better than any member of the
1416
Government. He must know of the attitudes and of the progress that has been made. Unfortunately, he and the Secretary of State have made comments that are having a destabilising effect not only on the management of British Shipbuilders, but on trade union involvement in the changes. They have affected people's attitudes towards those changes, although most agree that they are necessary.
If the Government pursue that course, trade unions will withdraw their co-operation. All too quickly their comments will lead to confrontation in our shipbuilding industry. That is the last thing that we want. The Government seem determined to collide head-on with trade unions to prove a point. However, it cannot be argued that that is in the best interests of British Shipbuilders, merchant shipbuilding or of our naval dockyards. Nor can it be in the wider interests of the many hundreds of thousands of companies and their employees who supply our shipyards.
The Government cannot argue that there is any good reason for getting into such a position, any need to do so. British Shipbuilders has been making progress. It is meeting its financial obligations to the Government and is well on its way with orders. There have been major improvements in its industrial relations. There has been a massive reduction in the number of disputes and the number of man hours lost in the yards. In 1972 nearly 4 million man hours were lost. That figure has consistently gone down, reaching 0·12 million in 1979. The number of disputes has also greatly dropped. No one can say that a major improvement has not been made.
A wage deal of 11 to 12 per cent., self-financing over 18 months, has recently been concluded. One would have thought that Government Members would have given their right arms to have seen that reflected in the economy. However, the attitude expressed in the Minister's speech last night puts those things at risk. To what purpose? There is no real demand for privatisation in terms of selling shares. It will probably be some time before there is a major demand for that. Will the naval yards be hived off back to the owners? They have not yet received any compensation. In many ways they have had to wait longer than when we

1417
were in office. At that time they criticised us heavily. Perhaps their assets will be returned to them instead of compensation. That would give the Government a way out as regards public expenditure. However, it would not provide a future for our shipbuilding capability. No one can be in any doubt that our merchant shipbuilding capability would be irreparably damage by such a move.
The Minister should argue for stability in British Shipbuilders. He should not make speeches and comments that create instability. We understand that by means of the Whitehall machine he has gone as far as to book a provisional slot in the legislative programme to introduce a Bill to enact whatever the Government decide.
Such information usually leaks out. What impact does the Minister expect that news to have? No doubt he will say that he is just being prudent and is ensuring that the Department books its place in the Gracious Speech, but it seems to be a clear indication of intent. The Minister has already been told by the Confederation of Shipbuilding and Engineering Unions of the likely result of such a move.
In north-east Scotland, the Clyde, the Tyne, the Wear, the Tees, Merseyside and elsewhere, there has been, if not a revolution, certainly a major and fundamental change in the attitude of the unions and their commitment to this important industry. British Shipbuilders has streamlined many aspects of the industry. There is more co-ordinated and efficient marketing, a free exchange of technology—the commercial barriers have been removed—and the transfer of production resources and even production workers has gone ahead effectively. There is free exchange of research and development effort and a co-ordination of design effort. They are major achievements for the industry and for all the industries that depend on shipbuilding.
We have seen the allocation of ship types to yards with particular expertise, co-ordination in national wage and salary structures—the removal of a massively complex arrangement, reducing between 160 and 170 local bargains to one overall approach. That has been of major benefit to the industry. There is an industry-wide pension scheme, co-ordinated purchasing policy and a career development plan.
1418
All those improvements will be jeopardised by the idea that the Minister of State is floating.
The industry has also developed the establishment of best working practices, the co-ordination of training at all levels to ensure proper standards, the adoption of a single clearing bank to reduce overdraft charges and so on, a single point of contact for prospective purchasers, the Government and all the organisations and agencies involved in discussions with the industry, a co-ordinated approach to world exhibitions and trade fairs, and a harmonised accounting system.
Those are all major advantages which have been brought about by having a unified shipbuilding industry. It would be foolish in the extreme for the Government to jeopardise the progress that has been made. It would meet with fundamental, serious and major opposition, not only in the House, but in the industry.
1.9 am
Mr. Ernie Ross: As my hon. Friend the Member for White-haven (Dr. Cunningham) said, while we welcome the scheme, one of the problems for those of us who are members Of the trade union movement is that we do not believe in redundancy schemes as such, because we do not accept that one worker has the right to sell a job that he temporarily holds. But we recognise that the problems facing many of our industries require that if there are to be pay-offs a payment should be made to each worker concerned to ensure that at least he can sustain his family and himself while he seeks work. However, with the policies being pursued by the present Government, one would hesitate to hazard a guess at the sums required by those who may be made redundant in the next few years to ensure that they can sustain their family at a reasonable standard of living until they secure employment.
My hon. Friend also referred to the statement made by the Minister last night at the Royal Institution of Naval Architects. Here again, we would point out some of the difficult areas into which the Government's policies are leading this nationalised industry, when they seek to introduce private capital. Our arguments in the debates on the British Aerospace Bill are just as relevant in connection with the shipbuilding industry. Clearly,

1419
shipbuilding—and particularly the naval aspects—is a strategic resource.
We hear from the Conservatives about their commitment to the defence of this country. I shudder to think of the interference in our naval contracts that there could be if foreign ownership were allowed to infiltrate into our nationalised industry. Looking at the way in which the Government are trying to de-nationalise British Aerospace, one can only assume that they will use similar plans for the shipbuilding industry, and we cannot have much confidence that those plans will contain safeguards for a strategic resource.
We also wait to hear from the Government when they will pursue a proper scrap-and-build programme. While most of the British fleet is, perhaps, much more competitive and modern than that of many of our overseas competitors, there is still, at the bottom end of the fleet tonnage, great scope for such a programme. Many of those ships would suit the capabilities of the yards that hon. Members on both sides of the House represent.
The benefit would not go only to the shipyards. The country would benefit from the modernisation of our fleet through the saving of energy. Benefits would also go to the Conservatives' friends, the owners of the shipping fleets, through operating much more efficient fleets. We hope that the orders that are given will not be used simply to seek to justify the Government's continued lack of support for the industry, but will assure the workers in the industry that the Government are concerned to ensure that we have a viable industry in the 1980s and the 1990s.
I should like to concentrate on the effects that the order may have in my own area. The Robb Caledon yard in Dundee faces a serious position, which grows more serious as the weeks go on. There is to be a meeting between British Shipbuilders and the shipbuilding negotiating committee tomorrow and on Friday. On Friday they will concentrate on that yard. I hope to be there to speak to British Shipbuilders and the members of the SNC.
I have written to Ministers asking for support for specific areas within the Dundee yard. It is now generally agreed fol-
1420
lowing a meeting in February at the yard between British Shipbuilders' executives, the Robb Caledon management and the trade unions, that the yard must diversify, particularly into oil-related industry structures and other non-shipbuilding work, including steel fabrication for both offshore and onshore construction, and ship repair and refit work.
To do that the yard must be capable of responding to those industries. British Shipbuilders are making demands on the Dundee yard to seek work in the oil industry. A basic requirement of that industry is delivery on time. The Minister made great play of the need for prompt delivery. The yard therefore requires the necessary tools and equipment. There is no point in telling an oil company that it cannot have the required service because the facilities in the yard are so antiquated that the time schedules cannot be met or have broken down because of a lack of planned maintenance.
In my letter to the Secretary of State for Scotland on 26 February I said that I was concerned that there was no planned programme of maintenance in the Dundee yard. If the work force is to diversify, that is absolutely crucial. I also asked in that letter for a much wider view to be taken of Dundee, and suggested that, perhaps, a new yard could be built there. However, as we are discussing the redundancy payment scheme, it is more relevant to concentrate on more immediate problems. A new yard for Dundee is a long-term and perhaps uncertain prospect, but in the immediate future we need facilities that can respond to the new situation.
Yarrow Engineering Glasgow Limited, a private company, announced on 8 April that it would be closing down its ship repair yard in Dundee from 9 May 1980, with the loss of 46 jobs. Yarrow's have just completed at Dundee one of the biggest repairs to a vessel in Britain since the Second World War, having almost rebuilt a vessel that was previously named "Smitt Lloyd" and renamed "Muhammed Ali". It was an astounding technical achievement. Perhaps that is why it was given that name.
That company has expert knowledge of the ship repairing sector. In announcing the closure, the chairman made it clear that it was impossible to operate a ship repairing industry in Dundee with

1421
the existing facilities. He instanced the lack of suitable cranage facilities and the very limited dry dock facilities. The company made it clear that considerable upgrading and modernisation of harbour facilities are necessary if Dundee is to compete effectively with other ship repairing areas. Those are the very same comments that I was making.
On 17 March the Under-Secretary of State for Scotland with responsibility for industry and education indicated that, if there was to be diversification, the Government might give Dundee sympathetic consideration. The chairman of Yarrow Engineering Glasgow Limited has expert knowledge of ship repairing, and the Government must take his comments seriously if they are concerned to support the shipbuilding industry, particularly in Dundee. The time is ripe for the Government to make a special case of Dundee.
Within the Dundee yard we have a highly skilled work force, capable of building ships at the very edge of technology. It has proved that in the past with the cable-laying ship built for the Post Office. The yard provides apprenticeships and training for about 100 young people in Dundee, who will contribute not only to the industry, but assist manufacturing in Dundee to remain competitive.
It is for those reasons that I believe that the time is right for the Government to come into Dundee and to give some special aid to the Dundee port authority to build a synchro-lift facility within the Dundee harbour. It is vitally important that that synchro-lift should be built and the money provided to allow the port authority to build it.
One of the problems of representing an area which has special development area status is that when the economy in that area—
Mr. Deputy Speaker (Mr. Bryant God-man Irvine): I have allowed a great deal of latitude to the Front Benches and I have tried to exercise the same restraint in relation to the hon. Gentleman, but I remind him that we are discussing whether £120 is to be the limit.
Mr. Ross: I accept your point, Mr. Deputy Speaker, but the £120 is money that the workers in Dundee would rather the Government kept. While agreeing that
1422
the figure should be increased, I think that it is quite fair, within the debate, to suggest to the Government ways in which they could avoid having to pay this money, whether they increase it or not. A number of people in Dundee are concerned to suggest to the Government other ways in which—even if the Government increase the money—such sums could be spent. It could be used, possibly, for other more urgent requirements.
The special development area status is an acceptance by the Government that the area concerned has special problems. One of the reasons why the Government are now seeking to increase the redundancy limit in regard to the shipbuilding is obviously to take account of that aspect. What we find in the special development areas is that when we run into problems we attract people whose backgrounds are slightly spurious, to say the least. Today we have had someone who suggested that he would like some Government money to build a synchro-lift in Dundee. I would not agree that he is a person who should be given any help in this regard, because in the same breath in which he asked for Government assistance he admitted that he has no experience in the shipbuilding or ship repairing industry. Yet he suggests that he knows the answers in regard to the ship repairing concerns in Dundee.
The people in Dundee are not asking that they be allowed to take advantage of this increase in the redundancy payments scheme. The workers and the management in Dundee are asking the Government to come in and give some assistance, so that that money can be used to help British Shipbuilders ensure that there will be a British shipbuilding unit within the Dundee area in the 1980s.
1.23 am
Mr. Frank Field: I hope that my brevity will be matched, Mr. Deputy Speaker, by your generosity should I stray just slightly beyond the order that we are discussing this evening. It is a year since we had a similar debate, and I think it worth while to spend a couple of minutes reflecting on what has happened within that period.
The last 12 months have witnessed a continuing decline in shipbuilding. Much of the 1970s has seen a fall in the numbers working in the industry. While the rest of the world was expanding in

1423
terms of shipbuilding capacity in the early part of the 1970s, the British shipbuilding industry did not respond in a similar way. The latter part of the 1970s has been marked by a continual decline in the numbers employed in British shipbuilding and the support industries. That decline has continued over the past year.
A marked decline in the numbers working in the industry has also been matched by a drop in the restrictive practices. Hon. Members would be hard put to think of another industry which has suffered the contraction that the shipbuilding industry has suffered, and which has matched that contraction with a disbandment of restrictive practices, at a time when unemployment generally in the economy has been rising. That is a sign that the men wish the industry to survive.
If that is not enough to show their good faith and their wish to make the industry a success, one has only to examine the recent pay agreement to which my hon. Friend the Member for Whitehaven (Dr. Cunningham) referred. We would have to search hard to find other industries which have reached agreement on productivity increases leading to a real increase in standards of living for the work force. The most recent issue of Incomes Data Services' report stated:
"Credit for the comparatively smooth conclusion to this year's negotiations must certainly go to the industry's good industrial relations, which show a marked improvement since nationalisation."
That has been achieved peacefully. We must ask "Why?" The answer is simple. There is agreement in the industry for implementing the corporate plan. That plan rests on two assumptions. We are debating one of the assumptions.
One assumption is that there should be a further contraction in the size of the industry in terms of employees. The second assumption is that the contraction should be mitigated to some extent by a shift from work on merchant shipbuilding to completing orders from the Royal Navy. My hon. Friend the Member for Whitehaven commented on the lack of orders which have materialised from the public sector.
I am anxious about the orders which Cammell Laird hopes to achieve. We are
1424
particularly interested in the two support tankers. A recent letter from the Minister of State, Ministry of Defence caused particular anxiety. It stated:
"The shipbuilders' tenders have now been evaluated and, in the light of that evaluation, it has been decided to review the Royal Navy's support tanker requirement in order to determine whether it can be met more cost-effectively. The review is in hand, but since it has not yet been completed, it has been decided to allow the current tenders to lapse."
There is a possibility of further redundancies, not just at Cammell Laird but at many other shipyards. That makes the order that we are debating even more important.
A key question relates to the corporate plan, agreed and approved by the Government a year ago. The Government gave it their blessing. The plan comprised two parts. It attempted to win a sizeable number of merchant shipbuilding orders and to bring orders from the public sector. What has happened to those orders? Did the Government agree to the plan when they came into office? Did they agree to both parts when underwriting the financial future for the industry over two years? If so, what has changed their minds about the Navy orders?
A year ago the Minister rightly made great play about the fact that he was in favour of the scrap-and-build programme. He said that he was one of the EEC Minister most in favour of it. What news has he to report on that front? It is not only important in gaining merchant shipbuilding orders. If there is to be a contraction of the orders that we hope to receive from the Navy, scrap-and-build takes on an even greater importance.
Will the Minister be a little more forth-coming than the newspapers have been about his speech yesterday? What are the plans for what will be the phrase for the 1980s, namely "privatisation of the yards"? Will it be only the Navy yards, or do the Government have plans for the mixed yards? My correspondence with the Minister concerned the loss of shipbuilding jobs in Cammell Laird both well before and after nationalisation. In the period up to nationalisation we suffered more than our fair share of job losses compared to the average job losses over the country. Since nationalisation, Cammell Laird has once again borne more

1425
than its fair share of job losses over the past couple of years.
There is an unemployment rate of 11 per cent. in Birkenhead as a whole, with about 280 vacancies and 7,500 unemployed. In the river streets around Cammell Laird unemployment is reaching 30 per cent. When we debated the matter a year ago the Minister said that Cammell Laird had a bright future. What hope does he hold out tonight? What has happened to the corporate plan, especially the Navy orders which were a crucial part of fulfilling the target of a peaceful rundown of the shipbuilding industry to a lower level of production? What does he have to report on scrapand-build? What are the plans to introduce private shareholding into the yards, and how extensive will that be?
The answers to those questions will, in part, determine how important is the order that we are debating tonight, and how many of our constituents will be dependent upon it in the coming year.
1.33 am
Mr. Adam Butler: I shall attempt to answer points that have been raised during the debate, but briefly as you, Mr. Deputy Speaker, have guided us on this matter.
It would be appropriate to deal with the one specific point in regard to the order itself, the raising of the limit, to which the hon. Member for Whitehaven (Dr. Cunningham) referred. He asked a specific question about its impact. My information is that raising the limit could affect about 1 or 2 per cent. of the beneficiaries. The average wage in British Shipbuilders for manual workers is about £90 to £100. Therefore, the figure of £120 is, generally speaking, above that level.
Having asked that introductory question, the hon. Gentleman launched into, not a powerful attack on the Government, but an accusation that we were lacking in our support for British Shipbuilders. I reject that as a totally unfair and unjustified charge. He knows of the massive package of aid which I announced to the House in July of last yeas—aid that was put behind British Shipbuilders in a considerable number of ways. That aid has been made available, and we have given full support to British Shipbuilders over a difficult time.
1426
There are three areas with which I should deal in some detail. The hon. Member for Dundee, West (Mr. Ross) referred to the problems of Robb Caledon. I am well aware of them. I am aware that British Shipbuilders will be meeting the shipbuilding negotiating committee in the course of the next day or two. I am informed that Robb Caledon is one of the yards that will be discussed.
There have been special understandings in regard to that yard between the management and the unions, and it has been given an opportunity to find orders. My understanding is that those orders have not been forthcoming. Therefore, consideration must be given to what the next step should be. The hon. Gentleman asked whether the Government could do anything to help. Decisions in regard to the yard must be a matter for British Shipbuilders. As for aid being available for other matters, the hon. Gentleman referred to the special development area status of his constituency. That in itself is an attraction for any inward investment.
Mr. Ernie Ross: Although we are vitally concerned about the future of Robb Caledon within British Shipbuilders, there are other ship repairing and oil-related facilities in Dundee, namely, Kestrel Engineering, Peterhead Engineering, and, until 9 May, Yarrow Shiprepairing, which could also benefit from Government assistance. Therefore the question goes wider just than assistance for Robb Caledon. We require assistance if Dundee is to participate in the ship repairing industry generally.
Mr. Butler: The hon. Gentleman must forgive me if I do not pursue his point about the new yards that he mentioned. I know that there are problems, but we are talking about a redundancy payments order which affects the yards of British Shipbuilders, and in that respect Robb Caledon is relevant.
On scrap-and-build, I confirm that I have been as strong as anybody in my support within the Council of Ministers for such a scheme. However, the House knows that within the Community there must be agreement between Ministers in order to proceed. Such agreement has not been established. At present I can report only that the proposals are back with the Commission and are bogged down by the

1427
lack of agreement. Certainly, from time to time, I see whether anything can be done by our people to make progress, but I have no great confidence at this moment in a scheme coming forward. I repeat, the benefits from such a scheme would be small. However, if such a scheme were to produce a few orders that would be welcome. I have not given up hope, but I have to be frank about the situation.
I was asked about the position on public sector orders. It is fair comment that there have not, perhaps, been the public sector orders that a number of hon. Members would have expected. Whereas one can bring orders forward, one cannot expect the Ministry of Defence to place speculative orders for unwanted ships. I hope that more orders will be forthcoming. Turning to the vessels which were referred to by the hon. Member for Birkenhead (Mr. Field)—the two support tankers—I gather that this review is taking place. The fact that it is taking place indicates that orders may be forthcoming, but that is something for which he and I must wait.
The hon. Member for Whitehaven referred to the "Frederick Russell". That was a straightforward case of an order being put out to tender. Regrettably, other non-British yards were able to meet the requirements of a customer at a significantly cheaper price.
Mr. Field: I should like to press the Minister a little further on that point. It has been represented to the House that it is unreasonable to expect the Government to rustle up a few public sector orders, and perhaps that is so. However, when the Minister announced a major package for the shipbuilding industry, and the level of support that the Government were to provide, we were told that the plan was in two parts—what was expected from the merchant shipping side, and what was expected from British Shipbuilders on navy orders. Therefore, I assumed that, before the level of financial support was commended by the Government, they had looked carefully at the two parts of the plan and had paid particular attention to the public sector orders—the navy orders. I should be grateful if the Minister will confirm that at that stage the Government underwrote that side of the programme, and said that they thought it
1428
was feasible for that number of ships to be included in the plan.
We now find that those ships are not forthcoming from the public sector. Hence the real urgency of this order, because we now expect redundancies to be at a greater level than was originally envisaged. Is it not the case that the Government have shifted their position on public sector orders?
Mr. Butler: There is no question of the Government shifting their position. Public sector orders can emanate from two sources. There have been orders from the Ministry of Defence, and I am confident that orders will continue. On the other side of the public sector, the number of ships that are possible in total tonnage is small. We have tried to find out whether those orders could be accelerated. I do not think that that position should be exaggerated.
The production of naval ships is part of the overall plan, although I remind the hon. Member for Birkenhead that the option 2 plan—as it came to be known—of British Shipbuilders referred specifically to merchant shipbuilding. Again, I remind the hon. Gentleman that in July we said that we supported the plan, but we made it clear that we felt that the targets would be difficult to achieve. Tonight I have reminded the House of the position since last summer, and I have given an indication of the order book with regard to merchant shipping. British Shipbuilders is making a brave and strenuous effort to reach its targets. We must hope that orders are forthcoming on the merchant shipping side.
I did not raise the subject, but I am reminded that I made a speech last night—
Dr. John Cunningham: Before the Minister moves to another point, may I say that it is not good enough for him to gloss over the question of public sector orders? There is no doubt that a year ago, when the Minister made his major announcement about British Shipbuilders, there seemed to most people—certainly those in the industry—to be a commitment from the Government on public sector orders. The record since then has been less than the apparent commitment. Military orders have not been as forth-coming as people were led to believe,

1429
and one—albeit small—non-military British public sector ship is now being built in a Belgian yard. The Minister of State says that that is because the Belgian yard was able to build it more cheaply. That may be so, but only because of a significant subsidy from the Belgian Government. It is not good enough, and we shall not allow the Minister to skate over this record as smoothly as he has tried to do. The record of the Government in this respect is bad. It could be better. It is in the interests of everyone—not least the Government—that it should be better. Would it not be a tragedy if the predicted upturn in shipbuilding orders came too late because of the Government's failure to sustain existing capacity in British yards?
Mr. Butler: I must correct the hon. Gentleman in one respect. It is totally untrue to say that the Belgian yard which gained the order for the "Frederick Russell" was subsidised. Belgian shipyards are not subsidised.
I am not attempting to gloss over this at all. I said to the House very frankly in answer to questions, when the policy was announced and subsequently in other debates, that we would bring forward public sector orders where we could. But there must be a degree of realism in all these things, and it is realism which the Government have practised. We are not prepared to fabricate orders especially for this or that purpose. As I have said, there have been naval orders and there will continue to be naval orders. I make my representations to my colleagues in the Ministry of Defence in regard to such orders. But it is not my intention, and certainly they would not respond, to have orders fabricated or brought forward unrealistically. That the hon. Gentleman must accept.
I was about to refer to the speech which I made last night. It was picked up in one newspaper, and I am glad, because it allows me to put it in context. I was making reference to the constraints which managements in the public sector experience. Indeed, there were exchanges in the House today on that subject. I was pointing out that that was one of the difficulties which accompanied the public sector and made the job of running public sector businesses more difficult. Consequently, the success of the business itself is less good. I pointed
1430
out that managements' energies, at least in part, had to be used to deal with the political dimension. I also said that, with regard to the public sector, there was no guarantee of job security. I did not elaborate on the point, but I need say no more, because the evidence is that in the public sector today there is no such thing as job security. Regretfully, it is an area where redundancies are greater than anywhere else.
The Government are considering the introduction of private sector capital into the industry. I have made no secret of it in my meetings and discussions with the unions, whether at national level or in the yards. But we shall introduce private sector capital into British Shipbuilders at the appropriate time only if it is in the best interests of the industry. We believe that the private sector is, generally, better for industry than the public sector and, therefore, for those who work in that industry. It would be for that purpose, and not for any reasons of political dogma, that we would go ahead with plans for British Shipbuilders. However, no decisions have been made, and we shall make announcements at the appropriate time.
It is because we have a high regard for British shipbuilding that we have given the industry our support since we came into power. The order we are debating, while important to those few people who will be covered by it, is a small part, and evidence, of that support. Once again, I commend it to the House.
Question put and agreed to.
Resolved,
That the draft Shipbuilding (Redundancy Payments Scheme) (Great Britain) (Amendment) Order 1980, which was laid before this House on 12 March, be approved.

NORTHALLERTON (LEVEL CROSSING)
Motion made, and Question proposed, That this House do now adjourn.—[Lord James Douglas-Hamilton.]
1.50 am
Sir Timothy Kitson: I apologise to you Mr. Deputy Speaker, and to the House and to my hon. Friend who has to answer this debate for raising yet another problem at

1431
this very late hour. But the problem of the Springwell Lane level crossing at Northallerton is difficult and tiresome for many of the inhabitants who regularly have to cross this railway line.
The problem arises because in recent months British Railways have changed their policy with regard to the use of this railway line. Until May of last year, the line running from Northallerton to Teesside was used only at night, but, with the introduction of the HS-125 intercity services last May, additional traffic was put on the line. Indeed, it is now used regularly day and night, carrying more than 40 trains a day.
The crossing is close to the centre of Northallerton—probably less than half a mile out of the centre of the town—and it serves 26 houses, some farm land and 74 people who live just across the railway line from the centre of the town. All the residents leaving their homes for work, children going to school and tradesmen serving those houses have to cross the railway line.
The Springwell Lane crossing is unsatisfactory in this modern age. Last Saturday I went there again to refresh my memory of the situation. As usual, I discovered that the gates had again been left open. That is how the gates are left for most of the time nowadays, although they are supposed to be closed. Because the gates swing outwards, anybody going into Springwell Lane drives up to the gates and, if they are closed—which, as I said, is a rare occasion—has to cross the line five times before he gets his car over the level crossing and to his house. He opens the gate, walks across and opens the other gate, which opens outwards on the far side, walks back and gets into his car, drives across the line, gets out of his car and walks back and closes the far gate, closes the near gate behind him, gets into his car and drives to his house. As the line is 22 yards wide, it is not a happy prospect on a cold, wintry or snowy night. It is hardly surprising that the 74 inhabitants of Springwell Lane do not bother to shut the gates.
British Railways employees, who have for some months been working on the far side of the railway line from the centre of the town, cross the line regularly. I am assured by people who live in Springwell Lane that those employees rarely
1432
close the gates.
I should add that the gates are 9 ft. 9 in. wide. That does not allow for the modern farm machinery that has to cross the line in this day and age. It is impossible to get a combine harvester across the line without taking it to pieces.
Some time ago British Railways put in an audible warning alarm, which most people in the area state is totally inadequate and unsatisfactory. I am assured that it makes the most appalling row, which affects the houses adjacent to the crossing. At a recent public meeting one householder, who lives close to the crossing, said that he is woken up as each train passes because of the row made by the machine. He always gets up and has a cup of tea. That happens 10 times every night. He assures me that if it goes on for much longer he will need to consult his doctor.
This may seem a small point, but it is true to say that this is an unsatisfactory position. The Act covering the status and the provisions of the crossing is outdated and does not take into account the modern-day user—soundproof cars, invalid carriages, farm machinery. All of these use the crossing regularly. The Act which operates here is the Leeds and Hartlepool Act 1846, which incorporates the provisions of the Railway Clauses Consolidation Act 1845. The road over the crossing was referenced as an occupation road and bridle road. Under section 61 of the Act, British Railways' obligation was only to provide and maintain
"convenient Ascents and Descents and other convenient Approaches"
together with
"good and sufficient Gates…on each side"."
I stress again that 74 people living in 26 houses are affected. Whenever they go out they have to use the crossing and handle the heavy duty gates, which have to be manually opened and closed. Not only are there 74 residents but there are the milkman, the postman, the paper boys food delivery people and farm machinery and British Railways employees, all of whom are using the crossing regularly. A census was carried out in 1971 which showed that 231 vehicles used the crossing every day. I believe that the House would agree that it is likely that that figure has risen considerably in the last nine years.

1433
We also have the problem of an increased number of trains arising from the introduction of the HS-125 locomotive on the main line. This has meant the diversion of, on average, 40 trains a day, on to this line. The rules applying to the opening and closing of the gates are continually ignored. This creates a danger for the innocent user who is not experienced in the workings of the line.
Recently I attended a public meeting, which included representatives of the residents, British Railways, the county council and the district council. It was clear from that discussion that British Railways recognised the need to improve the crossing. They argue, however, that at the moment they are fulfilling their legal responsibilities. Nevertheless the present situation, most people would agree, is unacceptable. As is so often the case, the question here is: who is to pay for the new crossing? British Railways suggest that it would cost something in the region of £30,000 for flashing lights and a modern barrier, and they would probably install it in the middle of 1981. They also said at this meeting that they would accept at least 50 per cent. of the cost of the reorganisation. Then they look to the district and county council to make a contribution. As in so many of these cases, it seems that we are really arguing about from which pocket we take the money. British Railways suggest that a new, modern, crossing with automatic barriers should be installed, and everyone accepts that this is necessary.
I think that my hon. Friend will be aware of the case of Herrington v. British Rail in 1972. British Railways were found to have other responsibilities for the safety of the public which are not normally found in their terms of reference. They did not accept this parallel at the time. A complaint was laid before the Health and Safety Executive some years ago drawing a comparison between the responsibility of industry and a public body.
It can be argued that the milkman and the postman who use this railway crossing are not covered because the gates are never shut. As the employees of British Rail use this crossing they must know about the risk to the public yet they appear not to take any action. In the past 10 years there have been possibly two prosecutions
1434
and everybody knows that the normal practice is to leave the gates open. It would be argued that the postman and the milkman have a right to look to British Railways and to ask whether their safety is covered.
I am sure that when my hon. Friend replies he will be sympathetic. We all know that there is difficulty in finding money. However, the present position must not be allowed to continue indefinitely. I repeat, British Railways accept that there is need for improvement. They recognise that adequate safety arrangements are not provided because for many years the need to close the gates during the day has not arisen. By habit they are left open day in and day out, week in and week out, and now year in and year out. With the substantial increase in traffic, we know that the safety requirements are not covered.
The Secretary of State has powers under section 124 of the Transport Act 1968 to require the British Railways Board to provide additional protection where a private crossing carries a significant public user. I dare say that he may feel that he should implement that part of the Act.
I have been helped by Councillor Bacon, who was recently elected to Northallerton council. He has done much research into this case and taken a great deal of trouble with it. I am grateful to him for the work that he has done. He, like so many others, believes that unless we do something with the railway crossing, we shall have a serious accident.
All the residents who live in Springwell Lane believe that some action should be taken, and the Minister could help us in one way. As British Railways have accepted the fact that improvement is required, have offered to pay a substantial part of the cost and have turned to the local authorities to provide some of the money, perhaps my hon. Friend's Department could find a way of co-ordinating discussions between British Rail and the local authorities which would result in a solution. I cannot believe that we should allow the present situation to continue.
I very much hope that when my hon. Friend replies he will assure us that the necessity for improvement is accepted and that a way of finding the necessary money will be discussed with all concerned.
2.3 am
The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): I congratulate my hon. Friend the Member for Richmond, Yorks. (Sir T. Kitson) on obtaining an Adjournment debate on the Springwell Lane level crossing. I listened with interest to what he said. I realise that the present situation at this level crossing is not in any way satisfactory. I think that everyone involved recognises that. Almost all the parties involved would like to see the arrangements at this level crossing improved.
As my hon. Friend rightly anticipated, we are mainly concerned about who pays for the necessary improvements and how we can best achieve some agreement to ensure that they are made. Indeed, I think that everyone concerned accepts that there should be some form of automatic level crossing at this point. The sort of crossing that could be provided would be the new type of automatic open crossing, which is remotely monitored from a signal box. That would involve "wig-wag" traffic signals at all four corners of the crossing. The crossing would be widened to enable vehicles to pass each other and audible warning devices could be turned down at night. The cost of the installation cannot at present be estimated exactly, but I am told that it would not be less than £50,000. We are concerned about the way in which the various authorities might contribute to produce the necessary money.
My hon. Friend has described the present road and rail layout, which is unusual. Part of the unusual background has given rise to the present situation. Springwell Lane crosses the Northallerton-Stockton goods line in Northallerton. The two lines divide and Springwell level passes below that part known as the high level by bridge crosses the low level by level crossing, passes beneath the East Coast main line and terminates at a farm.
The lines are operated under ancient legislation. I believe that it was the Leeds and Thirsk Railway Act 1846 which governed the present situation. Certainly it incorporates the relevant parts of the Railway Clauses Consolidation Act 1845. My hon. Friend has correctly described the legal obligations on the board, with which it complies. That legislation governs all the arrangements concerning the
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crossing, including the obligation upon those who use it to reshut and fasten the gates after use. However, as my hon. Friend says, with his knowledge of the crossing, in practice that system is by no means being followed as regularly as perhaps it ought.
Since the middle of the nineteenth century there has been further development in the locality in Springwell Lane as well as recent changes in railway traffic. Springwell serves some houses west of the East Coast main line. Some of them are terraced houses south of the road between the two lines that were built at the turn of the century. There are some bungalows north of the line that were built before and after the last war. There are 25 houses in all.
The level crossing is unmanned and it has always been unmanned. It has wide wooden gates about 10ft wide which open away from the railway and a sleeper surface adequate for carrying cars. It has wicket gates for the use of pedestrians. I have been given details of the visibility and speeds on the line. At line speed for the freight trains that use it—about 50 m.p.h.—down trains can be seen for about 300 yards, which is about 12 seconds' warning, and up trains for about 150 yards, which is about six seconds' warning. As that is not adequate, the railway has been provided with a warning bell, which sounds for about one minute. The bell has recently been altered to what is known as a yodel alarm, which is more reliable in icy conditions.
I have listened to what my hon. Friend said about the inadequacy of the alarm, although he has also said, somewhat inconsistently, that those who live near to the line have apparently been complaining about the noise that it makes at night. I can well understand that the noise is unpleasant, especially if it is experienced frequently as one is trying to sleep.
Unfortunately, this situation has been allowed to grow up over the years. I am sure that that is through no one's specific fault. All the surrounding houses must have received planning authority from the local land authority when they were built. The railway board tells me and my Department that it was never given any opportunity to comment on the adequacy or otherwise

1437
of the crossing. The use of the line and the housing development near it has built up over the years without anybody consulting anyone else, as far as one understands, about the adequacy of the crossing. It continues to be operated on the old basis.
Fortunately, there has so far been only one accident, although I do not place great reliance on that, since we should not wait for accidents to occur. I am told that during a night in January 1974 a local car driver was struck by a goods train on the crossing. Fortunately, little damage was sustained and there were no casualties. The gates had been left open on that occasion. Apparently the car driver did not open the car window to listen to the bell.
It was probably lucky that the consequence was not more serious. However, the fact remains that that is the only accident that has taken place.
The traffic on the line has recently changed. For many years goods trains were carried on the high-level lines by day—which involves going over the lane on a bridge—and the low-level lines by the level crossing were used only at night. High-speed trains were brought on to the main lines in May 1979. Since then, low-level lines have been in use for 24 hours to save the use of a cross-over on the main lines. I well understand my hon. Friend's representation that, since the line has seen a greatly increased use on the lower level, concern has increased.
At the time, the board reminded all those concerned in writing about the change in the pattern of rail traffic and they were reminded of their responsibilities towards reclosing the gates. There have been two prosecutions for failing to close the gates. In October 1979 two individuals were fined £25 each. I am sorry to say that my information corresponds with my hon. Friend's local knowledge, and in practice the gates are not always closed after use. Some attempt has been made to measure the present use of the crossing. I am told that householders keep about 50 cars. A census carried out in May 1979 showed that 230 vehicles used the crossing per day.
There is now pressure to use the legal powers available to try to get those involved to reach an agreement to modernise the crossing. I followed the argu-
1438
ments of Councillor Bacon, to whom my hon. Friend referred. He has written to the railways inspectorate suggesting that the board was not fulfilling its responsibility under section 3 of the Health and Safety at Work etc. Act. However, the Act cannot apply since the method of working the crossing is laid down in a specific nineteenth century statute. The board has no power of its own to change that statutory obligation.
My hon. Friend raised the question of section 124 of the Transport Act 1968. That has been looked at. It gives the Minister power to make an order to improve the protection of the crossing. That power can be used only if the crossing has developed significant public use, namely, when a former private road has become a public highway. An important problem is that the road clearly remains a private road. The local authority has looked at the problem but has declined to adopt the road as a public road. The crossing is, as it always has been, a private level crossing. The Minister's powers under section 124 of the Transport Act 1968 do not apply at the moment.
I hope that my hon. Friend will forgive me for being so technical, but this is of concern to his constituents. The legal position is that if the road were to be adopted as a public road, the powers under section 124 of the Transport Act 1968 could be used to authorise modern forms of protection at the crossing. It is also possible that a grant, under EEC regulation 1192, might be available.
The local council has declined to adopt the road and so it is not a public road. It therefore remains a private level crossing. I am glad to say that some discussions have taken place. My hon. Friend said that he attended the meeting on 21 March at the district council offices. I understand that the North Yorkshire county council, the Northallerton town council, Councillor Bacon and a number of householders were present. I am sorry that no agreement was reached at that meeting about how the cost of providing the improvements—which I think all would agree are needed—could be met. Once again, it was made clear that the county council—the highway authority—was not prepared at that stage to adopt Springwell Lane as a public road. There was an exchange between the board and

1439
the county council that did not reach a successful conclusion. Along with my hon. Friend, I hope that something can be done to enable the various local authorities and the board to reach some understanding and that the improvements will be financed.
On the general policy for improving level crossings, last autumn my right hon. Friend the Minister agreed with the recommendations of the level crossing working party and on the basis of its work the British Railways Board proposed automatic open crossings at the site, and design work for the necessary equipment is in hand. But the board is not prepared to bear the full cost on this private crossing, and that is not surprising when one looks at the considerable amount of level crossing improvement work that has to be done.
Nevertheless, the board has agreed to contribute towards the cost of the necessary improvements. It is open to the highway authority and the local authority to contribute to the cost. Section 123 of the Transport Act 1968 specifically empowers them to make a contribution. It is my hope and, I understand, the hope of the board that the understandable concern for safety at the crossing will be followed by some understanding that there should be local contributions to the cost of improving it. The board has limited funds available for level crossing improvement and modernisation and it must apply its priorities. The crossing needs improvement, but it cannot be regarded as having the highest priority in the list and it is not right to expect the board to pay the entire cost.
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I have to repeat that the crossing is a private one, the use is of a private nature and, therefore, my right hon. Friend has no legal powers to require the board or anyone else to do anything. If the road were to be adopted by the county council as a public highway the situation would undoubtedly be changed, both in law and in fact. Whether that is necessary is something that the local authorities must decide.
I hope that agreement will be reached among those involved on how they share the cost. The Department has no specific legal powers to require anybody to do anything, but I understand my hon. Friend's concern and, like him, I hope that something can be done to meet the requirements of his constituents. If my Department, I or my hon. Friend can be of any assistance in facilitating contacts between the board and the various local authorities involved, who, I am sure, are anxious to help, we shall do anything that we can.
I conclude on that more encouraging note for my hon. Friend's constituents. I think that everybody wants to see something done to improve the crossing. We are somewhat bogged down in discussions about who produces what contribution to the cost and, although the Department and Ministers have no legal powers, we shall give whatever help we can in bringing the parties together to reach understanding and agreement on the division of the cost.
Question put and agreed to.
Adjourned accordingly at eighteen minutes past Two o'clock.

SOCIAL SERVICES
  Fazakerley Hospital (Cross-infection of New-born Babies)
  Fazakerley Hospital (Cross-infection of New-born Babies)
  Health Service (Restrictive Practices and Bogus Incentive Schemes)
  Health Service (Restrictive Practices and Bogus Incentive Schemes)
  Marriage and Divorce Statistics
  Marriage and Divorce Statistics
  Members' Correspondence
  Members' Correspondence
  Disabled Persons (Access to the Skies Programme)
  Disabled Persons (Access to the Skies Programme)
  Invalidity Benefit
  Invalidity Benefit
SCOTLAND
  Public Expenditure White Paper
  Public Expenditure White Paper
  Tenants' Rights Etc. (Scotland) Bill
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  Scottish Tourist Board
OVERSEAS DEVELOPMENT
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EMPLOYMENT
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FOREIGN and COMMONWEALTH AFFAIRS
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NATIONAL FINANCE
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ENVIRONMENT
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NORTHERN IRELAND
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TRANSPORT
  1981 Census
  1981 Census
  COUNCIL OF EUROPE (CONSULTATIVE ASSEMBLY)
  COUNCIL OF EUROPE (CONSULTATIVE ASSEMBLY)

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

LORD ROSKILL
The Right Honourable Sir Eustace Wentworth Roskill, Knight, a Lord Justice of Appeal, having been appointed a Lord of Appeal in Ordinary and thereby created a Baron for life by the style and title of Baron Roskill, of Newtown in the County of Hampshire—Was, in his robes, introduced between the Lord Denning and the Lord Hunt of Fawley.

MESSAGE FROM THE QUEEN
The Earl of WESTMORLAND: My Lords, I have the honour to present to your Lordships a Message from Her Majesty the Queen signed by Her own hand. The Message is as follows:
"I have received your Address praying that the Location of Offices Bureau Revocation Order 1980 be made in the form of the draft laid before your House. I will comply with your request".

EEC AND COMECON: CANCELLED TOP-LEVEL MEETING
2.48 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what grounds the European Community has cancelled a top-level meeting between representatives of the EEC and COMECON to formalise their relations as negotiating bodies on trade and economic co-operation.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard): My Lords, the Community has told the Council for Mutual Economic Assistance that in view of the limited progress made during the last round of talks at working level, in Geneva in early March, the time is not yet right for a further top-level meeting.
Lord BROCKWAY: My Lords, I thank the Minister for his reply. May I ask him whether or not planned economic arrangements between the two coordinated authorities would be more effective than the EEC proposal that separate negotiations should take place with the nations in the Communist sphere? Will not this inevitably lead to COME-CON negotiating separately with West European countries, thus increasing their division? Is not this decision a repudiation of the Helsinki agreement whose main provision was for joint economic co-operation?
Viscount TRENCHARD: My Lords, to take the noble Lord's last point first, I do not think that the decision is a repudiation of Helsinki. Indeed, the Community has tabled a new draft and is positive in its desire to help East European countries' relations with the Community in trade affairs. To turn to the first point raised in the supplementary of the noble Lord, it is a problem of the competence and practice of the two bodies and of individual countries. At the present time individual trade negotiations are carried out on some matters by individual countries, particularly in relation to the East European States. The competence of the Community particularly to negotiate for all the EEC countries is of a different order from that of the CMEA. These are detailed and complicated matters, but it is felt that a further meeting is necessary at official level before the top-level meeting, if the top-level meeting is to be successful.
Lord GORONWY-ROBERTS: My Lords, may I put this point to the Minister: From what he said in his first Answer and, indeed, followed up in his answer to the supplementary, can we take it that there will continue to be official contacts between the two bodies, aimed largely at getting, so far as possible, a similarity of structure on both sides, leading to composite negotiation on the lines he

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described? And while these official negotiations go forward, can he confirm that the meeting of ministerial principals is postponed rather than indefinitely abandoned?
Viscount TRENCHARD: My Lords, contacts are continuing, and we have offered a further meeting at official level. Certainly in this sense one should think in terms of a postponement, not a cancellation. In regard to the noble Lord's point about working towards a similarity in structure between the two organisations, I do not think that is necessarily the aim of these talks, or that it is necessarily desirable. The two organisations are different. They probably suit their own purposes very well.
Lord BROCKWAY: My Lords, can the Minister say whether the present arrangements for discussions on environmental pollution will be maintained, and whether it will be possible to review the extension of joint activities which are so important for both sides?
Viscount TRENCHARD: My Lords, I think that is a detailed matter that could come under this heading or under other headings. I will let my noble friend know of the noble Lord's request that these matters should continue to be discussed.
Lord HANKEY: My Lords, may I ask the Minister whether the Government have any philosophical doubts about the desirability of our starting to deal officially with COMECON? Is not the COMECON organisation rather considerably under Soviet control, by means of which the Soviets are able to co-ordinate the economic policies of the whole of Eastern Europe? And is it really in our interest to lend authority to an organisation which has that effect in Eastern Europe, particularly at the present time, when the Russians ought to be in the doghouse?
Viscount TRENCHARD: My Lords, I am glad that the noble Lord added the words "at the present time". If the Soviet Union would do as the world requests it to do in relation to Afghanistan, we could be back to square one, where encouraging trade between East and West generally is important.
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However, I think it is important to say that while the Afghanistan situation has certainly not helped in this, or in any other, area in terms of East-West relations, the CMEA is, as I understand it, a moderately loose association of Eastern countries, including all those as well as the Soviet Union; and helping those countries to make economic and trade contacts with the Community or Community Members, as appropriate, remains an aim of the Government.
The Earl of ONSLOW: My Lords, can the noble Viscount assure us that if trade between the EEC and COMECON is increased it will not by-pass American trade restraints with the Soviet Union as a result of Afghanistan; in other words, it will not be used as a "filler up" of an otherwise voided situation?
Viscount TRENCHARD: My Lords, there is certainly no chance of this agreement (which is not an agreement at the present time) being used in the manner suggested by my noble friend.

DISCRETIONARY AWARDS: EXPENDITURE PLANS
2.55 p.m.
Baroness DAVID: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what they anticipate the effects of local authority reductions in the provision of discretionary awards will be on:—

(1) opportunities for young people;

(2) course provision, especially in subject areas which are essential but where demand is limited; and

(3) providing colleges.

The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, the Government's expenditure plans published on 26th March (Cmnd. 7841) did not assume any reduction in the level of expenditure on discretionary awards over the period to 1983–84. They provided furthermore for a growth in the provision for home students in non-advanced further education. Our estimate is that this should permit a 10 per cent. increase in the

279
number of students enrolled on non-advanced courses. How individual local authorities respond to the Government's plans is for them to decide. But I do not anticipate significant reductions in any of the areas referred to by the noble Baroness.
Baroness DAVID: My Lords, while thanking the Minister for that reply, may I say that I was of course aware of that situation, which is only to be expected because I too have read the Government's expenditure plans document. But is the noble Lord aware that all but three local authorities are cutting discretionary awards? Is he aware that this very morning, giving evidence to the Select Committee on Education, Science and the Arts, Dr. Richard Hoggart said, "Discretionary awards are being wiped out"? What action are the Government going to take in the light of these actions, apparently paying no attention to the money that was put into rate support grant for the purpose of discretionary awards?
Lord BELSTEAD: My Lords, I do not think that the noble Baroness should believe all that she reads in the newspapers.
Several noble Lords: Oh!
Lord BELSTEAD: Well, my Lords, I think the noble Baroness would be well advised to take my advice. The reply which I gave to the noble Baroness represents a considerable increase over the period to 1983–84 which was taken into account when the Government made up their Expenditure White Paper, and I repeat that there is no reason why there should not be an expansion over the period that I am talking about.
Lord ALEXANDER of POTTERHILL: My Lords, I wonder whether the Minister could clarify one particular point in my mind. We all know that the nature of the rate support grant gives the Government no control whatever on how rate support monies put into the grant for education are necessarily used. There is no guarantee therefore that the provisions that the Government intended to be made in this field will necessarily apply. My concern, however, is with a particular issue of grants, namely, grants to bodies—
280
A noble Lord: The noble Lord should ask a question.
Lord ALEXANDER of POTTERHILL: My Lords, is the Minister aware of the impact of the failure to make grants to bodies which would qualify for grant from the European Community's Social Fund if the grants were made in this country? In other words, the failure of local authorities to make grants for such projects means that we are not getting the use of the Social Fund which is available for us.
Lord BELSTEAD: My Lords, I accept that what the noble Lord is saying may very well be—and knowing the noble Lord's experience, almost certainly is—a consequence of the non-making of grants in certain cases by certain authorities. But the Government believe that the discretionary grant system works not unreasonably well and it is a system which they have no intention of changing at the present time.
Baroness GAITSKELL: My Lords, is it not a fact that there is very high youth unemployment in areas where there is also high adult unemployment? Does this not engender the most terrible resentment among young people and a mounting bitterness, which is very easy to understand when the Government are really mortgaging our future? Is it not also surprising when we hear the Prime Minister usually introduce her remarks on cuts with the words, "I am the last person to do this"—that or the other? Is this not cynical—
Several noble Lords: Speech!
Baroness GAITSKELL: It is not a speech; it is a question. Is it not cynical the way the Prime Minister says that? Altogether it is a complete scandal.
Lord BELSTEAD: My Lords, I was not aware that unemployment, and particularly the tragedy of youth unemployment, was something which was new; it has been with us for some years, and I. for one, would not make a political point about it. I was also not aware that youth unemployment trenched upon the question which I am being asked today, namely, discretionary grants by

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local authorities, except in this respect: if you are a young person and have the ill fortune to be unemployed and drawing benefit for that, it is still possible, I am glad to say, to receive a discretionary grant at the same time in order to take up a part-time place in a college of further education. This is a practice which certainly we inherited from the previous Government, and I am delighted to say that it continues.
Baroness DAVID: My Lords, is the Minister aware—if not I should like him to be—that I would not base any question on newspaper reports without checking the facts? In the light of what he has said, will he give me an assurance that there will not be drastic cuts in discretionary awards?
Lord BELSTEAD: My Lords, the discretionary awards are made by local authorities. The assurance the noble Baroness wants me to give is, therefore, totally beyond my power to give, although, of course, I would wish to do everything I possibly can for the noble Baroness in these matters.
Baroness BACON: My Lords, is not the noble Lord the Minister rather missing the point, in that what is happening is that the Government are keeping local authorities short of money and driving them to cut discretionary grants and many other things? Is not this another example of taking the burden away from taxation and putting it on to local authorities through rates, and the rates are a very unfair form of taxation?
Lord BELSTEAD: My Lords, if the noble Baroness will forgive me, I do not think I can have made myself clear in my original Answer. I said that the Government's public expenditure plans in the White Paper provided for a growth in the provision for home students in non-advanced further education, and our estimate is that this should permit a 10 per cent. increase in the number of students enrolled on non-advanced courses up to 1983–84. That does not square with what the noble Baroness has just said.

THE EASTER ACT 1928
3.3 p.m.
Lord AIREDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they will move to bring into force the Easter Act 1928.
Lord BELSTEAD: My Lords, the Government continue to take the view that it would not he appropriate to implement the Easter Act 1928 without the full concurrence of the Churches. We understand that such concurrence is not likely at present.
Lord AIREDALE: My Lords, I am obliged to the noble Lord, but was not that circumstance known to Parliament in 1928? What is the advantage of retaining Easter as a movable feast which was not apparent to Parliament in 1928?
Lord BELSTEAD: My Lords, I think that our predecessors in Parliament were wise in their generation. The noble Lord will be aware that when they passed the 1928 Act it was written into it that it could come into operation only by Order in Council, and it was provided that in bringing the draft order in:
"regard shall be had to any opinion officially expressed by any Church or other Christian body".
Since then it has always been reckoned by successive Governments that this meant that one wanted a view agreed by the Churches, and that view simply has not been given.
Lord BYERS: My Lords, may I ask the noble Lord whether anybody is working on this problem to try to obtain an agreed view?
Lord BELSTEAD: My Lords, I gather that the World Council of Churches was very much exercised with this at the World Council of Churches Fifth Assembly at Nairobi in 1975.
Baroness BURTON of COVENTRY: My Lords, will the Minister help me on this, and as I read it in a newspaper perhaps he will be able to tell me if I am

283
correct. Is he aware that I thought I read in the newspapers recently that certainly the countries in the EEC, and I think all countries in Europe with the exception of Switzerland, have now brought their summer time into line with ours? Would it be possible, in view of that co-operation, to see what line they would take on the question of Easter?
Lord BELSTEAD: My Lords, I have not had the pleasure of replying to Questions recently from the noble Baroness. I have only been able to sit on the sidelines and watch as she manages to steer matters in the direction that she particularly wants. The question the noble Baroness asks does not arise from the Question on the Order Paper. I will, however, try to find out the answer, and I promise the noble Baroness that I will write to her.
The Lord Bishop of CHELMSFORD: My Lords, is the Minister aware that there is a growing convergence among the Churches on this subject? The British Council of Churches, which incorporates all the major Churches except the Roman Church, and many smaller Churches have a policy that there should be a fixed Easter. Is he aware that the Roman Catholic Church has itself accepted in principle that this should be so? This leaves the Orthodox Churches of the East, the 11 Patriarchates, and there I think the picture is very different; I think there would be considerable difficulty there in a change of this sort. In any case it would be necessary that the 11 Patriarchates should meet together in Holy Synod in order to approve a matter which they see as extremely important. Is the Minister aware that the 11 Patriarchates have been waiting for such a synod for 800 years?
Lord BELSTEAD: My Lords, I am grateful to the right reverend Prelate for the information which he has given to the Government and the questions he has asked. All we can do is to pray that the Churches will soon reach a conclusion.
The Earl of CORK and ORRERY: My Lords, is my noble friend aware that in fact the Orthodox Churches now usually have Easter on a different date from anybody else? Would it make any
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difference at all to them if the rest of the Churches should settle on a fixed date and leave them to go their own way?
Lord BELSTEAD: My Lords, perhaps I ought to add that I am advised that since 1928 successive Governments have always looked for the full assent of the ecclesiastical authorities. We believe, therefore, that the view of the Orthodox Church is important in this matter.
Baroness SEEAR: My Lords, would the Minister not agree that, if it is quite impossible to get a sensible arrangement over the date of Easter, it calls for a further review of our public holidays? Next year Easter falls on 19th April. This means that we shall have four of our precious public holidays pushed into a period of seven and a half weeks. For the rest of the year, whatever seven and a half from 52 is, we shall have the remaining holidays spread out. It is quite ridiculous to concentrate four public holidays—Good Friday, Easter Monday, the May Day holiday and the Spring Holiday—in seven and a half weeks.
Lord BELSTEAD: My Lords, it is most unfair, but that is life.
Lord MACKIE of BENSHIE: My Lords, may I ask the Minister whether it is a matter of Government policy and principle to secure the consent of all interested parties before they legislate?
Lord BELSTEAD: Yes, my Lords, on this particular matter.

ECONOMIC AND INDUSTRIAL POLICIES
3.9 p.m.
Lord PEART rose to move, That this House deplores the incompetence with which Her Majesty's Government are conducting their domestic policies which are resulting in increasing inflation, continuing industrial decline, deterioration in the balance of trade in manufactures, increasing unemployment, inability of industry to achieve necessary profitability and the erosion of the Welfare State. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I remember a debate

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some time ago when we discussed the gracious Speech. There is now, I said then, a new Government and we in Opposition will probe that Government and will make certain that we get our point of view across, even if we may disagree. We will do it forcefully and we will seek to extract from the Government the views which are necessary in order that we can, I hope jointly, guide our efforts so that we improve the economy of our country.
So, I open this debate in that spirit again, and I remember very well that gracious Speech. We probed what the Government really intended to do, for example, in relation to the nationalised industries. In the gracious Speech, proposals were put forward by the Government to amend the Industry Act 1975 and to restrict the activities of the National Enterprise Board. Other proposals were announced which would reduce the extent of nationalised and State ownership and increase competition by providing offers of sale, including opportunities for employees to participate where appropriate.
We now know that the Government have produced their Industry Bill, which I believe is a reactionary document. That 1E1 has been very strongly attacked by former Ministers in another place. It will really harm industrial development. The National Enterprise Board is being attacked specifically, and Clause 1 amends Section 2 of the Industry Act, Section 2 of the Scottish Development Agency Act and Section 1 of the Welsh Development Agency Act. It provides that the National Enterprise Board shall cease to have the function of extending public ownership and provides that the National Enterprise Board and the Agencies shall cease to have the function of promoting industrial reorganisation and industrial democracy.
The clause gives a new function to the National Enterprise Board and to the Agencies of disposing of assets held by them in order to promote private ownership. I make no complaint. After all, the Tory Party has always attacked public ownership, although on some occasions it has approved of it. There are many such examples. Even distinguished persons and politicians like Harold Macmillan and Winston Churchill on many occasions paid tribute to the work of nationalised bodies. So, there
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are some people in the Tory Party who may still be converted by the facts. However, the Industry Bill which has now been presented will be disastrous and will, I believe, harm our industrial strategy. The Labour Government had a good record as regards this matter. I remember how often, when I was speaking from the other side of the House, we were attacked on our handling of the economy. However, many noble Lords accepted that our industrial strategy was right and that we were pursuing a course which would help to regenerate industry in this country.
I believe that industrial aid is important. However, I am sorry to say that one of the key Ministers in the Government concerned with industry, Sir Keith Joseph, last week announced substantial cuts in Government assistance to regional industrial development agencies. I want to stress that this is not just a matter which affects the Labour Party and the Conservative Party: it is something which affects our country, our industry. I think that The Times was quite right. I think that Sir Keith Joseph with his unusual views is entirely the wrong person to be concerned with British industry. I think that he is a menace to the progress of industry in this country and he has shown that over his attitude to the steel industry and to the men themselves.
I believe that this is a vital matter for an area which I used to represent the North-East. Cumbria, my native Durham and Northumberland have always had great problems as regards unemployment. For the North-East, where the North of England Development Council operates, the Government's policy means a loss in the first year of £145,000 in aid. At a time when the region is struggling for survival, that 40 per cent. represents a cut in Government assistance, and it can only cause great concern.
Every effort was made by the last Labour Government and previous Governments to promote regional aid, and that has to be paid for. So, any curtailment in the North-East programme can only reduce the chances of the NEDC in attracting new industry. Local authorities within the region are still ready to match every pound the Government are prepared to grant, recognising that the creation of jobs is the only answer to unemployment caused by declining

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traditional industries. So, the cuts mean that a recasting of the NEDC operation is inevitable.
I have mentioned the North-East, but this situation applies also to Scotland. I know that my noble friend from Scotland, the former Secretary of State, Lord Ross of Marnock, feels strongly about this and on every occasion defends the Scottish interest. I hope that those noble Lords who are from Scottish areas will support me on this matter, because I believe that Scotland needs essential aids just as the North-East does. My noble friend Lord Ross of Marnock has always pressed other Ministers on this matter. I am not revealing Cabinet secrets, but when in the Cabinet, he was a doughty defender of Scottish interests. I hope that noble Lords who believe in Scotland, as many of them here today do, and who are fair-minded about this, will approve of what he has done and the stand that he has taken. I hope that another noble Lord who was Secretary of State will also back me and those who want to provide aid for Scotland now at this very moment.
Wales has considerable problems caused partly by the crisis in the steel industry but also by recession, the coal industry and the closure of pits, just as has the North of England. So, the story which we see now unfolding is Tory inaction which is really leading to disaster in these great areas of our country. After all, the men and women of those areas are the people—apart from agriculture with which I shall deal later—involved in industry who produce the wealth of the nation. They are sometimes held in contempt by some people for wrong reasons. They are the salt of the earth and the men and women whom we should help now. They are the people who will put our country right, given the right leadership. I am afraid that the Government are not doing that.
I advise noble Lords to read very carefully the report of the National Enterprise Board. I said this nearly a year ago and only yesterday I obtained from our Vote Office a document dealing with the National Enterprise Board and what it is doing. This is a body which is being attacked by Tory Ministers. It is a body which helps us to get new aid in
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the regions. If noble Lords care to go to the Vote Office they will be able to see what the functions of this board have been, how it has steered industry into the right quarters and how it has opened up exports abroad. Yet here is a Government who wish to strangle something which is helping our industrial revival.
I cannot understand the noble Viscount, Lord Trenchard, whom I admire so much. I think that he is one of the successes of the Government, and I mean that. Indeed, I hope that I am not harming him by saying that. However, I knew him when he was interested in agriculture and he was always fair, courteous and able. I believe that he has carried those attributes here in the House. However, I hope that he will not be wooed by those people in the Tory Cabinet who wish to pursue policies which will inevitably create disasters in those regions which I have mentioned.
When we had this debate previously—the one to which I referred earlier when the noble Lord, Lord Soames, was responsible for the debate—I asked about a specific body called ACARD. ACARD is known to all of us. In fact, its pamphlets on the micro-chip industry and the new technology are vital to our industry. It was set up, I am glad to say, by a Labour Government. I played a part in it and chaired the meetings. It was a committee of distinguished scientists and industrialists and I noticed that tribute was paid to it last week in The Sunday Times and the Observer.
However, there was one thing missing. Those reports did not automatically go to the Cabinet, because, according to the person who wrote the article in The Sunday Times, there was no Minister responsible. In other words, no one was responsible for science in a Conservative Ministry. I want to ask this question. Will the Tory Government, in the interests of our country, because ACARD must succeed—this is a body which is doing tremendous work, but the fruits of its work will not be seen for quite a long time, so it must be encouraged—say what the status of ACARD is now? I should like an answer to this question; I put the same question to the noble Lord, Lord Soames. Is there a Minister who is responsible for that body, as I was when I was in the Cabinet?
As I have said, it is a body which is doing wonderful work. Indeed, noble Lords have only to go to the Vote Office to see six policy documents on research and development produced by this body. By getting businessmen and scientific people together is one of the only ways in which we can create a revival in our country and, above all, meet the challenge of the new technology. That is why it is a tragedy that the National Enterprise Board should be attacked and destroyed by a Conservative Government. The National Enterprise Board has done much to encourage the chips revolution and the development of micro-technology. Therefore, I hope that we can have an answer on that. I trust that there will be no attack on ACARD. I know that it could be called a body which is academic, but in the end it is linked with industry. I trust that the noble Viscount will give me an answer at some time, if not in this debate then perhaps he will write to me.
I understand that noble Lords in the Government are hoping to extend new industries in rural areas. I give every support to that. But I hope that the noble Viscount will realise that we already have a very fine organisation dealing with small industries in the countryside—a body presided over by my noble friend Lord Northfield. We had an excellent debate not very long ago on this matter because the EEC and other bodies are interested in it. I hope that when the Government talk about aid for small industrial developments, as they did in the Budget, they will seek to use this body which has done so much CoSIRA—and which deals so much with industries in rural areas. It operates in three broad ways. It already has an approved programme of 1,000 small workshops and factories at key points in all declining rural areas of England. The programme is a partnership in operation with local authorities, which assess their own requirements and show us what self-help will provide. I hope that CoSIRA, which has only a small staff of 300, will not be cut back.
A Labour Government would give much more aid to CoSIRA than a Conservative Government. I hope that the noble Viscount will try to right this, because it is so important for the rural areas. Here we can see how the Govern-
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ment must be prodded over and over again. They seek to destroy the industrial strategy which we pursued and which is right. They are not sympathetic to regional areas; they never have been. They are not sympathetic to trade unionists who lose jobs. There is a hostility and an arrogance which we occasionally see in certain Conservatives; I am not saying that every Conservative noble Lord or every Conservative Member of Parliament is arrogant, but generally their approach to ordinary men and women is not one that I like. I can remember working politically with the men of the North-East and being on a local authority; I can remember the difficulties which we faced in the very difficult pre-war period.
There are, of course, noble Lords who are sympathetic and who will see why there is a need to pursue policies which will help build up a workforce and which will help to make our industries competitive with those in Europe. Therefore, I am not being critical of every noble Lord. But I believe that as a party the Conservative Party is basically hostile to a good, active, trade union struggle. I know that that may sound harsh to some people, but I cannot forget my background.
Moreover, not only are the Government not properly encouraging, as they should, a healthy environment; they are now attacking the National Health Service, to give just one example. My noble friend Lord Bruce of Donington was PPS to a great Welshman, Aneurin Bevan, who will always be remembered not just for his brilliant oratory and for his work for the Labour movement, but for the fact that he pioneered the National Health Service. He had a battle. With whom? The BMA and its friends in the Conservative Party. I believe that the creation of the National Health Service was one of the greatest acts that the Government ever did. I believe that, for all its faults, the National Health Service is welcomed by the British people and is the admiration of many people in the world who know our social services.
Linked with this decline in industry, we have shocking cuts in the National Health Service, and increases in prescription charges which are disgraceful. I could go on quoting the cuts that have been made, including the closure of

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hospitals and places where some of our young doctors are being trained. All this is coming under Tory stringency and the Tory axe. It is no good the noble Lord, Lord Orr-Ewing, nodding his head; he knows that I am right. He says that he is not nodding his head. There is a Health Service with broken promises. The prescription charge, only just increased to 70p from 1st April, will be £1 from December; but there has been a staggering five-fold increase since the Conservatives took office, when the charge was only 20p. From 1st April 1981 dental charges, which are going up from £7 to £8, will have to be paid by young people between the ages of 16 and 21, who now receive free treatment. Those who remember Mrs. Thatcher's pre-election promise that
"the Conservative Party has no plans for new NHS charges",
which she made at Beeston on 18th April 1979, will be interested to learn that a new charge of £2, with certain exemptions, is to be introduced for a sight test. So we can see how the Government are breaking their promises in a major field of activity. It also applies to housing and to many of our great services. Housing cuts will be considerable. I believe that rates will reach an all-time record when they are announced. So we shall see many more burdens affecting ordinary men and women.
Education has been mentioned in this House and I shall not go over our recent debate. I say only this to the Tory Party. We do not simply criticise the Tory Government because of school transport. I know that the Government got a bloody nose on that; they deserved it. Many of their own Members could not stomach what would happen to some of their supporters in the industrial areas. Now they are going to cut still further the field of education for our people. School meals and even school books are being cut. The Educational Publishers' Council reports cutbacks averaging 11 per cent. in local authority purchases of school books, and councils will be free to axe nursery education. I understand that when Oxfordshire Tories wanted to do this the Government were advised that nursery provision was an obligation under the Education Act 1944. Therefore, they have introduced a new clause scrapping the obligation.
Then we are to have the assisted places scheme, which I believe is a scandal. The Government have halved its initial cost in 1981–82, from £6 million to £3 million, but expenditure is still planned to rise to £55 million when the scheme is fully phased in. Here is a scheme which really is going to strike at the heart of the comprehensive school system, and indeed even the grammar schools. This is what the Conservatives are doing to the educational system.
May I say to the noble Lords that I really cannot understand them. Noble Lords opposite never shout for cuts in the private education system. I have never heard a noble Lord get up in this House and say, "If we are going to cut down for ordinary children, why should we not follow that precedent and deal also with the private sector?"—which probably can well afford to be cut down when compared to the schools we sometimes see in many parts of our rural areas which have large classes, and aided schools which do not give a proper education. So here we see that education, along with the National Health Service and housing, is falling under the axe of a Conservative Administration. I understand that even the fire services up and down the country are suffering from cuts in county council budgets. In London, for example, the GLC has taken 41 fire appliances off the road, and at least another 30 are perpetually under repair. This is a major service, and the firemen in that section are really concerned about what could happen.
Here we have a Government which will still pursue policies which, in the end, I believe, will harm considerably what we are trying to do. I have argued over and over again that Conservative Administrations always do this and always will. They seem to delight in seeking to destroy anything which smells of public service in the best sense. I believe that what they are doing is shocking, and I say to Tory Ministers it is really disgraceful. I know they do not like hard words, but I do not beat about the bush. I believe that what they are doing to our people in the field of social services and the services which are there before us is something that they will regret one day, because one day, inevitably, because of their policies, the British people will see that they made a mistake at the last General Election; and

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at the next General Election I believe they will be turned out for what they are doing to our people in relation to social security, education, and those other areas of activity I have mentioned.
I have always said that I must not speak long, because I once moved a Motion in this House that we should speak for only a quarter of an hour, and a Front Bench speaker for probably twenty minutes. I have kept to my promise. However, I believe that this debate will be regarded as an important debate. I know that the Tories are going to be attacked by my colleagues, and quite rightly. This is as it should be. Noble Lords are good at debating, and even though we may say hard things about our colleagues I hope they will take note of the seriousness of the argument that I have put forward. There is the industrial strategy side; the failure to respond; the desire to cut back the National Enterprise Board; the bringing in of a shocking new Bill which is going to prevent aid. Let us hope that even at this late hour Conservative Ministers, despite the Budget, will in their departments seek to reverse the trend which can only do harm to our country.
Moved, That this House deplores the incompetence with which Her Majesty's Government are conducting their domestic policies which are resulting in increasing inflation continuing industrial decline, deterioration in the balance of trade in manufactures, increasing unemployment, inability of industry to achieve necessary profitability and the erosion of the Welfare State.—(Lord Peart.)
3.34 p.m.
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, the noble Lord has, as we would have expected of him, given a good, robust, fighting political speech. One of the great pleasures of this House is that you can enjoy a speech of that nature and applaud it and appreciate it, even if you do not happen to agree with its contents. The noble Lord said that what the Government have done was shocking and disgraceful. I thought he was a bit extreme when he said that he thought that most Conservatives were arrogant and that he did not like their attitude towards people. If he
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looked back just a few months he would see that the electorate seemed to think that, despite the arrogance which the noble Lord attributes to us, they preferred the Conservative Party to the Labour Party.
The noble Lord made a bit of a field day of his Motion when he said that he
"deplores the incompetence with which Her Majesty's Government are conducting their domestic policies which are resulting in increasing inflation, continuing industrial decline, deterioration in the balance of trade in manufactures, increasing unemployment, inability of industry to achieve necessary profitability and the erosion of the Welfare State".
He blamed the Government for just about everything except the weather. It was really a remarkable catalogue. He really reminded me rather of Long John Silver with an old cutlass in his hand taking a swipe at everything he could see.
Listening to the noble Lord you would not have thought that the Government had done one right thing since they took office. One would not have thought that 12 months ago they were sitting here, presumably taking long-range decisions. Not taking decisions that would last for just three months but taking decisions that would last for quite a long while. If they were not, one might ask what they were doing. If one is honest and fair—and indeed the noble Lord is both honest and fair—one knows that measures which a Government implement take months and sometimes years to work through the economy before they have the proper effect. When the economy faces difficulties the measures have to be unpleasant.
The noble Lord and his friends found this out when they were in Government, and when their Government were forced to go to the International Monetary Fund in order to avoid total economic disaster. The terms which the IMF imposed then on their Government included the very policies which we are now pursuing, and which the noble Lord has decried. They include the public spending cuts and strict control of the monetary supply. It took many months—it always does—before the medicine worked. But in the end it did. The noble Lord's medicine did work when they were in power, until at the last minute they saw an election coming and they let the ropes go, and again inflation took off. The medicine will work again. The only difference between

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this Government and the last Government is that we are determined to stick to the economic policies, which are the only effective cure, until the medicine does work. If only the last Government had stuck to what the IMF had prescribed, instead of producing an inflationary preelection boom, the situation would be very different today. Instead this Government—and the whole country—have got to go through the whole process yet again.
All I am saying to the noble Lord, Lord Peart, is that before, as he does in his Motion, he throws the book at us let him be perfectly aware that those who were responsible for guiding the country for five years must bear a large part of the responsibility for the position into which the country has been guided and from which we now have to extricate ourselves. When the noble Lord deplores the incompetence with which the Government are conducting their domestic policies, let me tell him that we have been having to take these hard decisions which they did not—or would not—take. We have had to cut the vast spending plans to get the priorities of need right, and to try to give the taxpayer and the ratepayer value for money. We have had to try to restore incentives by getting personal taxes down. We have had to insist on the need to adjust the size and efficiency of the steel industry to the realities of world markets; to begin the reform of an education system which was not giving the average child, let alone the bright child, a fair start in life; to honour our defence obligations to our allies, and to restore confidence abroad, not only in our currency but in Britain as an influence in the world. Nobody can say that that has not been done.
All these things we pledged ourselves to do, and with all of them we have made a start, and achieved a good measure of success. I know that some of the spending cuts have been hard. The noble Lord I think used the words "shocking" and "disgraceful". But there is simply no alternative to this if we are to bring inflation under control, and if we are going to realise the resources to create new jobs in industry. We live by trade. The only way in which a business can succeed is by making a profit.
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The only way in which those employed in a business can be paid a reasonable wage, or indeed a wage at all, is if the business makes a profit. The only way in which we as a trading nation can exist—and we have to buy 50 per cent. of our food from abroad and import annually no less than £48,000 million worth of goods from abroad—is by selling goods abroad, and the only way in which we can sell goods abroad is to have enterprising, competitive, profitable businesses. The only way in which we can afford all the social benefits such as schools, hospitals, pensions and roads, which we all require, all of which are demandeurs of money, is in the end to have successful businesses which provide the income and provide the profit which can be taxed.
What makes a business successful? It is not the rules or the laws or the taxes. It is people—the managers, research workers, entrepreneurs—the workforce. The most important ingredient in any business, or in any country, is the people. It is their personality, their determination, their idiosyncracies and their character on which the success of a business, and a country, depends, and their ability to use those qualities. If one looks back over history one sees that only one thing made this country succeed—internationally, militarily, domestically or economically—and that is people and their character. Queen's Regulations never won a war; it was the soldiers led by the generals who won the wars. Bureaucracy has never made a profit; it is people who make the profit. Yet year after year as a nation we seem to have cocooned the initiative and enterprise of people with a web of restrictions and disincentives. Like a mycelium, they have crept into every crevice of our national and business life, too often sapping both energy and enterprise, and then having to be paid for.
It was a fundamental recognition of this Government that if this country is to succeed as we all want it to, then it is the people who will make it succeed. This made the Government determined to do two things. The first was to encourage individuals to give of their best and to be responsible for their actions, and, secondly, to cut down bureaucracy. Neither of those are easy tasks, and both are long term. It is a question of altering minds and attitudes. That is why the first

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thing the Chancellor of the Exchequer did was to cut direct taxation right across the board—to give people the incentive to work and the right to retain more of what they had earned and to dispose of it how they will. Is that what the party opposite would condemn? One thing is certain: they would never have cut direct taxation. They could not have done so. If the Labour Government had carried out plans which they had intended to carry out when they left office, they would have had to increase income tax by at least 7p in the pound above what it was when they left. We have reduced the top rate of tax from 83p to 60p and the standard rate from 33p to 30p. I find that a cause for rejoicing, not condemnation, yet the noble Lord, Lord Peart, comes and censures us for it.
Several noble Lords: Hear, hear!
Earl FERRERS: It is interesting, my Lords, that, among others, the noble Baroness, Lady Llewelyn-Davies of Hastoe should say "Hear, hear"—that she finds it disagreeable to have direct taxes lowered. That will make a very interesting fact. But it is not easy to control bureaucracy. It feeds on itself and, if one is not careful, promotes itself. Yet, despite that, we have managed to secure a drop in the number of civil servants from 732,000 when we took office to 708,000 in January of this year, whereas the previous Administration had planned not to decrease the number but to increase it up to 748,000 by April of this year. Is that reduction something for which we should be condemned?
Inflation is at the heart of many, though, I agree, not all, of our problems, and it is the Government's first priority to tackle inflation and bring it down. It is not easy, especially when you are confronted with world-wide inflation and when since this Government took office last May the price of a barrel of oil has risen from 20 to 33 dollars. Inflation undermines everything economically, and then it destroys people by putting them out of work, debilitating their morale and altering their attitudes, standards and values.
One of the greatest contributors to inflation is and can be Government. When people, as the noble Lord, Lord Peart, did, demand more hospitals, a
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better health service, a better education service, better social security and higher pensions—all of which we want to seethe Government have to pay for it. But the Government do not have any money. Governments do not have money. I said this once to an audience and somebody roared with laughter. He thought it was the funniest thing he had ever heard. But it is a fact. Government get their money in one of two ways. The first is by raising taxes from people; from the profits of companies—and if there are no profits then there is no tax—or from income—and if there is no job there is no income and then no tax—or from indirect tax on such items as petrol, beer and spirits.
The second way is by borrowing money, and if the Government go to the market to borrow money—in other words, to borrow money from the people—they have to pay interest on that money. That they do either by raising more taxes or by borrowing more money to pay the interest. But when you borrow money you have to pay it back at the end of the borrowing period. And when Government pay it back, how do they pay it back? By borrowing an equal sum of money, probably at a higher rate of interest, in order to pay back the principal, and, as it is at a higher rate of interest, so the demands upon the economy become greater to satisfy the original borrowings.
It is dangerous and a vicious circle, one over which a private individual or businessman would throw up his hands in horror, and yet it is one which Governments, and we as a nation, seem to tolerate. It is not for nothing that it is called the "national debt". I wonder whether your Lordships know that in 1974 the Government's total borrowings were £40,000 million. In the five years during which the party opposite were in power, they borrowed a further £40,000 million. It had taken 300 years for this country to bring its borrowings up to £40,000 million, and the party of the noble Lord, Lord Peart, doubled the amount in five years. But, when we say "This cannot go on. The burden is crippling us. It is part of the cause of our trouble. It has to stop", the noble Lord has the effrontery to censure us.
If Government expenditure is to be cut, it will hurt. Nobody has ever denied that. A Welfare State, with all the benefits

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which that brings, can exist only if we can afford it, and it can exist only to the extent that we can afford it. What we have to do is to ensure that it exists for those who need it. The noble Lord, Lord Peart, condemned the cuts which he said were being undertaken in the social security programme, but that programme costs £20,000 million per year. It accounts for about a quarter of all public expenditure and it costs each household about £1,000 per year. It expanded by 50 per cent. when the national wealth grew by only 15 per cent. If we are looking for cuts in public expenditure, it is inevitable that this programme must take some share of the economies, and those economies must fall on those areas which are most able to bear them.
When the noble Lord, Lord Peart, refers to the inability of industry to achieve the necessary profitability, I wonder whether I may remind him of what the Government of which he was a distinguished Member did to the agriculture industry when they were in office. I see the noble Lord looking horrified. He was a very distinguished Minister of Agriculture. He was not the Minister the whole time, but he was a Cabinet Minister and therefore presumably took some share of the responsibility. What they did was this. In order to try to protect the cost of living from rising they let the green pound get out of alignment by 20 per cent. for a period of three years, and it even rose to a height of 45 per cent. They thereby denied to British farmers the prices which their European counterparts were receiving, and they thereby knowingly deprived agriculture of the funds for investment.
One result of this—and I shall give the noble Lord an instance of one result—was that the pig industry has been crippled. The United Kingdom pig breeding herd dropped by nearly 20 per cent. since 1973, while the breeding herds in Denmark, Germany and the Netherlands rose by 16 per cent., 23 per cent. and 39 per cent. respectively, and this—
Lord PEART: My Lords, will the noble Earl give way? He mentioned the pig industry. The first thing I obtained from the Community on my first visit there was a big pig subsidy of over £30 million for our pig producers. That is on the record.
Earl FERRERS: Well, that is fine; but it is a pity that the noble Lord did not manage to get some other things straighter. The noble Lord's Government had this deliberate policy. What happened to the cost of food, which he was trying to protect? It went up by 120 per cent,. and farm incomes fell in real terms by 38 per cent. We thought it intolerable to deny British farmers the same price as other European farmers, and we undertook to devalue the green pound during the lifetime of a Parliament. In fact we achieved this within nine months. There is nothing in that to be censured about.
For years this country has not given of its best, and we all know it. There is nothing wrong with the people. We have all the initiative, flair, business acumen, the will to work and the determination to succeed that any country can want. The character of the British people is our greatest single asset. What is wrong is our organisation. For too long Government have numbed and nannied, and this Government want to get out of the hair of people. We want to set the conditions within which people can give of their best. It is businessmen who run businesses best—not Government and not civil servants. It is employers and employees who must negotiate together over wage settlements. It is not for Governments to determine the wages in other people's industries. It is for employers and employees and trade unions to work together for the success of their business, each contributing his or her own particular skill.
No one can afford to be selfish. No one has the right to be selfish—although we all have the ability to be selfish. We are all inextricably bound up with, and dependent on, each other, whether we like it or not. Life is not long enough for a perpetual, or indeed periodical, battle between "them" and "us", when "them" is dependent on "us", and "us" is dependent on "them". And, my Lords, who are "them" and "us"? So often it may be management and employees; sometimes it is management and trade unions; sometimes it is trade unions and trade unions; sometimes it is public bodies and private individuals; sometimes it is Government and governed. Always it is British against British.

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When one looks back, not with nostalgia, to 40 years ago, to the devastation which faced this country, it seems inconceivable that collectively we could let a situation develop where the British could find themselves so often pitched against the British in selfish cause, instead of being linked together in common cause against a common enemy, whether that enemy was an international aggressor, as it then was, or whether it is international competition, inflation or recession, as it now is.
If one looks at the tragedy of the last steel strike, one asks, who were the winners of it? The British Steel Corporation?—they lost £130 million over the strike, and the effects on future orders may be even more serious. Hardly a win there. The strikers?—the average steel worker lost about £1,400 in gross wages. Hardly a win there. The trade unions?—it cost the principal trade union apparently about £2 million in picketing and publicity costs. Hardly a win there. The taxpayers?—it cost them more than £9 million in social security payments to strikers' families. No win there. That was the toll of disaster for something which no one wanted and from which no one benefited, other than our overseas competitors.
The only glimmer of light that may have come out of this is that the Government did not get involved, and throughout the dispute—
Several noble Lords: Oh, oh!
Earl FERRERS: Well, my Lords, I find it very odd that the noble Lord thinks that that is funny. What did he expect the Government to do?—to get involved? Throughout the dispute people asked, "What are the Government going to do?", as if by some magic wand the Government could alter, or resolve, a situation which was not theirs. Too often in the past people have turned to Governments of all political complexions, and asked, and even demanded, that the Government should solve problems which are not the responsibility of the Government. Too often solutions have been sought and made in a glare of publicity in Downing Street.
This Government intend to leave responsibility in the hands of those who are responsible. It is the job of management
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and employees to negotiate a proper settlement, in the full knowledge that excessive wage increases not only add to inflation, but also, by placing increased burdens upon the business, create the unemployment of some of the very people who are supposed to benefit from the increase.
In all walks of life we must accept that one's own job is dependent on the jobs of others, and that the jobs of others depend upon the work which one does oneself. And when people decide, however good the reason, not to avail themselves of the jobs which they have, and by so doing put at risk the jobs of others, and possibly the viability of their own and other firms, then it is only fair to assume that they should have made at least some provision for such an eventuality, and that they should not turn to Government to provide all the financial support.
We have on occasion witnessed a situation where people earn more by being out of work than by working, where the earnings of those who are working are taxed to provide bigger incomes for those who are not working. This is a crazy situation, which no one can justify, and which is fundamentally unfair. If it is for trying to take action against that kind of situation, that the noble Lord, Lord Peart, accuses us in his Motion of eroding the Welfare State, then most people will say, so far as that particular aspect of the Welfare State is concerned, "So be it—and high time too!"
We are going through a difficult time, and I have tried to indicate to your Lordships the strategy which this Government are adopting which is to give back to the people, as best they can, the responsibility for decisions, and for the effects of their decisions, which is rightly theirs. This is not achieved overnight. When a patient is suffering from a fever, it is necessary to give him a cure. The cure is often unpleasant. We are providing the cure. There comes a time when after the administration of the cure, the patient is in the position of having both the fever and the cure, and suffers from both. That is the situation in which we find ourselves at the moment.
We have suffered for over two decades from the march of the bureaucrats, from incomes policies, statutory and voluntary,

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phases 1, 2 and 3, pay pauses, controls, Government involvement, stop-goes—the lot. None of them has worked. Manufacturing output is now lower than it was in 1973. Yet one ingredient—the ability of the British people—is as good as ever. That is why we want to give them the opportunity to give of their best, and feel free to do so, for the benefit of themselves and their country.
It will not be easy. We will meet with criticism—and the noble Lord, Lord Peart, has promised us some criticism today. But we have made a start, and a Government who in 11 months have, among other things, made the biggest ever cuts in personal taxes, who last year made the biggest ever increase in pensions and social security benefits, who have taken special steps to help the disabled, war widows and one-parent families, who have produced an imaginative scheme to provide help for the really needy with their fuel costs, and who are planning to help council house tenants to become home owners—that Government deserve support and encouragement. And if the noble Lord, Lord Peart, seeks to divide the House this evening, all I would say to him is that I would hope that the House will reject his Motion entirely, as being irrelevant, inaccurate and unconstructive.
Lord McCARTHY: My Lords, before the noble Earl resumes his seat, does he not agree that what is disagreeable, and what we on the Opposition Benches find unacceptable, is not that the Government have cut taxes, but that they have cut direct taxes? In order to do so they have raised indirect taxes, with the result that the rate of increase in the retail price index has doubled in 12 months.
Earl FERRERS: My Lords, it is a fundamental fact of this Government's approach to life that individual taxation was too high. Of course that is the case, and that is why we have lowered it. Other taxes may have to go up, but the reason for any rise goes back to the borrowings of the Labour Government during their term of office.
4 p.m.
Baroness SEEAR: My Lords, we might almost be in another place—and how
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right the noble Earl, Lord Ferrers, was to say a moment ago that we were suffering from a cure. That is the summary of a good deal of the content of the speech of the noble Lord, Lord Peart. In the Motion which is before us, Lord Peart seems to imply that there is nothing which the present Government are doing of which he approves. If we on these Benches speak in support of the Motion, and if ultimately we pursue the Labour Opposition into the Lobbies, as may well be the case, let it not be thought that we are giving wholehearted or indeed anything but the most qualified support either to this Motion or to the remarks of the noble Lord, Lord Peart.
Implicit in Lord Peart's speech was the implication that under the Labour Government everything was progressing in the right direction, and that if all had been left to them all would be well. The fact is that this country is suffering from a long-term and serious disease—a disease so serious that this kind of party politics across the House is singularly out of place. It is also true that the position of the country relative to other Western countries has fallen deplorably in the past 20 years, from being one of the best off among Western countries to being one of the poorest. During the period of which I speak Labour were in power for 11 years and the Conservative for nines years. Therefore, the honours are even.
If it is said that it is easy for a Liberal to say these things because in none of those 20 years did we have any power—except for a short period of influence under the Lib-Lab pact during which things got markedly better—noble Lords have it in their power to see that we do get more influence. If noble Lords on either side of the House are prepared to do something to alter the totally undemocratic system by which the Government are brought into power and by which Governments with only a minority of votes are in a position to govern, if they are prepared to change that situation we will willingly take the challenge to see whether we can do better. My Lords, we could scarcely do worse.
Therefore, in giving very qualified support to this Motion, we are in no way suggesting that the way in which the Labour Party conducted the affairs of the country has done anything to cure the

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deep-seated problems from which we suffer. The noble Lord, Lord Kaldor, who will be addressing the House a little later, no doubt will tell us—he has told us before, but that makes it no less true that the troubles of this country go back a very long way indeed and require fundamental changes of a painful kind to get us back into a position in which we can begin to afford the kind of Welfare State and standards of living we would all like to have.
As the noble Earl, Lord Ferrers, said, it is ridiculous to go on borrowing to the point at which far too high a percentage of the national income is being devoted simply to paying interest on the debt, let alone to paying back the original debt. We recognise that much of the action which the Government are taking is to be deplored, but we also recognise that the policies put forward by the Labour Government provided no cure. The nonsense of spending more and more as productivity levels barely increased at all is surely a nonsense that even a tyro could understand.
Therefore, although to a large extent we take the view "a plague on both your houses", we say that in one respect at least we support what the present Government are trying to do. It must be right to give priority to the control of inflation. Inflation at the level at which it is running today, up to nearly 20 per cent., is a canker of the most evil kind, not only economically but also politically and socially. If it continues, it will destroy the very fabric of society and the nature of political democracy. Therefore, not only for economic reasons are the Government right to put their full weight behind the fight against inflation. Only by controlling inflation can there be any decent democratic future for this country and for the people who will live here in future.
Our quarrel with the Government is not so much in what they are trying to do in the control of inflation, but in the methods and attitudes which they are adopting. They are devoted to the idea that the control of money supply is the essential—almost exclusive—weapon that can be relied upon overwhelmingly to deal with our problems. The control of money supply, and with it inevitably the very high interests rates, is an instrument on
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which the Government rely, in our view, to a totally excessive extent. We believe that there should be a multi-pronged approach to this extremely complex problem. We believe that the control of inflation will not be met just by the use of this one instrument. I know that there are other methods which the Government could adopt, but to a large extent they are relying on the control of money supply, in the belief that if one gets the money supply under control, the other problems will fall into position.
Why are we so critical of this blunt instrument? We are critical for a number of reasons. First, the Government believe that if they control the money supply this in itself will control the level of pay. The argument, as I take it, is that because of the shortage of money employers will not be able to afford to pay high wage increases, and that the market forces between labour and those who control pay in industry will operate in such a way that the control of money supply indirectly will control the level of pay. I believe that is a fallacy. It is a fallacy to trust market forces in pay negotiations because there is no real market there. On the side of labour one is dealing with colossal monopoly power which is not subject to market forces. Unless the Government recognise that and have some other policy to deal with pay, rather than relying solely on money supply and its influence on an employer's capacity to pay, one will not get pay under control by the use of this instrument. That is what is now happening. It must be apparent to the Government as they see pay increases rising, and as they themselves have had to admit by agreeing to huge inflationary pay increases in the public sector, that the control of money supply by itself will not deal with this important, though not exclusive, element in the creation of inflation, namely, excessive pay settlements.
It is not true to think that the level of pay claims will be moderated by rising unemployment. No doubt that is the way in which the Government think the argument will run. But the fact of the matter is that when the trade unions are negotiating pay claims, they are negotiating on behalf of those members who are in work, not on behalf of the people who are not in work. It is a harsh thing to say, but it is true, that the level of unemploy-

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ment does not in fact limit the pressure for pay increases, because it is those who are in employment who determine what the pay increases are going to be; and the fact that there are key areas in industry in which the bargaining power of labour is such that, be the money supply position what it may, be the unemployment level what it may, they are still able to push up pay, and so long as that is true reliance on the money supply to control the level of pay will simply fail.
My Lords, the second reason why we are concerned about this over-reliance on money supply is this. We are not saying, let me emphasise, that we do not consider there should be a reasonable attempt to limit the supply of money. Of course, we recognise that that is so. It is the over-reliance on the instrument that we are criticising. There is, my Lords, a very grave danger that the combination of the limitation on the money supply, high interest rates and the high value of sterling is going to leave behind an industrial desert, and that there will be a number of companies going out of business. There are already a growing number of companies going out business, and once companies have gone out of business it is not going to be so very easy to bring them back. It may well be that these are not the companies which ought to he going out of business in terms of the long-run economic future of the country, and that it is not those that really ought to disappear which will do so, but those which are affected by what happen to be the transitory conditions of the present time, which will hit certain industries and certain enterprises very hard indeed. It is a very crude selection of those which ought to go in relation to those which ought to stay. There are many people in this country today who are sympathetic to what the Government are trying to do but who share this fear that the price which is going to be paid as a result of applying this method will be too high for the middle-run health of the economy, let alone for its long-run health.
My Lords, the third reason why we are unhappy about the way the Government are using the money supply as the instrument for fighting inflation is that there is no indication (it may be that it is in the minds of Ministers, but there is no indication
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that comes over to Opposition parties or to people in general) that the Government are being selective in that they have a plan in which they will use selective methods to restructure industry in this country. I said at the beginning that we suffer from deep-seated industrial disease. We do. We have many industries in this country for which there is no middle-run or long-run future. We need a switch to high technology industry, to high added-value industry and to industry which can make a real contribution to conservation. That is the pattern of industry, the structure, that we want in this country for the future. Unfortunately, we are weighed down with low value-added industries in which, sooner or later, the competition coming from the middle-income countries, which are growing at an enormous rate and with great success, will make it impossible for us to hold our own unless we move quickly towards the new technology.
One of the most encouraging things—and do not let us forget it—is that the Trade Union Congress itself has come out, in a most encouraging publication, in full support for seizing the opportunities of the new technology. Of course, it means harsh changes; but this is the way in which the Government ought to be taking steps to ensure, not only that we conquer inflation, which in a sense is a negative objective, but that we are seen to be making steps towards an industrial structure for which, in the middle-run and long-run, there is a real future, and which holds a promise of being able to give people, both in the public and in the private sector, the sort of standards which we all seek.
My Lords, I believe that there are people on the Government Benches who want to do this. I can only say that the lead has not been given to show people in this country, first, that it is necessary to make these changes; secondly, that in making these changes there is real hope; thirdly, that the changes will be painful but they will be worth while; and, fourthly, that where it creates pain the Government are prepared to take all the steps they can to alleviate that pain. But that it is economy, sacrifice, with a clearly defined purpose—that is what is not coming over. We are not told the reason for it; where the Government are leading us; why this is necessary.

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Let us not have this kind of bickering in your Lordships' House. We need the changes that I have been trying to describe. We need this kind of leadership. In my view, we need far more of a consensus approach to these problems; they are far too serious for party bickering. But we need a positive emphasis on why the change has to be, and how it is going to be brought about. I believe there is a promised land, but the Government are not giving us any evidence, are not convincing the country, that they know how to lead us there.
4.17 p.m.
Lord LEE of NEWTON: My Lords, many of the criticisms we have of this Government are contained in the Motion which my noble friend has moved, but one of the criticisms which is not set out in that Motion is that, while many of us have been trying for a long time to modernise industrial relationships, trying to get both the trade unions and the employers to set up a system of negotiation appropriate to the last few years of the 20th century, all this has been made impossible by the policies which the present Government have brought to bear. Indeed, our anxieties on a very wide variety of these vital issues are contained in the Motion; and, in so far as they have been answered at all, the reply has of course been the usual one about the need to control inflation. I join the noble Baroness, Lady Seear, in saying that of course this is one of the major problems that has to be faced; but I submit that you cannot defeat inflation merely by a policy of savage deflation allied to the resurrection of a type of laissez faire capitalism and the devil take the hindmost. It cannot be defeated by measures which almost erode the very fabric of our society—a tax on the sick and on the unemployed and a cutting back on local government housing and education.
In any event—and I pose the question to the Government Front Bench—when will these policies begin to show the results which they are supposed to achieve? We are now almost 12 months and two Budgets past the date when they were going to prove effective, and the record to date is one of large-scale increases in the rate of inflation, which is still rising. I think our present position could be
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summed up in this way. Within a contracting economy, with a 20 per cent. level of inflation, we are paying ourselves 20 per cent. increases in incomes, our industrial base is rapidly eroding and we have an over-valued exchange rate which is making many of our products quite uncompetitive, while a 17 per cent. minimum lending rate makes industrial modernisation extremely difficult and expensive. In consequence of these things we have now reached, probably for the first time since the first industrial revolution, a stage at which imports of manufactured goods have passed our exports of those goods. I think that the noble Viscount, Lord Trenchard, a week or so ago said that last year, without the revenues from our oil, the balance of payments would have been some £10,000 million in deficit. When pointing to these facts, one hears the comforting answer that we will restore much of the balance through the service industries. I should like to think that this is true, but may I ask this? Which are the service industries which are going to achieve this desirable end? I know that tourism has been influential in this degree. It has brought huge benefits in foreign currencies and so on, but I think that last year it began to show signs of decline. Indeed, as far as the service industries as a whole are concerned, last year the invisibles were at a lower ebb than they were the previous year and have been for some time.
I have mentioned the erosion of the manufacturing industries: I ask again: what do the Government intend to do to reverse this trend? I heard the noble Earl, Lord Ferrers, and the noble Baroness, Lady Seear, say that some of them cannot be viable. Which are they? Which are the manufacturing industries on which we can expand and can modernise? Up till now one hears bland assumptions that the manufacturing industries are on the way out and the service industries will compensate. I do not believe it and I want answers from the Government as to which they have in mind. Throughout a great many of the industrial areas in this country there are growing fears that we are heading rapidly towards the position of 1931–32. Indeed, if one believes the Cambridge economists, we are going to be there within a few years from now. We know, and have known for a long time, the problem of Northern Ireland in this

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respect; but now we have reached the position where Wales, Scotland, the North-East and the North-West are parts which are approaching crisis point. If things go wrong with British Leyland—and I hope to God that they do not!—the West Midlands will be as badly placed as the other areas I have mentioned. I come from Merseyside where well-known firms are either closing down or dismissing considerable numbers of employees almost every day that one hears the local radio, watches TV or reads the local Press.
The Government contribution has been to cut down on the development areas and the intermediate areas, which is having a most detrimental effect on job opportunities. In consequence long-term unemployment is on the increase as a percentage of total unemployment and the lists of vacancies grow less every time they are issued. If one examines the vacancies which are available, most of them are for skilled jobs; and, again, the Government contribution has been to cut back on the monies available for the Manpower Services Commission with its vital retraining function. In this situation we are entitled to ask whether the Government really believe that an upturn in world trade would bring unemployment in this country down to acceptable levels or whether it would merely increase the volume of imports as a artificially high exchange rate functions against us—and those imports are what are causing our industry to continue to wither.
The noble Earl, Lord Ferrers, mentioned steel and what happened during the strike. After the strike, which I believe had no need to take place at all if the Government had done their job, we are now in a very dangerous situation. We are still cutting back on levels of production in steel, which presupposes either a considerable fall in demand for steel by our home consuming industries or that the Government are anticipating an increase in the volume of imports from other countries. It has to be one or the other.
We shall then be told that this is because our steel industry is not competitive. How are we to believe that a steel industry with two of its major plants, at Llanwern and Port Talbot, working at 50 per cent. of capacity can be competitive with imported steel? Many of the managers in the
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steel industry are very disturbed at the degree of cutting back that is going on. They have been consulting with Ministers as well as with the BSC. Mr. Robert Muir, the secretary of the Steel Managers' Association says:
"Our representatives were brushed aside without a moment's consideration, far less for any reasoned objections. But what if we are right? The organisation maintains that the BSC could become profitable at around its present level of output of 17 million tons of crude steel per year".
This is not merely the ranting of politicians. These are the facts laid down by the people representing high management in the BSC; and apparently the Government are not interested in their representations.
The noble Earl, Lord Ferrers, posed a question during his speech. He asked us who were the winners in the steel strike. It so happens that The Times anticipated his request for information. The Times leading article of April 2nd 1980 said:
"The outcome of the steel strike is the most significant success that the Government has had in the domestic field since it took office. It is a success achieved by a resolute refusal to act
Later in the same article, it went on:
"But the result should not be interpreted on either side as a crude victory for industrial machismo. The cost to the industry and the country has been too great for that".
According, to an influential and friendly commentator, therefore, not only have the Government's most significant success been achieved by masterly inertia but the cost to industry and the country has been too great for the Government to congratulate themselves on the outcome. A few more Government successes like that and a patient will be gone anyway.
In fact, the picture of increased payments in the public sector—and I remind noble Lords that the steel union got 16 per cent. anyway—is one of sheer unadulterated chaos. If you work in such industries as coalmining, water supply, electricity supply and teaching, 20 per cent. plus is the going rate. In other industries, like steel, the Government would rather see a very great threat of shortages resulting in a vast increase in unemployment rather than permit the level which other industries are getting. The reply that we get when we talk about what should have been done on steel is that this was in the interests of the taxpayer. I pose another question—I am full of questions today. Who but the taxpayer is now going to pay

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for the quite unnecessary losses that we are incurring in the steel industry? Can we be told what policies the Government have in mind to bring down our import bill and encourage the purchase of home produced goods instead?
Under normal conditions, I have not been an advocate of general import controls, but it seems to me that the argument used by Mr. John Nott in reply to the TUC, that such action encourages British industry to remain uncompetitive, ignores the fact that many other countries are using such controls extensively even where their industries are competitive. I should have thought that that makes the argument for selective import controls very strong indeed. The case was well stated by Mr. Victor Keegan in his Guardian article on 24th March last. He quoted the fact that earlier in March the French Government blocked British Airways' application to launch what they called a "Channel hopper" between London and Paris for £20 fare. That was an obvious protectionist measure in order to shield Air France at a time when France is defying a court order and blocking imports of British lamb.
Mr. Keegan also pointed out that while we are opening up our telecommunications market to other countries, Germany had actually announced that public sector bodies should only purchase telecommunications equipment designed and manufactured in Germany. After pointing out how ridiculous it is to allow a 60 per cent. penetration of our home car market by foreign cars, he pointed to the fact that France has told the Japanese that they can have only 3 per cent. of the French market, while Italy keeps them out by allowing one Japanese car in for every Italian car sold in Japan—and there are not many of those!
We have recently seen the trouble in the artificial fibre industry, where apparently we are being flooded by American imports based on the fact that they are getting cheap oil. There is a certain irony in the fact that one of our major industries is being undermined by that kind of import while we are self-sufficient in oil. It is time we began to look at how we use these things. No Government which are concerned about the uncompetitive position of our industry
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can afford to minimise investment in the micro-electronics developments which are now an ever-increasing feature of industrial life. This was mentioned by the noble Baroness, Lady Seear—and I agree with what she said.
There is, of course, a great deal of speculation as to the effects of these developments on employment levels. The trade unions throughout Europe—including our own TUC—are arguing that significant reductions in the working week with longer holidays are now necessary to prevent considerable increases in unemployment in consequence of the uses of this new revolution. There is, of course, a different point of view being stressed by some employers' associations, including, I believe, the CBI. But whichever of these views one takes, one thing is certain: we cannot afford to neglect them, and we cannot afford to believe that we can do without the introduction of these new ventures. We cannot afford to allow ourselves to become dependent on the imports of them from other countries. A recent NEDC report criticises the Government for cutting public support to a level well below that to which the last Government committed themselves. In particular, the report refers to the microchip, because of the vital role this plays in the regeneration of our industries. May I be told by the noble Viscount, when he comes to reply, whether the Government will agree, in the light of inflation, to restore their support to at least the levels agreed by the last Government?
I do not wish to weary the House by quoting a lot of figures, but it seems to me from what figures are available that we are now being left badly behind. The Government's action in cutting down the activities of the National Enterprise Board—referred to by my noble friend Lord Peart—is really a most remarkable performance. The National Enterprise Board was doing an absolutely outstanding job of work in this particular field, and to cut down their activities now is sheer masochism at its very worst.
These restrictive policies are based on the belief that our rate of public spending is too high and must be cut back. The noble Earl, Lord Ferrers, gave us that story all over again today. According to the EEC Commission's annual report,

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the share of national income going to general Government expenditure is lower in this country than in any other EEC country. Our level was quoted in 1979 as 42·8 per cent. against 46·4 per cent. in West Germany and France and 58·3 per cent. in Holland. Yet we complain despite that that their industries are competitive and our's are not.
The noble Lord, Lord Cockfield—I thought he would be speaking today—told us at col. 1363 of Hansard on 2nd April:
"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".
Of course the money supply must not get out of hand; but to become obsessed with this, and to use it as the only vehicle for dismembering as much of the Welfare State as possible is a self-defeating objective as working people seek to avoid such attacks on their living standards. In his anxiety to discount the forecasts of the economists such as the Cambridge Group, the noble Lord, Lord Cockfield, gave us a lesson in elementary economics which finished up with a flight into higher mathematics which revealed to us all that two and two make four. I thought at that particular point he was about to overthrow Professor Friedman in favour of Einstein. Apparently that was a hope that was not to be fulfilled. I am getting fond of The Times and I commend to Ministers the contents of an article on the subject in yesterday's issue by Sir Bryan Hopkin. I am sure that we agree that Sir Bryan has an outstanding record in advising Governments. He showed the connection between the policies being adopted by the Government and the inevitability of a rising level of unemployment.
I mentioned earlier the problems of the increases that we are paying ourselves over and above the wealth that we are creating. It is not the first time that I have referred to this; probably it will not be the last. This is one of the reasons for the high inflation that we are discussing. It would be ridiculous to try to dodge the issue. I long since began my advocacy of a permanent incomes policy to replace the principle—if that is the right word—of Middle Eastern
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bazaar haggling which is passed off these days as free collective bargaining and which has now achieved the complete contradiction in terms of including in free collective bargaining a "going rate" and "comparability studies". I do not see how one can combine the two things.
Both the present Prime Minister, the Secretary of State for Industry and the Chancellor have made it clear that they are not going to relax their severe squeeze on the money supply to accommodate large payment increases, and that the consequences will be an increase in the numbers of unemployed. The fact that in very many instances it is not those who receive the large increases who become unemployed does not seem to trouble them in the least.
The Government's attitude to the problem consists of repeated statements that incomes policies have failed. Both the noble Lord, Lord Cockfield, and today the noble Earl, Lord Ferrers, have told us that. They proceed to make equally loud lamentations about the disastrous results of free collective bargaining. May I suggest that it is becoming time that they decided that two negatives do not produce a positive. They are relying on the theory that heavy unemployment limits the power of workers to demand large increases. But, my Lords, there are now 1½ million people out of work. The Government tell us that the level of increases is running at 20 per cent. Might one ask what level of unemployment they have determined as being the correct one at which their theories are going to begin to work? Are the Government going to wait for even higher unemployment, plus Mr. Prior's misnamed Employment Bill and Mrs. Thatcher's threat of sterner measures yet to come, to have the desired effect on incomes? Surely no thinking person would deny that there are stern and very anxious days ahead. A more sensitive and progressive Government would have done everything possible to get all sections of the nation to combine in a common effort to surmount those problems. This one has simply divided the nation deeply and it is worthy only of our condemnation.
4.41 p.m.
Viscount ECCLES: My Lords, it is only a very short time ago that the noble Lord,

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Lord Byers, introduced a good debate on the Budget strategy. I must say I thought that in that debate first things were put first and we had some extraordinarily good speeches. My noble friends Lord Cockfield and Lord Thorneycroft deployed the case for the Government's policies with a lucidity and effectiveness which does not leave very much for anyone who, like myself, is a great supporter of the Chancellor of the Exchequer, to say. But I was surprised that today, when I had thought that the Opposition were going to do very much better, because they must have been dissatisfied, I suppose, with what happened a fortnight ago, the noble Lord, Lord Peart, although he put the word "inflation" into his Motion, never mentioned it in his speech. He never mentioned the borrowing requirement. One might think from listening to the noble Lord's speech that we had no financial problems in this country. The noble Baroness, Lady Seear, who said some very good things with which I agree, said that inflation was far and away the most important problem facing us. She went on to say that she did not believe that total reliance on monetary policy would achieve the victory over inflation that we all want: but it is not fair to say that the Conservative Party is relying only on monetary policy. Our view is very clearly, if I understand my noble friends aright, that one must first conquer inflation before any of the things that we want to do can be safely done.
What is extraordinary about Labour Party speakers is that they will not answer the question: "If Government expenditure and Government borrowing are not to be reduced, how then can inflation be defeated?" I think I may be slightly unfair, perhaps, to the noble Lord, Lord Lee of Newton, and even to the noble Lord, Lord Balogh, as regards their speeches, because they did suggest that an incomes policy of national extent might be an alternative to the Chancellor's monetary policy. But that was precisely the policy on which the last Labour Government staked their fortune—only to find it sabotaged by their best friends.
Lord LEE of NEWTON: My Lords, would the noble Viscount give way? He tells us that things were going all right with the incomes policy until it was
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sabotaged. Is not the inference from that that if the incomes policy had kept on there would have been no problem?
Viscount ECCLES: My Lords, I am afraid I cannot agree with the noble Lord. The fact of the matter is that, as the noble Lord, Lord Balogh, said quite rightly, an incomes policy of the type he was advocating requires a bargain with the trade unions. I agree; but in the event the trade union leaders did not, and very probably could not, deliver their side of the bargain and they destroyed a Government which had been financed by the subscriptions of their own members. It is quite natural that a Conservative Administration should take note of that goal kicked against their own side, especially as we have no financial dependence on the unions.
The fact is that the Labour Party failed, and the country unmistakably said they wanted a change. There was a general feeling at the time that they wanted a really radical change; and that sort of turning-point has occurred quite often in our history. I believe this to be another turning-point. If I might take your Lordships back a long way to show what I mean, in Tudor times agriculture was the central objective which the Government chose to protect. Later, in the 18th-century there was colonial expansion, followed by free trade in the 19th century. Then the gold standard was the sacred cow and between the wars unemployment assumed the first place, to be followed by nationalisation and a debilitating dose of Socialism. Now it has to be inflation. Governments have to choose a central objective around which they form all their other policies, bending and shaping them to try to achieve their central objective.
Lord BALOGH: My Lords, does the noble Viscount think that the British people accepted in the election that the way in which inflation is to be fought is not a civilised manner by bargaining, but by atrocious increases in unemployment?
Viscount ECCLES: My Lords, the British people at the Election first and foremost wanted to get rid of the Socialists. Secondly, they thought that other leadership was necessary and they saw in Mrs. Thatcher someone who knew her own mind and whom they thought would

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stick to it. Of course, to defeat inflation will take time and many rough and unpopular actions, and I do not wonder that the Labour Party is shocked at such a painful change in policy. After all, it is very different from what they were doing. Their policy was to distribute money we had not earned and to cover the deficit by doubling the national debt. We think that cannot go on, but I quite agree with the noble Baroness, Lady Seear—I see she is no longer in her place—that the novelty of changing the central objective of a Government in the way that we are doing is difficult to put across to the public.
I should like, if I may, to say a word or two about communicating with the public on a subject as difficult as that we are trying to deal with now. Sir Winston Churchill used to tell his young colleagues that,
"the ear of the public is very small and rarely able to listen to more than one large idea at a time".
Therefore, it is important, if we are going to defeat inflation, that we should be able to simplify what is a very complicated monetary operation: that is, to find a way of symbolising what the battle and the victory mean to everybody. In this respect, the art of politics differs little from the art of the painter. The artist invites his public to view the landscape from his chosen angle, and he selects only one or two significant features.
In our previous debate, my noble friend Lord Cockfield, surveying with a masterly eye the Government's strategy, bid us consider the public sector borrowing requirement as the most significant feature. The noble Lord, Lord Newton, reminded us of that in his speech. My noble friend told us that the increase in the borrowing requirement, during the time of the Labour Government, had been a great influence on increasing the money supply, and it was this increase in the money supply which had made possible excessive wage and salary awards, leading directly to a rising rate of inflation. Therefore, if we want to see prices steady again, the Government must borrow much less. That means either cutting expenditure or raising taxes.
From what Mr. Callaghan said in another place yesterday—I must say that I thought it extraordinarily significant—
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the Labour Party is against all cuts in Government expenditure. Evidently, they believe that we can spend our way out of inflation. That is palpable nonsense. But in any case where would the money come from, if we tried not only to spend our way out of inflation but to do the many things which have been advocated this afternoon from the other side? To raise billions more by taxation would undermine whatever confidence still exists in our industry, and to raise equal or even larger sums on the market, if it were possible, would do the same. So that my noble friend's logic was unanswerable.
However, I am not at all sure that the PSBR is the right symbol to choose. I question the selection for this reason. Nowadays we are all borrowers. When I first had a bank account, my father told me that to run an overdraft was morally wrong. That was in 1922. My children now think me extraordinarily foolish not to have borrowed large sums to buy works of art, which would have appreciated in value many times. What about credit cards? My father would have called them passports to the infernal regions, but nowadays the very best people walk about with wallets stuffed with these temptations to overspend. It is not very easy, with those changed attitudes, to make the PSBR the villain of the piece.
So, thinking of communicating with the public, I would select the interest rate as the most significant target in our financial strategy. The interest rate hurts almost everybody, and everybody should know that the Chancellor is determined to cut Government spending, for the express purpose of bringing the interest rate down. Why is it as high as it is? Noble Lords opposite really must accept that it is because the spending decisions of the Labour Government, and the excessive awards in incomes in the public sector, pushed the borrowing requirement to a height where it was more and more difficult to get the money that was necessary.
Your Lordships will be well aware that in November last the minimum lending rate was raised to 17 per cent., simply because the Government could not cover the monthly borrowing requirement, without offering more to lenders who had had

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their fill. The consequence of that is a rise in mortgage rates which eats into the purchasing power of countless families. Let them realise that they are paying for the Labour Government's extravagance. I am told that if Labour had been reelected and had stuck to their manifesto, the PSBR would now be over £14 billion a year. No one knows where that money would have come from and, as my noble friend Lord Ferrers said, we would have been back in the hands of the International Monetary Fund in a month or two.
Lord RAGLAN: My Lords, may I intervene for a moment? Is it really true that this high MLR is a consequence of the Labour Government's policies? If it is, why are the United States in exactly the same position with rather higher interest rates?
Viscount ECCLES: My Lords, that is quite an interesting subject. I happened to be in the United States when this great rise in interest rates occurred, and it foxed a good many of them. But the normal explanation was that property values had increased so sharply that everyone who was getting a hit short of money went and borrowed against the increased property values. This, being simultaneous with the squeeze of the Governor of the Federal Reserve Bank, produced the higher rate. That is what the New York Banks said and, so far as I know, it is probably right.
Lord RAGLAN: My Lords, has the same thing been happening here?
Viscount ECCLES: I do not think so, my Lords. I really do not know. I thought that private borrowings from the joint stock banks here had not shown the kind of astronomic rise which they showed in the United States. The noble Lord may know better than me.
In conclusion—I do not want to keep the House too long—granted that no major unforeseen difficulties arise, the Budget strategy will work and will bring down the interest rate. Industry will then be encouraged to expand and new firms to start. Purchasing power will be released to those who are now paying high rates and instalment credit will, I suppose, be cheaper. A fall in rates will probably see some hot money withdrawn from our market—the noble Lord, Lord
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Kaldor, knows much more about markets than I do—which will cause some weakness in the sterling exchange, and all these things will be good for employment. Unless this happens, it is no good any noble Lord on this side or the other side asking the Government to spend more money. There is no more money to spend.
I hope that the Government will make the interest rate the front runner in their public explanation of why restraints and economies will benefit everybody. The Labour Party have no credible alternative to the policy that we are pursuing. They talk about the evil consequences of inflation, but they have not got the will, much less a policy, for dealing with its causes. The Prime Minister and her colleagues have a hard year ahead of them, but they have the satisfaction of knowing that they are trying to do what is right. We should support them to the very best of our ability.
4.59 p.m.
Lord KALDOR: My Lords, the publication in this year's Red Book of the long-awaited economic plan by the Government, called "Medium Term Economic Strategy", provides an opportunity to review the competence with which the Government conduct their affairs in terms of their own chosen objectives. This Red Book is an extraordinary document. It contains bold assertions, logical non sequiturs and tautologies masquerading as empirical laws, which will provide rich source material to teachers of economics and examiners for many years to come.
The Government's objective, as we all know, is to bring down the rate of inflation. This is uncontroversial. What is new is that, in their view, this requires,
"a progressive reduction in the growth of the money stock".
This is the new emphasis, to which they add in the same paragraph that they will,
"pursue policies necessary to achieve this aim".
Why say that? Why not just say that from now on they will issue less and less new money each year?
If the increase in the money supply is the cause of inflation, as Ministers constantly proclaim that it is, surely this implies that the money supply is something that

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can be directly controlled, in the same way as VAT, or income tax or the size of the armed forces. If it is not, if it is something that can be influenced only indirectly, through the use of other instruments, then the rise in the so-called money supply is at best a measure of inflation and not the cause of it.
When the noble Lord, Lord Cockfield, told the House the other day—and I am sorry that I was not able to be here—that the
"money supply was the critical factor in the level of inflation",
he was saying in effect no more than a doctor who says that, "body temperature is a critical factor in health". If a man suffers from disease—say, malaria—it is correct to say, within limits, that the extent of his fever is an indication of the seriousness of his illness. And some doctors may use body temperature as a "proxy variable" for the cause of the disease. If a man suffers from severe malaria and he is to be cured very gradually in four years—and not quite, even then—it may be convenient for a doctor to draw up a temperature chart, such as that shown for the expected growth of the money stock in Table 5 of the Red Book. He could plan for a temperature zone of 102 to 104 degrees in 1980–81, 101 to 103 degrees in 1981–82, and so on until the patient's temperature was nearly normal in 1983–84. But a "proxy variable" is not the same thing as an instrumental variable. You cannot cure malaria by bringing down the temperature, even though your temperature will necessarily come down if and when malaria is cured.
Anybody who has studied the joint Treasury-Bank of England consultative document on monetary control which came out recently must be clear about this. There is no pretence in that document (bar the extraneous Introduction of which the less said the better) either of being able to control the money supply directly, or that any such control, even if successful, would itself cure inflation. On the contrary; paragraph 1.4 of the document says that the very adoption of a monetary target tends to accelerate monetary growth and push up interest rates above what they would be.
The true instrumental variables, as this document makes clear, are fiscal policy
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and interest rate policy. These influence the level of expenditures of consumers and businesses and, through them, the public's demand to hold liquid assets, cash and bank deposits.
These are the same instruments as those of Keynesian policies of demand management. What has changed are not the instruments of control but the objectives. The present monetarist economic management aims at regulating effective demand, not for the sake of full employment, but rather the opposite: in order to secure a certain maximum rate of growth in total expenditures or in total incomes—the two come to the same—or, if I may use a technical term, in the rate of growth of the money GNP. This is the real target. The growth in the money stock—whether you choose one definition, another, or a third—is only a proxy, and not a very good proxy, because, as experience of recent years has shown, the rise in the money national income consistently exceeded by 20, 30 or even 50 per cent. the growth of the money stock.
The rate of growth of the total money income, though it may be a true target, is not the same thing, of course, as what we or the public generally understand as inflation. Inflation is something that relates to the rate of increase in prices or in the cost of living. The rise in prices depends on the rise in costs, the costs of material and the costs of labour, and these can be influenced by the instruments of fiscal and monetary policy, meaning restrictive fiscal measures and higher interest rates, only in an irregular and highly uncertain manner. Restrictive fiscal measures, particularly when they imply higher taxes and higher charges, may have a perverse effect by causing an acceleration of wage inflation—as indeed happened last year.
The Government can, and do, make sure by their policies that the aggregate demand for labour be reduced, and goes on falling, and that wage earners shall be punished for asking for too much.
But this in itself may be unavailing in the light of what Professor Hicks called, in a felicitous phrase, "real wage resistance", by which he meant the workers' demand for compensation for the rise in living costs through an increase in money earnings. Hence, in order to succeed, it is

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not enough for the Government to reduce effective demand and thereby induce a slump in production and employment. They must break "real wage resistance", and this is the crucial factor in their whole strategy.
In order to bring down inflation, as the noble Lord, Lord Cockfield, I am sure will agree (because I read his speech of last week), pay settlements must be consistently lower than the prevailing rate of increase in prices and must be lower not only for one year but for a whole number of years in succession. Since "real wage resistance" is enhanced by this process, as well as being abated by the Government's policies, it is impossible to predict the outcome.
"Real wage resistance" is no doubt abated by reducing the workers' ability to resist.
This Government orchestrated a whole gamut of policies in order to reduce "real wage resistance". The cuts in employment pay, the cuts in benefits to strikers' families, the rise in numerous charges, of gas and electricity prices, of rents, of rates, and the contemplated tax on food, all serve this end, as well as the policy, to which my noble friend referred, of resistance to wage claims in the public sector as in steel, which has been claimed by some as a great victory. On the other hand, the militancy of the unions is bound to be enhanced as well by what they feel is a deliberate process by the Government of reducing their standard of living. One cannot reckon on the same cost-unconscious resistance to wage pressures in the private sector as in the public sector. In the public sector, Sir Keith Joseph may be willing to pay any price to get a victory in a strike, but in the private sector firms will not resist if it is too costly. Some of the policies of the Government—for example, the unfortunate idea of raising gas and electricity prices by 10 per cent. more than the rate of inflation, whatever the rate of inflation is—acts as a built-in accelerator of inflation in much the same way as OPEC acts as a world-inflation accelerator.
The cost of living will always rise more than in proportion to the rise in labour and material costs. In the ensuing tug of war between the trade unions and the Government—the one trying to reduce
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real wages and the other trying to prevent this from happening—it may well turn out, contrary to the expectations of all noble Lords opposite, that the road to 1984 will show a continuous acceleration of inflation and not a steady abatement. It may well turn out that we shall be made poorer and poorer and, at the same time, face ever faster inflation and fail to get benefit of ever slower inflation, for the sake of which we were asked to endure this self-inflicted poverty.
Before I finish with the subject of monetarism, I should like to take this opportunity of replying to the specific criticisms of my previous contentions by the noble Lord, Lord Cockfield—who I am glad is here at the moment—and also the noble Lord, Lord Harris of High Cross, who I am glad, is also present to hear it. The noble Lord, Lord Cockfield, made three main points. The first was that I had ignored the all-important time lag of two years between the rise in the money stock and the resultant inflation. The second is that I took no account of the changes of velocity of circulation; and the third point was that my selection of countries (to quote his own words) was "narrow and unrepresentative".
On the first point, I wish to assert boldly that the two year time lag is an invention; it has no basis in fact. The figures quoted by the noble Lord, Lord Harris of High Cross may have looked very impressive but they are an incidental consequence of two wholly unrelated events which dominate the two series from which his figures were drawn. The one was the introduction of Competition and Credit Control by the Bank of England in 1971 and the other was the outbreak of the Arab-Israeli war in 1973 which led to a four-fold rise in oil prices and also, in this country, to a wholly artificial and unnecessary wage explosion on account of the Heath threshhold agreements, the terms of which were drawn up before the Yom Kippur war supervened. Unless the noble Lords, Lord Cockfield, and Lord Harris, can present us with some causal link between the gesture of the Bank of England in 1971 and the Arab War in 1973, I shall continue to believe in what statistics show for the United Kingdom for other periods as well as for all other countries;

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that is, that the closest fit between the money series and the income series is found, not when there is a two-year time lag, or a one-year time lag, but when no time lag is assumed.
On the second point, I can only say that the change in the velocity of circulation automatically eliminates all discrepancies between changes in the money stock and the change in the national income. The quantity theory of money is thereby reduced to pure tautology, since "velocity" is defined—as I am sure the noble Lord, Lord Harris of High Cross, knows—as the reciprocal of the ratio of the money stock to income. Sharper minds than even those of the two noble Lords, such as that of the great Professor Milton Friedman, are of course aware of this, and for that reason have always insisted that it is the stability of the velocity of circulation, both as between different countries and as between different times, which is the ultimate proof of the causal role of money in inflation. To quote Professor Friedman's own words from the Lloyds Bank Review of October 1970
"If the relation between money and income is a supply response, as Professor Kaldor asserts"—
he was replying to me; that is how I come into it—
"how would he explain the existence of essentially the same relation between money and income for the U.K. after the Second World War as before the First World War, for the U.K. as well as the U.S., Yugoslavia, Greece, Israel, India, Japan, Korea, Chile and Brazil?"
The answer, of course, is that I could not explain it. Nor could he. For the relationship between money and income for all these countries is not at all the same. In fact, they could not be more different, as your Lordships will see when you look at the figures. Professor Friedman, as on some other well-known occasions into the details of which I do not wish to enter, invented the facts to clinch an argument, and relied on his reputation as an expert for being taken on trust without anyone bothering to check the figures.
The fact remains that in Switzerland four times as much money is chasing goods as it does in Britain; in Italy, Japan and Israel nearly three times as much; and in West Germany twice as much.
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None of this is in the least consistent with the monetarist doctrine, as indeed Milton Friedman—though not perhaps the noble Lord, Lord Cockfield—would have been the first to acknowledge.
On the third point raised by the noble Lord, Lord Cockfield, I agree that my original selection of countries was narrow but not that it was unrepresentative. I have now extended my researches to cover a much wider group of 10 leading countries and, as I could hardly ask your Lordships to listen to any more figures from me on this subject, I have done something else. I have placed a copy of a summary of my results in the Library and asked the Librarian to show it to any of your Lordships who would care to look at it. I think you will find them pretty conclusive both as regards the first and the second criticisms of Lord Cockfield.
If the Government's economic strategy is thus no different from a perverse or inverted Keynesian strategy, their underlying philosophy—which is ultimately far more important—is no different from an inverted form of Marxism. The doctrine of Marx was that under the capitalist system, capital exploits labour; it appropriates as profits the surplus value which should belong to the labourer. Her Majesty's present advisers are equally convinced (and just as wrongly) that in the kind of capitalist system which developed in post-Keynes, post-Beveridge Britain, the situation is the very opposite. It is labour which exploits capital—too much of the surplus value is appropriated in wages and too little is left for profits. If Britain is to get out of the present mess (so runs this argument) this situation must be reversed, or at least the balance must be redressed. And it can be redressed only in making Britain more like Hong Kong and less like the proletarian dictatorship which some people imagine it to be.
I am conviced that those who hold these views have a fundamentally false approach to our problems. There are countries in the world which are quite unlike Hong Kong and quite unlike Soviet Russia, and which have made a remarkable success since the War of the kind of economic and social system which Keynes and Beveridge were dreaming about for post-war Britain.

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I am thinking of France, for example, whose pre-War economy showed much the same symptoms of decadence, and was beset by much the same kind of difficulties as Britain is now: the mutual antagonism, or even hatred, between the managerial class and the working class; large-scale unemployment, obsolete and decaying industries, stagnant production, endless recriminations and a much diminished loyalty to the interests of the nation as a whole. There were many Frenchmen (like Main) who thought it more important to defeat Blum and to teach the French workers a lesson than to defeat Hitler. After the War a great cooperative effort on all sides, long-range central planning by the Government, combined with the nationalisation of all major banks and insurance companies that was a very important feature—made it possible to invest and to modernise industries on a very large scale and to achieve over several decades very fast growth rates leading to a state of general prosperity (France is not so very far my Lords, and you can go and see for yourselves) that is widely spread among the community, and which is in sad contrast to ours.
Those who know anything about France and about the way French industries, particularly nationalised industries, are managed would not say that Britain's failures are to be laid at the door of the trade unions and the workers generally and not to the failures of leadership and management. France is run by technocrats. Men like Marcel Boitieux, the head of Electricité de France, or Pierre Dreyfus, who built up the nationalised Renault Company into the largest and most successful motor car producer in Europe, have no equivalents in this country; and even if they did, the system would never allow them to get there. I am sure they would not be included in the confidential list of the "Great and the Good" which the Civil Service keeps for the use of Ministers and from which all such top appointments are selected. Until we get a fundamental change at the top, we shall never succeed. Bringing the working classes to their knees—which is the real raison d'être of monetary targets and all that goes with them—will only make things worse. This is a lesson that is not easily learned. It took the French a full-scale military defeat and four years of Nazi occupation to learn it.
5.22 p.m.
Lord JACQUES: My Lords, I will not try to follow my noble friend. I find it astonishing that a Government which are so committed to supporting the family should propose a child allowance of 45p less than the index-value, and at one and the same time allow the bankers to retain what the Chancellor himself described as a "windfall", which has nothing whatever to do with either efficiency or enterprise. That will rebound back upon the Government themselves. In the same way as night follows day high profits are followed by demands for high wages and salaries. Wages and salaries are increasing at a tremendous rate in the financial sector and that will give a new basis for comparison elsewhere, and consequently it will feed inflation.
The Government's strategy is failing and will continue to fail because it is based on a number of assumptions which are either wholly or substantially invalid. First, there is the assumption of free competition. We all know from the most casual day-to-day observations that it is possible for a trade union or a combination of trade unions to negotiate a substantial wage increase, and for the company or companies concerned to pass that on to consumers by increasing prices. That is not free competition; that is the exercise of monopoly power. The only place where we have a great element of free competition is at the international level. There we have some element of free competition, certainly more than we have internally. What is the position there? Despite North Sea oil we have a huge deficit on our current account.
Secondly, there is the assumption, which was referred to by my noble friend Lord Lee of Newton, that unemployment will inhibit wage demands. Well, it would at one time, when the workers were not organised, when the play was upon the individual. But now, when the workers are organised, unemployment is much more likely to create militancy and lead to overmanning. And of course, in the kind of society in which we live, one man's increase in wages can be another man's increase in unemployment.
Then there is the assumption, which is held not only by the Government but by almost everybody on the other side of the

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House, that our public expenditure is excessive. As my noble friend Lord Lee of Newton pointed out, the latest Annual Economic Review by the Commission of the European Community points out that the proportion of our national income which is devoted to general Government expenditure is lower than in any EEC country. In our case it is 43 per cent.; in the case of France and Germany it is 46 per cent.; in the case of the Netherlands it is as high as 58 per cent. But, what is worse, we are neglecting public investment. The same report points out that our public investment as a proportion of our GDP is less than that in any other country in the Community. It further points out that the average for the Community is 4·5 per cent. whereas, our public expenditure is only 3 per cent. of our GDP.
Our Government are not satisfied with that. These figures refer to last year. Our miserably low figure of public investment last year is now being reduced by a further £554 million in 1980–81. Who suffers for that? In the short run it is the private sector, which is the main contractor for this expenditure, which will suffer. In the medium term and the long term it is the community which will suffer, with less expenditure on hospitals, on schools, roads and railways, on harbours and airports, which is what public investment is about. We will suffer in the medium and the long term as compared with other countries. They are so far ahead of us in the amount that they are investing in the future that if we are not the poorest country in Europe this Government are certainly going to make us so within a very short time.
I should like to say just a few words on education. In the next few years we are going to see a substantial change in the number of 5- to 16 year-olds attending school. There is going to be a substantial decline such as we have never seen before in the number of 5- to 16 year-olds going to school. That gives us an opportunity. We will have accommodation available which we can use for nursery education at one end and for training for industry at the other end. So we have got an opportunity with a minimum of expenditure. But what is happening? Let us take nursery education. Next year there will be 40,000 fewer children in nursery schools than there were in the previous
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year. That is the way in which we are taking advantage of the circumstances which are coming up.
When the right honourable lady the Prime Minister was at the Department of Education there was a fierce campaign on her part for nursery education. In her White Paper of 1972 she figured that by 1981 there would be 90 per cent. of the four year-olds in nursery schools and 50 per cent. of the 3 year-olds in nursery schools. But what is the position? This Government contemplate that by 1982 the figure will be only 35 per cent. We are not awake to the changes and the possibilities that are coming as a result of the change in the birth rate.
Let us consider the assumption that, when incomes and wage demands are too high, we can claw back—all one has to do is increase the cost of electricity, gas, prescriptions and so on. That, my friends, is nonsense. It occurs only for one year, because the charges for those services go into the retail price index and increase the retail price index, and in subsequent years wages are based upon that index. So, we do not claw back effectively: all we do is delay for one year.
Let us look at the high interest rates and what they are doing. They are crippling industry and in particular the small firm. It is well known that the small firm is generally overstretched. It may be quite solvent, but it usually has cash-flow troubles because it is trying to walk before it can crawl. High interest rates play the devil with that kind of firm. Consequently, if the high interest rates continue, many will find it necessary either to go bankrupt or to sell to larger companies at knockdown prices. The present Government are supposed to foster the small firm. They are not fostering it with their present financial policy.
The volume of goods and services available is equally as important as the amount of money that is available when it comes to deciding inflation. If we are to increase our productivity, then the surest way of doing so is by increasing our investment. However, with high interest rates we are inhibiting investment. If they continue they will cripple our industries. Moreover, our interest rates are maintaining the pound sterling at a value in excess of its internal value.

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Consequently, our exports are dear and our imports are cheap, with devastating effects upon our current account balance and upon the base of our manufacturing industry. Those are the results of Government policy.
However, there is one more fallacy, one more false assumption to which I should like to refer. There is the assumption that it is possible to ignore the trade union movement: that all we have to do is to allow free collective bargaining and forget the trade union movement. That is not on—"things ain't what they used to be". Nowadays it is the moral duty of any Government to have close contact with the trade union movement because of its strength and its influence. It is for any Government, in having that close contact, to use their influence to get wages determined by profitability and productivity on the one hand, and by skill, responsibility, dirt, danger and other such matters on the other hand; and to try to get the movement to avoid wages being determined by ability to disrupt the economy and to inconvenience the public. If the unions are to be persuaded, it can only be done by public opinion. The Government must lead that public opinion, and they should be on as friendly and as close terms as possible with the trade union movement.
What we have not realized—certainly the Government have not realised it—is that during the post-war period there have been fundamental changes in our institutions in the economic scene. There has been a strong tendency by both employers and employees to develop monopoly powers. As a result of those developments it is absolutely essential that we should have a permanent, but flexible, incomes policy. With such a policy, this country can be one of the richest in Europe; without it, it will continue to be one of the poorest. That is the nub of the problem. I do not care what the colour of the Government is. Unless they are prepared to seize that problem, they will not succeed in bringing Britain around to where it should be.
Viscount MASSEREENE and FERRARD: My Lords, before the noble Lord, Lord Jacques, sits down, I should like to ask whether he would agree that the high exchange rate is due not only to
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high interest rates, but to our income from oil? That makes the situation difficult. It is not entirely due to high interest rates.
Lord KALDOR: My Lords, with respect—
Lord JACQUES: My Lords, in my view the interest rate is the greatest factor. I think that we shall probably find that out shortly because the interest rate will probably come down, and then we shall see a change in the rate of the pound.
Lord KALDOR: My Lords, would my noble friend Lord Jacques agree—
Earl FERRERS: My Lords, with respect, I think that the noble Lord, Lord Jacques, was asked a question at the end of his speech. This is not a Committee stage and I think that it would be right for the noble Lord, Lord Harris of High Cross, to continue.
5.37 p.m.
Lord HARRIS of HIGH CROSS: My Lords, it was no doubt somewhat foolhardy for me to think of emerging from the no-man's-land of the Cross-Benches to intervene in what I thought would be a fair old party political dogfight. Indeed, I thought, until the noble Lord, Lord Kaldor, spoke, that the argument was conducted with all of the usual decorum that marks debates in your Lordships' House. The noble Lord certainly injected a great amount of vigour, passion and invention into your Lordships' proceedings. We shall look forward to looking at his latest submission in the Library and coming back to trying to sort out some of his difficulties in understanding the monetary propositions in forthcoming debates.
There are great difficulties in measuring in a consistent way the monetary magnitudes and there are very great difficulties and subtleties in comparing their operation from one country to another. It will not do to try to dismiss these substantial propositions that are basic long-term historical trends and truisms by picking up some statistics from different countries and bouncing them around in that way.

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Reverting to the Motion on the Order Paper, no doubt the words of Adam Smith come more readily to me than to some noble Lords. But, when I first read the Motion with its talk about deploring the incompetence of Her Majesty's Government, I thought of a forerunner of the noble Lord, Lord Peart, who in the 18th century was apparently deploring the performance of the Government of the day in somewhat similar terms and said in Adam Smith's hearing,
"These Whig dogs will he the ruin of the nation",
to which Adam Smith in his rather phlegmatic way said,
"Sir, there is a deal of ruin in a nation".
It seems to me that when the noble Lord, Lord Peart, in his Motion at any rate, talks about deploring incompetence, he would have to agree that there has been a deal of incompetence in the performance of all recent Governments in the matter of economic policy which he puts forward. It would be more convincing, to me at any rate on the Cross-Benches, if, when he pointed his accusing finger at the Government, he was more ready to acknowledge the unwitting contribution that he and his own colleagues had made to the long-familiar ills which this Motion lists before us.
I am in some agreement with the noble Baroness, Lady Seear, because it seems to me that it ought at least to be common ground between all of us in this House that our problem is compounded of two quite distinct elements. I do not want to follow the noble Lord, Lord Kaldor, in his medical analogies too far, but it seems to me that, first, there is a longterm structural ailment of relative economic decline. This is notably indicated by poor productivity of labour, that is seen especially in the old staple industries, where, I think significantly, the dear old, antique British trade unions have become most strongly and stubbornly entrenched. That is a long-term structural problem, and on that matter I agree at least with the noble Lord, Lord Kaldor, though we disagree somewhat in our diagnoses. We may even agree that it has some relationship to class, but whereas the noble Lord has frequently said that this decline owes something to the objective facts and frictions of class, it is often
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seen by me, watching the party dogfight, as owing a lot more to the stimulation and stirring up of subjective class sentiments.
But it has been the attempt to escape from this long-term secular, chronic weakness by monetary stimulus that has added a second and acute problem, which is the disease of inflation. The problem is that these two afflictions of secular decline and inflation call for conflicting remedies. To enliven the economic performance would call for expansion—the attempt to galvanise effort, enterprise and investment, about which the noble Lord, Lord Jacques, spoke—substantially by reducing taxation, particularly on earnings, whether wage earnings, salary earnings or even earnings from investment.
On the other hand, to subdue the fever of inflation requires a curb on total spending. The only way to advance on both fronts, stimulating output and curbing total spending, might be for the Government to make much more far-reaching cuts in public spending than have so far been possible, so that at the same time they could reduce taxing and borrowing and avoid excessive printing of money.
As the noble Viscount, Lord Eccles, said in his most eloquent speech, the Government have correctly given priority to their battle against inflation. In doing so, they are broadly confronted with two choices. The first is shock treatment. I noticed from some recent writings of the noble Lord, Lord Kaldor, that, for purposes of exposition at any rate, he is now in something of an unholy alliance with the Nobel Laureate, Professor Hayek, in saying that shock treatment might be the best way to put monetary policy to the test. The alternative to shock treatment is the more Fabian approach preferred by Professor Milton Friedman—the Fabian approach that the Government have chosen—which relies upon the inevitability of gradualness in monetary prudence.
It seems to me that it is perfectly clear that the noble Lord, Lord Kaldor, is right in this matter, that shock treatment could work if we stopped any printing of money. But in that event it would work only by concentrating all the necessary adjustments in wages, contracts and incomes into a very short period indeed. For the nation to tolerate that degree of shock

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would require a rather larger amount of consensus between the two sides in politics than alas! exists. Actually, it would require nothing more, in my view, than that the Labour Party in Opposition should continue to affirm the truths on which it acted when in power, when Mr. Healey, after 1974 and despite the oil crisis about which we heard from the noble Lord, Lord Kaldor, got the inflation rate inherited from the previous Conservative Government down from 25 per cent. towards single figures over that period.
Therefore, I think that the Chancellor is right in concentrating on his monetary policy over a period, and I congratulate him on the monetary plan of trying to phase-down inflation over a three- or four-year term. That seems to me to he correct. My only concern is that he should aim at the lower end of his targets as he goes along, so that by about 1982 he is on a monetary expansion of around 5 per cent. rather than his range of 5 per cent. to 8 per cent. or 9 per cent., because it is what happens to monetary policy in 1982 that may determine what happens to inflation in that most portentious year of 1984.
The noble Earl, Lord Ferrers, and others have lamented the rise in the national debt, the cost of servicing it, and the level of rates of interest. I do not know whether in a debate of this kind I am allowed to offer what I think is a constructive suggestion or contribution. But I shall suggest that the reforming Chancellor of the Exchequer might consider a further innovation to add to those which he has already introduced. It is the issuing of indexed bonds. It seems to me that if we share his confidence that over a period the rate of inflation will be brought down, it is clear that the rates of interest will also decline with a reduction of the borrowing requirement. In that case all the more should we see the folly of continuing to issue long-term Government stock at 15 per cent. interest, which will have to go on being paid when inflation has abated.
As an all-party gesture, I should like to suggest that he might take a leaf out of Dr. Dalton's book. If noble Lords will cast their minds back to the post-war years, they will remember that Dr. Dalton introduced a 2½ per cent. bond. Let the Chancellor issue a 2½ per cent. bond, but let him tie its value in future years to some
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appropriate index of prices, and then let him offer those bonds to open competitive tender. There is no difficulty in predicting that they would move to a substantial premium. If the Government succeed in bringing down inflation against the expectations of the noble Lord, Lord Kaldor, and others, indexed bonds would save taxpayers from financing debt at high interest rates in the years ahead. Where Dr. Dalton's bonds slumped to 20 devalued pounds per £100 of original 1947 value, Sir Geoffrey's new bonds would, in my view, not merely retain their full value, but would involve a diminishing cost to Government as inflation is brought down. So in place of what became known as "Dalton's Duds", Sir Geoffrey Howe's new bonds might win him fame and becoming immortality as "Geoffrey's Gems"!
5.47 p.m.
Lord DAVIES of LEEK: My Lords, we are grateful to the noble Lord, Lord Harris of High Cross, and I hope that he will pop in a little more often to give us a few of his talks and some of his authoritative information. We may not agree with all of it but certainly, if I may say so without sounding pompous, the idea of an indexed bond, and the way in which he approached his speech today, were valuable to the House.
Today we are debating and asking questions about the fact that we deplore the incompetence of Her Majesty's Government. Have the Government been incompetent, and can we show—and spike down a point—where they have been incompetent? That is pretty easy to do as we go along. The conducting of their domestic policy is resulting in increasing information, which is inflation. On the medical side it is information, but on the economic side it is inflation. There is no doubt that that has taken place since the Government have come to power. I found that out this weekend, when I had to tax a couple of cars, when I had to pay my water rates and my ordinary rates. I discovered a marvellous economic point—that although my income tax is to be reduced a little, I am paying a hell of a lot more for my water rate, my local rates, my petrol and my cars. Life is becoming more difficult day by day. I am losing weight daily as a result of this Government I being in power.

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The other point is the continual industrial decline. I could bring up masses of figures. My noble friend Lord Lee has brought up the figures and so have others, so it would now be a redundant factor to reiterate those figures which we all know about concerning the industrial decline and the increase in unemployment. We have discussed many times before the deterioration in the balance of trade. We must remember that we are living in a world of old machines. We had 289 steam engines before the rest of the world had any. I think we are still using those 289 the way that industry is going! I have seen shipbuilding in Japan, Korea, the Far East and places where they have the benefit of the use of modern machinery, but we in Britain are not realising what we are competing against. You get the silly idea that the Far East is living on a handful of rice. Nothing could be further from the truth these days. We had better kill that ancient idea of the great bloated influence of Great Britain alone. There is a deterioration in the balance of our trade in manufactures.
Through the brilliance of the market at home in insurance, in shipping, our invisible exports are holding their own, and we can be grateful to the businessmen and the people who understand the international system of commodity working that we are doing something there to get a balance in our payments. The great economic fact is that so far as sale of manufactures and goods overseas is concerned, for 200 years we in Britain have never been able to balance our actual exports with actual imports. Without the invisible trade of insurance, tourism, et cetera, we would never have had a balance in our trade.
The strange thing is that I have just entertained five Americans today. Having bought them a cheap drink I very tenderly passed around and said, "What do you feel about Britain today?". They said, "It is much dearer than New York. Your theatres are more expensive to go into. Staying in your hotels is a rip-off". The greediness of people is not helping this Government or any Opposition in the real greediness of making the maximum out of tourism in this country and taking them for a ride. In other words, it is true that there must be a
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change whichever side of this House we are sitting today. Unless there is a change of heart in our people, in their attitude to buying and selling and the entertainment of overseas visitors, we can easily destroy the tourist industry, which earns us more than our motor-car exports. That is a point that you might put above a party point at the moment.
Now let me come to the noble Earl, Lord Ferrers. He was saying that he has reduced my income tax a little. So he has. But look at the increase in local rates! I have had my rates bill, and I looked at what it is now and I know what it is going to be next year, and I know what is happening to me with the increase in value added tax. Let us be honest about this; it is these things, despite the little that I have had taken off my tax, that enable the Government to make massive tax reductions for people in higher income brackets.
In the Guardian today Simon Hoggart reports on the lady, Mrs. Thatcher, who is making history—let us be fair to her. After her first year of office his first assessment is that her style of government is an "intensely personal style". This is to be expected. But by the use of a vulgar street phrase, which I will not use, he implies in the Guardian that she creates a "sudden terror" around the people who are near her. Unfortunately—or I would say fortunately—she displays a cleverness that she likes to be acknowledged. One of her Cabinet allegedly said, "She has made up her mind before she discusses anything". Now that is a clever ploy. But one thing that is demonstrably clear is that the lady is a very able and clever woman, but she lacks what Solomon asked for, wisdom, and that comes long before cleverness in the gamut of man's real achievements. All this gives this lady difficulty with the so-called Tory "wets" in the Tory Cabinet. I hope that some "wets" will be around; which really means men and women of ability in the party who have the courage to criticise leadership when criticism is needed. Thank goodness we had quite a lot of it at one time when I was chairman of the Bevanite group many years ago.
To quote Hoggart again on the TV appearance—now, no leader of a party should do this—she said that Jim Prior, whom I am very fond of as an able

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Member of the party opposite, "was very, very sorry indeed" for having expressed the views to industrial journalists that it would be a very good idea if Sir Charles Villiers were to go. Certain lessons must be learned even in this great Conservative Party, which is one of the great parties of British history. Prime Ministers are not expected to criticise Cabinet colleagues on television. Loyalty is a two-way stretch. Nevertheless, despite this, one must be fair to her and say that she is, more than most Prime Ministers of the past, making herself available to Back-Benchers.
You might ask what has this to do with the resolutions we are talking about today. It has very much to do with them. We are in this trouble very much because of sycophantic following, before discussion, of the United States of America's policies. Those of us who have been around America during presidential elections must beware that great nations like this, or European nations, are not drawn into the hysterical atmosphere that is created during elections in the United States. It has an effect on this country, because you are suddenly talking as though a nuclear rearmament is as easy as possible to the tune of £6,000 million. What is the meaning of all the economic discussions we have had, all the algebra and the calculus of economics, when they leave out that we are going to spend £6,000 million on rearmament? We shall be in a bigger jam than ever.
You say, "What do you want? Complete pacificism?" No, I am not taking that position at all. I want us to look at the realities. The realities in the final analysis are that we shall come to what I call the axiom of the acquisitive society, which has not yet learned how to achieve full employment without either preparing for war or being in a war. That is the history of 100 years of modern society. War, colonial activity, has always been able to export a revolution. Mankind must find the answer to this, or in the nuclear age all our talk is simply pillars of cloud.
Now I think I shall cut out 10 more minutes of what would have been a pretty good speech. I have been speaking for 10 minutes, and 15 minutes is long enough. The truth is that there is a danger—this is the fact—of a new
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right-turn that we thought we had destroyed in British politics. I am afraid of it. I would not like to see a white collared fascism. Now do not let anybody think that I am accusing the party opposite of that. I am not. I would not think of doing it. But if we are not careful, and are driven into the miserable aspect of 3 million unemployed, it could happen. I will now say something else. As a young man struggling for scholarships I saw in Wales the miners—fine lads who went to the sixth form of the grammar school with me—standing derelict on street corners, with IQs that were as good as any in the Mensa class.
I put this forward now for all of us on both sides of the House to learn. It is that the young men and teenagers of today will not put up with the misery of mass unemployment that we put up with 40 or 50 years ago. The warning is there with the motor-cycle youths and the people we had trouble with the other day in Bristol. They want something, and at the very time when they are wanting it, what are we doing? We are cutting grants to universities, cutting scholarships and cutting rural education. That right turn must be changed.
Many have paid tribute to the noble Lord, Lord Carrington, and I join in those tributes. I hope the noble Lord will have as much success in the foreign field—and we need it—as he had with Zimbabwe. Although I could, I will not develop that argument because I said I would stop after speaking for 15 minutes. I hope he will have the opportunity to play an important part in our general relationship. I do not want to wander into the subject of foreign policy—we will debate that on another occasion—but I thought it was stupid for the United States to tell a great nation like Russia, "Get out of Afghanistan by day 28 or else". Or else what? Blow up the world? That is why we want men with diplomatic ability, the sort of ability shown by the noble Lord, Lord Carrington, when he was working in the African situation. That is an honest tribute to the party opposite. We must find an answer to this problem or, as I said, today's debate will just have been bubbles.
When we ask questions about the success or otherwise of this Government's policies they tell us they are succeeding,

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but how can we be sure of that when, for example, the Manpower Research Group of the University of Warwick have said that unemployment is rising and will rise to between 2·7 and 3·3 million by 1985?
My final point—noble Lords will be pleased to hear that—follows from what the noble Lord, Lord Underhill, said. We are calling people scroungers, but what are the facts? Tax fiddles cost this nation £3,750 million a year. The average family could be paid about £6 a week more were it not for the massive scale of tax fiddling that goes on in Britain. It goes on unchecked, or it would do were it not for the checking that is done by the members of the Civil and Public Services Association. However, at the very time when such checks are so important, the Government are cutting the staff of the Inland Revenue by about 5,000. If we could save £3,750 million a year by maintaining the staff of the overworked Inland Revenue, it would be worth it to the nation, and there cannot be the slighest doubt about that. These facts do not come just from me. They are facts supplied by the Inland Revenue's Civil Service union and the inspectors themselves. Rather than making a commotion about scroungers who are unemployed, we should be working in real depth to try to solve this problem of tax fiddling. I said I would speak for 15 minutes. The figure 15 appears on the clock and noble Lords have listened to me for long enough.
6.4 p.m.
Lord BOWDEN: My Lords, it will be difficult for me to follow that speech by my noble friend Lord Davies of Leek, and at the outset I want to return to the original Motion. We are criticising the Government and I wish to criticise them, as I have on previous occasions in this House, not so much for their failure to cure inflation, which will be an extraordinarily difficult thing to do anyway, but for their failure to cope with some of what one might call the by-products of inflation which have of themselves been extraordinarily dangerous to the community at large. In fact, I have often thought that some of the remedies have had effects far worse than the disease. I ant reminded that when King Charles II was dying his doctors bled him, blistered him, gave him purgatives, applied leeches to
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him and kept him awake all night. In the end the poor man complained that he was too long a time dying, and one can understand why he was anxious to be gone once his doctors really got at him. I have often felt that some of the actions of the present Government in dealing with inflation have been just as unhelpful.
Regarding the curtailment of public spending, this seems to be a splendid idea, but then one thinks how it works. I referred on the last occasion when I spoke in your Lordships' House to the appalling decay of the infrastructure of much of the North-West, which I know a lot better than I know London; the decay of the roads, the decay of the sewers, the decay of the water supply, the decay of the electricity network and the decay of the aqua system underground which works in conjunction with the reservoirs. This decay is going on all the time, but meanwhile there are unemployed civil engineers who could mend these antique remnants of our culture of 100 years ago.
I have often felt that the Government never do their sums properly. When one works out the cost of mending, say, the sewers, drains or water supply, one must include in the calculation, if one is to do it properly, the fact that the men who might be doing it will no longer be drawing the dole, that the machinery they will be employing will no longer be rusting away, that the gravel pits which are now standing idle will be being worked, and that limestone will be being burnt in the Peak of Derbyshire to provide the cement. In other words, the difference between the apparent cost of the work and the true cost to the community is probably very slight, but the benefits which accrue are very great. Any sensible Government trying to economise on public expenditure might try to work out what is the best buy, and I suspect that the best buy is often the crude, perhaps rather unexciting, renewal of the vitally important infrastructure of a great deal of our industrial community.
The great civil engineering firms recently visited the Secretary of State, Mr. Heseltine, and found that he was willing to cut even more from their estimates than had previously been done, and we must remember that these great firms have no other employer than the Government; so when the Government cut expenditure, they cut capital works of enormous importance and

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allow the cost of not doing the work to be borne by the men who might have done it, as well as the people who suffer from the increasing decay of the various parts of the structure on which they ultimately depend.
Here is a case for a different type of calculation than the Government, any Government, have ever undertaken, and I believe that attempts to suggest that we are saving money while these various things are fast getting worse are grossly misleading because of the way in which the calculations are done. I beg the Government to contemplate the idea of working out the true total cost to the community of these various works instead simply of saying that total expenditure is being cut. It may turn out that it is costing us more money not to do the work and then have to do it when it gets worse.
My second point is that the accountants have recently announced that they are to introduce their latest exposure document as a regular system of accounting, and on the basis that calculations are done allowing appropriately for the effects of inflation, the consequences for industrial profits as announced are quite extraordinary. For a very long time most of our industry has announced profits 50 per cent. more than it has actually earned, if the companies concerned made appropriate allowance for renewing their various machine tools and all the other equipment in their factories. Last month I came across a particular account, which several of your Lordships may have seen, for a firm which announced two sets of figures. On the one basis of the historic cost which it had hitherto had to use it made a profit of £16½ million, and on the other basis, making what it felt to be an appropriate allowance for the effects of inflation on its operations, it lost £4½ million. That is an absolutely astonishing change, and the question which the Government must earnestly ask themselves is, what is to be done, and how are we to cope with the fact that a very large profit is being converted into a fairly substantial loss as a result of a change in the method of accounting which reveals for the first time what has actually happened to the firm.
I have discussed this matter with your Lordships many times. It is a very complicated matter, but it becomes very
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relevant because about a week ago the accountants finally announced the system that they are to use. The question I pose to the Government is this. Is it possible that we have habitually and for many years been charging firms on the basis of profits that they have not earned, making them distribute their assets in the form of dividend as well as taxes? Furthermore, is it not possible that for the last 20 years we have had a capital levy which in effect may be the prime cause of what we call the English disease?
How can any industry anywhere survive if it is always being made to pay out taxes and dividends which it has not earned? The money can come only from capital. Therefore, I say, as I said to the noble Lord, Lord Cockfield, when he last replied on behalf of the Government in regard to a similar topic, we have had a capital levy—an enormous one—and it seems to me that this of itself may be one of the principal causes of our industrial decline.
A few moments ago I spoke to your Lordships about the problems of the civil engineering industry. I should now like to show to your Lordships another aspect of the interaction between the two themes that I have just mentioned. I refer to the question of a shortage of moneys in the building societies. The building societies are getting in only about half as much money as they want, and they could distribute much more even than they are now being asked for. But for many years the building societies have in effect been engaged in transmitting purchasing power from the hands of the people who lent the money to the building societies, into the hands of the people who borrowed it from them. Anyone who lends money to a building society right now watches the real purchasing power of the money that he puts in gradually disappear. At the same time people who borrow money from the building society expect as a matter of course to see the value of the house that they buy with it increase very significantly.
This is properly said to be caused by inflation, but it is not simply caused by inflation; it is caused by a combination of inflation, which we cannot cure, and inflexible and ridiculous Treasury rules, which we could cure. The noble Lord, Lord Harris of High Cross, put the matter

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quite simply. He asked, why is it not possible for the Government to issue bonds at about 2½ or 3 per cent., guaranteed against inflation? The building societies could perfectly well borrow money at about 4 per cent., plus some part of the increase in the equity of the value of the houses which are built with their loans. I am quite sure that if they did that, they should be able to borrow all the money that they want. This is the point that the noble Lord, Lord Harris, made a few moments ago.
Similarly, people who borrowed money from the building societies would then have to contract to pay back not only a fixed-rate mortgage, but also some part of the increase in the equity of the house. If this were done, not only would money come into the building societies, but the total initial cost to the man who took out the mortgage would be very dramatically reduced, perhaps to about half what it is today.
Your Lordships might ask why has this not been done. The building societies are perfectly aware of the idea—they have been for years—but they run into flat opposition from the Treasury which points out, for example, that anyone who lends money to a building society in this way, and then gets some increase because of the increase in the value of the house which is bought with the loan, would be subject to capital gains tax. Furthermore, any contract to allow for the increase in the actual value of the mortgage as the value of the house increases would be ultra vires, for other obscure fiscal reasons.
So apparently we are to allow the building industry to collapse because of the obduracy of the Treasury and its refusal to cope with the fact that inflation is here, at least for the time being, and must be survived, while on the other hand we are to allow a large part of the main civil contracting industry to disappear because in working out the costs of the work that they are to undertake, we do not allow for the cost of not doing it or of the increased cost when it ultimately is done. After all, no one would indefinitely defer painting a house on the grounds that he would save money thereby, if he realised that the house would fall down if it were not painted
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sooner or later. This is substantially the situation which we have got ourselves into in the building trade.
So I believe that much of our problem is in fact man-made, in the sense that it is made by the Treasury and by the Department of Inland Revenue; yet we need not suffer from it. Although at this moment we cannot say how we can cure inflation instantaneously, I believe that we ought to work harder on the problem of coping with inflation until we can cure it.
That really is all that I ought to say, but I must not sit down without making one further observation, relating to the appalling effect on the whole educational system of the financial cuts which are being imposed upon it. I shall mention just one of the many points on which I could elaborate. When I was in Manchester I had a constant succession of civil engineers who came to my institution from countries all over the world. For example, one such engineer, whom I know very well, became the doyen of engineers in Malaysia and built a great many of the public works in that country. He wrote to me and said:
"I came to England and got a degree, and my sons did, too, but no one else will be able to do that".
He added:
"What you don't realise is how much work has been steered in the way of English contractors by people who have graduated in England and gone back to their own countries, full of affection for England".
I wrote to Sir Keith Joseph about this situation, and he demanded that I should quantify it. But, my Lords, if I attempted to quantify it, some wretched civil servant in, say, Malaysia would undoubtedly be jailed for it, because the only reason by which one can say that influence is brought to bear in favour of this country is that there is something over and above what I call the crude calculation of total cost in the contract. For very many years we have been enormously fortunate in that there was a time when our civil engineers went out and did work in what used to be the Colonies. Then the time came when they were the ex-Colonies, and we exploited the affection with which senior civil servants regarded this country. My own institution used to educate the engineers, much as the London School of Economics educated the politicians.

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I remember once, at a conference in Moscow, that the director of the University of Moscow said that
"We in Russia go to enormous lengths to get students to come here from all parts of the world. We give them scholarships, we go and select them, and we do all we can to help them when they are here. We have in my institution students from 63 countries".
I said:
"In Manchester we do nothing. We let students come if they want to, and we have students from 62 countries right now".
It will be dreadful if we destroy what has long been one of our most important assets in an attempt to save money. The word "university" is sometimes taken to imply that an institution is universal in its range of interests. That is not so. The original definition of a mediaeval institution of higher learning was that it accepted students from all parts of Europe, which was the whole known world in those days. The universality of such a body is in the origin of the students rather than in the discipline which it teaches. It will do infinite harm to some of our most famous and best-established institutions if we attempt to keep out all students, other than those who can pay the extraordinarily high fees which are being demanded. It is ridiculous to ask the student to come to this country and pay a fee of £3,500 when he can go to France, Germany or Holland for practically nothing or to the United States for a quite small fee. The cost to this country in the long term may be very great indeed. It is unfair to accuse an academic of being ineffective if he takes the view that such matters cannot by their very nature be quantified.
The Government are confronted with the most appalling task, but they are making their own problem very much worse by their failure to grasp the fact that the effects of attempts at curing inflation may be far worse than even the inflation itself. Inflation of itself does not reduce the amount of iron in the earth; it does not reduce the efficiency of the mines or the steelworks; but the effects of attempting to cure inflation can make it impossible for them to work. I believe that the Government should think again about their technique for surviving inflation lest we be destroyed in attempting to save ourselves.
6.22 p.m.
Lord MISHCON: My Lords, it is customary in certain circumstances to thank a noble Lord who tables a Motion for having done so. I can well understand that noble Lords on the Government Benches did not want to commence their speeches by adopting that custom. However, I wish to thank my noble friend Lord Peart for having tabled this Motion and for the speech which he made in support of it. With the charm that makes him so popular a figure in this House, the noble Earl, Lord Ferrers, referred to your Lordships' House as being a very civilised place in which one can enjoy speeches even if one does not agree with them, a place in which speeches are accepted with intelligence and courtesy despite their possibly vitriolic political content.
Although I accept that statement, I should like the noble Earl to realise, as I am sure he and his friends recognise, that this Motion has been tabled with great seriousness. Because this has been a quiet debate, it does not mean that Opposition Peers regard the contents of this Motion as other than extremely serious. The Motion voices, in the view of the Opposition, the feeling which is being expressed by a great number of people who voted in the election to which the noble Earl referred. Many people are now taking a different view in regard to the votes which they cast at that time.
The Motion details a number of matters, and with your Lordships' permission I shall repeat them because, so far, no noble Lord on the Government side of the House has denied the truth of any of the matters complained of as a result of the Government's policy. I am not saying that the Government have done other than deny the charge of incompetence which is said to lead to these results, but I am sure the House will agree that the Motion sets out an astonishing collection of events.
The Motion decries the fact that Her Majesty's Government's policy has resulted in "increasing inflation". We all know that inflation has disastrously increased, and is increasing still further even in accordance with the Government's forecasts. The Motion refers to
"… continuing industrial decline, deterioration in the balance of trade in manufactures …".

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Indeed, the Government have forecast a decline in productivity and a drop in manufactured products of 3 per cent., to be followed by 4 per cent., and to be followed by possibly even greater percentages.
The Motion then refers to "increasing unemployment". I pause there for a moment, because it is impossible within the period of time which your Lordships' patience will tolerate at the end of a debate to seize on more than one subject and to do it justice. I wish in a moment or two to deal with the question of young people of this generation who are the lifeblood of the future of our nation and what they are being offered as the direct result of Government policy. I say categorically and without offence, but with every sincerity, that a Government who deliberately set out to create and increase unemployment are carrying out a wicked, inhuman policy. I shall seek to enlarge on that statement because of the disastrous effect of such a policy.
The Motion refers to the
"inability of industry to achieve necessary profitability".
The friends of noble Lords opposite and indeed the friends of noble Lords on this side of the House who are leaders in industry in this country complain day by day of the high interest charges and the difficulties that face them over exports because of the rising value of the pound. The Government are producing policies which, it is said, are intended to bring back the sick patient to health—a metaphor which has been used often in this debate. At present the leaders of industry see no signs of a cure. Indeed, they themselves are feeling pretty sick because they are having to lay off workers whom they do not want to lay off and are having to create redundancies which they do not wish to create. That element must be considered.
The Motion ends by referring to
"… the erosion of the Welfare State".
I need not pause for more than one second to elaborate on that matter, because we all know that the Welfare State has indeed been eroded. If everything that is detailed in the Motion is right, it surely deserves to succeed if we go to the beginning of the Motion which deals with an allegation that it is the Govern-
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ment's wrong policies, namely, their incompetence in dealing with the dangers that confronts us—and there is no doubt about those dangers—which have brought about these results. What an accumulation of results there has been.
I said that I intended to concentrate on the issue of unemployment. I do not wish to quote from speeches made by Members of my party in another place or from any speech that has been made in this House from the Opposition Benches. If I wanted to quote from any speech at all in that context, I should take the speech which was made by my noble friend Lord Lee of Newton. But in the course of that speech he referred, merely in passing, to an article which appeared in The Times yesterday. It was not written by a Labour spokesman or by a Liberal spokesman. It was written, in fact, by a distinguished servant of this country, Sir Bryan Hopkin, who headed the Government Economic Service and who was Chief Economic Adviser to the Treasury from 1974 to 1977. The article is headed:
"Is the Government blundering around in the dark?"
With your Lordships' permission, I will quote just one part of that article:
"… the Government has embarked on a policy of making unemployment high enough, for long enough, to break down the present scale of wage and salary increases and in this way eventually get the rate of inflation down and so change inflationary expectations.
"The first thing that needs to be said is that if this is indeed the policy it would be better if it would be stated frankly to the public. The second is to recognize that nobody"—
and he underlines the word "nobody"—
"knows how much unemployment will be required to achieve any defined deceleration of inflation, nor how long it will go on.
"The knowledge to enable one to work out a balance of the costs and benefits of the policy simply does not exist. The Government is blundering about in the dark, …".
I pause there, my Lords. This is not a Labour Party spokesman, I repeat; not a Liberal Party spokesman. This not a political diatribe, not a piece of street corner oratory; but the considered judgment of a distinguished servant of this country who specialised in the advice that he gave to the Treasury. He says:
"The Government is blundering about in the dark",
and he goes on to say,

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"for all its stance of firm and informed purpose. It is a matter of judgment what the costs in high interest rates and unemployment of a given benefit will be. My judgment is that if the policy continues to be operated as it is at present the costs will be heavy and prolonged".
I turn from there to recollections of a debate in your Lordships' House which lasted for a day and a night. It was the education debate. I remember so well that the noble Baroness, Lady Young, almost made light—and I want to use the word "almost" with emphasis, because I wish to be fair—of the various economies that might have to be made in regard to the children in our schools who will he (if I may use the popular phrase) the generation of tomorrow upon whom this country will rely. She said that there would be economies, and she said that if the transport charges went through—and, as we know, they did not—then she imagined that there would not be any economies which might have disastrously to come in regard to the quality of teaching in our schools.
Again, I look—and this is no more than a couple of days ago—at the Sunday Times, and at what was said by their education correspondent. The Sunday Times I am reading from is the edition of 13th April:
"Warwickshire, for example, is chopping 295 teachers' posts, though falling rolls justify a cut of under 100. The result, in some primary schools, will be classes of up to 35 that combine two or even three different age groups. Northamptonshire, which already has one of the worst primary pupil-teacher ratios in England, will suffer a further decline, giving it one teacher to every 25 children. Manchester currently has one of the best ratios—one to 20·4—but this will decline to one to 22 by 1982 …
"Buckinghamshire, Bedfordshire, Ealing and Coventry are among the other authorities that are making significant cuts in pupil-teacher ratios.
"It's going to be exceedingly difficult for schools to maintain the curriculum', said Roy Harding, Buckinghamshire's chief education officer. 'It may not be possible to keep up standards. There will be problems in providing remedial courses. Some secondary schools may not be able to offer a second foreign language'. Even where cuts are purely for falling rolls, the loss of specialist teachers may seriously affect a school's curriculum".
Then, under the heading "Books", he says:
"Widespread reductions in schools' allowances for books and equipment are considered even more serious by most teachers, coming on top of five years of austerity.
"In one Northamptonshire secondary school, a recent parent-teacher survey found that, in some
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first-year and second-year classes, up to 10 children were sharing one science textbook".
That is the generation to come, upon whom we shall rely for scientific and technological knowledge, skills and jobs.
"In a Bristol comprehensive, the geography department cannot afford to buy set textbooks for a new A-level course, and maths, physics and biology are all struggling with out-of-date books".
I could go on, but I promise to spare your Lordships any more quotations except that, in order to avoid any criticism that may come later that this is the result of the transport charges vote being lost in your Lordships Committee, perhaps I may point out that at the end of the article it is made perfectly clear that all these economics that I have mentioned were decided upon, and according to the education authorities had to be decided upon, when they thought that transport charges were in fact going to he made.
In terms of unemployment for young people leaving the schools, now deprived of many of the essential ingredients of education, we face an unemployment figure of 2 million, to become 2½ million, of which figure it is estimated that between a quarter of a million and something like 400,000, I believe, may well be young people leaving school. I say this, and then I sit down. If this is the policy of Her Majesty's Government in order to make the nation state, which is sick, and undoubtedly sick, well again, then all that they are doing is killing off in a most cruel manner, an inhuman manner, the best of our youngsters' chances, the best of our people, and they are pursuing a policy which deserves, not only to be criticised but to be condemned in your Lordships' House tonight.
6.39 p.m.
Lord ROCHESTER: My Lords, we are coming to the end of this debate, and the questions which are uppermost in my mind are these: Has it been justified? What purpose has it served? And what practical benefits will it bring? I should like to go along with the noble Lord, Lord Mishcon, in some of the things he has said about it, but I honestly cannot. I do not feel that there has been much justification for it, nor that it will prove to have served any very useful purpose. It must be the fourth or fifth debate on the present Government's economic and industrial policies that we have had since they

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came to power. Each time we seem to cover much the same ground and end in as much disagreement as when we began. The only difference this time, it seems to me, is that the debate is not on a Motion for Papers but on what amounts to a vote of censure on the Government, the outcome of which is predictable if only in view of the large, inbuilt Conservative majority in this House. We on these Benches will feel obliged to vote with the Opposition because of the number of points on which, as my noble friend Lady Seear, has said, we are in disagreement with the Government; but I shall take no pleasure in so doing, and certainly it will not be because I think that a Labour Government, were they now in power would be performing any more competently than the present Government.
When I read the terms of this Motion, my first reaction was: Who is talking? Surely, any disinterested observer of our proceedings would now expect that, in deploring the incompetence of the Government, the Labour Party would have credible policies to put forward designed to reduce inflation, to arrest industrial decline, to increase employment and business profitability and so on. Yet no such constructive approach is apparent from the terms of this Motion and, on several crucial questions, divided as the Labour Party is as between trade unions, the National Executive Committee and the Parliamentary Party, I am not sure at all what its policies really are. For example, we heard something today about incomes policy. I pay tribute to the noble Lord, Lord Lee of Newton, and to the noble Lord, Lord Jacques. Their views on this matter have been consistent over the years; but it can hardly be said on the matter that the Opposition speak with one voice. Similarly, we have heard of the need for a co-operative approach to our problems. But when, just over a year ago, we were in a state of near chaos in our public services and the Labour Government were implored by people on all sides of the House to consult with other parties about our predicament, there was then no willingness to adopt a co-operative political approach to our problems. Moreover, if the Labour Party is judged by recent performance—and there can be no better test than that—when they left office they left a residue of greatly increased
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unemployment and the prospect of higher inflation to follow.
As to the erosion of the Welfare State, it was again the noble Lord, Lord Lee of Newton, who, in our debate in January 1979, at the time of the lorry drivers' strike, went to the heart of the matter when in his forthright way he said that nowadays we are faced with demands on national resources that did not even exist; and that it was on that issue that the price of defeat was the virtual ending of the Welfare State. How true that was! It was in that same speech that the noble Lord advocated compulsory arbitration as the best solution in such circumstances. I noticed that the noble Viscount, Lord Amory, in a more recent debate, that introduced by the noble Lord, Lord Kaldor, only two months ago in this House, returned to the same theme when he expressed his strong belief that we shall never get wage negotiations on a fair and satisfactory basis until the principle of freely-accepted and binding arbitration is once more restored to repute and to acceptance.
We are still a long way from that happy state; but, as I have said before (if remember rightly, with some support from the noble Viscount, Lord Trenchard) I should like to see a start made by the Government of the day seeking to initiate discussions with representatives of employers and trade unions aimed at encouraging the establishment and observance of negotiating procedures throughout British industry, under which disputes which concerned agreements that had already been entered into are settled by arbitration instead of by industrial action. I should be grateful, if when the noble Viscount replies to this debate, he would say whether he retains sympathy with that objective and, if so, whether there is any prospect of the Government making any moves in that direction.
My Lords, on a number of points we agree with the Government objectives, and particularly, as my noble friend Lady Seear has already said, in the priority that they are giving to the need to reduce the rate of inflation. We cannot continue indefinitely through borrowing to consume so much more than we produce, thus obliging our children to repay debts that we have incurred. For this reason we accept that there is a need to reduce public

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expenditure; although in some cases we are troubled by the pace at which the Government are proceeding and also by the absence, as we see it, of sufficient discrimination in the means employed, and, indeed, not employed, to effect economies. Here perhaps I should like to say how much I agreed with the noble Lord, Lord Bowden, in what he said just now about the effects of reduction in Government expenditure on the recruitment of students from overseas, and how much, in material terms alone, this country has to lose (as I see it) from that approach.
I will mention only one other example—and that because it has been taken up by two or three speakers—and it concerns the steel industry. I, and, I think, my noble friends, will agree that there is a need for some restructuring of the steel industry. What is more, I feel that the changes that are now required would be a good deal less painful if the process had been started by the last Government. Now, however, there is a heavy price to be paid in lost jobs, particularly in areas of high unemployment, and the Government therefore bear a heavy responsibility to see that the necessary adjustments are made at a pace that does not produce intolerable social upheavals. The trouble is that it is the people at the bottom of the pile, and particularly those who are young and already deprived, who in the end are going to be most hurt by the unemployment that will ensue. It is on this count that I hope very much that the Government will learn the lesson of recent events in Bristol, and not least in the matter of the resources they are prepared to use in the next few years to help, for example, the ethnic minorities in our inner city areas. To that extent, at least, I go along with what the noble Lord, Lord Mishcon, had to say just now.
What concerns us on these Benches more than anything else about the Government's domestic policies is that, as a nation, we are continuing to pay ourselves vastly more than we can afford, not merely in increases in wages and salaries but in the elimination of jobs that such increases inexorably will bring in their train. On a number of occasions, I have spoken of the urgent need to establish agreed, long-term procedures designed to influence the general level of pay settlements, and also for discussion in some
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appropriate forum involving representatives of Government, employers and trade unions from which a wider public understanding can be gained of the effect on the economy of pay rises that are not matched by corresponding improvements in productivity.
When last I raised these points, in the debate which the noble Lord, Lord Kaldor, introduced two months ago, it was the noble Lord, Lord Cockfield, who said that we already had the National Economic Development Council and the Government seriously doubted whether there was room for the creation of an additional body. The difficulty about using the NEDC for this purpose is that its deliberations are not publicised sufficiently widely to have the educative effect that is required. On that occasion, too, the noble Lord, Lord Cockfield, said that the other partners in the NEDC were understandably suspicious of the usefulness of such discussions, and if progress was to be made then it would have to be made slowly.
My understanding is that the CBI and at least elements in the trade union movement are still anxious to proceed down that road, both in an educative way and procedurally, to the best of my knowledge. For example, the CBI wishes to shorten the period of the annual pay round, reduce the number of bargaining units in industry so they relate more closely to common interest groups, and arrange for pay claims in the public sector to be dealt with at the end of the pay round so that settlements take account of those in the private sector which have to be dealt with in accordance with competitive market pressures. The fact that there are difficulties in the way does not seem to me at least to be an adequate reason for not trying to make headway. When the noble Viscount replies to the debate perhaps he would be kind enough to say whether the Government are at least prepared to make some move in this direction.
As to the practical benefits that today's debate will bring, I fear that it will contribute little to the solution of our problems again, because the Motion before us has been couched in negative terms concerned solely with what is thought by the Opposition to be wrong Government policies without at any point re-

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cognising the difficulties that would now confront any Government bearing the responsibilities of office. Here I very much agree with what the noble Lord, Lord Harris of High Cross, had to say.
For my part, I continue to feel that in default of any change in our electoral system we will not solve our problems until all the political parties are prepared to come together to confront them. Even now, there is however one proposition on which it may be that there will be a measure of agreement in the House: that relates to the urgent need to improve our relatively low productivity, if only because as a trading, nation and at a time when we are moving into deep recession, worldwide, our need to remain competitive internationally means that new job opportunities will have in general to follow and cannot precede such an improvement. I was glad to see the validation of this proposition in practice earlier this week. It is only about 15 years ago that Sir Arnold Weinstock was vilified for the strong action that he took in reducing overmanning in the General Electric Company. It is good to see that productivity in that company has now improved to the point where, in the face of stiff competition from France and Germany, an export order has been landed which will have the effect of safeguarding hundreds of jobs for years ahead.
I think that I have spoken for long enough. I end by saying that it is only possible in this House for us to talk and pass legislation—often, I fear, with inadequate knowledge of what actually goes on in the real business world. At least in what we say, and the way in which we legislate, I hope we may be guided by the principle that we should do all we can to help those in the front line of industry to fulfil its basic purpose; namely, the efficient production of goods and services for the benefit of the whole community.
Baroness GAITSKELL: My Lords, before the noble Lord sits down, may I ask him, after his rather deflationary speech, criticising in undertones and overtones the Government and the Opposition, whether he has a miracle cure for all our ills? Has the Liberal Party a miracle cure? Only a party which has a
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miracle cure at the moment can afford to be quite so superior as the noble Lord was just now.
Lord ROCHESTER: My Lords, I hope that the noble Baroness does not really think me to be so arrogant a person as she seems to be making out. The distinctive point about the Liberal Party policy—which may not amount to a miracle, but which is sorely needed, as I tried to indicate—resides in this point: our problems are now so deep-seated and intractable that neither of the major parties will be able single-handed to solve them, and it is only when we are prepared to come together that we shall have a hope of doing so.
Lord DAVIES of LEEK: My Lords, is the noble Lord aware—
Several noble Lords: Order!
Lord DAVIES of LEEK: My Lords, I am perfectly in order. Regarding the superior attitude—and I am looking at the Liberal debate—there was only one concrete suggestion and that was profit sharing. I am glad that the noble Lord has now qualified it. He took a very "uppity" hand by saying we had nothing to suggest.
Lord ROCHESTER: My Lords, I am obliged to the noble Lord for that compliment.
6.58 p.m.
Lord McCARTHY: My Lords, despite the feelings on the part of the noble Lord, Lord Rochester, that this has not been a very original debate, and that we seem to have been going over much the same ground, I have rather enjoyed it. I have also enjoyed the spread of the speeches which I found extremely interesting. There will be 13 speakers in this debate, eight supporters of the Motion of the Leader of the Opposition, two Members from the Liberal Party, and one Cross-Bencher. We are going to have three supporters of the Government two of whom are Ministers. So if we could decide on the basis of the voices on this Motion tonight I would have no doubt about the result.
At this late stage I should like to do three things. First, to seek to try to

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narrow the area of the dispute between us. I always try to do that in order to explore the real differences. Secondly, to consider, as it has come up this afternoon, the Government's defence to the remaining charges which constitute the difference between us. Thirdly, to say why we consider on this side of the House that, given all the possible defences that have been put forward, the charge stands.
I cannot do better than begin by asking the House to remember something which the noble Lord, Lord Cockfield, said in the debate on 2nd April. I quote his words from column 1361 of the Official Report:
"One only has to cast one's mind back 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 … These were the fruits of an inflationary society."
Our point is that in respect of all those measures the situation has got disastrously worse since this Government came to office. I do not see why there should be any debate between us about these facts. I would go so far as to say that there is nothing in this Motion with which any reasonable Member of this House—and we are all reasonable Members—could disagree, at least after the word "in" in the second line. There has been increasing inflation. There has been continuing industrial decline. There has been a deterioration in the balance of trade in manufactures. There has been increasing unemployment and an inability of industry to achieve the necessary productivity. The only issue in debate is: Has there been an erosion of the Welfare State? That is a perfectly reasonable issue that we can debate. The difference between us is not whether inflation has doubled since the last election—we all know that it has. It is whether there will be a continuing rise. The Government admit that inflation will rise at least until the middle of next year. It is not whether there has been increasing unemployment—the highest since 1926. It is not whether there has been increasing industrial decline and falling profitability. The CBI says this. It is not whether the balance of trade has got worse. The Government say this. But they also say that it is not their fault and that it is going to be all right really. But
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of course, there is a narrow argument between us about whether or not the Government policies have eroded the Welfare State.
But we have not had much of a defence so far from the other side of the House about what the Government have done to the Welfare State, although I am quite prepared to admit that there have been increases, in volume terms, in planned expenditure. There have been improvements in health service spending. There have been attempts to index certain social security payments in the Budget. Of course, they have not been fully indexed, if you take into account what is going to happen to the retail price index. Nevertheless, there have been plans to spend more money. On the other hand, if you take into account the real cuts in certain aspects of Government expenditure, plus the real cuts in the value of unemployment benefit, invalidity benefit and sick pay, and if you take into account the fact that the figures in the cash limits in respect of inflation next year are, on the Government's own estimate, likely to be greatly exceeded by the volume movement in the retail price index, then I would say that the social services are bound to be squeezed in real terms in the next 12 months. Therefore, we have proved our point that there has been an erosion in the Welfare State.
In answer to all this the Government, so far as I understand what they say, have three sorts of reply. The first is what I might term "the riposte international"; the second is "the riposte socialist"; and the third is: "Wait and see"; or "It will never get well, if you pick it" or "Leave it alone; it is all coming right some time". I should like to spend a little time on each answer because I want to try to narrow the area of difference between us.
I do not think that anybody on this side of the House wants to deny that the international situation in which the Government took office was an extremely difficult one. It is the international economic recession which since 1974 has been responsible, more than any other single factor, for the increase in unemployment; and unless there is a general economic recovery across the board, the chances are that not only in this country, but in other countries as well, the level of unemployment will continue to rise. This

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country is uncompetitive in the Western World, and generally all this happened long before this Government came to office; it also happened long before the previous Government came to office. We have discussed these matters before in this House. So it is the case that this Government face a very difficult international situation.
All these and many other factors which noble Lords have discussed and accepted are a reasonable reply to part of the argument, but they are not a total reply, because in many ways particular aspects of this Government's policy have made the situation worse. For example, in what I thought was a fantastic speech made during the Budget debate in another place, the Member for Leeds North-East said—and I should like to ask the noble Lord the spokesman for the Government whether he agrees—that it had ceased to be the policy of this Government to influence the exchange rate. He said that Governments should not try to control exchange rates any more.
Therefore, if it is the case that the present high rate of sterling, which has been partly caused by the Government policy in respect of the minimum lending rate, is making the present international position of this country more difficult, this Government say there is nothing to be done about it, because they have given up any attempt to control the exchange rate. I suggest that the logical alternative for that perhaps it is coming—would be for the Government to propose that we should go back on to gold standard, perhaps at the pre-war parity.
But there are many ways in which, we say that certain things the Government have done have made it more difficult for this country to compete internationally. After all, it is this Government which intend to cut aid to industry by 50 per cent. in the next four years. It is this Government which plan for no increase in the GNP next year. It is this Government which have abolished the small business subsidy and cut regional development expenditure. Therefore, in all kinds of ways this Government can be indicted with having made our international problems, especially in terms of our competitiveness significantly worse than they were when they took office.
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The second reply the Government make is that these are difficulties they have inherited; and this has been very evident in speeches made from that side of the House. We on this side have said in previous debates, and also other speakers have said in another place, for example, the Member for Heywood and Royton—that mistakes occurred during the last Government. Over-optimistic assumptions were made, for example, about public expenditure and the rate of growth in the economy and, most significantly and most importantly to my mind, it has been said that the previous Labour Government seriously over-estimated the extent to which they could control the level of wage settlements. Serious and significant mistakes were made—all Governments make mistakes. I only hope that since confession is good for the soul, and it is coming from this side of the House, similar confessions will come from the other side when the noble Viscount rises to reply.
But the question we have to ask ourselves is whether any of this justifies or explains what this Government have been doing with the economy since taking office and, in particular, whether it justifies and explains what the Government have been doing with the economy since the previous Budget. My submission will be that in fact the more the Government argue and seek to develop the point that they faced a very serious and dangerous economic position, the more they stand condemned in terms of what they did in the Budget last year.
Let us look very briefly at what the Government did. After the noble Lord, Lord Peart, sat down, we were asked from the other side of the House: Where is the economic argument of the Opposition? It is based upon what the Government have been doing to the British economy in the last 12 months. Essentially, these things were done. The Government raised the minimum lending rate. The Government planned to cut the PSBR. The Government shifted from direct taxation to indirect taxation. Those are the three main things that were done in the last Budget. The first question that I should like to ask the Minister who is to reply is, "Put your hand on your heart, my Lord. Would you do it again? If you would do it again, for God's sake why didn't you do it again this year?"

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These measures were supposed to do three things. Raising the minimum lending rate was supposed to terrify the trade unions and reduce the level of pay settlements. Cutting the PSBR was supposed to release resources for the private sector which would expand, and the motivating force to produce that expansion was the shift from direct to indirect taxation. This—in a phrase which is very familiar to those of us who listen to the speeches of the present Secretary of State for Industry would release the animal spirits of British entrepreneurs. "Animal spirits of entrepreneurs" is a misquotation from Adam Smith. It is astonishing how many misquotations from Adam Smith the Secretary of State for Industry makes. But that is what was supposed to have happened.
This policy would have been all right on two assumptions: first, if nothing else happened; and, secondly, if what was required had happened in the right order. If, first, we had had a reduction in the level of pay settlements; if, secondly, we had had a release of resources for the private sector and if, thirdly, in that order there had been an upsurge of animal spirits. The trouble is that the Government committed two simple fallacies—not economic, but philosophical fallacies. These are not from Adam Smith; they are back in Popper—another author frequently quoted by the Secretary of State for Industry.
The first fallacy is the mono-causal fallacy. The assumption that social events are controlled by single levers, such as the money supply or the minimum lending rate so that you can operate on these single levers and things will happen as you wish. The second fallacy may be termed the tendency law confusion. The belief that in social events you can produce cause and effect. That in social events a stimulus produces a given reaction like one of Hume's billiard balls.
In fact, what happened was that other things happened. There is no mono-causal phenomenon. What happened was that things did not occur in the right order. The minimum lending rate had no perceptible effect, and has, as yet, had no perceptible effect, on pay expectations. Pay expectations have been affected by
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increases in the retail price index. At the same time the cut in the PSBR was very significantly delayed, largely due to the fact that the Government continued the Standing Commission on Pay Comparability, so that it is going to produce a 25 per cent. pay movement next year. The tax cuts sucked in imports, partly because the minimum lending rate was kept up for a long time, and, not surprisingly, there was no galvanisation of the entrepreneurs.
As I have said, it is interesting to see what the Government did next. If things had gone right last year, then the Chancellor this year would have maintained the mixture as before. He would have cut direct taxes again and raised indirect taxes to compensate. Or maybe he would not have had to raise indirect taxes at all and could have lowered the minimum lending rate. But if the Chancellor had seriously believed that things were fundamentally right but they had not yet come completely right and that what was needed was more time, then he would have cut direct taxes, increased indirect taxes and, maybe, raised the minimum lending rate to speed up the process.
In fact, the Chancellor did neither of these. We had what, in very broad terms, was a standstill Budget. So the central element left in the Government's policy which is supposed to bring about a different situation from the situation of the past 12 months and which is supposed, alone and unaided, to take out of the British economy the 100 per cent. increase in the rate of inflation which the Government's policies have created, is a reduction in the PSBR. A cut in the PSBR is to produce this change. This will produce a massive reduction in the rate of inflation.
It is the worst case of over-promotion since Caligula made his horse a consul. How can one believe that the PSBR can play a role of this size and significance in the drama of the British economy? The PSBR is not Hamlet in the British economy. The PSBR is not Othello. It is not Lear. It is not even the fool in Lear. The PSBR is, in terms of the role which it can play in the British economy the fool in Timon of Athens. Yet this Government give it every role in the play.

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Therefore, we have to look at the real forces of inflation. They are, of course, the forces which produced the increase in the retail price index which this Government largely brought about by their policies. You can look at the estimates of different surveys and studies. The ITEM group say that the Government are responsible for three-quarters of the rise in the RPI. Other people say that they are responsible for two-thirds of the rise. But, certainly, they are responsible for the great bulk of it. So I say once again, and I hope that I shall get an answer, "Looking back over 12 months, would you do it again, and, if you would do it again, why didn't you do it in this Budget? Why didn't we have the mixture as before?"
I suggest that it was because the Government have come to their senses, because the Government realise what the real forces of inflation are, and they do not know what to do about them. I do not say that the Government want inflation, but they do not know how to avoid it. That is the problem of the Government.
So that the retail price index continues to stand at about 20 per cent. and will continue to rise. It may fall a little when the effects of the Government's indirect taxation policies work their way through, but there are many other factors working in a different direction, some of them in the Budget, some of them as a result of local authority expenditure, and many of them the result of the policy of reducing PSBR. Because if you insist on a tight PSBR, and if you force the nationalised industries to raise their prices in order to pay for current investment, then, of course, that will shove up the RPI even further, I also have to say that, in my opinion. the effect of wage inflation on the retail price index has not yet really begun to work its way in.
Curiously enough, the way in which the economy actually works is that when entrepreneurs believe that the level of wage settlements is rising, or is about to rise, they do not raise their prices immediately, because, on the whole, prices are contractual and cannot rise until between six and 12 months after the increase in costs. What they do is to borrow money, which causes the PSBR to rise and causes the money supply to
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rise, and monetarists say that that is what is causing inflation!
What is actually causing inflation is the fact that the expectations in respect of pay settlements are beginning to rise. My fear is that this will happen again next year. I seriously hope that this will not be the case. I seriously hope that there will be a significant fall in the level of pay settlements, certainly in the private sector; because we have already been told, by no less a person than the Chancellor, that in the public sector the going rate will be about 25 per cent. I should again like to ask the Minister who is to reply: If that is the case, what does the level of settlements have to be in the private sector next year to reach the Government's targets—a 16½ per cent. movement in the RPI by the fourth quarter of 1980, and a 13½ per cent. movement in the RPI by the second quarter of 1981? And I have another question to be going on with. If the Chancellor is wrong about what happens to the pay movements in the private sector, and if they are half as high again as the figures that he did not put in the Red Book, what will be the result of that on the retail price index? When are the Government going to realise that you cannot fight inflation by raising prices? That is the fundamental policy of this Government—they fight inflation by raising prices.
Finally, we shall be asked what is the alternative? I suggest that your Lordships have had a comprehensive account from the noble Lord, Lord Kaldor, of what could be an alternative. Of course, some of it is his personal view, but I would not demur from a great deal of it. We have also had a similar account of what could be another possible alternative from the noble Baroness, Lady Seear, who said that what she would suggest is a "multi-pronged approach". I am sorry that the noble Baroness is not in her place. What she proposed comes very close to what the Labour Party would support in what we would call a balanced" economic policy. That is to say, we would argue that you can have, and you can afford, a higher PSBR than this Government will accept. You can have a higher growth rate than this Government accept, and a lower minimum lending rate, if you are prepared to put two different and additional elements into your policy mix.

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Of course, you must have control over the money supply. You should also maintain control over the size of the public sector borrowing requirement. But I wonder whether the Government have got control over the PSBR at the moment. However, you have to put two additional elements into your policy. First, you have to have a policy for prices. It is no good abolishing the Price Commission and then relying on the PSBR. Secondly, you must have a policy for incomes. I have argued with noble Lords opposite—and the last time I argued I argued with the noble Earl, Lord Gowrie—what is involved in an incomes policy. I do not want to detain the House with further details tonight. But I have argued that the successes of three and a half years of the last Labour Government's incomes policy far exceed the successes any other Governments have had during the post-war period in their exchange rate policies, or in their monetary policies, or in their fiscal and other policies. But, as I have said, it is only in the realm of incomes policies that we are expected to achieve perfection.
So we shall continue to ask for a balanced approach. We shall continue to ask for a Government which has a range of policies—none of them perfect, none of them working all the time, but all of them trying all the time. All this Government are relying upon now is a reduced PSBR and an irrelevant Employment Bill. The aim of that Employment Bill, as the noble Lord, Lord Kaldor, rightly said, is to assault real wage resistance. That was his way of putting it. My way of putting it is that the Government are trying to break the power of the trade union movement. Because we believe that is no way to run a country, we ask this House to vote with us tonight.
7.23 p.m.
Viscount TRENCHARD: My Lords, I still find myself a novice in winding up debates of this nature and I shall probably learn that one ought to stick to one's original brief. But I am not going to do so. I have listened to all the contributions to the debate with extreme interest. Various squiggles are written on a piece of paper. Therefore I may be a little less fluent, but I hope that I shall be able to answer a few more of the points which have been made. I am going to concentrate on the industrial aspects, not only
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because they are the ones for which I am partly responsibile but also because, due to the debate of two weeks ago, and to other debates, my noble friend Lord Cockfield has dealt with a great many of the points which were so well dealt with by my right honourable friend the Chancellor of the Exchequer in his Budget speech on the financial aspects. I am also going to try to avoid too much duplication of education debates. Much as I should like to do so, I am not going to follow noble Lords opposite into regional policy, except to say that this is an area which I know something about. I am more than satisfied personally that we have been able to effect major economies and to keep, within the resources available, a thoroughly effective regional policy to help the areas of greatest need.
The noble Lord the Leader of the Opposition paid me a personal compliment when he began his speech. Perhaps I could return it by saying that I think both he and a number of his friends are very courageous men. They are courageous to put down a Motion, as my noble friend the acting Leader of the House has said, which blames us for everything except the weather. They are courageous to put it down in April 1980 after we took office in May 1979 and to headline all the points where the policies of the previous Administration have produced failure—the opposite to success. That is why we are starting out on a new tack.
It is not, as the noble Lord the Leader of the Opposition declared it to be, a reactionary tack. It is a tack that has lifted the standards of living in other countries to more than double that of ours—and is still doing so. It is a different tack but it is a modern tack. It is a tack which has been proved in the past to be successful in this country and is still being proved to be successful in the most successful countries of the world. I shall return later to the history of our industrial decline for one reason only; namely, to try to get a little more clear the industrial reasons. In that context, I shall say a few more things about other countries.
May I start by taking the point mentioned by many noble Lords opposite: that this Administration has increased inflation. The noble Lord, Lord McCarthy, said that we have doubled inflation. We have acknowledged more than once both

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in this House and in the other place that the shift from personal direct taxation to indirect taxation was inevitably bound to put up the RPI but that this was necessary in order to produce the offsetting tax incentives and to bring our tax structure more into line with those successful competitor countries which have been outpacing us but which once were far behind us.
We have not doubled the rate of inflation. It is true that on a year-on-year basis the figure in May 1979 was 10.3 per cent. In June—bearing in mind that the Budget steps did not even begin to take place until July—it was already 11.4 per cent. It was on an increasing trend. While there are limits to the validity of taking a six-month basis and annualising it, nevertheless, in May it was already 13.7 per cent. and in June 1979 it was already 15.7 per cent.
Let me, if I may, quote the right honourable gentleman the Chancellor of the Exchequer of the previous Administration in Hansard of 25th January 1979, col. 754. He said:
"Let us assume, for example, as some pessimistic forecasters in the City are already beginning to predict, that the increase in the nation's earnings in the current pay round is as high as 15 per cent.—an outturn that some people seem to contemplate with equanimity as a reasonable one, because it is roughly the same as the outturn last year. They are quite wrong if they think that is reasonable. The most obvious and inevitable consequence of this assumption coming true would be that the year-on-year increase in the rate of inflation would move into double figures in the summer of this year"—
that is, 1979—
"and would probably reach about 13 per cent. by the end of the year. So we would be back, on inflation, to where we were in 1976. We would have lost all the ground we have gained in the fight against inflation in the last three years".
That is more or less exactly what the wages round turned out to be, and as a consequence inflation was increasing, as the previous Chancellor of the Exchequer predicted—and increasing extremely fast. We have added four percentage points or thereabouts between the taxation changes and the necessary moves on the green pound which my right honourable friend mentioned, in order to give our farmers a more fair and competitive opportunity.
On top of that we have had material increases of the highest order of any in
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recent years. Fuel in sterling—and, as we have heard, sterling is strong—has gone up by 92 per cent. in the 12 months ending March this year. Raw materials therefore, including fuel, have gone up by 37 per cent. With those situations, part of them inherited but part of them due to international situations over which nobody has control, the rate of inflation was bound to rise a little beyond the percentage points we have added, before indeed we can begin to see our measures to contain it start to work.
We do not believe that the control of the money supply is a single weapon, the only weapon, which needs to be used in order to control inflation, let alone to put this whole problem right. However we do believe that there are many things which Governments can do, and there are even more things which they cannot do. They can control the money supply, they can affect taxes, incentives and the like; they can affect laws and the balance of bargaining positions between trade unions and managements, a subject to which I shall return later.
They cannot, except in one or two glaringly obvious areas, such as the development of nuclear energy, and to a degree where we are continuing commitments to help in very obvious, necessary all-pervasive developments like microelectronics—they cannot forecast which parts of industry are the ones which will succeed, nor can they produce that success. They can only produce conditions in which that success is much more likely; and which firms in what industries will succeed is a highly unpredictable affair.
But we are not on a one method cure. We regard the money supply as a prerequisite to the control of inflation—an essential pre-requisite. In choosing malaria as an example, I do not think that the noble Lord, Lord Kaldor, chose the right example. I believe that he would have done better to choose obesity. If you do not control the food supply to a patient who is suffering from obesity, the obesity will get substantially worse, and that is the point which noble Lords on this side have been trying to make about money supply. Under both Administrations over the last two decades, money supply has not been correct and the obesity has increased. My right honourable friend the Secretary of State

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for Industry uses the term "monetary incontinence", which I believe to be also a correct term and the more I work with the right honourable gentleman (since his name has been mentioned personally in this debate) the more times I am infuriated; but I am infuriated by his appalling habit of being intensely accurate! We have seen recent examples of this in relation to his realism and his determination not to print money or to put the Government in a position to print money in order to settle the steel dispute.
I have said that the money supply is not our sole measure. Within the Government's province the cutting of Government expenditure is that much more important and I shall return to it and to the international comparisons a little later. Our whole range of policies—abolition of controls, encouragement through the tax system and through the non-operation of an incomes policy, which has proved to erode differentials whenever it has been applied—is designed to create conditions in which the human qualities of this country (and they are great still) will be used to reproduce growth and to try to catch up with those countries which have passed us.
Remarks were made which I hope, on reflection, noble Lords will feel were not helpful. There is nothing in the Government's philosophy which resembles our "determination to break workers' ability to resist"—which was one phrase I noted. There is nothing in our philosophy deliberately to create unemployment in order to do this kind of thing. We are trying to return to realism. If inflation continues on a permanent basis—leaving out the argument of ups and downs in the short term—more and more people will be priced out of jobs, as indeed they have been under the previous Administration when unemployment doubled. For that reason we wish to have no more unemployment at all and wish realism could really spread throughout the length and breadth of this country. If we could achieve the kind of productivity rates that exist on the Continent—leaving on one side America, with its huge market—and could achieve them now we could with no difficulty overcome the problems of the strong pound and the interest rates and could now be regaining shares of markets. This realism is spreading and I shall come
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to some optimistic signs at the end of my remarks.
To return to history for a moment, we have to differentiate totally between the very long-term industrial decline and the short-term decline of the last two decades. We had the Industrial Revolution first. There was a slow and inevitable decline which had to follow, having an enormous share of world markets. I will go through the shares of world markets as estimated since 1880, when we had 40 per cent. of world markets; in 1913 we had 29 per cent.; in 1938 we had 22 per cent.; in 1955 we had 19.9 per cent. Then the story starts, but before telling that story let me point out that since we had the Industrial Revolution first, since America with its great resources had been catching up and indeed overtaking us in productivity, we were bound to lose shares of the world market during that period.
Between the wars we actually improved our productivity, as the noble Lord, Lord Kaldor, has mentioned on more than one occasion, at a faster rate than almost all the rest of our industrial competitors. That was between 1925 and 1937, and that did not coincide with import controls, which were only introduced in 1932. Your Lordships will remember that the last figure I mentioned was for 1955, when we had 19.9 per cent. share of the world market. In 1974 it was down to 8.8. per cent. I deliberately take 1974 so as not to be partisan. It has moved up a point in value since then, partly based on the price competitivity of the very weak pound in 1976, and partly now based on the value method of arriving at the statistics which has benefited from the strong pound.
Why did this happen and why is this short term quite different and much more serious than the long term? It is because our market system, which has raised the standards of living of Germany, Japan, the United States and other countries to levels well beyond our own, has been completely clobbered with taxes which produce disincentives, with controls, including price control—which had effects which I will mention in a moment—with the perpetual incomes policy which eroded differentials and I do not know how any democratic country can apply an incomes policy without that likelihood of occurrence—with the balance of bargaining power

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tilted too far against our management and in favour of the immoderate elements (which are not the majority) in the trade union movement. For all these reasons we have clobbered the private enterprise system.
This Government believe in harnessing all the brains in the country. They do not believe in clobbering the market and private industry and then introducing Government agencies and expanding them as a panacea for all ills. We are not destroying the NEB, as the noble Lord, Lord Peart, suggested. We are intending to regenerate the private sector, to maximise the private sector, gradually to decrease the role of the NEB. But we have a vigorous NEB, in good condition and it is going well.
My Lords, perhaps I may give a quotation which I have just received in relation to France. It is not really a quotation; it is a note and a document which was much quoted by the noble Lord, Lord Kaldor, in the debate today. I want to point out that while their economy has many factors, they believe in personal incentives to a very high degree, and the inequality of their earnings is vastly greater than in this country. Their threshold on tax for the single person was £2,455 against our £1,165 and for the married person £3,240 against our £1,815, that is broadly speaking, double. Their starting rate tax was 10·8 per cent. for single people and 72 per cent. for those married, against ours which is now 30 per cent., that is, about one-third. Their top rate, like ours, is 60 per cent. I think we should take more of a leaf out of successful countries' books.
Of course many of them, Germany and Japan particularly, built up their industrial strength under a degree of individual protection. There was sympathy for the countries whose economies had been ruined during the war. At that stage international trade arrangements had not reached the sophisticated form they have now, and they protected their individual industries at the growth period, which was then sensible for them. It is not sensible for us now. With our manufactured exports still running at £3,200 million a month; this is more than our manufactured imports. It would not be sensible for us, nor is it open to us under
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international trading arrangements as they now exist. We do, however, believe in the most open but the most fair trading system that we can achieve through those international arrangements, and within those obligations we shall vigorously prosecute the idea of ensuring that we give British industry the fairest trading opportunity we can.
My Lords, I do not want to detain your Lordships longer. I just want to return to the question of the erosion of the Welfare State, which is mentioned in the Motion, and to the question of cuts in Government expenditure, which is obviously connected with it. I want to say that the control of public expenditure in this country and the reduction of it is necessary because we cannot afford the levels we have. With GDPs which are less than half that in Germany, for instance, with our shares of markets still as poor as they are, and with our wealth-creating sector absolutely stagnant, we simply cannot afford more. We cannot afford more because the profitability of our industry is lower by far than that of all other countries; our standard of living is lower; our tax take is thus lower. The only way of finding the extra money would be on the lines that my noble friend the acting Leader of the House outlined, of borrowing yet more. Until we can get the wealth-creating sector really growing again there simply is not the money to spend on the social and welfare parts of our life, which are so vital, to a greater extent than in the Government's plans outlined in the Budget.
Given time our public expenditure cuts will work and will affect the public sector borrowing requirements, and they will affect interest rates. I admit that there are many other factors which affect the connection between those items, but given time those things will work and interest rates will come down. Caring and compassionate policies in a bankrupt State are really worth less than nothing. We have to give priority to getting on with this new task, building the foundations for recovery. Time is necessary for a new tack to work. The Japanese have been on a policy of heavy incentives for 30 years under a Government which has emphasised the kind of policies that we now emphasise. If such a course had been undertaken in this country we would be talking about a work ethic in Britain.

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I can assure the noble Lord the Leader of the Opposition that it is not the intention of the Government to do anything to ACARD. As opposed to it reporting to him as it used to at one stage, it now reports to the Prime Minister, who gets the reports personally, I suspect possibly even faster than the noble Lord suggested. I should like to thank the noble Lord, Lord Harris, for his interesting comments on indexed bonds, which I will make sure my colleagues look at with great care.
My Lords, I fail to understand the decision, if it is a decision, of the Liberal Party in the House to vote against the Government on this Motion. Almost everything that the noble Baroness, Lady Seear, said, and the noble Lord, Lord Rochester, said, criticised, at least in a ratio of two or three to one, the policies of the past Administration compared with our own. They must know that one year is a quite inadequate length of time for a new tack—with many of the policies which they have advocated for years involved—possibly to have time to work. I do not know whether they still want to hold on to the Lib/Lab pact which perhaps prolonged the life of the Labour Government, and thus allowed a further decline
of this country to take place before we could start to introduce new policies which have been successful in the past in this country, and which are continuing to be successful and raise standards of living. We might have started those policies earlier. I trust that they might reconsider their decision and vote according to the comments that they have made, rather than in the opposite direction.
Lord PEART: My Lords, we have reached the end of a long debate and we have had a rather long wind-up speech. I shall not comment upon the matter, except to say that I was so pleased that my noble friend Lord McCarthy made such a fine speech which was recognised by the "Hear, hears!" of the whole House. I think that we should come to a decision, and therefore I shall press the Motion to a Division.
7.52 p.m.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 61; Not-Contents, 98.

CONTENTS

Aylestone, L.

Hale, L.

Pitt of Hampstead, L.

Bacon, B.

Hatch of Lusby, L.

Ponsonby of Shulbrede, L.

Balogh, L.

Houghton of Sowerby, L.

Ritchie-Calder, L.

Banks, L.

Hutchinson of Lullington, L.

Rochester, L.

Birk, B.

Jacques, L.

Ross of Marnock, L.

Blyton, L.

Janner, L.

Seear, B.

Boston of Faversham, L.

Jeger, B.

Sefton of Garston, L.

Brockway, L.

Kaldor, L.

Stewart of Alvechurch, B.

Brooks of Tremorfa, L.

Kilbracken, L.

Stewart of Fulham, L.

Bruce of Donington, L.

Leatherland, L.

Stone, L.

Burton of Coventry, B.

Lee of Newton, L.

Strabolgi, L.

Cledwyn of Penrhos, L.

Leonard, L.

Strauss, L.

Cooper of Stockton Heath, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Taylor of Mansfield, L.

Cudlipp, L.

Underhill, L.

David, B.

McCarthy, L.

Wade, L.

Davies of Leek, L.

Maelor, L.

Wallace of Coslany, L.

Donaldson of Kingsbridge, L.

Mishcon, L.

Walston, L.

Gaitskell, B.

Ogmore, L.

Wedderburn of Charlton, L.

Galpern, L.

Oram, L.

Wells-Pestell, L. [Teller.]

Gardiner, L.

Peart, L.

White, B.

Goronwy-Roberts, L.

Phillips, B.

NOT-CONTENTS

Airey of Abingdon, B.

Belstead, L.

Cockfield, L.

Allerton, L.

Boyd of Merton, V.

Cork and Orrery, E.

Amherst of Hackney, L.

Bradford, E.

Craigmyle, L.

Ampthill, L.

Brookeborough, V.

Cranbrook, E.

Avon, E.

Campbell of Croy, L.

Crathorne, L.

Bathurst, E.

Cathcart, E.

Cullen of Ashbourne, L.

Bellwin, L.

Clifford of Chudleigh, L.

Daventry, V.

De La Warr, E.

Home of the Hirsel, L.

Robbins, L.

Denham, L. [Teller.]

Hornsby-Smith, B.

Rochdale, V.

Denman, L.

Hylton-Foster, B.

St. Just, L.

Drumalbyn, L.

Keyes, L.

Saint Oswald, L.

Dudley, B.

Kinross, L.

Salisbury, M.

Eccles, V.

Lauderdale, E.

Sandford, L.

Elliot of Harwood, B.

Long, V.

Sandys, L. [Teller.]

Faithfull, B.

Lyell, L.

Selkirk, E.

Falkland, V.

McFadzean, L.

Selsdon, L.

Falmouth, V.

Macleod of Borve, B.

Sempill, Ly.

Ferrers, E.

Mancroft, L.

Sharpies, B.

Fortescue, E.

Mansfield, E.

Skelmersdale, L.

Gage, V.

Massereene and Ferrard, V.

Somers, L.

Gainford, L.

Mills, V.

Spens, L.

Galloway, E.

Montogomery of Alamein, V.

Strathcarron, L.

Gisborough, L.

Morris, L.

Strathclyde, L.

Glendevon, L.

Mottistone, L.

Sudeley, L.

Glenkinglas, L.

Mowbray and Stourton, L.

Swinfen, L.

Godber of Willington, L.

Northchurch, B.

Tranmire, L.

Greenway, L.

Nugent of Guildford, L.

Trenchard, V.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

O'Neill of the Maine, L.

Tweeddale, M.

Onslow, E.

Vaux of Harrowden, L.

Hanworth, V.

Orkney, E.

Vickers, B.

Harris of High Cross, L.

Rawlinson of Ewell, L.

Vivian, L.

Harvington, L.

Redmayne, L.

Westbury, L.

Henley, L.

Reigate, L.

Wynford, L.

Returned from the Commons with the Lords amendments to certain Commons amendments agreed to; with certain other Commons amendments not insisted on and the Lords amendments in lieu thereof agreed to; and with the Lords consequential amendment to the Bill agreed to.

TREES (REPLANTING AND REPLACEMENT) BILL [H.L.]
8 p.m.
Lord SOMERS: My Lords, I beg to move that this Bill be now read a second time. Before I go any further, I should like to thank all those who have helped me with their advice in constructing this Bill. In particular, I should like to express my thanks to the noble Earl, Lord Bradford, who I am very glad to see is joining in this debate, for the tremendous help that he has given me. I should also like to apologise for the fact that unfortunately I missed the debate on 26th March on the Motion on forestry of the noble Lord, Lord Dulverton. However, I have read the debate very carefully and I am glad to say that I agree with practically everything that was said.
However, this Bill attacks a slightly different area of tree preservation. Its main object is to preserve the slower growing trees, the hardwood trees—mainly deciduous ones—which, of course, are thinning out owing to the simple fact that they are slower growing. There is an increasing unwillingness on the part of both local authorities and private owners to plant trees which they know perfectly well they will never sec come to
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maturity. We are very fortunate that our forefathers were more farseeing than that. They planted these trees, which they knew perfectly well they would never see or enjoy, for us and for our enjoyment and we should be grateful to them. We should do the same for our descendants. These trees include such well-known trees as the oak, the ash, the beech, et cetera, which are all well-known deciduous trees and very much-loved features of our English countryside.
However, I must confess that love of the beauty of these trees is not the only motive behind this Bill. It is certainly one, and an important one, but there is also another point. In a small way one of my hobbies is carpentry, and I have been shocked at the fact that today it is more or less impossible for the ordinary person to obtain hardwood. As a boy, I remember the days when one could buy well-seasoned English oak from the nearest timber merchant. But now that is quite impossible. Even wood specialists apparently cannot get it, and although I imagine that it is available in some way to furniture makers, for the ordinary person it is quite hopeless—one cannot get it at all.
Of course, I have heard various reasons for that. I believe that a good deal of our hardwood is being exported. If that is so, surely that is all the more reason why we should plant more of those trees. I have heard another reason: that a great

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deal of it is used for purposes of veneer, which is, of course, now becoming very popular. That surely is another reason why we should plant more of these trees.
Many will ask why I have directed the Bill only against local authorities. The reason is simply that the private owner is very hard indeed to describe in a Bill. He ranges from the man who owns a large forestry estate and runs it on a commercial basis, to the owner of a suburban garden with a few trees in it. Incidentally, I should say that I belong to the latter category. But sometimes I have been shattered to see the way in which some of my neighbours treat their trees; they obviously know nothing whatever about them. Therefore, I think that it would he next door to impossible to get any legislation which would cover such a very wide category.
I must apologise for one criticism which I hear has been levelled against the Bill. It is that the Bill is very badly drafted. May I say that I wholeheartedly agree with that; it is shockingly drafted. However, it has many points which I have every intention of correcting when and if we come to a Committee stage. I should like to give your Lordships a few of the details which I intend to alter. In Clause 1, line 10, I am told by experts that I should have referred to "genus" and "species" rather than "species" and "variety". In Clause 2, line 5, after the word, "places", I intend to put,
"… on land owned and administered by the said local authority",
because, of course, of the obvious reason that there may well be land inside the local authority area which does not belong to it. In Clause 5 the present wording is very unsatisfactory. It says:
"This Act supersedes any regulations …"
I do not wish that to stand. I intend to put:
"This Act shall apply, notwithstanding any regulations in force by the local authority".
Of course, many local authorities have excellent regulations as regards tree preservation, and I have no wish to disturb anything that they have provided; but, of course, some have not. Also, I hope to include a clause that will make the Bill not applicable in cases of woodland which has to be thinned. It has been questioned why I have limited the Bill to trees which have been growing for over
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three years. The answer is simply that many trees seed themselves very freely. I have a neighbour who has a sycamore tree, and the number of young sycamore seedlings that I have pulled up is without count. I also have a horse chestnut in my garden, and I suffer from the presence of a grey squirrel. The number of chestnuts that he has planted in my garden each year would, I think, defeat any mathematician. So one must make some provision for the pulling up of young seedlings. Therefore, I have limited the Bill to three years.
One matter has worried me and has been pointed out by others; namely, the question of the enforceability of the Bill. There is certainly a question, and I have no desire to add any more legislation to the much too long list of unenforceable legislation that we already have. However, I think that, on the whole, local authorities are very anxious to preserve trees themselves, and I do not think that the Bill is likely to need a great deal of enforcement.
Someone has also criticised the fact that there are no penalties. There, I confess, I am completely at sea. I do not have enough legal experience to know what would be appropriate penalties or where they should be imposed. If any other noble Lord wishes to make some suggestions on that point, I shall gladly consider them. Of course, I quite realise that this Bill will not get through Parliament before the end of the Session. But if your Lordships will give it a Second Reading and if we can get it through our House before the end of the Session, I shall introduce it again at the beginning of next Session, and we can go through it without any further delay. Therefore, I beg to move.
Moved, That the Bill be now read 2a—(Lord Somers.)
8.10 p.m.
The Earl of BRADFORD: My Lords, it is a great pleasure to follow my noble friend Lord Somers and to congratulate him on introducing this Bill into your Lordships' House. As I think he said or implied, it is not really a whale of a Bill; it is rather a minnow of a Bill. At the same time I think it could do a great deal of good. I would hope that it would do good in several ways: that it will remind local authorities of their obligations with

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regard to trees, and, secondly, and possibly even more important, that it will remind them of the tremendous importance of trees to the countryside and to our landscape and, through the local authorities, will remind the population of the same factor.
Some local authorities are well aware of their obligations. In my part of the country, Shropshire and Staffordshire, we are fortunate and the local authorities are conscientious in this matter. They keep tree banks and they use them very successfully. But there is little doubt that others in some parts of the country are not so conscientious, and I hope that this Bill will goad them into rather more action than they are taking at the moment.
My noble friend dealt with the question of why the Bill is aimed at local authorities and why private landowners are not included. I think there are many good reasons for that. The private owners are already very much shackled by the licensing procedure for felling trees with its normally associated replanting obligations. They are also very often constrained by tree preservation orders, and none of these applies to local authorities. I would think, too, that private landowners on the whole are much influenced by their traditional care for the landscape, in that the greater part of our present landscape was created by them and is due to them. They may have acted on the advice of Capability Brown, but at least they instigated the action and paid for it to be carried out. Your Lordships may query why the ratio of two to one is included in the Bill, when certainly many landowners hold the view that a ratio of ten to one is appropriate in renewal of trees. I think in this case it would be impossible to enforce such a high ratio.
Some may query also why only planting is covered because, as many of your Lordships will know, the protection and the aftercare of the trees is possibly even more important than their initial planting. My noble friend has dealt with the difficulty of enforcement in this matter, but one hopes that the effect of inducing local authorities to plant more trees will also have the effect of inducing them to look after those trees and give them the necessary aftercare; and that therefore it is not necessary to cover all these matters.
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My noble friend referred, too, to the forestry strategy debate of three weeks ago in which I had the honour to take part, and in which I stressed at some length the general importance of trees. I have no intention to weary your Lordships by repeating anything I said on that occasion, but I think there is more interest than ever in trees generally in the country. It could be said in fact that as a nation we are a nation of tree lovers; yet as a nation we do all sorts of dreadful things to them. We light fires under them; we scorch them; we stick notices on them. In fact my local authority at home has just put a whole lot of notices about their pending road plans on some nice up-and-coming young hardwood trees all round the place. They cut bits off them; carve names on them (very often hearts and arrows as well); tie things on them; nail fences to them; hack through their roots; let animals chew them; build houses, roads, drains and walls under and around them; starve them, poison them, drown them; accuse them of damaging their homes; drive machinery at them, and often just accuse them of being in the way and a general nuisance. Finally, they cut them down.
As well as the direct damage there is a great deal of indifference and a lack of appreciation of just what a tree is and what it does. Here, with your Lordships' permission, I should like to quote from a most excellent book, entitled, appropriately enough, Trees, by the American author Andreas Feininger. He writes as follows:
"Man's life, his origin, his uniqueness, perhaps even the continuation of his very existence, are inextricably tied to the life of trees. Had there been no trees it seems likely that the human race would never have come into being. Should the trees die it is not inconceivable that man would become extinct".
I quote that not just to be alarmist but as a statement of what I think is the deep relationship between man and trees. It is of the greatest importance to cultivate a positive attitude towards their care and perpetuation. To trees, too, we owe the purity of the air that we breathe in that they absorb carbon dioxide and give off oxygen. They provide so much that we take for granted. They provide a totally unquantifiable amenity value and innumerable other benefits.
The Tree Council recently have estimated that through disease, drought, old

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age, development, neglect and modern farming methods we have lost over 50 million trees in the last 50 years. In addition, more than 15 million elms have died from Dutch elm disease. All these points go to underline the importance of even a quite small measure like this to get more trees planted. The important thing all round, as I said in the forestry strategy debate three weeks ago, is that we need more trees planted. If this Bill can make some, even small contribution to add to that store, it will be well worth while. I hope that your Lordships will give the Bill a fair wind. Once again I congratulate my noble friend on introducing it.
8.19 p.m.
Lord KILBRACKEN: My Lords, it is a pleasure in this cosy little group to be considering a non-controversial and totally apolitical measure for a change. I can assure the noble Lord that I am completely in favour of the principles behind his Bill, and congratulate him, if I may, on introducing it into your Lordships' House. As I read it and studied it I became aware of certain points which seemed to me to be worthy of criticism or debate. If I do criticise them, or make suggestions, I hope it will be understood that I do so in the most constructive spirit and in the hope that it may perhaps be possible to improve the Bill in the course of its passage through this House.
I wish to start at the end and consider the schedule, because it seems to me that the trees which the noble Lord has chosen to include in the Bill have been selected in an almost capricious way. I do not know why he has decided to include these and not others. Let us consider the poplar family, for example. He includes the aspen, but not the lombardy, and the serotina poplar is omitted. Again, the sweet chestnut has to be replaced; but the horse chestnut—and what can be more beautiful than a horse chestnut when it is in flower?—can be cut down and no replacement made. The plane tree is a very important tree of the cities because it can survive the polluted atmosphere; but the plane tree and its distant cousin, the sycamore, are not included and nor are any of the willows. The willow is a huge family, and I think in particular of the weeping willow and the cricket bat
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willow, which can be cut down and not replaced.
In his opening remarks, the noble Lord said he was confining the Bill largely to hardwoods, but I see no reason why all the softwoods should be excluded and why it should be possible to cut those down with equanimity—the spruces, larches, firs, pines and so on. Finally on this subject, what about rhea trees? If there is a eucalyptus or a tulip tree growing, it can be cut down and an empty space left where it once grew. I would ask the noble Lord to consider whether the schedule could not be deleted altogether, and whether the Act, as it will become, should not embrace all trees of any kind. I do not understand why some, apparently without any good reason, should not be included in the legislation. The only tree that might be excluded is the elm, because I assume that nobody in his right mind would plant an elm at the moment.
That brings me to the second point, which is that at present it is laid down that a tree must be replaced by another tree of the same species. I should be happier if that were left to the local authority to decide, and then we could include all trees in the Bill, including elm trees, and when an elm was cut down it could be replaced by a tree of a different species. I think it can be left to the local authority to decide what tree to plant in place of one felled, and I would therefore suggest leaving out the last line of Clause 1:
"trees of the same species and of the same or similar variety".
The noble Lord in his opening remarks referred briefly to the question of thinnings, an important point because where, say, a small area of beechwood, or whatever species it may be, has been clear felled, thinnings will be removed every 10 years or so until the final quantity of trees for that area is left, which will then grow on to maturity; and somehow or other the Bill should be drafted so that trees removed in the normal process of thinning a plantation according to the principles of good forestry, should be omitted.
Regarding the provision that one tree should be replaced by two trees, I appreciate the noble Lord's wish that the number of trees should steadily increase,

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but I do not think it is quite so easy to do as that because trees grow in so many different circumstances. If you have a line of 20 mountain ash growing in a street and two or three of them die and have to be felled and removed, it is normal to replace them with two or three specimen trees, probably of the same species; but if you have to plant half a dozen, where will you put the other three? That may not be easy when it comes to replacing specimen trees.
The Earl of CORK and ORRERY: My Lords, is the noble Lord not slightly off line here? If these trees die then they do not come within the provisions of the Bill, which deals with trees actually cut down by the local authority.
Lord KILBRACKEN: I should be grateful for clarification of that point, my Lords. I should have thought that if a tree dies, one normally fells it. It may get blown over in the wind; but if one is looking after one's trees properly, then I should have thought, with respect to the noble Earl, that if one sees the tree is dead it is better to fell it right away before it falls in the storm and does damage to one's neighbour. That is irrelevant to the point I was making, which was that if for any reason it becomes necessary to remove two or three trees in a line of trees in a street, you have to replace those with individual trees, and if you have to plant twice as many, it may be hard to find a place where you can stick in the extra ones.
One noble Lord mentioned that if you are setting down a plantation—it may be half an acre or an acre or 10 acres—of beech or oak or whatever it may be, you plant certainly more than two (probably 10 and, in the case of beech or oak, up to 20) trees for every one that is going to grow to maturity, and it is therefore necessary to plant far more than two trees for every one you cut down.
There are two other matters I wish to mention briefly. First, the noble Lord, Lord Somers, referred to the question of sanctions or penalties. Although I am not a lawyer I feel that if there are no sanctions at all, there will be no way in which this Bill can be enforced. Secondly, I would ask the noble Lord to consider whether the aftercare of trees should not be made an integral part of the Bill. Of
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course, if trees are not looked after they die, and presumably if they die they do not have to be replaced. There will be nothing to stop a local authority from putting in 50 trees this year and pulling them up next year and planting them somewhere else, unless there is something in the Bill to ensure that the trees are properly looked after once they have been planted.
Apart from those minor points, I wish to express my appreciation to the noble Lord for presenting the Bill in your Lordships' House, and assure him that I wish to help its progress in every way possible.
8.28 p.m.
The Earl of CORK and ORRERY: My Lords, I too feel that a good deal of merit should descend gently upon the head of the noble Lord, Lord Somers, for introducing the Bill. As one who started his life and has since spent a great deal of it in, under and around trees—perhaps not in; yes, even sometimes in—and having always been closely associated with trees, which are the first things I see when I look out of my window in the morning, I feel very strongly about the disappearance of trees of almost any kind, and I wish nothing but well for the Bill.
I am bound to feel in agreement with the noble Lord when he says that it needs some amending. I do not go quite as far as he went in the appalling epithets he poured on it—I really do not believe it is quite as bad as that—but I am sure it can be amended and made a thoroughly worthwhile and workable Bill. The first part of the Bill of course contains the nub of the matter—it is really encapsulated in Clause 1—and I begin with a slight wonder as to whether or not there is liable to be any doubt about the meaning of the phrase "local authority" in a particular case. Perhaps the Minister will have something to say about that when he replies.
Who is the local authority in any particular case? If a motorway is being built and a whole wood is uprooted, I suppose that this is done at the instigation of the Ministry of Transport, which is not part of local government, anyway. In the case of an A class road the work may be carried out by a county council at the instigation

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of the Government. Are they responsible in such a case? If the work is done by a district council at the instigation of a county council, who then is responsible? Perhaps some thought should be given to the actual definition in this case, with regard to where the responsibility lies.
I shall return to that point in a moment when I deal with Clause 2(3), but I should now like to make a brief remark on the question of the one to two ratio. My noble friend Lord Bradford has called this into question by saying that the ratio is much too small, and so it is, and the noble Lord, Lord Kilbracken, has agreed. But he has also said that in some cases it is much too big; and I entirely take his point about cutting down moribund trees in the road. In such a case the authority that cuts down these roadside trees is not bound to plant two trees in the same place from which one grew. The authority can plant the second one somewhere else. It is probably very difficult to get around this particular problem in any way that is more satisfactory than leaving it as it is. On the whole, I should think, the ratio of two trees for one will probably pass as near enough to be right.
I skip on to Clause 2(3), which provides a complete get-out for any local authority that does not wish to be bound by the Bill. If this subsection were not included in the Bill, and a noble Lord proposed to insert it, he might rightly be accused of proposing a wrecking amendment. Let me take an imaginary example of the kind of thing that I have in mind. Let us suppose that a district council that wished to build a car park were to cut down an oak tree. It can then replace that oak tree with two sprouting acorns, and plant them in the middle of the car park. The point is that they would instantly be ground into the surface by the motorcars. Those plantings, being less than three years old, would not have to be replaced. So in fact there would be no obligation on anybody to replace anything, except by way of an insignificant sprout which could instantly be allowed to die. It would be such a ridiculously useless operation that no notice need be taken of the Bill.
I quite see the noble Lord's point when he speaks of trees that have sprung up in large numbers and which are not to be preserved; but I believe that he is
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thinking of that part of Clause 1 which refers to replanting, and he has not considered that the provision also applies to the cutting down of trees: trees are not to be cut down. The clause refers to trees destroyed or felled that are less than three years old. Trees are not covered if they are less than three years old. If they are less than three years old, they do not have to be replaced. So any tree that is less than three years old can be cut down or destroyed and never replaced. I think that it will be found that there will be no need for anyone to take any notice of the Bill if he does not wish to do so. I am postulating a somewhat extreme case of a rather recalcitrant council, yet I think we must get it right, and this does not seem to be quite right. It would not be very difficult to draft a provision to put this right, and I think that I should like to do so, if I am so allowed.
Clause 3 appears to have the effect of setting up a very considerable new bureaucracy solely for the purpose of looking after and recording details of trees. I do not think that any local authority will he very happy with this. I know of one or two who cannot stand the thought of it. I wonder whether it is really necessary to have anything so elaborate. Could not the case be met by simply providing that a local authority must keep a register in which it records the trees that are cut down and the particulars of these trees which replace them, the register to be open for inspection at any time by an inspector appointed by the Minister or by any member of the public? That would be a fairly simple and commonplace type of operation which I suggest would probably meet the case adequately. The proposals that the noble Lord has offered us in the Bill are rather daunting and elaborate, and possibly tend to amount to using a steam hammer to crack a nut. Everything thereafter is pretty well plain sailing.
I have made a note complaining about Clause 5, but as the noble Lord has himself already done this, I need say no more about it. I, too, have doubts about the schedule, and I rather join with the noble Lord, Lord Kilbracken, in his doubts. He may well have a good idea in suggesting that there should be no schedule. I am not quite sure how this would work out; I think that it needs

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much more thought between now and later stages of the Bill. I am not totally happy about it in detail, but one has one's private, personal tastes. I think that there are already far too many macrocarpas in the country, and the idea of cutting down a hedge of those and planting two more hedges in their place fills me with dismay. However, perhaps that is a rather personal point of view, and it in no way lessens the fact that I support the noble Lord and congratulate him upon his Bill. We should be grateful to him, and I hope that ultimately his efforts will meet with great success.
8.36 p.m.
Lord GISBOROUGH: My Lords, I should like to add my congratulations to the noble Lord upon presenting the Bill, but I am afraid that I cannot receive it with quite the same joy as did previous speakers. It is certainly wrapped up in good intentions, but I think it is an extremely poor Bill, and a totally unnecessary one. First, Clause 1, which refers to local authorities, totally leaves out all those public authorities such as the various gas and electricity boards. They are not covered, yet they are probably the worst offenders, because while the local authority has local councillors who are extremely keen about the amenities of their own town, an electricity board sitting in a particular area and covering Little Puddlington 200 miles away really will not know whether there are any trees there, and will care even less.
Local builders are among the worst people in this regard, because they buy a little piece of land and needless to say, chop down trees in order to get the houses fitted in. The builder, unlike the landowner, who is there for life, comes in, builds a house, and goes. Thus in this matter the local builder should also be covered, if possible. Road programmes have been mentioned by the noble Earl, Lord Cork and Orrery. Here there is the interesting speculation of a road being put through a wood comprising perhaps 200 trees and the local authority having to find space in a totally different place for 400 trees to be planted.. There is also the matter regarding the same species, which the noble Lord, Lord Kilbracken, has mentioned. This proposal would be
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utterly impracticable because it could well be that one particular species has been planted and grown stunted for years, and perhaps it will be recommended that a much better kind could be grown next time; and that is too restrictive.
Then we come to the interesting proposal that the trees must be planted at the site or at any other place within the local authority area. This would mean that the local authority for Westminster—as I think is the case here—if it were able to fell the trees in Parliament Square, could replace them with trees planted in the middle of Hyde Park, which would really be too absurd for words. There is also the matter regarding plantation or standards. It makes a huge difference whether one is talking about numbers of trees in the form of a plantation, or whether one is talking in terms of the replanting of standards. Surely the whole Bill involves standards, and not plantations, which is totally different.
Lord KILBRACKEN: My Lords, is there any real reason for thinking that the Bill does not affect plantations? If a plantation is cut down within a local government area, the Bill would apply to it.
Lord GISBOROUGH: My Lords, I take the noble Lord's point. Therefore, let us pursue the matter. Local authorities are not particularly flush with land. Normally they only have land which they actually need and if they had to take it out of a plantation of, say, five acres to create a public park or whatever it may be, they would have to find 10 acres of plantation. Obviously that would be impossible for such an authority to do.
Clause 2(3) of the Bill specifies a period of "less than three years". My noble friends Lord Bradford and Lord Cork and Orrery have already dealt with that point. In my part of the world, and I do not think it is unique, if one plants 10 trees, if one survives the first three years without being cut off in its prime and vandalised, it is very lucky. The essence of the matter relates not only to planting but to the maintenance of a tree to maturity or to a certain age.
I regard Clause 5 as absolute nonsense and it would have to be deleted. The noble Lord, Lord Kilbracken, and others men-

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tioned the question of the schedule. Why is that provision so narrow? Why not include the palm tree which grows in many places in the South of England?
We must then examine the question of the use of these trees for hardwood. I cannot believe that local authorities would plant trees with the end object of the creation of hardwood for use as timber. Timber production is one thing. It is produced in forests and plantations for that purpose. If one even had in mind the production of furniture timber in towns, it would be too absurd to consider such a matter because when such wood was mature, nobody would allow such trees to be cut down because they would be protected. That suggestion is a nonstarter, and for that very reason the numbers are not worth thinking of. Furthermore, the treatment in respect of pruning and so on would be quite different.
Most authorities are extremely keen on trees. All local authorities of which I have had experience are fanatical about them. One notices in places such as County Durham great numbers of little towns with trees lining the roads, and many trees have been planted on council estates. Trees are planted in places where one might think that local authorities would not take the trouble to plant. Local authorities in general have planted very great numbers of trees. The only people who sometimes are not particularly careful, unless pressed, are the public utilities. I believe that this matter would be far better left to circulars and to councillors in their own areas to look after the subject. I believe that they will look after it thoroughly. There are many ginger groups, such as the Civic Trust and the CPRE, who are always ready to remind councillors of their responsibilities in this regard. I regard this Bill as a nonsense, however good the intentions behind it.
8.44 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, the Government are as enthusiastic as is the noble Lord, Lord Somers, that large numbers of trees should be planted to enrich the environment of this country. The loss of many trees over the last decade, particularly due to the
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ravages of Dutch elm disease, has brought home the desultory visual effect of a relatively treeless landscape, and this is certainly a cause for concern. Lord Somers and I are therefore at one that more trees need to be planted. Before I go any further, I should say that I have taken the Bill to relate to local authorities acting on their own behalf. If a local authority is acting on behalf of a Government department, I assume that they are not affected by the provisions of the Bill.
Tree planting was given a considerable boost by the Government-sponsored "Plant a Tree in 73" campaign, following which the Tree Council was set up to promote the planting and care of trees, and to act as a forum for some 25 or so national organisations to co-ordinate initiatives for tree planting. A great deal has been accomplished in the past seven years, to overcome the previous years of neglect. Much more needs to be done, but it is the Government's view that the proposals put forward in this Bill are not the best way of overcoming the problem.
There are a number of reasons why we cannot support the Bill. We have declared our determination to reduce substantially the number of controls over local government activities and to give the authorities more discretion and flexibility in the discharge of their functions. That is one important reason why we cannot support this attempt to impose a statutory duty on all local authorities to plant a defined number and species of trees. As my noble friend Lord Cork and Orrery properly said, the proposals would also involve increased bureaucracy in that, all else apart, local authority staff would need to spend time on ensuring that the legal requirements for planting were being carried out and on notifying the details required by Clause 3. Furthermore, one might ask—indeed, one has to ask—who is to monitor the provisions of Clause 3? The implication at least is that central Government should employ supervisors to ensure that local authorities comply.
My noble friend Lord Cork and Orrery asked where the local authority responsibility lay. The answer is that it could be with either the county or the district council, depending on the circumstances in each case, as both levels of authority have locus in such a situation. But in any case, we do not believe that the

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proposals would necessarily lead to any more trees being planted by local authorities than they would otherwise plant. Indeed, the Bill could well be counterproductive, as authorities might be disposed to carry out tree planting only up to the extent of the proposed new statutory duty.
My noble friend Lord Bradford said that the Bill will remind local authorities of the need for trees and will goad some authorities into action. That is a fair point that can only be to the good. Although we do not keep comprehensive statistics of local authorities' tree planting programmes, I believe it is also fair to say that the numbers of trees being planted by many authorities are already, as my noble friend Lord Gisborough said, well in excess of the numbers demanded by this Bill.
I understand, for example, that Essex County Council, one of the counties which has been particularly hard hit by Dutch elm disease, is currently planting, or grant-aiding landowners to plant, in excess of 75,000 trees per year, and Norfolk and Cornwall's programmes are of a similar size. Local authorities, of course, receive considerable assistance from the Countryside Commission in their tree planting programmes in the countryside.
Furthermore, to specify that replacement trees must be of the same species and of the same or a similar variety is too restrictive. Authorities may well have an over-preponderance of trees of a particular species, or trees which are unsuited to the locality. When, for any reason, these have to be felled, authorities will often wish to replace them by trees of a different species. We want to encourage the planting of as wide a range of species as possible, in order to give greater variety to our environment and to lessen the chances of diseases spreading.
To specify some 15 species, in the way this Bill does, is likely to give credence to the view that these are in a first division of suitability, and that other equally fine species are less worthy to be grown. We ought not to do anything to discourage the planting of other beautiful trees, as the noble Lord, Lord Kilbracken, so rightly said. For all these reasons, not to mention some of the practical reasons raised by the noble Lord, Lord Gisborough, we cannot support the Bill.
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However, like the noble Lord, Lord Somers, we do wish to encourage the extensive planting of trees. In accordance with the National Parks and Access to the Countryside Act 1949, local authorities have the power to plant trees for the purpose of preserving or enhancing the natural beauty of their areas, and Department of the Environment Circular 36/78 advised authorities to develop policies, within financial constraints, for their own planting, and to set a positive example to encourage planting by private owners.
Although these financial constraints are still with us, this is no reason to believe that local authorities will award tree planting any lesser degree of priority than they have done hitherto. I under-stand that the Countryside Commission expect to spend at least as much on amenity tree planting this year as they did last. A valuable contribution in the provision, planting and care of trees for the community can also be made by such organisations as civic societies, county naturalists' trusts and other voluntary groups. I must say how much I endorse what my noble friend Lord Gisborough said about the enthusiasm that exists for the planting of trees in the inner cities, too—a source of activity in which I am personally concerned. It is encouraging to note, just about everywhere, the enthusiasm with which there is the planting of trees to enhance the environment.
By a happy coincidence, this debate is taking place the day after the Tree Council has launched its National Tree Campaign, and I should like to take this opportunity to urge support for it. The campaign aims:
"… to encourage local voluntary groups, individuals and families to plant and care for trees and to inform and interest our youth, so that, in their turn, they will enjoy an environment of health and beauty in trees which are so often taken for granted".
Incidentally, the campaign also aims to raise £1 million to enable more trees to be planted.
The Tree Council is seeking the support of local authorities to this campaign, and I am sure that they will play their full part in getting more trees planted and in ensuring the proper care for young trees. Her Majesty Queen Elizabeth the Queen

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Mother has very kindly agreed to accept a gift of 80 trees to commemorate her 80th birthday. I hope that the Tree Council's recommendation, that the opportunity should be taken to plant clumps or avenues of 80 trees as an expression of affection for the Queen Mother and to help to beautify the landscape, will be taken up by many authorities and groups. I repeat my sympathy and support for the basic objectives which this Bill sets out to achieve, while at the same time I hope that the noble Lord, Lord Somers, will accept my explanation as to why we cannot support it.
8.54 p.m.
Lord SOMERS: My Lords, I am most grateful to all those who have taken part in this debate, but I regret to say that many noble Lords seem totally to have misunderstood the purpose behind this Bill. As far as the planting of trees is concerned, naturally I realise that there is a very great enthusiasm for it, but the whole purpose of this Bill is not to further the planting of trees in a general sense but to further the preservation of numbers of certain varieties of trees. The reason why I have said "certain varieties" is that they are the slow-growing trees which people who are keen on tree planting today are very unlikely to plant because they know perfectly well that they will not live to see them come to maturity. They are extremely valuable trees, not only from the point of view of their timber but also from that of appearance. For instance, I think it would be a very great pity if the oak tree were to become a museum piece in our countryside, and was very rarely seen.
Lord KILBRACKEN: My Lords, would the noble Lord not agree that the aspen, for example, and the silver birch, are extremely fast growing trees?
Lord SOMERS: Yes, I certainly would, my Lords, of course; but the point is that they are very much self-sowing, and therefore are not likely to become reduced in numbers.
The question of the proportion of two to one has been mentioned. Some noble Lords think it is too high, others too low. The reason why I chose that proportion was that in the areas of certain urban councils there is unlikely to be room to
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plant more than two of the same species. Therefore, I did not wish to raise it above that. Of course, the reason why it is two rather than just another one, as the noble Lord, Lord Kilbracken, I think, suggested, is that (as he must know as well as I do) if you plant two trees it is quite likely that only one of them will survive owing to various causes—bad weather, pests, and so forth. These days, even hooliganism, I think, might be included.
My noble friend Lord Cork and Orrery spoke of the clearing of a large area of woodland in the construction of a motorway. There I think he has made a valuable point. I think that possibly should be excepted by a special clause, which I will consider inserting in the Bill at Committee stage if your Lordships give it a Second Reading, which I sincerely hope your Lordships will because, although imperfect at the moment, I feel that it is necessary to try and protect the planting of these trees, which are rapidly becoming more and more rare. Then, the noble Lord, Lord Gisborough, suggested that it is absurd to expect local authorities to plant trees in order to produce hardwood. Of course it is, but an oak tree—does the noble Lord wish to interrupt?
Lord GISBOROUGH: My Lords, with respect, it was the noble Lord himself who raised the point about having timber from these trees to use.
Lord SOMERS: Yes, my Lords. I raised that point as one reason behind this Bill, but not by any means as the only one. I think it is most important that the oak should be preserved as a feature of the countryside. My Lords, I have really said all that I can on this. I hope that I have made clear the objections about the schedule, why other trees are not included. I sincerely hope that, in spite of the fact that this Bill has not received support from the Government, your Lordships will give it a Second Reading.
On Question, Bill read 2a and committed to a Committee of the Whole House.

INSURANCE COMPANIES BILL [H.L.]
Returned from the Commons agreed to with amendments; the said amendments to be printed.
HIGHWAYS BILL [H.L.]
Reported from the Joint Committee with amendments, and recommitted to a Committee of the Whole House; Bill to be printed as amended.
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